Results round-up: Saga, Sanne

Over-50's insurer and tour operator Saga proposed an 18% dividend hike after delivering a solid year of profits growth.

Underlying profit before tax, excluding derivative gains and the impact from the government's changes to the Ogden discount rate for personal injury claims grew 5.6% over the year to £187.4m for the year to 31 January.

This was virtually in line with consensus forecasts of £188m, and would have been higher but for the £5m drag from maintenance downtime at its Sapphire cruise ship.

Growth reflected a very strong performance in the motor insurance business, more than offsetting declines elsewhere in insurance, and positive travel performance.

Basic earnings per share from continuing operations of 14.1p were up 6.0% from the previous year.

A year of strong cash flows saw the board propose to increase the final dividend to 5.8p, leading to growth in the full year dividend of 18.1% to 8.5p per share, and cutting net debt from £547.7m to £464.8m.

Chief executive Lance Batchelor is shifting the company towards a new lower-capital model where Saga will leverage a deep knowledge of its loyal customers to enable it to act as a broker of various third-party services.

Towards this aim, it has identified around half a million 'higher-affinity customers', HACs, which buy premium versions of what Saga sells, have higher retention levels, and have a higher propensity to buy multiple products across the group, holding an average of 2.1 core products each -- with a target improve this average by 20% over five years.

Using the knowledge about this group Batchelor believes he can can significantly refine the current model to increase efficiency by reducing marketing costs, while examining similar customer group's who do not share all the same characteristics to approach and market to them in a way that optimises the likelihood of them developing an affinity with Saga.

Sanne

Asset and corporate administration service provider Sanne said it had quintupled full year profits to £15m from £2.4 the previous year, driven by cost control and growth in revenue.

Underlying profits were up 31% to £22m, while revenue jumped 40% to £63.8m in what the company called a “transformational year”.

The company has recommended a final dividend of 6.4p a share for a total of 9.6p, up from 7p a share.

Sanne said it had seen a strong pipeline of new business within its core alternatives focused business divisions of debt, real estate, private equity and hedge.

The projected annualised value of new business won in the year grew to around £13.8m, up from £13m, Sanne added.

The company said its diversified geographical presence would allow it to deal with the uncertainties created by the UK's decision to leave the European Union.

“While the final outcome of the UK's negotiations with the EU will not be known for some time, the Group continues to invest in the development of its client proposition across its many operational centres, both inside and outside the EU,” Sanne said.