The idea that things will never be the same again after the vote to leave the European Union doesn’t seem to have reached the average British consumer yet.
That is according to the latest profit report from Saga plc. The over-50s insurance specialist highlighted a 5.6% increase in full-year pre-tax profits thanks largely to strong demand in its motor insurance broking arm and its travel insurance sector: suggesting that Brits have not yet lost the holiday bug in spite of the apparent threat to the economy.
Saga, which offers river and ocean cruises, escorted tours and more alongside its insurance products, said that current reservations were actually 8% ahead of the prior year.
However, despite a strong performance from its motor broking business, there was a warning about the potential impact of another controversial action – namely the personal injury discount rate review. The Government’s decision to cut the rate used by insurers in order to settle personal injury claims has received a strong backlash from insurers and Saga believes it has already felt some of the aftershock. Profits from insurance underwriting dropped, as did profits in its other insurance broking businesses.
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However, overall, according to a Reuters report, its underlying pretax profit, excluding derivative gains and the impact of the rate change, rose to £187.4 million in the year to January 31, that’s up from £177.4 million a year earlier.
“For the third successive year since IPO, we have delivered a strong set of financial results,” said chief executive Lance Bachelor.
“Underlying profit before tax is up 5.6%, consistent with our ongoing objective of delivering consistent, sustainable profit growth. Debt is down sharply, and I am very pleased that the dividend has again materially increased.
“Our performance has continued to prove the strength of the Saga business model, which builds multi-decade relationships with our target demographic through a range of excellent products and services. This breadth allows us to deliver consistently for our shareholders, despite the ebbs, flows and challenges in the insurance and travel markets.”
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