Member Info for Banburyboy

Gordon i have posted the extract from the TU three times last was 9.16 on June 30th. Exact lift is in there
Tu clearly says cruise had a small cash surplus in the period meaning all burn is Tour. Could not be clearer.

Beach we are saying the same thing . I still chuckle at Millionares post with city mates backing that travel would drive a fourfold increase in share price. No it wont only the sale of Tour will enhance our prospects. They cant sell it as they would need to quantify how much customer money they have spent and give that to the buyer to fund future holidays and they aint got it.

Beach why this continues is a lot of customer back in March 20 rebooked for early this year 2021. They are not included on the £100M we have allready shelled out. Customer retention on Tour is a double edged sword. Why do we need £80m for corporate purposes its to pay back the custmers that rebooked. We need a clear statement on how much more liability Tour has. Only when we have that can we determine what the companies true prospects are. Unfortunately im much moor downbeat

Beach a good point and the only crumb of comfort i can take. Its less accounting reasons more corporation tax.
Cruise is in the tonnage tax regime so out of scope of corporation tax. This means losses cant be carried forward really bad news but could not have been forseen. Its beneficial to have losses in Tour where they can be carried forward. But working in the public sector and having intimate knowledge of hmrc what you can get away with needs an evidential base and needs rooting in reality. Maybe £0,5m a month might fit that bill. Not even Donald Trump would shift £7m from cruise to Tour or would he :)

Beach
1 There trading update says Tour is burning £7m a month i have not made it up Feb -May 21
2 They annouced a year ago they were ring fencing tour receipts. Until the they were spending on receipt and had to pay for an Abta bond. The accounts are really clear we are paying back £100m + of deposits we have blown. Works ok until you have a pandemic but then you are screwed.
I had thought perhaps we had reached the end but burn Feb - May indicates some customers had paid eighteen months in advance or rebooked so the haemorrhaging of cash goes on and on.
Sorry i know you have expert knowledge of the business but Saga 2017- 19 was kept afloat by spending customers holiday money when we received it rather than when they had the holiday.

No tours for a year is cash burn of £84m. Recent raise £80m for corporate purposes . Join the dot ! Joking to a degree but £7m a month ! To give some context thats two thousand three hundred travel agents on 36k each a year. See why im so concerned ?

Much higher volume today than any other since recent decline and buys much higher than sells.
Only thing i can think off is other Tour operators are furloughted and dont burn £7m a month. That number is eyewatering compared to the buttons it adds to the bottom line. We need a clear statement on what the burn is , how much relates to the hand in the till sorry accounting issues with customer deposits (£100m) and counting and how much is running costs which should have been furloughed. Tour is a mess and despite being a broken record no one has posted a semblance of a case for the defence. We are all lulled into a false sense of security by insurance and to a degree cruise. Tour might only be a small part of profit but it is so high risk and eats so much cash that it drags the rest of a good business down.

Charles - they started sailing with one of the two ships a few days back others here posted.
From the accounts the cruise business segment is just the two cruise ships. Everything else is defined as Tour.

Trading Update - Period 1st February - 31st May

“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.”

“Cruise cash flows are modestly positive for the year to date as a result of the collection of final balances on June and July departures.”

31st January 2021 - Accounts year to 31st Jan 2021

“During the year, the Group provided an additional £64.1m of cash to the Tour
Operations business to cover trading cash flows, £46.0m of which was provided in the first half of the year when the business
experienced higher cash outflows for customer refunds and overheads.”
During the year, the Cruise business reported a net cash outflow of £36.6m, of which £30.7m related to the first half and £5.9m
related to the second half. The Group paid £25.7m of trading costs, refunded £8.1m of advance customer receipts, paid
restructuring costs of £3.2m and interest costs of £8.6m.

Lots more disclosure on where the cash goes on cruise.
How have we burnt £30m on Tour in the first four months to 31st May 2021 when it had ramped down to £14m in the second half year year to 31st Jan 21.

High take up to be expected really free money existing bond holders swapping 3.375% interest for 5.5% interest in the same company with the same risk. Wonder how much that advice cost ?
Still dont get this transaction the old bonds were not due until May 24 and the new bonds only buy us 24 months to May 26 at a high incremental price . Why not wait ? Why not have the new bonds for longer as it creates a cliff edge in terms of May 24 and May 26
I know others on here see this as "genius" and great management . I will give credit where it is due - tonnage tax regime for cruise / three year fixes , valuation of insurance , savings from divesting estate as examples - but something not quite right with this transaction.
The rose tinted on this board will see this as prudent, precautionary, good management. I'm really fearfull of a sting in the tail on Tour. No one answers the question of why Tour is burning £7-9m a month Feb - May. Hansgreaves in the fool quotes cash burn as failing that's not what the TU says it's risen.
Until the company makes a full statement on what the maximum future liability is on Tour receipts that they have pi***d away in earlier years we wont know the full facts. Pay attention to the cash flow statements in the accounts - they have already used £100m plus inaproriatly and the TU on burn in Tour indicates this issues has not ended and is still costing us. They cant really say that so we dress it up as needing cash for corporate purposes.
I am positive on Saga but just want a bit more disclosure on what the situation with Tour is. as its clearly in trouble.

