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Published on Tuesday, January 28, 2020

Saga reveals financial hit from Thomas Cook collapse

Saga Holidays took a £4 million hit from the collapse of Thomas Cook, according to its trading update today.

In an update for the period from August 1 to January 27, the over 50s specialist said it continued to face 'challenging markets' in travel and insurance.

For tour operations, revenues are expected to be down around 5% compared to the prior year, in line with trading at the half year.

"We are seeing a much more resilient picture in those parts of the business where our customer proposition is truly differentiated, notably in escorted tours," it said.

"The administration of Thomas Cook in the second half has resulted in approximately £4 million of one-off costs which will be taken below Underlying PBT."

The update was more positive, however, about its cruise business.

"In cruise, we are building on the excellent progress over the first half of the year," it said.

"The first six months of operation for the Spirit of Discovery have been successful. Customer feedback has been very positive and we expect the new ship to achieve EBITDA of more than £20 million for the second half.

"The build programme for the Spirit of Adventure is on track and we remain on time and on budget for delivery in August 2020."

Saga said it has forward bookings for 2020/21 of 76% of full year target levels and it remains fully on track with our expectations for £40 million of EBITDA per new ship.

Overall, it expects underlying profit before tax to be in line with its previous guidance.

Euan Sutherland, Group CEO, said: "Although Saga continues to face challenging markets in insurance and travel, we have a clear focus on improving performance and cost efficiencies within the Group, while strengthening our financial position and reducing debt."

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