Saga (SAGA) 125.2p

Loss to date: 1.6%

Original entry price: Buy at 127.2p, 19 April 2018

A reassuring update (21 Jun) from over-50s insurer-to-travel provider Saga (SAGA) helps underpin our positive view on the company.

Trading met expectations for the first four months of its January 2019 financial year. The company reported ‘good momentum’ across both its insurance and travel business.

There wasn’t a lot to excite investors in the statement but after a profit warning in December 2017 the absence of any real negatives is undoubtedly a step forward.

What was encouraging was the 740,000 people it now has signed up for its ‘Possibilities’ membership scheme compared to 500,000 in April.

Eighty percent of Saga’s group profit is generated by one fifth of its customer base. It has spent a long time understanding how this segment came to become so loyal, so that it can a) try and sell more relevant products to them and b) see which other customers have similar characteristics.

The Possibilities scheme is part of this broader drive to have greater engagement with its customers.

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