A fair point Gordon. it is complex and they can buy the old bonds at a discount so the old bonds closed at £98.69 today they have been as low as £90 They are on the german market . Presumably they wont buy unless it makes sense and there is a discount.
The £10m fees paid for the right issue made me weep it is criminal and god forbid what this effort will cost.

In short this whole exercise is two thirds £170m refinancing - i can live with that. One third £80m a capital raise. Its the lack of detail on the £80m i have a problem with and the company describing it as for "corporate purposes" should worry all of us. Its RNS code for we dont want to tell you.

Gordon - there are probably savings on the term loan from the bank which will be higher than 5.5% but we dont know the rate. Anything above 9% and interest is the same on both arrangments
I would frame your question diferently why replace a loan that matures in three years at 3.3% with one that matures in five years with 5.5%. interest ?
Answer they needed cash the £80m quick . Question - why ?
Precautionary ? (they have £80m already in cash) or something more sinister ?

Sage
I did research before i posted - recent five year issues WH Smith 1.625%, Sage 1.6% whitbread 2.77%. Its at the higher end of the scale for recent issues . When it had all its accounting worries Tesco would have paid a high price - much lower now i suspect .
My beef is not so much the rate but lack of detail on what the plan is for the £80m to be used on - sonething not right if tour is burning £7-9m a month ((Feb to May 21 ) . Cruise burns nothing in the period. Company information in their trading update .
Really hope i am wrong

Charles - no positive i am afraid. If the company does well the risk rate will lower and the price of the 5.5 per cent bonds will trade at a premium to the £250m issue. We will have to pay more than £250m to redeem.
They may well refinance and if its a straight swap all well and good.
What i dont like here is the rate we are paying, and the fact they need £80m for corporate purposes , and we have £400m of bond due within two years of each other.
What we don't know is what the £80m for. You guys think its precautionary. I'm less sure and i think Tour may have more issues

SoH - Yes expensive - but represents the risk attached to the company high debt and low margins and volitility on travel.
Medium term they are storing up problems last week we had a £250m bond repayable in May 24. This week we have £150m repayable in May 24 and £250m in July 26.
Repaying / refinancing that will be very difficult.
Unlike others i am pretty downhearted by this financing exercise and fear it is more than precautionary - Tour has even more issues the fact its burning £7-9m a month should seriously worry shareholders.
The share price will go up on sentiment and a cracking insurance business - but any doubts i had about exiting around £6.50 - £7 are gone.

Thanks Culco
Its on my bucket list to meet as many long termers as I can at the to be determined (£7 ?) party. i think it would be brilliant. Hard to find a venue to suit all but we are heavily in the North East and Yorks so i had thought meet York station and decamp to nearby pub ?. Maybe even travel down from Newcastle together !
This has been one hell of a ride and we have all spoken for ages now.
Anyone know of any similer LSE meeting / party ? Anyone been to one ? And have any feedback ?
Stage one is who is in and up for it ? Views on York or better alternatives ?What price triggers the party.
Happy to co-ordinate responses so we can firm up on numbers, venue and party price.
Banbury

Sold a few around 400 of the 14,000 or so i hold . Bit scary being all in on one share.
Might sell a few but my exit is circa £7, which i do think is possible short term if travel resumes uninterupted.
After that keen on diversifying !! Think IMB has a great dividend and is cash generative, still value capital gains and DIv 's in house builders, and quite like Lloyds which has a huge capital buffer and i think will late next year pay 5p dividends. an 11% yield on todays price. Keep also looking at MEARS facitliies management on housing - there cash position is very strong - just working through the business model. Hopefully build a nice little portfolio to supplement various pensions and it will all be courtesy of Saga.
In case we forget at the current price RDH is £70m up on his £100m investment - nice work.

Remember Banbury's story .
80k down on AIM over a few year - that's a casino . Do or die / boom or bust on the last 20k - all of into Saga lowest price £1.27 but pretty low (£1.50) average. £7 and I'm back level.
Reseached this one to death and fair value £7-9. I think Sheltie is bang on this has £6 written all over it this year. Sell Tour or give it away and we will hit £8 this calander year.
Beach £8 party the beers are on me :)

£5 = £700m market cap must be close to the fTSE 250.
That would then give it another leg as trackers join in .
Someone apologies did some research and I cant remember the number anyone remember.