Member Info for alwayswrong

Rxdav..that is exactly what I thought when I heard it but I read somewhere there is maths behind it.. just like the golden ratio scenario if you have heard of that.. But yes time will tell

Ignore the headlines... They are invariably for "front page of the Sun" readers... Look at the notes to the accounts... You will all have read about the impact of Monarch and the £2 million loss... But did you know about the sale of Allied Health Care in 2016 for a fee of £7million..? Well that money was never received and was written off this year and it wasn't even mentioned.. There is a further dispute of a similar amount on the contractual arrangements with the new boat which hasn't been mentioned. Bottom line is go straight to profit after tax which doesn't lie or allow you to manipulate it ... It was £20 million lower this year than it was last year or in other words about 2 pence per share less.. However the dividend actually went up by 0.5 pence per share.. Furthermore there has been a separate profit warning for next year. Increasing the dividend therefore seems at the very least to be an imprudent decision of the board.. Yes I do recognise the cash generative nature of the business but if you now overlay that with the £600 million of new debt being taken on for the two boats and the word reckless comes to mind. I think the new chairman will be kept very busy.

Arsenal58 I have made a couple of previous posts about the flawed strategy of expanding the cruise part of the business. Rather strange then that you echo me and then say I don't know what I am talking about. Well listen up and you can echo me again in a few weeks... In a hidden part of the accounts is the capital cost of the boats.. £583 million repayable over 12 years at 4 per cent interest. Or in other words about £1 million per WEEK... The cruise business currently makes £6 million profit PER YEAR!! but LB says this will grow five fold by 2022...which will mean maybe £30 million per year How will £30million per year service £600 million of new debt? Its like buying a £600,000 house whilst earning a salary of £30,000 a year. .. How did that get through the Board... To me those two new boats are huge white Elephants... Although I now know they are neither.. They are actually both 'spirits' ... And they even have names... One is called Discovery and the other is called Adventure.....Well I think one day the spirits of Discovery and Adventure will come back to haunt the shareholders. Saga isn't a buy and hold forever share its a share you trade on the ups and downs.

Rxdav... Well yes I do have balls but no they are not made from crystal.. It is though a strange phenomenon that the stock markets decline markedly in years ending in an 8...Think back to 2008.. But also 1998 too. One was also due in 1988 but the big bang in the city and the first generation of computer generated algorithms brought the crash on a few months earlier in October 1987. If you note the stock market has been in decline already this year.from the high of 7778.. so whilst I am mindful that history doesn't repeat itself exactly.. It often does rhyme. My guess and it is a guess is that it will hit 6200s and then resume the bull trend. Make your own mind up and act accordingly. I have.

I agree that it may go up prior to ex divi date but bearing in mind price yesterday was £1.17 then divi already factored into price. My reason for believing it will fall to £1.10 is not due to fundamentals of Saga but to wider fall in ftse of a further 15 per cent which will take Saga down with it as a falling tide lowers all boats in the harbour. If you look carefully you will note that prior to the year end results Saga had tracked the wider ftse 250 for the whole of 2018.. This looks likely to continue..

At £1. 28..is my suggestion .You will be able to get back in around £1.10 when ftse 250 reaches its lowest level later this year.. Saga will track the fall... Yes you will miss the final dividend of 6p but buy back shares at around 18p cheaper Do your own research..

Well it moved up against a fall in the overall market so that's a good thing.. What has happened previously though is that individuals and/or institutions wishing to sell have done so into the rise for whatever reason.. either reducing long positions or selling in the hope that the price reduces further and then buying back at a lower level. Whilst I welcome the rise I am not too positive in the short term as the trajectory is still downward and the ftse will in my view fall another 10 per cent or so before resuming its upward path and Sagas share price will have to swim against this downward market momentum just to tread water. A positive update on the 12th would be welcomed.

.. Oh and not to mention of course how to alienate all of your staff from top to bottom with one condescending remark to make yourself look superior.

Rxdav.. Very good point.. To be honest I would rather he remain silent as every time he speaks he put his foot in it.. I worked for several CEOs like that and they were a nightmare. He can't resist the limelight though and spouting off to the media.. I read one article he wrote where he spoke of being surprised as how slow the insurance industry was to change. Well it isn't slow.. It already has a business model in existence which has been profitable for centuries..

Don't think there is always necessarily a thoroughly researched and costed out business case for growth.. I was divisional FD for a few FTSE companies over a 20 year period and I lost count of the number of crass expansion ideas I fought against. In this instance it might be nothing more than LB an ex naval man having a liking for big boats and getting a lackey to write a business case supporting it.

Thanks Morrisey for that slightly different insight and yes I agree with your sentiment of branching out into a related activity which cant be easily replicated online... I just wouldn't choose one with such high capital outlay paid back with such low margins.. Too much risk for not enough reward..

Sorry as you can see the board has misalligned the columns which is annoying so I will try and show it a different way. Insurance had income of �415 million and profits of �215 million which gives a 52 % margin Travel had income of �432 million but profits of only �15 million which only gives a 3 % margin I know which side of the business I would be trying to grow.

