Saga shares sink on coronavirus woes in travel arm

Over 50s’ firm Saga has seen shares sink as it warned coronavirus has affected its travel business due to cancellations and falling demand.

Shares dropped 8% after the group said its cruise arm has seen a “higher level of cancellations for departures in the near-term and more generally a lower level of bookings for departures further out”.

Its tour operator division has also been hit by a 20% slump in forward passenger bookings for 2020/21, with a “more significant” impact in recent weeks.

The group said: “The evolution of Covid-19 and the impact this will have on full year earnings for 2020/21 cannot be predicted with any certainty at the current time.

“While our travel business will be impacted, the group expects the performance and cash generation of the Insurance business to be largely unaffected.”

It added there are a “range of actions” it can take to offset the travel woes, such as ongoing cost cutting efforts.

Saga adds to a fast growing list of travel firms to caution over an impact from the outbreak.

William Ryder, equity analyst at Hargreaves Lansdown, said: “The shares are down over 45% since February 20, and today’s update just confirms the group is facing problems.

“The outbreak has hit most companies in the travel and leisure sector, but Saga wasn’t in a great place to begin with.”