(Reuters) Britain’s Saga said it expected its underlying pretax profit to grow by just 1-2% in the current year and fall 5% next year, sending its shares 20% lower.
In an unscheduled trading update, the provider of travel and insurance services for people aged 50 and over said more challenging trading in insurance broking and the collapse of Monarch Airlines would limit profit growth in the year to the end of January 2018.
An investment of £10m ($13.4m) to take on more customers, a fall in earned profit and lower reserve releases would push underlying pretax profit 5% lower in the the year to January 2019.
Saga shares tumbled 23% to 138.3 pence by 0929 GMT, taking them to the bottom of the FTSE Midcap Index. They were priced at 185 pence when the company listed in 2014.
Monarch collapse hurts Saga tour business
Saga said its tour business would see one-off cost of about £2m ($2.7m) hurt by Monarch going into administration.
Saga also said it had completed a review of its operating structure and would see about £10m of annualised savings next year.