Member Info for Banburyboy

25% Corporation tax April 23 not 25 - apologies

Zccax77
Whilst i am sure my number £120m is right and the questions i am asking on tour's long term future should be hugely relevant to shareholders . Two important caveats in Tour cash use.
1 The cash use of £120m is a mix of pure burn paying staff to do admin and re-imbursing customers for their holiday deposits that the company has spend in earlier years. With the rights and fund raise this practice stopped and all receipts are now ring fenced (previously covered by an ABTA bond when we were spending it). The company has never really offered a split of the two parts and seems for reasons you would understand to want to say as little as possible on the issue of spending deposits . I had hoped that these had worked their was through and we were drawing a close after FY21 but the £7-9m a month TOUR burn in the trading update Feb - May 21 indicates thats not the case. So i would concur "proper" burn is less but how much less is guesswork as I 've has been through the accounts with a toothcomb
2 . Cruise opted into something called the UK Tonnage tax regime. With corporation tax rising from 19% to 25% in April 25 this is important. The election to be in the regeime is for 10 years and based on our ships tonnage the tax is fixed at a really small figure (i did the workings and its a couple of 100k a year). Massively smart move in ordinary times but in a pandemic it means cruise losses are not allowable to carry forward against future insurance profits. So for FY Jan 21 there is an incentive to push as many losses as they can through Tour. They have to operate by the book so sharp practices wont be allowed. As cruise takes off and the new 25% CT regime kicks in the reverse is true for future years and it pays to ascribe as many "shared" overheads to cruise as possible. I'm not in need of a job but Saga will have a clever tax accountant who will help them navigate this.

I hope this provides a little bit more context on why the figures are what they are and some of the underlying dynamics at play.
As well as expecting exception cruise booking and a 40% hike in insurance PBT probably as important is a feel for have the legacy issues on spending cruise deposits worked through ?
If they have fantastic a quick fire sale of Tour and this company has £7-8 written all over it
BB

Baysil informative and interesting post. Thanks gives me loads of confidence we reach an agreement and draw a line under this.

As at 30th August 20,958 capacity on cruises and 6,787 left so we are at 67.5% capacity.
This is split Q1 74.3% Q2 81.1% Q3 70.2% and Q4 44.4% - average 67.5% at the end of August 21 .
To give some context
- 14th June trading update 48%
- 19th Sept 2019 interims 50% we are way ahead of this with three weeks to go
- 28th January finals RNS 76% bearing down on this with five months to go
In the month we shifted 858 cabins
The main movers had a theme - 20th April Fjords 49 cabins , 19th sept Fjords 42 cabins, 10th September Ireland 47 cabins , 28th August Ireland 37 cabins . 8th July Ireland 37 cabins and 6th Jan Caneries 37 cabins.
The Ireland one I find suprising.
I think these figures are outstanding and i'm hoping along with a 40% hike in PBT on Insurance (in line with peer reporting) will give the shares a significant lift off when we have the interim announced.
Defiinate hold for me with the prospect of a bounce after the interims

Zccax 77 with the greatest of respect to you why do we need a proxy for cashflow when the company is explicity reporting it. Proxy's are what we use when the information is not reported.

“During the year, the Group provided an additional £64.1m of cash to the Tour Operations business to cover trading cash flows” Annual accounts page 38

Through the first four months of the year, the focus has been on ensuring the safe restart of the Travel business, while keeping costs and subsequent cash burn to a minimum. The monthly cash burn for the four months to 31 May 2021 was at the lower end of our previous guidance of £7m-£9m per month. 14th June trading update

Cruise cash flows are modestly positive for the year to date as a result of the collection of final balances on June and July departure 14th June trading update

Year end Sept 30 and looks like an update early October.
Interims were really good £1.637bn operating profit (£0.4bn exceptionals) and $3bn reduction in debt.
Also at interims they suggested they would meet there full year targets fairly comfortably.
Dividend savings are circa £900m per annum and should enable further reduction in debt and still pay 9%.
I'm hoping for a 50% return on this one over three years three 10% dividends and 20% capital growth to £18.36.
Ambitious certainly but not out of range and mad.
On the downside i see the dividend as safe so staying still would be £11.30 in three years.
I really see some upside here for any new investor and no offence meant to those with higher averages.

I was dreaming should have read underlying loss before tax -- not profit

Zccax77
Page 36 is a different metric the £36.9m is an underlying profit before tax - that was cushioned by normal trading pre covid in Jan Feb and most of March 2020.

