THOMAS COOK GROUP

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Thomas Cook : Saga takes £4m hit from Thomas Cook's collapse

01/29/2020 | 01:13am

OVER-50s insurer Saga has said underlying profit before tax will meet expectations despite the company taking a £4m hit from the administration of Thomas Cook.

However, it warned home and motor insurance policies will pull in revenue three per cent lower than the previous year.

Margins will still hit the higher end of Saga's £71 to £74 guidance range.

Saga said it was operating against a "challenging" backdrop in its last half-year between August and January. It has set full-year underlying profit before tax guidance at between £105m and £120m.

The company yesterday also warned of a future hit to its underwriting business from higher inflation on third-party damage and theft costs.

Overall inflation stands at seven per cent, up on longer-term predictions of five per cent.

"This trend is not expected to have a significant impact on the current year but will have a modest adverse impact on future year margins if retail pricing conditions remain competitive," Saga said.

The company revealed it is "fully on track" to hit £40 in earnings before interest, tax, depreciation and amortisation per new ship by 2020/21.

Shares rose 7.6 per cent yesterday to close at 44.92p.

(c) 2020 City A.M., source Newspaper

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