UK's Saga warns of annual losses as costs eat into revenue growth

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(Reuters) -British holidays group Saga Plc Tuesday warned that it could report a small underlying loss in 2022-23 before returning to a profit next year.

Saga, which sells cruise holidays and insurance to over 50-year-olds, had in September forecast a profit for the year despite a weak market outlook.

For the financial year 2022/23, revenue is likely to increase tenfold, though marketing and administrative expenses could push it into a loss, Saga said in a trading statement.

“We continued to navigate a challenging period for the UK motor insurance market and, although there has been some pressure on our underwriting business, our retail broking result will be in line with expectations,” Chief Executive Officer Euan Sutherland said.

Meanwhile, tour bookings for the coming fiscal were strong, aided by increased demand for long-haul destinations, the company said, adding that booked revenue rose 13% to 110 million pounds ($136.36 million).

On Monday, the group said it was in discussions to sell Acromas Insurance Co, the underwriting unit of its wider insurance division, to help pay down its debt.

The group expects its net debt at the end of this month to be slightly higher than the 721.3 million pounds it projected at the end of July.

The company expects the small underlying loss before tax for this fiscal year to be in line with forecast.

($1 = 0.8067 pounds)


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