Shares in Saga, the over-50s travel and insurance company, have slumped after it warned profits would be hit by factors including the collapse of Monarch Airlines.
When Monarch went into administration in October, resulting in the UK’s biggest peacetime repatriation of holidaymakers stranded abroad, Saga had to switch to other carriers and said this would add £2m to its costs.
The company said its insurance division also faced “more challenging trading”. A spokesman for Saga blamed intense competition in motor and home insurance, “with some players aggressively targeting volume growth”.
Saga shares tumbled more than 25% to 135.70p in early trading on Wednesday.
The company expects underlying pretax profits to grow by 1-2% in the year to 31 January, followed by a 5% drop in profits next year.
The firm has looked hard at its cost base and taken action to save £10m annually from next year, but the changes will result in a one-off cost of £4m. They include about 100 redundancies out of a total workforce of about 4,500.
Sources told the Guardian that the job losses included senior executives at Saga magazine as well as in marketing and financial services.
Lance Batchelor, the chief executive, said: “Against a backdrop of some challenging trading conditions in our final quarter, we continue to develop the business for the long term.”
In September, Saga unveiled plans for a concierge-style scheme offering customers “VIP access” to events and “money can’t buy” experiences as part of an effort to rebrand itself.
