Holiday group Saga's profit view underscores steady travel rebound

By Eva Mathews

(Reuters) -British over-50s holiday and insurance group Saga forecast annual profit to more than double, betting on strong long-haul travel demand from retired and wealthy Britons to offset weakness in its insurance unit.

Chief Executive Mike Hazell told Reuters on Tuesday the company was not expecting significant impact from the on-going Middle East conflict on travel and cruise demand.

"We're generally seeing Middle East travel holding up albeit a little bit of a knock on Egypt and Jordan," Hazell said, without quantifying it in financial terms.

Saga operates a 28-day cruise to Israel and Ancient Egypt, currently scheduled for September, which it is keeping under review, Hazell added.

Leisure travel demand to the region was hit after the Gaza war began, with airlines pausing flights and some travel operators altering itineraries.

Shares in Saga, a constituent of the FTSE small cap index, rose 4.9% to 152.2 pence by 0930 GMT, after it also forecast full-year revenue growth of between 10% and 15%.

Saga has been trying to reduce its huge debt-pile through cost-cutting measures that include headcount reductions.

The company recently underwent a management reshuffle that brought in a new CEO and CFO, and announced plans for a potential partnership for its Cruise operations, which operates the 900 plus-passenger ships 'Spirit of Adventure' and 'Spirit of Discovery'.

Last September it put a sale process on hold for its insurance underwriting arm, whose potential sale to Australia's Open was terminated earlier in 2023.

The insurance business remains challenging, Saga said on Tuesday, adding that it expects policy sales for the year to decline by 9%.

(1 = 0.7883 pounds)

(Reporting by Eva Mathews in Bengaluru; Editing by Rashmi Aich and Christina Fincher)