Insurance group Saga has announced that its profit is expected to be £110m in the full-year ended 31 January 2020, in line with its target range of £105m to £120m.
The group had also witnessed “good progress against the business priorities set in April 2019 and positive momentum in the cash generative Insurance business.
In the full-year period, the group sold 320,000 three-year fixed-price and 57% of new business volumes were written on a direct basis.
Its branded policy sales were down 3%, however, due to “discipline in new business pricing”.
The group’s projected insurance cash flows are “broadly unchanged” from the year prior, though its insurance goodwill is expected to be impaired by £370m, primarily relating to an increase in the post-tax discount rate from 8.55% to 10.7%.
In light of the ongoing coronavirus pandemic, the group has also decided to suspend dividends, and protect its balance sheet through a precautionary £50m draw down of its revolving credit facility, with available cash resources at the end of March of £92m.
The group has also reduced its operating expenses, with run rate cost savings of £15m from actions that were implemented in February.
It said that this will be partially offset by an expected £10m of redundancy costs in the current year.
Euan Sutherland, group CEO, said: “In a year of change, Saga has made significant operational progress and strengthened the management team to ensure the business is positioned to deliver for our customers and members and for investors.
“Saga Insurance remains largely unaffected by COVID-19, however along with all other Travel businesses, our Travel business has been significantly impacted.”
He added: “We have acted quickly to ensure the health and wellbeing of our customers and colleagues and, following the government’s advice on cruise ship and air travel, we have suspended our Cruise and Tour operations.
“We have also worked with our banks to agree temporary amendments to our debt covenants. We have significant available liquidity and can consider a range of further mitigating actions across the group.”