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" The Group has retained over 70% of advance receipts on cancelled Cruise departures, and new bookings for next year have been very positive."
"The sale of the Saga Sapphire was completed on 12 June on terms broadly in line with previous expectations "
"The Group's new mid-sized ships are ideally placed to offer 'safe sailing' "
"The sale of Bennetts Motorcycling Services generating net disposal proceeds of around £23m"
"The Group has now signed an agreement for a debt holiday and covenant waiver for the two ship facilities. This allows the deferral of £32m principal payments that were due up to 31 March 2021. These deferred amounts will amortise over a four-year period. Interest remains payable and no dividends can be paid by Saga Group while these principal payments remain outstanding."
"The Group has successfully delivered £15m of run-rate cost savings"
" The Group's liquidity position remains strong and benefits from diversified sources of income"
"The Group announced the sale of two domiciliary healthcare companies, Patricia Whites and Country Cousins, in March, and recently completed the transfer of Saga-branded healthcare customers and colleagues to a well regarded third party care provider for a nominal sum"
"Our Insurance business has been resilient and more than 70% of Cruise guests have moved their booking to later sailings"
I really dont think things are as bad as the SP suggests..myself
I was worried about this initially. However Saga has many strategic options they can do first such as sell AICL or titan or destinology to reduce debt. Also the board are heavily incentivised to push the SP up as they have a mountain of options starting at 18p so a rights issue at 13p would be shooting themselves in the foot. Also they have enough cash till March
Does anyone think there will be a rights issue?
Same here, just wish the price stays here for a few months for me to load up with my salary.
" I think it will stay low until September until it is clear whether covenants will be breached "
They have already agreed a delay on ship payments until next year ...so in that situation they have to pay added interest and postpone dividend payments until those payments are caught up....but of course that does mean they are climbing a hill for a while until up to date...probably 2021 to pay for the lack of payment in 2020...no dividend until 2022
The cruise ship just has a basic staff at present..i am hopeful the covid cases in mid/late August and start to dip in September as the hot summer weather subsides and people return form holidays/ouside spaces...
Flu season doesnt really happen until Dec-March so...there is a chance, who knows, that covid could get under some control in autumn and first vaccines ready for end of year/early 2021 to just about help the flu season....
with regards to the main business I dont think there is cause for concern with regards covenants there ..travel insurance is down and insurance sales were slightly down but insurance claims are likely to be less...so reasonable chance of evens
Throwing in the towel selling , but whoever is selling others are buying.....and there are plenty no doubt stitting on the sidelines searching for the bottom...we could see 16-17p again if those cheap bottom shares disappear fast..
I am looking to buy within the next few days...see how the market moves...keeping an eye
Interestingly the number of short positions has remained unchanged. So not shorters driving down the price.
I think it will stay low until September until it is clear whether covenants will be breached
The suspicion is that there will be no profit declared this year, and quite probably little profit next year either. Almost all the profits are attributed to the Insurance division and for as long as its cruise and river ships remain anchored up, then every penny of profit will be spent on the costs associated with ships.
From a simple overlay of the share price with Carnival Cruises, the pattern is, to all intents and purpose, a mirror of the other. The inference is that Saga is considered first and foremost to be a cruise operator and not an insurer. If a viable and tolerated vaccine is approved by the late autumn then Saga has a chance to survive intact, but it seems to me pretty inevitable that the company will be split up. And my back of a fag packet numbers suggest that shareholders would be financially better off if the company were broken up. Perhaps Mr Sutherland will hoist the forsale notice? I rather hope that to happen.
"Surely Saga could give us an update on how the trading has gone in the first half."
yeah..it has been 2 months since any further covid update ...but...the Interims last year were on 19th September...so..we may have to wait for those....i think though that the share price will over sell and get a bounce from that....too much bad news priced in...in my opinion...but..you never know ..
I hope you have not "topped up" too soon. If this goes under 14p we might see it go under 10p soon after.
I just topped up at 14.50p. Although the business is apparently split 50/50 travel/insurance I think Saga will be looking to alter that ratio in favour of insurance where there is more profit and less unpredictability. Their loyal customer base gives them a captive audience to which they can sell all types of insurance.
assuming no more bad news for travel....
I would top up if I had the funds
Just averaged down - for the last time hopefully - at 14.4p. Surely that was the bottom?
Rupans.... Spot on! And although this refers to a rival ship, once there is SOME revenue from cruise operations for Saga, the immediate impact will be seen and reflected in eliminating many of the fixed costs of an anchored ship.
The pareto principle for Saga is not perfectly noted, but is a background snippet. 80% profits are from one division (insurance) and 80% costs are in another (travel). Revenues are (broadly) evenly split between insurance and cruises.
Thanks retired banker. I think I may well do exactly that.
Mark - question I think you should ask yourself is do you feel Saga is going bust or back to 35p ?
If you believe it can weather covid then 35p isn't at all aggressive pricing for a business with current market cap of 165mm and underlying profit from its insurance business >100m.
So if you feel it is worth investing why try catching the absolute bottom ... why not put half your money in now at 14.5p and if you get a chance to add in the next couple of weeks at 12p do so.
For my part I topped up at 15-17p and am expecting a rebound when interims get delivered within the next month - long before any clarity on cruise business is available.
It may hit 10 to 12p. But eventually this will go up as long as cruises start up again. My advice even though I have already bought in is to wait until some confirmation of cruise activity from the UK starting up and then buy (assuming less than 23p or so)
I’ve been in this twice before once a year ago ( that hurt )and the next time I lost much smaller ( from just above 50p ) this surely hasn’t got much further to fall .... has it? I’m considering getting back in but to undo previous losses I’d need to see 35p from here. What’s people thoughts on the floor here I’m think 10-12p ????
The Group’s in-house underwriter AICL continues to play an important role on the motor panel, providing a source
of competitively priced risk, primarily focused on lower risk drivers. AICL also underwrites a portion of the home panel,
although all the risk in the home insurance business is passed on to a third party insurance company.
You are right, so the reduced claims on motor should benefit Saga.
I think it's only home insurance that is reinsured with a third party, so I'm hopeful of some much-needed bunce from reduced claims this year.
sorry meant for zccax77
Pianista,
Yes much of it is reinsured by AICL which wait a minute Saga owns. Saga owns a re-insurance business? who knew?
They have also stated that the benefits from such a drop in claims will not be realised until the next financial year
"Most of their underwriting is reinsured so there is unlikely to be much benefit from low claims".
It was worthy of mention in the trading update though:
"Current year claims frequency from March onwards has been much reduced as a result of lower miles driven following the start of the COVID-19 lockdown. The Group has not recognised any COVID-19 related claims upside in current year results or financial projections".
So maybe we'll get a pleasant surprise when the half-year results are announced.
Just pray they breakeven this year. The market has marked this down by £350m for having nil profits this year (last year cashflow was £93m).
Most of their underwriting is reinsured so there is unlikely to be much benefit from low claims.