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Many thanks Roguemale1! Good to be here, just watching from the sidelines for now but tempted to buy in soon! But policies sold figures does concern me.
I went through all their annual reports yesterday. For their 2018 annual report it says they sold 4,415 policies in 2023 this was down to 1,725 policies in 2023. PBT in 2018 was 123M from insurance and in 2023 it was 67.7M.
Until they sort out their insurance business they'll struggle to pay off their debt.
Morning Golarge, welcome aboard the good ship SAGA.
"Also if you look year on year the number of policies they're selling, it's more than half what it was back in 2018."
Please can you clarify what figures you are using to make that statement? It doesn't appear to be based upon the Annual Report and accounts for that period....
There seems to be a huge spread on the price right now. About 8p between buy and sell. I was considering jumping back in with my profits from SALT but maybe wait till that spread narrows.
The latest trading update from saga essentially said 'travel is doing great but there's still major challenges with insurance business'. Their insurance business is the only part which actually makes any real profit, so believe this is the reason it's dropping. Also if you look year on year the number of policies they're selling, it's more than half what it was back in 2018. Their insurance business is clearly struggling and they've got huge debt, so it's tough times ahead.
A couple of years ago, when results were FAR worse and transparency going forward was utterly lacking, Saga was trading between 300p and 400p. If I recall correctly the CEO bought £200,000 worth of shares at just under £3.90.
Now, with travel almost fully on track and cruise booming, why all this gloom from the markets?
Insurance has been under pressure over the last couple of years, but all the talk in the media over the last couple of days has been about motor policy prices rocketing.
So why the gloom?
https://sharecast.com/news/news-and-announcements/saga-says-annual-profit-set-to-more-than-double--15995692.html
Saga says annual profit set to more than double
Saga said on Tuesday that it expects full-year underlying pre-tax profit to more than double on the previous year as it hailed an "outstanding" year for the cruise and travel businesses.
In an update for the period from 1 August 2023 to 29 January 2024, Saga - which specialises in products and services for the over-50s - said it now expects revenue growth of between 10% and 15%.
Ocean Cruise revenue is expected to grow by around 30% year-on-year, it said, delivered through a load factor of 87% and per diem of £331, both significantly ahead of the 75% and £318 seen a year earlier.
As a result, and in line with previous guidance, the group expects to exceed its target of £40m Ocean Cruise trading EBITDA per ship.
Meanwhile, the river cruise segment is expected to return to underlying profit, supported by a load factor of 85% and a per diem of £285. This equates to revenue of around £44m and 17,000 passengers, up from £29m and 12,000 a year earlier.
Travel revenue growth is expected to be between 40% and 45%, with 58,000 passengers, up more than 20% on the prior year. In line with previous guidance, travel - when combined with the river cruise business for consistency with previous reporting - is on track to return to pre-pandemic underlying pre-tax profit, it said.
Chief executive Mike Hazell said: "For 2023/24, Saga remains on track to deliver significant growth in revenue, in addition to an underlying profit more than double that of the prior year, exceeding our previous guidance.
"Our cruise and travel businesses have had an outstanding year, having taken around 120k passengers on holiday, with customers continuing to be drawn to the strength of the Saga brand and offer. As a result, these businesses will return to profitability, in line with expectations. In insurance, the market-wide inflationary environment and declining policy volumes are continuing to impact our performance.
"The year ahead will see a continuation of these trends across our business. Bookings for the new seasons in cruise and travel are robust, showing good overall progress."
Saga confirmed at the end of last week that it was considering options for its cruse business, including a partnership arrangement.
...
Volumes aren't huge and we closed right on the last support, If we don't get a bounce tomorrow then it is highly likely that we'll head down again to 107 ish. That's my view anyhow. As for the selling I think the market is expecting another impairment in March, the strategy of three year fixed insurance deals is coming back to haunt SAGA it seems as costs in the sector rise. It has not fallen like this for over two years but again the volumes are lite. It's a tough hold as very few people selling will realise a profit from it. Hoping for some better days here thou once the knee jerk is over.
This is horrendous, can we stay above £1 this week ?
OK, thanks, I will try to be happy when it rises as no doubt, it soon will. However, I have to voice my concern when the price falls over 25% in a week. I agree with Bill, insurance is a disaster, but I feel the fall is overdone and we are due a correction back to 135 ish soon. After that, it’s down to any good deals that can be made on cruise, or less likely insurance. Anyway, good luck to all of us.
Buglet, I'm merely pointing out that your strategy as previously regaled, is sell some when they are higher and buy back lower. No issue with that.
But as previous I am just saying that the only time you post is after big drops, and always negatively. You never post positively when it rises....or indeed any personal opinions on why it might be going up or down. Just that there must be some secret bad news. Neither you or I have any influence on how this moves so may as well lighten up a bit? But good luck anyway. No issue with you making money long or short.
Not sure why you have to insult my strategy, which is perfectly sensible and has worked well over the last couple of years. Still, I expect nothing more from you, sadly.
Hi Banbury,
I've missed you !
Thankfully the Geordie Boys are getting fit again.
We like playing Villa!
I would like to see Villa get 4th place and CL as NUFC have no chance this season.
Best Wishes
Hey
How are you doing mate? Hope you've not done too much on those AIM miners? You could have lost it all here!!??
Yeah I guess till we see more detail its wait and see.
I was telling you £4 was too much. We should do one at £1.78!
Keep an eye on us, we'll need you in March!
UTV!
Buglet,
"Mr 10 million is not doing so well is he?" Well as far as we can see he is currently about at his average or maybe even slightly above it. As my learned friends said below, until his role/intent is clarified and the cruise JV/whatever is revealed along with the actual cruise numbers this is just gonna bounce around. Its being moved around at will by the small trades atm. In the position we're in does carrying the goodwill at all do us any good-its gonna get a big lump off oit dropped anyway as we have had the heads up on that.
I knew you'd be i put a 1/4 in , I took a 3/8ths out. Nonsense. You should go take lessons on the PFC board for bashing. You need to up your game LOL.
The new CEO will want to paint the picture dark at the start so they can make it brighter under their tenure...Always the same :)
Roguemale 1
Great to here from you . Whilst Villa are doing well (i even had Watkins in my Fantasy team as captain this gameweek ) it looks like the good ship Saga is to a degree treading water.
I pop in and recognise all the old names and great so many are holding the faith.
Tricky one as i based my whole investment case on this one on Insurance which i thought was a cash cow. It seems its having really difficult times.
Good to see Roger still here and underwriting the company and good the bond in May 24 will be repaid.
The £4 party in York seems a long way off.
If its any consolation since departing my share tips and performance have been somewhat mediocre.
I'm actually in REV Bars at 3.1p so slightly underwater and noticed your UAE man is in there as well. At the moment he seems to be sat on a loss but it could all change.
Regards to all SAGA posters past and present.
Mr 10 million is not doing so well is he? Look at Drahi and BT, just because someone with loads of money buys some shares doesn’t mean it’s a good investment. I sold a quarter of mine at 1.60 and just wish it had been more. I have reinvested now, but it could be a big mistake.
Billzo
Exactly. The trading statement does make an oblique reference to short term reduction in insurance due to rebalancing that business. It seems that this might be understated and some private investors have seen the update as purely positive. I think the update should have been clearer on this issue.
The fall is because insurance is a disaster, no secret, it’s been reported every time there’s been an update. I can’t see how there won’t be another write and I’d 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 margins……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 don’t know is what the JV type plans are for cruising. But with so many questions I think the price action is understandable.
What’s 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 £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 !
I’ve 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 £4+ range but since then mostly volatility!
I’m 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.