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Saga cruises along as 50-plus Britons continue to holiday

Holidaymakers over the age of 50 have been ignoring the post-Brexit drop in the value of the pound by continuing to book trips abroad, sending profits in Saga’s travel division flying.

Rising demand for holidays among those aged over 50, undeterred by sterling’s fall making holidays more expensive, sent profits in the company’s travel unit soaring 63pc to £11.9m for the six months to July 31.

Chief executive Lance Batchelor said that Brexit had had minimal impact on the group’s holiday business, because its customers were dipping into their savings or pension pots to book trips abroad.

“They’re much less impacted by what’s going on in the economy or in a bonus,” he said. “This is their time to travel and have fun. They’re not going to wait for a change in the economy or a change in exchange rates.”

The travel and insurance company, which is synonymous with cruises, said alongside its results the appetite for cruise bookings had been so strong that it had bought another ship with the aim of launching it in 2020.

However, despite the surge in travel bookings, profits at the group fell 6.3pc to £103.0m due to costs associated with fuel hedging and refinancing of its debt, which took place in May. Revenue decreased by £1.8m to £435.4m.

Stripping out those costs, underlying profits were up 5.5pc. The interim dividend will rise 11.1pc to 3p. The firm is on track to deliver a fourth consecutive year of underlying profit growth, Mr Batchelor said.

The group also announced details of a VIP-style membership scheme today alongside its results, part of its battle to shake off its ‘zimmerframe’ image and adapt to the changing needs of its target market.

As reported by The Sunday Telegraph, the concierge-style scheme hopes to impress so-called “high-affinity” customers – those who spend around £1,900 on a holiday – with ­’money can’t buy’ experiences and champagne receptions.

Peel Hunt analyst Andreas van Embden said that moving towards a membership structure would improve customer interaction and “makes the long-term investment case appealing in our view, despite the short-term drift in the company’s performance”.

Although there is currently an intense focus from the business on member experiences and travel, Mr Batchelor insisted that the firm was not planning to dilute its presence in the insurance market.

On potential M&A deals, he added that the firm was not in talks with anyone in the insurance sector and had not been approached by the AA, which was talking to Hastings about a potential spin-off of its insurance unit over the summer.