Member Info for Banburyboy

I think a 2% reduction in revenues (from TU ) against a 14% drop in premiums is very good.
Below is from Direct line May TU and they think a 5% reduction is good
"Against this backdrop, we maintained our disciplined underwriting and our 5% reduction in average premium versus Q1 2020 was less than the market reduction".
We subsequently know the market reduction is 14% based on average premiums paid.
Keep an eye on other Insurance Company updates. I think the market will wake up to this over the next few days and impact the SP.
I think the insurance results are cracking and very much enabled by what I have said from day 1 is genius the three year fix.

Lance did not get a lot right but he got this right !! In terms of sucess factors echo's of Boris re getting the vaccination right but not much else. (Saw an interview with Max Hasting's BJ's boss at the standard who said he's a chancer who won a spectacular punt )

On the £6-8m v's £7-9m I spend my working life on finance governace issues and the issue is less whether its a good number but the company communication of the revised guidance which no one saw. A minor matter but important to sad gits like me

Millionare I asked the same question re £6-8m becoming £7-9m.
I think an educated guess rereading the Jan 2021 YU the guidance related to FY21.
I guess new guidance £7-9m must be buried very deeply in the accounts somewhere.

Guys like you I want good news and whilst I like the cash position. How about

A 2% decline in insurance sales but we know average premiums are down 14% for the same period last year. In that context this is an excellent result.

Not sure on this - no bad news but not outstanding but very OK !!

Best news was this
Group held available cash balances of £78m, excluding £23m within the Saga Tour CAA ring fenced group, in addition to an undrawn £100m revolving credit facility (RCF). This is slightly above the level at 31 January 2021 largely due to Retail Broking trading EBITDA and positive working capital movements.

Slightly I think is £3m above from later comments. With cash burn on cruise / tour at lower end of £7-9m this means insurance was £30m + cash accreciative in the period that's very good.

Anyone know where new guidance of £7-9m came from. I though they were at the lower end of £6-8m when they last updated.

Accipiter
One to watch out for is cash.

In five months to 31st December 20 (adjusted for no recurring disposals) they burnt £9m. With available cash of £51m at 31st Dec.

The accounts 31st Jan had available cash of £75m (£167m less restrictions).

I wondered about the jump but companies normally settle up before the year. I had thought anything above £51m in the TU which removes the impact of year end settlements would be excellent as it means cash burn is a net nil.

Expecting:

- Update on cruise forward bookings which should be good
- Update on covid dividend from lower claims and prior year releases.
- Accepter I think they are competing on price but as mentioned many times the fix is a game changer. I got the three-year fix deal last month at £250 really competitive lowest price comparison was £180. So margins may be flat but expecting policy growth.

I really can’t see bad news and am sticking with my £4.44 guess for close Monday. I am the only person in that sweep froma a week back so at the moment win!!

Beach – good find. I did wonder if the new appointment was Doffus Winchmore! as he has clearly gone somewhere! I really hope you are right on tour and the company will know far more than me BUT. the margins are wafer thin and the risks high so I only hope they address that. In my experience a new appointment could be as much preparing it for disposal or restructuring. Time will tell. In its current form Tour is a dead weight

Rogue I’m saving the top pub recommendations in Northumberland until you wake up and visit. That said a £4.44 close on Monday and the sherbets are on me.

Olmsey. It does feel that way.
I keep looking at British bulls and they seem to call it more often than not.
The fly in the ointment is Mondays Trading update - which could provide another leg up or reassurance or cause it to drop.
I do think the chances of the later are remote and i'm hoping with TU and sailing in June we have left £400 behind.

Are you all hiding behind the Sofa like me

Very quiet on here !!
British Bulls issued a buy recommendation yesterday and £3.96 to sell as I type. Lets hope we maintain momentum into Trading update on 14th June and that update is good ?
Sweeps on price close on 14th June ? I'm going £4.44

Sum you are exactly right. Last year the FCA did something similar in the authorised current account overdraft market. Now all customers pay circa 40% APR for an approved overdraft irrespective of status with few exceptions. Previously it was risk assessed with the privileged few paying very low rates and the financially fickle really onerous rates. We all now pay 40% with that rate selected to be fair to all and protect banking margins. The issue becomes when people like me who were content to be overdrawn for a very short while at 7% pass at the new rate of 40%. If enough of us pass margins get shot and the rate goes up from 40%

Selecta6 welcome to the Board. I’m not convinced the three-year fix can be characterised as sharp practices. It caters for the need of those that don’t like switching and in effect a fix achieves the aim that the FCA are striving for no increase in premiums for loyal customers. I take you point on risk but it is no different to the fixed rate mortgage market but I agree at the end of the term you would expect the subsequent three year fix to pass on lower risk and be lower price. For those that don’t want to switch, are happy to pay a little extra and value the quality customer service the fix is quite good and a premium market offer.

Below are how the benefits as outlined by the Independent newspaper.

“This includes uninsured driver cover, as well as onward taxi travel – so if you’re in an accident in the UK that leaves your car unable to be driven, we'll offer to arrange a taxi to any UK destination.
Accidental healthcare is also included, with eligible private medical treatment for up to £1million if you or your spouse or partner are injured in a road traffic accident.
There’s also legal protection, which can help you recover uninsured losses for up to £100,000 after a non-fault accident if the legal team believes you can win your case (such as loss of earnings after an accident that's not your fault), plus you’ll get protected No Claims Discount (NCD) against two fault claims within a three-year period as long as you have four or more years of NCD”.

The three year fix in my opinion is well under the FCA radar and a solid case for the defence could be made.
I don't recollect Saga getting into trouble on the last FCA review. Can you tell me any more ?