JI5006 - My opinion was based on the segmental analysis shown on page 33 of their last annual report and again on page 124. I have reproduced an extract of the table below Revenue Profit Margin (�M) (�) ( % ) Insurance 410 215 52 Travel 432 15 3 Half of Sagas revenue which was insurance has a 52 % margin and the other half being travel generated just a 3 % margin. The accounts also reveal that the travel side which only accounts for 6 % of total profits consumes ONE THIRD of the internal selling and administration resources. You and they think this is a good idea and are buying more ships. I think its flawed but time will tell.

Thanks JI5006 for your more substantive post. OK put simply the switch from cruise broker to cruise provider is high risk.. Competitor reaction could result in Saga making losses rather than profits which would wipe out profit from broking side plus extra debt to purchase ships and what to do with them if the venture fails.

Well I take your point Mulder but I think LB isnt concerned about the share price because he doesn't think it will affect his job or remuneration package either way... A bit like the current PM not being concerned about the 4 million children in poverty because (thanks to the Daily Mail and other papers positive spin) it won't stop her getting back into number 10. The Crest Nicholson Board behaved similarly with regard to their lack of growth forecasts and the institutional shareholders responded by refusing to approve the Board menbers remuneration packages and that brought a different tone of voice from the Board . This is what Saga needs.

Rxdav... A very good observation re my debt remark.. and I must confess that aspect still isn't clear in my mind. My earlier comment was my genuine first impression and to a degree still holds. In my second post though I was drawing attention to how the city might see it... Debt representing 3 years net profits assuming no further dividend in that time and rising due to purchase of the ships with profits declining from insurance based on the latest trading update. Time will tell. Seedy.. If it was so simple to make profits from Cruises everyone including Richard Branson would be in it.. The reality is that its a difficult industry to operate in due to high entry and exit costs along with high and fixed operating costs . Accordingly the industry is now dominated by 3 players Carnival, Royal Caribbean and NCL Norwegian Getaway who between them have 80 per cent of the market. For Saga to succeed it has to steal some of their market share and to think they won't react in some way is naive.. Saga can only operate some routes due to its size and capacity so the major players if they wanted to could take out Saga by undercutting their prices on those routes considerably. Furthermore the market for European and American tourists isn't growing considerably. Of course that wouldn't stop Saga from exploiting the newest market on the horizon which is China and offer cruises to the Chinese in their native language because within a generation there will be more Chinese cruise customers than all other nations put together. That may be a more credible growth strategy but the earlier comments re competition still remain. JI 5006 - Your remark brought a smile but not much else to the table. I still think the share price will recover because there was an overreaction from the market but the ftse is in my view undergoing 20 per cent correction and a falling tide lowers all boats

You are probably aware that the auto pilot of a plane can get it to its correct destination without pilot intervention but I was somewhat surprised to discover that 97 per cent of the time it was actually travelling in the wrong direction. Its because it keeps automatically correcting itself and then correcting itself too far and heading in wrong direction the other way and repeating the cycle but to the traveller it still feels a smooth ride. A share price has similarities to this although the ride feels anything but smooth. But 90 per cent of the time its priced wrong for its fundamentals.. Sometimes over priced and other times underpriced and sometimes like now to extremes. So why is it underpriced now? It's because the Board and LB in particular over promised and under delivered on its forecasts of performance and the city lost confidence in them. When he then went on to say that he concentrates on running the company and leaves the share price for the city to determine they lost All confidence in him and to be honest so did I as that was a politically naive and crass remark. Fundamentally though a complete shift had taken place on the future performance of the share. Previously the City had priced the share as a growth share with growing earnings and the growing share price reflected this.. The admission in the last trading update however suggested it had now become a company where future earnings were in decline due to exiting the underwriting side of the business which was hugely profitable and expanding the broking side where increasing competition was squeezing margins. This is further exacerbated by the scale of debt and blind future investments in expanding the cruising side of the business which is notoriously competitive. In short it has surrendered its competitive advantage by making wrong strategic direction decisions and today's share price is an extreme reaction to those decisions. Mix that in with a generic decline in the overall Ftse and we have what we have . I predict an eventual fall in the FTSE of up to a further 15 per cent during 2018 and a corresponding fall of Saga share price to maybe 90 to 95 pence. The FTSE and in turn the Saga Share price will recover and go past its new fair share price but patience will be required. What will be needed is a positive update which is credible and subsequent delivery. If I was the incoming chairman I would sell the cruising side of the business and allow the insurance side to be taken over by maybe one of the larger insurance underwriters who could derive greater value and this would also secure the best possible value for today's shareholders. As usual though DYOR.

Hello everyone. I am new on here but I invested a significant sum in Saga and I am with you all in waiting for the turnaround in fortunes My ex boss was ex RN and flew helicopters in the Falklands campaign. He got to be a Commodore which is one rank below Rear Admiral. Lance Batchelor reminds me of him and I am not surprised he is ex RN. He is likely to be Benevolent dictator whose concept of achieving consensus will be getting agreement on how to carry out HIS orders. My ex boss knew nothing about business but had an unshakeable self belief and still held on to his rank in civilian life and spent all day on interviews and seminars and didn't get around to doing any work.. I did it all. I was responsible for Finance, It, procurement, fundraising and HR. He was responsible for me and reception. In my view the decision to expand into buying cruise ships is fundamentally flawed. Lots of capital investment for little return.. As a company though Saga isn't too heavy in debt and cash positive even after dividends so hoping for that bounce a bit of good news and an exit. Good luck everyone.