Package holiday downturn puts Saga shares into renewed spin

Troubled consumer group Saga’s shares fell again on Wednesday after pressure on its holiday arm spooked the City.

The over-fifties specialist, locked in a battle to convince investors a costly insurance revamp can pay off, had more bad news after package holiday revenues fell 4% and margins were hammered by discount deals.

“Conditions in the travel market are very competitive and affected by current political uncertainties,” it warned.

The package holidays account for 15% of company earnings, leading analysts to warn that profits would likely be at the lower end of guidance.

Shares fell 15% or 5p to 32.26p, adding pressure after a 40% price drop in April due to the insurance overhaul.

Chief executive Lance Batchelor will quit in January despite leading the turnaround plan.

“Against challenging headwinds in both travel and insurance, we see early signs of progress in stabilising our retail broking business,” he said.

Saga had been losing insurance customers for the past decade by competing with price comparison site rivals.

Now it will target more valuable customers directly with three-year fixed price insurance deals but that will cut the size of the business.