A few develpoments where i thiink Saga is well placed.
New rules on whiplash from today. Expected to reduce clais by £1bn per annum and premiums by £35 on average.
Money supermarket index of premium prices fasted ever drop quarter 1 of 2021 compared to same period 2020. £73 cheaper with average now £417 lowest since records started. Over 65s have lowest fall 6% to £258.

With 60% of the book fixed Saga should benefit from not handing back whiplash bonus, lower claims having to compete at renewal time.
Have a nice bank holiday all.

Accipter - it is genius on Batchelor's (previous CEO's part) . Terms and conditions

"Why might your price change
• You make a claim
• You get a driving conviction
• Insurance Premium Tax increases
• You make any other changes to your insurance, such as changing your car.
Towards the end of your year’s insurance, we’ll send you a renewal invitation with the price for your next year’s policy. If nothing has changed, the price will be the same as last year.
Can I leave during the three years?
Of course! Your price may be fixed for three years, but you’re not tied in. It’s completely up to you if you choose to leave when your insurance runs out at the end of each 12-month term. If you wish to cancel your policy at any other time, you can but there’ll be cancellation fees to pay."

Basically drive safely don't make a claim don't upgrade your car and you pay the same. By stealth we weed out the more risky customers and squeeze the maximum out of the ones we want. Genius and bodes well for future insurance margins.

All the more help in bailing out tour :)

• Interesting announcement this morning from FCA that they are coming down hard on price walking – loyal customers for car and house insurance paying more each renewal. Saga I think has played a blinder a three-year fix is about as close as I think you can get to price walking without crossing the red line. Finals had 596k of fixed policies and 60% of the total. I’m think less impact on us and a major impact on others

• RDH fair point what are management seeing in Tour that Banbury is not. My case for the defence is management sold Destinology for a nominal £1 last year after paying £20m for it and incurred a £10m plus exceptional on its disposal. They also had Titan up for sale pre pandemic. Maybe disinvesting tour is management strategy. I always try to be objective so positives on Tour. Dofus a marketing / PR man (where has he gone?) would I am sure sight cross sales with other business particularly travel insurance. As a numbers man it clearly pays on the tonnage tax regime to push profits into cruise as incrementally cruise has nil corporation tax. Possibility shared overheads are “unfairly” skewed toward Tour for tax reasons contributing to wafer thin margins. Neither feels compelling as a logic to support it and still feel Tour is (and will continue to be) in a post pandemic world a problem and drag on the SP.

• Slow and Steady – Barney Curley / John McCrickick / Luke Harvey interview is absolute world class. You don’t need to know the first thing about racing but what a battering Barney gave both of them. Not seen it before and wow showed the better half and she was wide eyed.

Thaknks both sounds interesting.
Complete guess but the amount suggests institutional holding given the small Pi float !!!
I feel i want to now say something earth shatttering but out of my depth knowledge wise . So £6.80 takeover bid tommorrow ( for whole company excluding tour :))

Gordon is it £3m or 3m shares ?. Sorry dont have access.
Also to the lay person what is an uncrossing trade. I have heard the term but dont know its significance.

Marcus welcome back. £8 is top end of my range. Sell for a nominal sum or give away tour and in my opinion it would hit £6 within a week. Agree we wont go bust. Insurance stable, cruise lower risk greater opportunity by the day. Tour in contrast wafer thin margins, large accumulated losses high risk and very low returns. I see little prospect of tour in pertuity acting as a dead weight on the company. Sorry if this is not what others want to hear but no one has ever made a defence case for tour. Is there one ?

Slowsteady 400% overstates. If it wad ever 9p in old money you were diluted unless you took up the rights at 12p. Ive done maths and bit of luc closer. Off topic i remember barney curley. Do you remember Flockton Grey !! They used paint to disguise i think a 4year old as a 2 year old. Give away was it won by 20 lengths over 5 furlongs. Rumour at the time was Barney but never proven

In normal times at 80% capacity and £234 per person per night, The two ships make about £55m a year between them. If things go well £70m is not impossible. £45m loans need repaying so its £10 - £25m cash flow advantage.
Corporation tax will be levied at 25% from 2023 so effective payment of £2.5m to £6.25m assuming repayments get releif.
Saga has put both ships in the tonnage tax regime at 58, 250 tons each ship pays £141 per day so corporation tax liability capped at a paultry 102k per year on cruise.
River cruises are outside of the scope of the scheme
Unfortunatley an unintended consequence of the tonnage regime is cruise losses from the pandemic cannot be offset against profits on the wider business e.g insurance. I am sure the clever accountants at Saga will attribute as much of the cruise loss as they can to tour / river but how much!!
Why I like this is it shows what was a no brainer before the pandemic opting into the tonnage scheme can have unforeseen consequences when facing the unknown .
Back to the asylum for me

Hi Waterloo welocome Couple of Carnival differences

In normal times 80% o SAGA profit comes from home and motor insurance.
Saga has a large Tour operation, which is loss making, and operates on wafer thin margins. The prognosis is worse IMO on tour than cruise
Saga only has two ships so relatively small and does some river cruises.
There are links with Carnival but they are fairly limited

Gordon always good to miss my posts - one guy on here thought I needed certifying !!

Just had a quick look at the three Aug cruises and availability on all three is identical to what it was when I looked on the 20th.
I do wonder if that devalues the analyisis that some of us are undertaking as they are drip feeding capacity !!
Trading update should reveal more - also on Insurance margins, prior year claims and any remaining covid dividend re reduced travel.

Gordon my post was 20th May cruise update