Over-50s insurance and travel company Saga boosted annual pre-tax profits by 55% to £176.2 million as it increased passengers on its cruise ships and expanded the number of policies it sold.

The Folkestone-based business, which floated on the London Stock Exchange two years ago, will pay a 7.2p per share dividend, up from 4.1p a year earlier, with bosses saying they expect steady profit growth in future years and higher payouts for shareholders.

The group’s revenues grew 7% to £963.2 million, with earnings before interest, taxes and other charges up 5% to £238.8 million.

Its travel business had the strongest growth, with turnover up 11% to £423.1 million, although its insurance arms brought in £510.1 million, up 4.1% on the previous year.

Underwriting made trading profits of £213.1 million, up 8%, driven by strong growth in home insurance and the inclusion of motorbike insurer Bennetts, which it bought for £26.3 million in January last year.

Trading profit on holidays was £17.2 million, up 26.5%, largely driven by a full year contribution from Destinology, which contributed £32.8m.

It bought a majority stake in the online travel company in August 2014, which specialises in four and five star holidays to the UAE, Far East, Indian Ocean and Europe.

However, it said growth in its tour operating business next year will be nullified by two months of maintenance on its Saga Sapphire ship.

In September, the company revealed it is to buy a new cruise liner, ready in 2019, with an option to build a second by 2021.

This year marks the 65th anniversary of the foundation of Saga by Sidney De Haan, the late former owner of the Rhodesia Hotel in Folkestone, who started offering off-peak holidays to retired people.

“Our core insurance and travel businesses maintained their strong growth trajectory and were enhanced by new and improving products, new routes to market and the ability to target a broader range of customers..." - Lance Batchelor, Saga

The company, which employs nearly 4,500 people, of which 3,000 work in Kent, was taken over in 1984 by his son Sir Roger De Haan, the philanthropist, who sold the business in 2004 to private equity firm Charterhouse.

It later combined with the AA, owned by CVC and Permira, to form Acromas Holdings.

The business floated on the London Stock Exchange in May 2014 with a market value of £2.1 billion.

Since then its share price has risen from 185p to 202p today, increasing 2% following the announcement of its latest results.

Saga Group chief executive Lance Batchelor said: “Our core insurance and travel businesses maintained their strong growth trajectory and were enhanced by new and improving products, new routes to market and the ability to target a broader range of customers.

“I look ahead to the next period for Saga with a great deal of confidence.

“The year ahead will see a renewed focus on our customers and further developing the Saga brand.

“We will be looking closely at the whole customer journey with a view to putting more of Saga into our customers’ lives.”