Cash burn / usage is a different measure and arguabily a better one and their is no hiding place for clever accountants .
I did source my information from the provisional accounts and have not read these however if you scroll down to page 38 about half way down the Para begining" For Tour Operations..." it confirms a cash burn of £64.1m
The other figures are in the 2020 accounts and the figures to May 21 (£7-9m a month) are in the last trading update.
Pretty confident my figures are correct.
I hope that clarifies
Banbury

Tour which is non cruise holidays represents 80% of pre covid turnover. For y/e Jan 19 combined turnover (Cruise and Tour) was £457m and profit £17m circa 3%. For Jan 2020 turnover was £464m and PBT £1m no margin. Not explicitly split in the accounts but the assumption is Cruise makes a small profit and Tour is loss making. Pre covid Titan was also up for sale. Covid arrives :
- Auditors value goodwill on travel as zero in 2020 accounts .
- Destinology is sold for a notional £1 after costing £20m and on preferential terms to buyer - significant net assets and a £12m loss to Saga
- The accounts for 2021 specifically show £64.1m cash burn on Tour (cruise is half this). We take no furlough and pay the staff !!. The recent TU is really clear 4 months to May 21 - cash burn on TOUR is £7-9m a MONTH. Capitals as its hard to believe. Cruise is moderately cash positive as the revenues for June and July 21 are booked in May .
- So up to May 21 the cost of Tour being idle is £64.1m plus say £32m mid point in TU add three more months say £24m. Cost to company £120m and counting. With no prospect of restaring.
So why get rid of Destinology and not Titan ? To me they are two parts of the same coin.
Hindsight is a great thing but furloughing the business would have saved cash and massively increased our options around the strategic future of the business .
Recovering the £120m and counting is near impossible on the wafer thin margins that the business makes historically.
I would still suggest and would not be suprised to see a Detinology type deal with Titan and still think thats why its got a new MD. I just really hope i am right.
No Tour with all it problems even in good times - Iceland volcano / Thomas Cook repratriation massively derisks the company and it wouls be £6 within a heatbeat. The only significant insurance risk is the FCA review of the market. For Saga a lot depends on the three year fix is it restrictive. I think the answer is a clear no - the review is targeting customer inertia and increasing premiums year on year for customers who just renew with no consideration or thought. I think the fix is a solution to that problem rather than a contribution to.
Many have heard these comments before but really just something for my cheery friend BobF1 to get his teeth into. Hopefully it clears the "hurdle" of gossip even if it is the same old Banbury broken record :)

Guys good posts.
See it done it. I'm a new investor at modest amounts £5k just before the last div. Seriously thinking of adding more with price at historic lows and a dividend that looks safe.
You clearly know the company . What's your view on the current price to a new investor ? And what do you see as main risks ? Many thanks

Saterday times listed it as one of top ten most attractive takeover targets for huge cash generation.

Baysil good post lots of permutations buts that's my line of thinking as well compromise as they can't pay what they don't have. Too risky to play hardball.

It's my Money.
If you are right and that's the legal advice and the risks of failure are minimal then the company will and should take that action you describe.
I can't see anything other than a negotiated settlement for something lower than the court order. In short holding out is not simple and success is not guaranteed.
Hopefully we will know soon.

Company will assess the risk a bird in the hand now ( $1.2bn) or the promise of we will go to the ball and ($1.7bn) by rejecting a settlement. I think they will conclude going to the ball is too risky and we may end up with no clothing and take a bird in the hand.

It's my money
I am sure the company board advisors and major shareholders will act in Cairns best interest.
Interesting to see if that's as Baysil and I suggest or you and EC.
Hopefully not long now.

Baysil definitely agree five to one on we settle and dont drag this out. I think interest and legal fees have little chance of being offered. Best we can hope for over and above the principle settlement is some preferential treatment . I for one would welcome Cairn being back in India. Lightening may strike twice but not here IMO

Bob your dont sound very cheery .
Perhaps you could but the board on the right track with some incisive comments on insurance solvency ratios or retention rates. Or the impact of Saga of opting into the tonnage tax regime for corporation tax. Or some update on latest Tour and Travel bookings ? Its generally an informative board but nothing to stop you starting the ball rolling on an area that interests you and others I am sure will contribute.

The pouch is £15 on Amazon. This old saddo is easily pleased and quite chuffed.

Just received a posh and expensive looking Faraday pouch from Saga with their logo on. Im insured with them. They must know my car is keyless and are saying the latest theft is for someone to put a device against my wall to boost the fob signal from key in house and relay to the car. The metallic pouch stops that as does keeping the fob away from walls and doors.
Very nice touch I think.
Similar to the cruise chauffeur buying the coffee

Despite Telegraph and Times the number of spaces on Baltics 29th August and Croatia 2nd September has risen 167 cabins on the Baltic and 96 Croatia.
Slightly nervous with how this reconciles with the news on cruises generally doing very well.