Will it be more than just those 50 and over interested in Saga’s latest trading update on Thursday?
The stock is yet to recover from the Monarch Airlines-related profit-warning inspired plunge suffered at the start of last December. Up until mid-April, Saga has spent most of the year trading between £1.10 and £1.20, its worst range since debuting on the stock market back in 2014.
It did manage to rise to £1.39 by the start of May, a 5 month peak, only to slide back towards at a current trading price of £1.27, in part thanks to going ex-dividend on May 17th.
The reason for Saga’s brief recovery was April’s better than forecast full year results. Though pre-tax profit from continuing operations dropped 7.6% to £178.7 million, underlying pre-tax profit managed to nudge 1.4% higher to £190.1 million, with a healthy 5.9% jump in full year dividend to 9.0p per share. CEO Lance Batchelor went on to say that the company has its ‘pricing in the right place’ and has ‘seen a significant uptick in new motor and home customers joining the brand’.
The firm has already warned that profits are expected to fall in 2018/19 due to insurance price reductions. Any update on this could be crucial to the reaction to Thursday’s statement, as will more general signs that the issues that plagued the company in 2017/18 have begun to ease in the new financial year.
Saga (LON:SAGAG) has a consensus rating of ‘Hold’ alongside an average target price of £1.99.
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