First-half 2025/26: ahead of plan, powered by Travel
Saga’s interim numbers for the six months to 31 July 2025 show a business hitting its stride in Travel while keeping a firm grip on debt reduction. The Group returned to profit at the statutory level and, despite higher interest costs, now expects full-year Underlying Profit Before Tax to be in line with last year. Trading EBITDA is expected to be ahead of prior expectations.
| Headline metric (continuing ops) | H1 2025/26 | H1 2024/25 | Change |
|---|---|---|---|
| Underlying Revenue | £320.5m | £298.2m | +7% |
| Revenue | £328.2m | £300.6m | +9% |
| Trading EBITDA | £67.5m | £62.4m | +8% |
| Underlying Profit Before Tax | £23.5m | £24.8m | -5% |
| Profit/(loss) before tax | £3.7m | £(116.9)m | +£120.6m |
| Available Operating Cash Flow | £89.4m | £54.4m | +64% |
| Net Debt | £515.1m | £617.2m | Improved |
| Leverage Ratio | 4.3x | 4.8x | Improved |
Notes: “Underlying” and “Trading EBITDA” are Saga’s alternative performance measures. Net finance costs rose to £20.5m (from £12.9m) after refinancing at higher rates.
Travel: ocean, river, holidays – all three humming
The decision to unite Cruise and Holidays under one leadership team is paying off. Travel delivered Underlying Profit Before Tax of £41.6m, up 33% year-on-year, on Underlying Revenue of £246.7m (+9%).
Ocean Cruise: fuller ships, higher yields
- Underlying Profit Before Tax: £34.5m (+23%).
- Underlying Revenue: £130.9m (+8%).
- Load factor 94% (up 4ppts) and per diem £391 (up 8%). Load factor is occupancy; per diem is revenue per passenger day.
Forward book looks healthy: full-year load factor at 92% (+2ppts) with per diem of £395 (+10%). For 2026/27, load factor is already 3ppts ahead, per diem £437 (+13.2%).
River Cruise: tighter capacity, better pricing
- Underlying Profit Before Tax: £3.9m (+34%).
- Underlying Revenue: £26.2m (broadly flat, one fewer ship for part of H1).
- Load factor 93% (+7ppts) and per diem £364 (+7%).
- New ship Spirit of the Moselle launched in July.
For the current year, load factor is 87% (down 1ppt) but per diem is 7.3% higher at £351. Next year’s book is 5ppts ahead on load factor and 6.6% up on per diem.
Holidays: volumes and margins both improving
- Underlying Profit Before Tax: £3.2m (from £0.3m).
- Underlying Revenue: £89.6m (+14%) with 27.8k passengers (+13%).
For the year, booked revenue is £183.6m (+13.5%) with 60.8k passengers (+12.2%). Bookings for 2026/27 are currently behind (revenue -4.8%, passengers -7.4%) after marketing focused on in-year trading, but Saga plans activity to bridge the gap. The addition of a nationwide chauffeur service to all hosted stays from 1 April 2026 should support demand.
Insurance Broking: ahead of expectations, but home remains tough
Broking Underlying Profit Before Tax was £9.1m (H1 2024/25: £11.7m). Management had guided to a difficult market ahead of the new partnership with Ageas and say performance is better than expected.
- Policies sold: 693k (-2.5%), with motor +9% and travel/PMI +5%; home -19%.
- Policies in force: 1.247m (-10%).
- Customer retention improved to 84% (from 76%).
- Three-year fixed-price product remains popular: 209k policies in H1 (35% of motor and home).
The 20-year broking partnership with Ageas is on track to go live in Q4 2025. Saga sold its Underwriting business on 1 July 2025, simplifying risk and freeing cash. The sale delivered £17.0m more net cash than previously guided, although the disposal recorded a £23.9m accounting loss in discontinued operations. Expect further H2 investment in price and marketing to build policy volumes for the new partnership, which will weigh on second-half broking profit but should set the base for growth.
Cash, debt and refinancing: breathing room to 2031
Cash generation stepped up, with Available Operating Cash Flow of £89.4m (+64%), helped by Ocean Cruise, Insurance Broking and a £10.0m dividend from Underwriting pre‑sale. Net Debt fell to £515.1m, £77.7m lower than at 31 January 2025. Leverage dropped to 4.3x (from 4.4x in January and 4.8x a year ago) and is expected to be below last year for the full year.
- New £335.0m term loan matures 2031; old £250.0m bond and £75.0m Roger De Haan facility repaid.
- Liquidity: £140.1m of Available Cash, £33.4m undrawn RCF and £116.6m undrawn delayed-draw term loan.
- Covenants: ship debt interest cover 9.9x (minimum 2.0x) and debt service cover 1.6x (minimum 1.2x).
No interim dividend. Reducing Net Debt remains the priority and is restricted under financing agreements while ship debt deferrals are outstanding and leverage is above 3.25x.
Outlook and medium-term targets
Saga now expects full-year Underlying Profit Before Tax to be in line with last year, despite higher finance costs, and Trading EBITDA to be ahead of expectations. Travel has strong forward bookings across Ocean and River Cruise and Holidays. In Insurance, management will invest in volumes ahead of the Ageas go-live, tempering H2 broking profit. The Group reiterates its January 2030 ambitions: at least £100.0m of Underlying Profit Before Tax and leverage below 2.0x.
My take: why this update matters
- Travel is doing the heavy lifting. Higher occupancy and per diems demonstrate pricing power and customer demand for Saga’s differentiated, smaller-ship model.
- Cash flow and deleveraging are moving the right way. The refinancing pushes maturities out to 2031 and liquidity looks adequate, but leverage at 4.3x is still elevated, so sustained Travel delivery is key.
- Insurance is being reset. The underwriting exit simplifies the balance sheet and reduces volatility. Short-term broking profit pressure from growth investments is sensible if it kick-starts volumes under the Ageas partnership.
- Returned to profit. Statutory PBT of £3.7m is a psychological milestone after last year’s large loss driven by goodwill impairment.
The watch list for H2
- Travel execution: maintaining the current trajectory on load factors and per diems, and converting the Ocean and River forward books into margins through the winter season.
- Insurance transition: smooth operational go-live with Ageas in Q4 2025 and first signs of sustainable volume growth, especially in home where the market remains challenging.
- Debt and interest costs: continued deleveraging and tight control of finance costs after the step-up to £20.5m in H1.
- Cash conversion: keeping Available Operating Cash Flow strong, particularly from Ocean Cruise, while capex and dry dock spend remain disciplined.
- New partnerships: the NatWest Boxed savings launch in Q4 2025 and any early traction in Money products.
Bottom line
This is a confident first half from Saga. Travel is firing on all cylinders, Insurance is being rebuilt on a lower-risk footing, and the balance sheet has more runway. The main swing factor remains deleveraging: delivering another year of strong Travel trading and a clean Ageas transition will be crucial to bring that 4.3x leverage down. If they keep this momentum, the 2030 targets look far more achievable than they did a year ago.
