Saga, the over-50s holiday and insurance company, remains on track for a fourth straight year of growth as it plans to build two new ships in three years.

The Folkestone-headquartered firm increased underlying pre-tax profits by 5.5% to £110.2 million in the six months to the end of July.

Its insurance business remains its biggest contributor, with retail broking growing 5% to £70.9 million, helped by a strong performance in the motor sector.

However, bosses feel buoyed by a number of initiatives in its travel business, including the launch of its Saga Possibilities membership programme, offering benefits with partners like Nuffield Health, Apple, Majestic and Prezzo.

Construction is due to begin on its new cruise ship, Spirit of Discovery, in February, with a maiden cruised planned for June 2019.

Strong pre-sales meant the company opted to build a second new ship, Spirit of Adventure, which it aims to launch in August 2020.

Profits grew 63% in its travel business, up 63% to £11.9 million.

It has rewarded shareholders with an 11% boost in their interim dividend to 3p.

Overall revenues decreased by £1.8 million to £435.4 million.

Chief executive Lance Batchelor said: “Saga is on track to deliver a fourth consecutive year of growth.

“Underlying profits are up again and so is our dividend.

“Our retail broking and travel divisions are performing well.

“I’m delighted to announce the launch of Saga Possibilities, our new membership programme, available to all Saga customers.

“Saga Possibilities is a critical new offering that will allow us to thank and encourage our customers to enjoy more of what Saga can offer.

“I believe that these results continue to demonstrate that Saga is growing, has good momentum, and is on track to deliver in line with expectations for the full year.”