SHARE OF THE WEEK: Investors looking for reassurance from Saga

SHARE OF THE WEEK: Investors looking for reassurance from Saga as it seeks to dump its flailing underwriting business

Investors will be looking for reassurance from Saga next week as it announces full-year results and seeks to dump its flailing underwriting business.

In the over-50s group’s full-year results on Tuesday, analysts expect the travel and insurance company to post profits of £20m for 2022, sitting at the bottom end of its £20m to £30m guidance.

The company had previously laid out expectations for profits of £35m to £50m for the year, but slashed these figures blaming increases in the cost of insurance claims.

In 2021, Saga notched up losses of £61.2m following a complete halt in the travel and tourism industry due to Covid.

The insurance unit is the group’s largest business and has been contending with soaring claims in recent years.

In February, Saga confirmed that it was looking for buyers for its in-house insurance business – the sale of which could, according to reports, raise as much as £90m.

This would help the firm’s operational and strategic position and pay down some of its £721m debt pile.

Although exclusive talks with an Australian insurance group fell through earlier last month, analysts are expecting an update on Tuesday about how Saga’s hunt is going.

Andreas Van Embden, analyst at Peel Hunt, said this sale should be a key priority for the company.

Saga’s shares have rallied in recent months, jumping nearly 60 per cent in last six months – but are still over 90 per cent lower than its 2016 heights.

***
Read more at DailyMail.co.uk