Older clients keep UK's Saga strong as On the Beach falters

By Nithyashree R B and Raechel Thankam Job

(Reuters) -British travel companies Saga Plc and On the Beach reported an increase in second-half forward bookings on Wednesday, but uncertainty over next summer drove shares in On the Beach sharply lower.

While On the Beach's winter bookings were 12% ahead of last year's record, it said that for summer 2026, customers were delaying bookings until closer to the date of departure.

That has slowed revenues and forced it to forecast profits for the fiscal year 2025, ended September, below market expectations, driving its share price down 15.5% by 0948 GMT, taking it to the bottom of the FTSE small-cap index which was down 0.2%.

Saga, which relies on older, more affluent travellers, rose 3.7%, making it one of the biggest gainers on the same index.

Analysts said Britain's November budget, which people are expecting could squeeze their finances, was making those with the least disposable income hesitant.

"With the budget around the corner, it is probable that customers are waiting and seeing before committing to next year's holiday," said RBC Capital Markets analysts.

Saga, which caters for people over the age of 50, provides a range of travel products such as cruises, insurance, and financial services.

It is also in the midst of a strategic shift, which it said is on track, to refocus on its profitable core travel business, and is restructuring its insurance and money businesses through new partnerships.

"Our customers book very early with us. So we've already got a significant amount of next year's holidays booked," CEO Mike Hazell told Reuters.

"They have more disposable income and they're more resilient to short-term economic volatility," Hazell added.

Saga reported adjusted pre-tax profit of 23.5 million pounds ($31.73 million) for the six months ended July 31, compared with 24.8 million pounds a year ago.

($1 = 0.7406 pounds)

(Reporting by Nithyashree R B and Raechel Thankam Job in Bengaluru; Writing by Yadarisa Shabong; Editing by Rashmi Aich and Barbara Lewis)