April 12, 2018 / 10:27 AM / 3 months ago

RPT-UPDATE 2-Older Britons' spirit of adventure lifts over-50s travel firm Saga

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* FY Underlying pretax profit up 1.4 pct to 190.1 million pounds

* FY dividend up 5.9 pct to 9 pence per share

* Customers choosing long haul holidays- CEO

* Shares rise 5 pct

By Noor Zainab Hussain

April 12 (Reuters) - Affluent older Britons are becoming more adventurous in their choice of holidays, boosting the fortunes of over-50s travel and insurance company Saga , which has already met most of its holiday sales targets for this year.

Saga has seen strong demand for its long-haul trips, with growing demand for travel to India, as well as to Greece and Cyprus, CEO Lance Batchelor told Reuters.

“I think it reflects customers’ desire for interesting, more challenging journeys, rather than the traditional sort of fly and flop, where you go straight to the coast of Spain and stay in one place,” he said.

“(In ocean cruises) growth overall is positive with customers wanting to explore and experience some of the less recognised parts of Europe, for example our Northern Lights cruises,” he said.

Saga said its travel business had “excellent visibility of bookings in the year ahead.” In both tour operating and cruising, the company had already secured the majority of its sales targets for the year ending January 2019, it said.

Saga’s shares were more than 5 percent higher at 1000 GMT after earlier jumping more than 10 percent as investors cheered an almost 6 percent rise in full-year dividend to 9 pence per share.

“One of the concerns we have heard from investors since launch was the sustainability of Saga’s progressive dividend. This increase signals management’s continued confidence in the cash generation of its ongoing business,” Bernstein analysts said.

Saga reported a small rise in pre-tax profit to 190.1 million pounds ($269.5 million) for the year ended January after its tour operations were hit by the collapse of Monarch Airlines.

Saga reiterated that its underlying profit would be about 5 percent lower in the current fiscal year. Saga first made that forecast in December, citing challenging trading in insurance broking and the Monarch collapse.

Monarch’s failure hit Saga’s tour operations, leading it to restructure its travel business.

The drop in the pound since Britain’s vote to leave the European Union has hit British consumers’ spending power, but Saga’s customers have continued to travel, helping the firm report a 36.9 percent jump in underlying pre-tax profit in the travel business.

“Our customers remain resilient, they remain apparently unaffected by Brexit ... It doesn’t seem to have driven a change in their booking behaviours,” Batchelor said.

Saga will have two new ships by 2020, and has hit over 50 percent of its sales target for the ‘Spirit of Discovery’. ($1 = 0.7053 pounds)

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier and Adrian Croft

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