Targeting a growth demographic
The over 50s are the fastest growing demographic in the UK. In 2013 there were 22.8m over 50s1, a number that is forecast to grow by 27.6% to approximately 29.1m by 20331, meaning they will represent 40% of the UK’s population1. The 65-75 and 75+ segments are predicted to increase at an even greater rate over the same period, by approximately 34% and 70% respectively1. This is important, as those aged 65 or over are particularly strong contributors to the success of the Group.
A strong, capital efficient business model
Saga is focused on the development of products and services specifically for our customers. We then find the best way to create those products, be it in-house or teaming up with a best in class partner to produce them to our exacting standards. In a majority of cases, Saga uses third party providers, meaning we have very little capital at risk and are afforded some protection against the impact of market conditions. In the year to January 2016, 77% of all our trading profit was generated by activities where we had no capital at risk.
Consistent financial delivery and cash generation
Group profits have grown year-on-year for the past five years. Our capital efficient business model also means we are highly cash generative, with the majority of our profit after tax converted into cash after tax. This gives us the flexibility to continue to grow whilst paying down debt and growing long-term returns to shareholders via our progressive dividend policy.
Growth potential in the core businesses of insurance and travel
Our award winning core businesses of insurance and travel are well placed to grow from relatively modest shares of the market for the UK’s over 50s. We have delivered growth across our core business this year and have a clear strategy in place for growth in the future.
Growth options for the future
We are continuing to identify and assess new development areas for the long-term growth of the business. Our activities include the development of our recently launched investment management business, Saga Investment Services, and our ongoing pilots in homecare and retirement villages.
1 ONS population projections, CEBR (Centre for Economic and Business Research) analysis.