Highlights

  • Underlying Profit Before Tax across cruises, holidays, and insurance is higher than 2024/25.
  • Net debt and leverage are falling, aided by cash flow and strategic divestments.
  • Forward bookings for cruises and holidays are ahead of last year, supporting 2026/27 outlook.

Saga PLC (LSE:SAGA) shares surged 14.29% to GBX 496 on Thursday, marking a continuation of recent gains that have lifted the stock 24% over the past five days and 334% over the past year. Investors are responding to the Group’s updated trading figures for the 2025/26 financial year, which show higher-than-expected profits, improved cruise performance, encouraging holiday bookings, and reductions in net debt, alongside new product initiatives.

Profit Growth Across Divisions

Saga’s latest update indicates that the Group is on track to report an Underlying Profit Before Tax ahead of last year’s results and above the half-year guidance.

The Ocean Cruise segment recorded a 93% load factor, up 2 percentage points from the previous year, with a per diem of GBP 394, 10% higher than in 2024/25. Meanwhile, River Cruises benefited from the launch of the Spirit of the Moselle, achieving an 89% load factor and a per diem of GBP 349, up 7% year-on-year. Holidays bookings also showed momentum, with revenue growth of around 13% and passenger growth of 11%, aided by the consolidation of Saga’s Travel businesses under a single management team.

Insurance Broking outperformed expectations, with policy sales increasing across three of the four products. This segment is now expected to deliver an Underlying Profit Before Tax marginally above last year, exceeding prior forecasts.

Debt Reduction and Cash Flow Support

Saga’s balance sheet metrics have improved, with net debt expected to be marginally lower than at the half-year and significantly below the prior year. This improvement is supported by strong trading cash flow and higher-than-expected proceeds from the sale of the Insurance Underwriting business.

Leverage is projected to fall below 4.0x, excluding a GBP 60 million receipt from Ageas in December 2025, which temporarily reduces net debt pending working capital adjustments in 2026/27. These metrics indicate the Group has passed its peak leverage, with further reductions expected next year.

Forward Bookings and 2026/27 Outlook

Looking ahead, the Ocean Cruise booked load factor is 70%, 3 percentage points higher than the same point last year, with a per diem of GBP 445, 13% higher. River Cruises are at a 59% booked load factor, 4 percentage points above last year, with a per diem of GBP 367. Holidays bookings stand at GBP 132 million, 5% ahead, with 39,000 passengers, 1% higher than 2025/26 at the same point.

Insurance Broking is expected to meet prior guidance as the Ageas partnership becomes fully embedded in 2026/27. This outlook, combined with cash generation, positions the Group for further debt reduction and operational momentum next year.

Investors are buying Saga shares amid favourable trading updates, higher profits across divisions, improved forward bookings, and reductions in net debt. The combination of near-term performance and medium-term visibility has driven the 14.29% gain on Thursday and continued interest in the stock.