Member Info for Banburyboy

CJ everything in ecomomics in relative rather than absolute. Saga wont be sailing at 50% but lets indulge that propsition ? The key question how does 50% capacity compare to not sailing. Does the additional revenue at 50% exceed costs and make a contribution. The answer is yes as staff are not furloughed and the only extra costs are food drink fuel and entertainment i think that would be £50 per person per night tops So anthing else is accretive to cash flow.
- Target ebti&d on each ship is £40m per annum.
- Thats based on 80% capacity and £234 perperson per night
- That equates to £68m per ship ticket revenue or £5.7m a month. And this is key £40m gross profit before all financing from £68m sales !!!
- 50% cuts revenue to £43m. But we know ticket prices are closer to £300pppn so thats £55m or £4.6m a month.
So evemn at 50% capacity massively cash accretive and very positive on cash flow.
Incremetal costs of sailing are insinificant and i calculate the point at which the decision point pivots to no benefit as 20- 25%.
Conjecture only and as Joe says we will be at 80% but i dont think its commonly realised how signifcant margins are on cruise and how much of the cost base is fixed

FJ - tour as opposed to cruise has wrecked this company
- Destinology sold for £1 nominal after costing £15m a decade or so ago with a similar exceptional charge in last years accounts.
- They did not ring fence tour receipts and used them to fund day to day business (albeit ATOL insured) this cost them £100m in cash flow and meant they needed RDH to ride to the rescue. The accounts clearly evidence this.
They seem to not want to Furlough tour staff and tour lost as much as travel last year. Part of that is smoke and mirrors as cruise pays a special shipping related tonnage tax rather than corporation taxes so cruise losses cannot be offset. Great moving forward particualry with corporation tax rising to 35% but not now . The finance team will push as much of the loss into tour as possible .
Never the less we should not have a great tour loss the staff should be furloughed …. grrr……
The valuation of Tour has been quoted as £100-£150m and it should do well but with the uncertainty you mention why o why not furlough the staff or even part furlough them as they cant be busy.
Grumpy - banbury

Olmsey ive noticed British bulls and agree. When i get my £7 a share that im all in here for i might set up a small pot and follow them. Not brave enough though !
Agree all your points i think i was trying to suggest to CJ that but for travel the insurance arm is £6 a share. Its temporary only but travel is negatively valued on a wind up basis for now. The auditors notes show they strugglef with a valuation so settled on Nil

Rogue spot on. Insurance has turned the corner margins stabalised and 50% of policies three year fixes.
Cj in the finals note 8 auditors acceped historic insurance goodwill of £ 718m with £ 216m headroom to spare.
So there fire sale vauation of insurancr i £934m. Thats £6.67 a share. Its only uncertainty on travel holding this back. Im afraid your wrong on insurance its resiliant in a competative environment and made £140m last year

Cj a very modest price. The diference in monthly case flow between cruising and not is £8m. If this is not above your target when we sail i will not only walk the plank but into a shark pool as well. Its confirmation of cruising only that is holding this back imo

Hi Fordy 64 welcome to the Saga Board.
I saw the report on falling insurance premiums to. I don't think its a real concern heres why
- other insurers falling in line with market implying drop similer to Carnival is travel related
- yes premiums are falling but so are claims so net impact nil
- Saga made £134.6m PBT on insurance - 58.7m was from third part underwriters where profit is insulated.
- Of the remaining £75.6m retail profit just £33m was cars the real cash cows are home / travel and bolt on's legal cover etc
- 50% of all customers are on fixed deals that's what they want and that locks in increasing profits.
Resumption of cruise is massive for the company less because its a cash cow but more that that its burning cash .. so both ships at full pelt will contribute £40m to PBT they are currently losing us £50 to 60m per annum
So cruise restarting has an incremental impact on cash of £100m or £8m a month.
Insurance is stable and cross subsidising cruise for now and we are excuse the pun treading water. This will fly as we go through the summer without any hickups. so announcement, first sailing, huge demand in RNS / interims and more importantly from June we are getting £8m a month more in the bank than now.

Welcome Jackbogle.
I was thinking the same. Beach the £7 champagne party !! Remember i need £7 to break even after a mispent 6th decade chasing the AIM pot of gold. I know its a crock of s**. RH is our champagne man. I have a feeling he is RdH in disguise.

