Results round-up

Although first-half sales declined and the dividend was short of expectations, Saga beat analyst's profits forecasts and was confident the business is on track to meet its full year targets.

Revenue in the six months ended 31 July fell by 8.6% to £437.2m, with trading profits flat at £117.6m and profits before tax up 3.9% to £104.5m - which was ahead of the of company-compiled consensus forecast of £100m.

In April, the FTSE 250 company had guided towards profits growth of 5-7% for the year, following 5.2% growth in trading profits last year, and management said the business was "on track" to meet this.

Last year, chief executive Lance Batchelor set out a new strategy to transform its insurance underwriting business into a broker of third party services under the Saga brand, requiring lower capital in order to boost dividend returns.

Adjusting for the new focus, trading profits in the core business increased 2%, even despite making extra payments for the Saga Sapphire cruise ship, while including the benefit of derivative gains meant PBT was lifted 8.5% higher.

An interim dividend of 2.7p was proposed, up 23% on last year's payout but slightly below consensus expectations.

Strong cash generation during the half enabled a reduction in the ratio of net debt to EBITDA to 2.2 times from 2.4 a year before, as part of a plan to cut the ratio of 1.5-2.0 in the medium term.

Batchelor said: "The robust operational performance in the first half means that we are on track to meet our targets for the full year."

He added that there had been "no discernible impact to date" from Brexit, even on the travel business, where a recent poll of customers found 99% said that the decision would not make them reconsider their future holiday plans.

Although the travel business saw a 1% decline in tour operating passenger numbers and a 21% drop in ship passenger days, both revenue and profit delivered growth, despite the £4.7m impact of maintenance on the Sapphire cruise ship.

Hong Kong-based recyclable metal trader Zibao Metals Recycling Holdings announced its final results for the year to 31 March on Wednesday, with revenue rising to HKD 497.0m from HKD 403.8m.

The AIM-traded company reported profit before tax of HKD 0.6m - a serious slide from the 2015 figure of HKD 9.2m - with net profit after tax also at HKD 0.6m, down from HKD 7.7m.

Its cash position at period end was HKD 5.3m, up from HKD 1.1m a year ago.

Due to the difficult trading conditions, however, the board said it will not declare a final dividend, repeating their decision of 2015.

“Revenue for the period increased by 23%, million mainly due to an increase in sales through the Zhengbao stockyard acquired at the end of the previous year which in turn was offset by a material reduction in back to back trading,” said chairman Wenjie Zhou.

“This refocusing of the business was undertaken in response to difficult market conditions.

“Notwithstanding the change in emphasis of the business, gross margins fell significantly and profit after taxation decreased.”

Looking ahead, Zhou said the recent decline in the Chinese stock market and the depreciation of renminbi will make trading conditions more challenging, by increasing the local currency cost of imported scrap metals.

“The Chinese government is taking steps to address these issues by various methods including reducing interest rates and increasing investment spending,” he explained.

“In the longer term, these measures are expected to have a positive impact on business environment in which the company operates.”