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The fall is because insurance is a disaster, no secret, itās been reported every time thereās been an update. I canāt see how there wonāt be another write and Iād guess that most people will want to see the detail at end of year.
AICLs combined ratios are horrific and the broking business is shrinking with lower retention, lower new business sales and lower marginsā¦ā¦hence the business culling yet more people last year.
The only thing that propped up the share price was the Dubai investor, without that this would have dropped further.
The bit we donāt know is what the JV type plans are for cruising. But with so many questions I think the price action is understandable.
Whatās your explanation for this fall then?
Ah, I wondered where you were.
Remind us all what the bad was last time you said that? SInce then someone now has 10m reasons to be confident I think. I'll take his view of life thanks.
Are we going back to Ā£1.00. We lose 3% or so every day, clearly there is something seriously bad round the corner that we are not privy to. From 1.60 to 1.16 in a week.
Hi Luckyin,
The CEO has only been in his position for 5 days !
Iāve been an investor in SAGA for 5 painful years and have been pound cost averaging most of that time.
We had a period of meteoric share price growth in late 2020 into the Ā£4+ range but since then mostly volatility!
Iām still a Bull but my horns are battered.
Be Lucky
Someone bought 100,000 shares today. Wonder if our UAE friend has started soaking up stock again??
Luckin
Yes. The larger shareholders have read the update about rebalancing the insurance business resulting in reduced short term performance so they might expect another write down of goodwill. It is far too complicated for me so read it yourself and let me know your conclusions.
It was Investec downgraded from buy to hold and reduced price target.
They also have more than Ā£650m of debt at H1
Ā£400m Bonds
Ā£438.1m Ship Loans (Ā£188.9m Discovery@4.31% interest and Ā£249.2m Spirit of Adventure@ 3.30% interest )
They also have restricted use of the RCF until the Bond is paid in May , which I guess is why they are using Roger
" no utilisation of the RCF facility is permitted prior to repayment of the 2024 bond if leverage exceeds 5.5x, or liquidity is below Ā£170.0m "
Darn it! Saga's share price is inexplicably disconnected from a positive recent RNS.
Larger shareholders may see something amiss.
The initial share price jumped directly post-RNS, but the gain was quickly savaged away. Should I fear a black Swan?
I thought, my averaging down was an easy decision. I still do, but the tide surely should be turning by now. The share price displaying bad news to come rather than good.
I'm relying on the sum of the parts is greater than the current share price. Presuming, the debt is covered by cruise ships asset value and the cruising division is making decent returns. However, the insurance division, while challenging is likely to enjoy a very profitable recovery in time.
My fear must be the CEO is made to walk a plank for justifiable reasons.
Holding Tight!
Thanks Poker,
So when there is another writedown of the insurance the net equity will drop again. How much goodwill is in the books regarding insurance at the moment.
I suspect by May they will have done a sale and leaseback or maybe sold the underwriting business. Or Maybe generated enough cash to pay the bond outright as they currently have Ā£135 to Ā£145 million in cash at the moment.
still dont know which broker changed to hold and took out price target?
The Cruise City of Barcelona has now entered into a State of Emergency as a result of the regions drought and falling levels of water in the reservoirs (16%) ...the cruise ships will now only be supplied with water in case of extreme need.They will have to replenish elsewhere
" The issue in the Markets is how are SAGA paying down the 650M Debt ! "
well first step is in May with paying off the Ā£150m Bond using RdH Ā£85m loan ( at 10% interest) and available cash
They may have found it difficult to have entered into a new Bond, and as such turned to Roger , but it will mean their cash level will obviously drop ..worth checking the coupon the Bond compared to having to pay 10% to Roger
" That business has to be worth at least Ā£1bn enterprise value, so Ā£0.6bn equity."
The Equity on the books in the H1 Report was Ā£294.2m equally Ā£2.07 a share
The Saga brand is a major part of the positive side of the business, i don,t have a figure of value but it is significant
A JV is when you own 50% of a business. Therefore in order to do that they need a valuation for the business. That business has to be worth atleast Ā£1bn enterprise value, so Ā£0.6bn equity.
Hi ZCCAX77
Why would SAGA want to sell the Cruise Business ?
What they said in the trading update is we are exploring potential partners or JV.
The company told us the 2 Cruise Ships will make in excess of 80M pounds EBITDA this year.
They cost 337M pounds each to build and take 3-4 years to build.
The Ships are 5Star Deluxe vessels and demand is extremely high.
Current value of these ships will be in excess of 800M pounds.
The break up value of the SAGA business is HUGE in comparison the the current MC.
The issue in the Markets is how are SAGA paying down the 650M Debt !
I believe we will all find out on April 17th.... Possibly sooner.
Thanks rupans.
Hi Thomson,
The reason for the recent fall especially Friday is the fact that 1 of the 3 analysts has stopped setting a price target on Saga and moved to hold. If anyone has more details it would be greatfully received. I know that Peel Hunt has a price target of 145p (Hold) and Numis has reiterated a price target of 200p. Not sure about the one that has stopped placing targets.
Https://simplywall.st/stocks/gb/insurance/lse-saga/saga-shares/valuation
Fairly gloomy bot generated overview. Probably doesn't really account for the blend of travel and insurance, as its written as an insurance sector. Predicting a smaller loss and return to profit 2025 ish.
How much do you think we will get for selling this business?
Good post Thomson, now please stop this āgood news is comingā unless you KNOW something is in the pipeline. Thanks
Where is Banbury?
Buglet11. As far as I am concerned the latest update Was good news. At the time most investors were very reassured although obviously not so much with insurance. I cannot explain the massive drop in share price since the update but clearly that drop is not good news. In my opinion there has been lots of good news announced since my good news is coming remarks although I totally except there has not been the expected increase in the sp. Hopefully there will be an announcement soon and things will settle down.
Hey.
Hope you're well man?
Long time no speak. Had enough of the AIM sheet yet? Have a catch up on the detail here.
As you predicted Insurance fkkd. Cruise up. Debt a problem still.
SIngleton UAE investor 10m shares since October..
Have a look-you know how I like goodwill write offs?!!!
Speak soon.