Millionaire - I don't think competitions review, bond repayment and high debt can be linked to doom and gloom. They are the actual risks i think you said you were in investment banking as a youngster so would be appreciative of that !
Slowandsteady - cruise lengths vary at £235pppn and 80% capacity these ships add £20m each to the bottom line 55k a day. I think of the sold out they total six weeks in duration so £2.3m. According to their sensitivity each 1ppn is worth 300k on the bottom line per annum so £882 per day. So if the average ticket is £300ppn the 55k a day becomes £110k per day and profit is £4.6m. Very crude but based on the companies estimates.

Millionare i think the diference in our valuations is the perception of risk . There are risks :
- regulation by competions and market authority. Three year fixes are genius but are they unfair ?
- bond £250m due May 2024 needs refincing
- ship debt
- more covid incidents.
Im all here and want it to do well but imo multiples of 15 need a lot less risk than we carry.
-

In my opinion top end is £10. Thats based on a market cap of £1.4bn and profit before tax of £160m to £180m. Insurance made £135m last year and £130m the year before so need travel to make £30 -£50m.
I see this racing to £7 on news of cruises restarting and the interims to July 21. After that i think its a long haul. Company has been valued at £2bn previously but insurance is tougher and a few ancilliry businesses have been divested so i see £10 as a cap

Just touched 383p. Buys double sells in weak market. Bodes well

Great work Beach.
Its nuanced but i think thats as near certain as we are going to get.
Domestic cruising has been designated Uk based for covid. So whatever protocols apply to uk land based tourism will apply to staycations. For me the nearest comparitor is hotels - so if the Savoy opens we can cruise. Saga very well placed with top rating on covid compliance protocols.
It will happen but less convinced it will get a specific announcement.

Sorry guy but could not resist :
1 - Goodwill impairments once made can never be restated under International accounting standards. The way they have written this implies as at now they would have probably valued the goodwill but could not.
2 - In Feb 20 they entered the tonnage tax regime. This means you pay tax on cruising business based on the 58k tonnage of both ships. The timing of the entry was awful as it means they cannot offset the corporation tax loss from cruise against the profits on insurance. I do wonder if that is why tour is losing so much as it can be offset and cruise cant. Moving forward its brilliant the annual CT on each ship is £51,282 whether we lose or make money. With CT going up from 19-25% cruise is protected. I wonder cynically if we then move profit back out of tour into cruise !!
3- £9.9m of income on three year fixes earned and paid before 31st Jan 2021 was deferred to later years. 38% of all policies 610k locked in for three years and probably for life is excellent.

Sorry RH couldn't resist

Beware Roxbury.
With my luck the good ship Saga could go the same way as the Titanic. Me and you could have a pre party meeting for £7 on the Tyne somewhere you paying with all the CARD and WRKS cash !

Rogue - Puntland how can i forget autonomos part of Somalia say no more. BHR in Mozambique and FRR in the caucuses. I fell for the story of riches on everyone im a rubbish accountant and judge of company. Kiss of death for Saga :)

Rogue RRL trinidad oiler ! One of my many expensive mistakes BHR RRR HAWK FRR need £7 to recover fully what i had lost and written off with them. Saga is my last chance saloon so beers on me at £7

£4.50 boxing RH in. He's so jammy he will probably win a second time despite that.
Rogue a beer sounds good. Many on here might want to join York sounds pretty central . £7 party something to look forward to ?. I am sure i read on here two posters met up for a fight but anyone know of any other meet ups where posters with same aims celebrate sucesss ? Seems really appropriate after a pademic. Even pdh can come and RH sorry for using your thread as well as boxing you in. First beer on me.

Well done Rox and Idad. Both now top dogs on the Saga Board. Just relieved i did not have to walk the plank on insurance goodwill.

Jo brilliant on the lifeboats very funny

Beach to my horror on my five June / July cruises availability has gone up we previously had 423 empty berths and now have 483 so up by 60. Capacity down from 79% to 76%
All the increase is in the three week cruises and none in the fortnightly.
Any ideas ? Cancelations ? Or have they made more available ? Not sure how hard and fast the 80% rule is