Member Info for Banburyboy

269.3 to sell

Seem loads more on this board and price moving £2.65. Closest i have come to a ramp !!

Thanks FJ costs seems £12m so on basis of no imparments other than £3.4m on a hotel in st lucia (2016) that would be my absolute floor on a valuation.

Serious question could we not do a joint venture with a builder on a retirement village ? Our contribution the land with Saga branding they fund thd rest . Love that idea whys it impoosible.

Do you know the story of the St lucia hotel ?

FJ Gooner - good post and really interesting.
Difficulty with the sales is we don't know how much they cost and how much they are worth. I am hoping you / Dofus and others who worked for Saga might help stitch it together ?
In the Jan 20 accounts the cost of freehold / leasehold land and buildings is shown as £49.3m
The net book value of the same assets are shown in the balance sheet as £39.1m
The £39.1m represents the absolute minimum value of the assets as management needs to do an annual impairment review.
In the Jan 21 accounts putting but these up for sale they will need to reclassify them as "assets held for resale" but we wont know that until April / May
That will provide the cost and net book value specific to those assets lets just say for illustrative purposes the cost was £15m and the NBV was £12m. If the sale price was £30m it would mean :
1 - £30m straight in bank as we have already brought the asset - no evidence its mortgaged or still to be paid for
2 - Profit of £18m straight to bottom line.
A few missing bits anybody care to have a guess on how much of the Saga estate and property these three assets combined comprise in advance of the accounts ? And the sale price ?
It does sound really positive not only a one off gain on sale but also muchlower facility and utility costs and as i'm led to believe better productivity and employee wellbeing as they stay at home.
Love this company allways something different to look at

Looks like mr market beleives my bunkum on goodwill. Good day today !

The board has got noticably busier recently.
Ive posted for eight months or so and read the board for years. The quaity of information is good and whilst views are balanced and no one ramps i cant remember any one being negative on the prospects.
Rogue - Northen Accountant !!
I will have to hang my head in shame if i have got the goodwill wrong !!
Just to give you nightmares i was completely wrong in a previuos post on the payment of dividends being conditional on furlough repayment. Theres an ethics debate / lots of repayments from builders and supermarkets (business rates holiday) . Big debate in legal and accoutancy firms where partners are getting higher profit dividend against a backdrop of new graduates intake funded by furlough. Never trust lawyers or accountants !!
I will have to go quietly if i have goodwill wrong just a shame Mr Trump is unlikely to do the same.

The jambo welcome
In short as we had a 15 to 1 share consolidation offset by a new investor and £1.80 rights issue. Roxbury house has a great table explaining.
Comparing the share price over time is pretty meaningless the market cap is a more appropriate time series measure. Saga are sat at £350m for a company whose insurance arm makes £130m pbt and cruise / tour could make £70m when covid has gone. Few years down the line but at ten times earning no reason share price should not rise 5 fold. With a recent fund raise insurance covering the cash burn of travel being idle risks are minimal. The two businesses are quite " complimentary " in a pandemic. Im expecting a good trading update on 26th jan and a 30% rise the first of many. The second rise will be when uk govt approves cruising resuming.

Hi value- wise I share your view on the Board. Everyone seems to get on and some good information flow.

On goodwill you are correct at £718m. It cant be re-instated but can go down. Goodwill is validated on a balance sheet by a calculation that discounts the future level of income streams. The level of the discount rate is determined by the perceived risk on market conditions both in the company and the market in general. There is a lovely table on note 8 to the interims which shows that discount rate by business. The rate for the 31st Jan 20 accounts was 12.6% which is very high and drove the goodwill write down and £718m value.
For the interims 31st July management estimated the risk and hence discount factor was a much lower 9.9%. This means conditions as we known on insurance improved markedly for the interims this will be subject to audit at the finals but seems reasonable.
So if discounted at 12.6% gives goodwill of £718 on an equivalent basis 9.9% would equate to £900m +.
I think your enterprise value is pretty low. The performance on insurance for 31st Jan 20 on Saga was absolutely identical to Hastings last full year. Saga £109.9 and Hastings £107.7 spooky or what !! Hastings went for £1.66bn.

I hope this explains and my prudent "value" would be the circa £900m which I think comes out of the current discount rate.
One poster on here was really worried about further write downs with travel goodwill nil and insurance market conditions improving markedly I think that is highly unlikely.

Poker 15 to 1 split ?
Its a really cheap process i know a broker that did a 15 to 1 consolidation for £10m. Bargain !

Jed The M/C of the company is circa £350m
Insurance as a standalone is worth a minimum of £900m (management goodwill estimates in the interims) and a maximum of £1.6bn (similer size and revenues to Hastings who sold in the summer for that)
Cruise and Tour is thus valued at between negative £550m and £1.25bn. Which is the ships debt / term loan of £250m and more.
The valuation of Saga's cruise & travel operations is beyond distressed it apocalyptic.
So many posters on here continually say you forget about insurance - I don't think we do it's value is known and a given.
The reason so many on here are discussing and working through cruise is any good news in this area and the price will rocket. I've said for the last month we will be up 30% after the TU as I anticipate good news on cruise / holidays.
Even with 30% increase Mr Market will be valuing cruise / tours as a large negative.
My job is Accounting and finance strategy not detail but in the public sector I really see this as a great opportunity at the current SP with little or no risk (The Dofus taking it private is my main worry although like others cant it happening ).
Banbury

Horsears did all the analysis on occupancy and ticket prices over an extended period

Horse have you update this. Can you remind others of the headlines

BB

Horsearse did all the analysis on cruise occupany rates and per deim.

Horse are you still there ? Have you updated your analysis

BB

Wow lots of posts on here today and many new faces.
RH - Breakeven always goes back to the November 4th Tour presentation.
£40m profit per ship BIT&D is based on an 80% load factor and £235 per day ticket price. £20m after interest and central overheads
The sensativities are
Per deim + or -£1 = £0.3m per annum
Load + or - 1% = £1m per annum
Obviously two variables but in isolation break even is 60% occupancy at £235 or 80% occupancy at £168.
Everything is relative and even at these low levels we avoid the £6-8m cash burn so a huge step up from now.

Fj's work and another poster on here who look at loads of the cruises indicated occupancy was pretty good and more importantly per deim as measured by website prices was I think £80 above the £235. This is huge whether its sustainable in the long term is questionable but short term profits should be huge. I will try to dig out that analysis

Getting cruising is the constraint once we get there this will absolutely fly

Rouge / slow and steady weve been round this before . Times news is three weeks old
Saga is 2-3% of the market
The majority is reinsured so no benefit to saga
Travel insurance is very profitable and taking a hit £4m in interims for a for just four months.
£200m i wish !!!
Previous analysis based on market size / reisurance proportion and downside on travel looks like £20 -30m.
Trading update will reveal all but hope your right and im wrong !

Dofus thanks as ever for really informative response. I might know a bit about goodwill valuation on a balance sheet but my knowledge of advertising is clearly in the last century !!! I guess the beauty of forums like this.

Ad smart how clever is that and at 8p a shot i would have thought success rate of one in a thousand would make it still worthwhile.

For interest demograhics age, professional kids spot on. Have very cheap Saga car insurance and have previouly had house insurance.
Located in north east so house in lower band but probably wouldnt be in the south.
Im impresssed by reach !! .
Serious question if i asked for a brochure theretically could they have algorithms that perhaps put a lot more adverts to my sky alone or is that fanciful and its group targetef ?
Thanks for the other anaysis on travel moving to the right. Jan 26th update and finals will reveal more but im still content saga has liquidy to continue to end of 2021 with no travel.
One area i am interested in is furlough and how much they have claimed. I may be wrong but it 'feels" to me a contingent liability in that paying future dividends is contingent on paying hmt back furlough . Accounting standards require material contingent liabilities are disclosed and where practicable quantified. Quantification is clearly not an issue. So could be an issue moving forward as repayment of furlough has pre emptive rights over dividend.

Poker dont you recollect all the analysis previouly. Benchmark is november 19 presentation 80% occupancy and £234 per diem for £40m pbti&d.
Early bookings close to 80%
Per diem way up debate re broker margins

So revenue definately up and i would guess more than enough to cover costs.
Remember the now ships idle cost is £3 to £4 cash burn pm per ship. The model £40m pbti&d £20m after interest and central costs = £1.66m cash contribution per ship

So there is a £5 to £6m difference PER MONTH per ship difference between sailing and not sailing.
Aditional cost IMO will be inconsequential compared to that

Simon welcomr some informed posts in your history on other shares nothing covid related. Wondering why the post on Saga only re this ? Are you a holder ?

Dofus seeing more adverts on sky news for titan
You had thought river cruising was coming up on the outside.
Has your view on that changed as you were more downbeat recently !
It was on the market for £100m pre covid. Do you think when things are normal next summer it will be back to that valuation?

Poker i think deciding if we are better or worse from de hann is the equivalent of kniting fog.

Holders before de hann are generally worse off as he diluted us and got his 26% at a song.
Those who averaged down at the £1.30 level and took rights limited that dilution
Those that did not average down particularly the £2 + ipo guys are well down and will allways be.
But he did avoid us going to the wall or a fire sale. So the longer cruise are delayed the more the dilution above is mitigated by the safety net he provided. Hard to measure like writing on the head of a pin with a mars bar !

Any newbies in at less than £2 are on a winner

Peel Hunt interesting comments on underwriting business. I think motley fool suggested it had a hive off value of £400 - £500m.