Member Info for Banburyboy

Nil until jan 23 results. Company priority is repaying loans and renegotiating term debt. The higher the market cap the easier and i suspect the loan is to renegatiate. Lot of water to flow but we dont want a debt for equity swap on the term loan unless the sp is multiples of today. In the short to medium term imo this is a capital growth play not a dividend play

Castle fall 18/ 19 mainly insurance goodwill write offs off circa £350 m due to lower market value , 15% discount rate ( higher risk) and much lower margins particulaly on underwriting. 2020 finals confirmed goodwill at £700m (no further wrrite downs) July 20 interims had insurance profit stabalising and lower risk ( discount rate down to 12 % ) Meaning management value insurance at £1bn. Interims not audited but dont think 2021 accoutns will have any write downs. Banbury.

Excellent point Pianesta. RDH will be "conflicted" at any juncture and sounds like somone who does things by the book.
So agreed dowgrade the risk. The resultant opportunity he brings is not just funding putting a floor on any future need but also a bulwalk against any low ball bid.
So much happier.
Dofus good to here back on why you thought he might take it private as you know the company very well

Thanks Rogue
Of course you are right a little alcohol and i overthink !@
As many on her say forget about it or as the saying goes go away and come back on St ledger day

FJ / Pianesta/ dofus.
I,m constantly looking for downsides and risks to this share.
I missed the previous need for funding and subssequnt dilution. My caculations were they could hold out backed by asset sales. I was wrong probably misjudged debt covenents and stilll think they were using tour funds as working capital and that rug was pulled. Also dont get why they dont use furlough . That was history called it wrong moving foward :

Confident on insurance valuation and profits. Cruise and according to dofus river will see halcyn days risks ...
Higher insurance industry conduct requirements supress profits. Recent buy out valuations dont see that as an issue.
Cruise delays covid proves harder to supress than we think. Unlikely.
Top of my worry list is RDH buy out for one reason. It comes as a suggestion from Dofus who worked for and knows the company and can make a call even now to clarify segmental question in the accounts !
I know nothing about buys outs. I think we spoke early about any bid must be more than his 27p original invesment. £4.05.
£4.05 is a floor but anything less than £9 and im going to join loser Trump and spit all my dummies out.
Cant get my head round this. Is it a risk ? How would it happen ? would it be a stitch up with institutions ? any precidents elsewhere ? i assume any low ball would solicit a rival bid ? Could he rush it through thwarting a rival? How many SHs are buy out customers cant see him screwing them over.
One slightly panicked (and a bit tipsy) Banburyboy

Guys ive done my bit I hoping someone will pick up looking at the website so we can compare average cruise revenue and bookings to the base case - see earlier posts.
On insurance i'm looking for what I am missing and happy to accept an alternative case so
Goodwill is the carrying value of "insurance" It's accounting valuation as you cant measure it. It's rRogues favourate.
At Jan 19 that was £1,088m
At Jan 20 it was revised downwards to £718m. Two things drove this write down hugely lower Insurance profits £192m down to £131m FY 19 compared to full year 20 and an increased discount rate 12.6% compared to 9.6% at which future insurance profits are discounted to prove the value of goodwill. The high discount rate is explained in the notes as reduced market capitalisation and risk.
This is the bit I really like from the interims accounts profits are up and management have determined the risk on insurance is lower and used 9.9% to assess the value of goodwill. (despite same low market valuation)
This means two things (1) a future write down very unlikely (2) You do not re-istate goodwill but on a fairly prudent valuation of future cash flows insurance is back to 2019 level or £1,088m. Covid reductions will feed through and help.

I keep looking for the flaws but to me £1.1bn is a floor on the insurance valuation and £1.66bn (Hastings) is not out of reach.
De hann has played a blinder

SAGA HASTINGS
6 months to 31st July 2020 Y/E 31/01/20 6 months to 30 June 2020 Y/E 31/12/19
£m £m £m £m
Motor 17 28
Home 15 33
Other 10 29
Retail 42 90 36 94
Underwriting 28 41 44 31
Total 70 131 80 125

Fellow Saga followers
As threatened I have done my comparison to Hastings - whose insurance book was sold for £1.66bn in the summer.
- - Hastings net debt in 30th June 20 interims was £240m not dissimilar to us if you ignore ship loan which I think is right
--Hastings are almost exclusively car insurance with 8% of the market they make a lot on finance - monthly premiums at high APR. Saga is very roughly split three ways in terms of profit Motor / Home / Travel
-- Underwriting profits for the two are pretty similer
-- Saga re-insure more which i'm not sure on the relevance. Help required please ?
--- Insurance earnings on industry measures were Hastings FY to Dec 19 £125m Half year to June 20 £80m they were clearly aggressive in recognising reduced covid claims and specifically mention that.
---Insurance earnings on Saga FY to Jan 20 £131m Half year to July 31st 2020 £70m. They were clearly prudent in not recognising reduced claims and say so.
Saga's bottom line is hit by goodwill write offs but also amortisation on ships that Hastings don't have which makes us primae facie look bad

I will try to lift table in excel into a post but am pretty crap at that.
I'm not sure there is a complete read across but the two look spookily identical on lots of metrics . In my simple head if Hastings is worth £1.66bn SAGAs stand alone insurance business must be worth at least £1bn and probably a lot more.
And remember Hasting was brought in full knowledge of new tighter Insurance oversight by the regulatory body.
The more I research Saga the more confident I am in my 31st Dec 21 prediction of £9.
What do others think ?

Pianasta i/ bat i think the four areas i have highlighted are far more than just historical facts. They are all actually insight on the future based on some great work by three or four posters.
I may have over egged the £9 but feels a tad harsh.
I might bin my Hastings research and abandon the board like the fella the other day :)
Im a small share holder with a substantial waist

RH - looked at Card a while ago can see the attraction. Not keen on retail and customer habits trends change too oftern and newer products comptitors arrive . Will Card be around in ten years im not sure. Like mosb it has some eyewatering on line growth but from a small base. I recollect a contract with Aldi but they will sqeeze suppliers . November statments look good but how much footfall is pent up demand not sure comparatives are like for like. Could see this going up from here but not sure on sustainability ( Saga i am !) Im probably wrong but feels like one to take a 20-25 %profit and run if you get the chance !!

Hi all in no particular order :
Really like the work on forward cruise bookings (occupancy and price) and the £20m per ship (bottom line) planning assumption looks rock solid to me and conservative
Dofus has informed opinion on river cruises coming up on the side. Hope he is right
View is Titan might have some value (despite goodwill being written down to zilch) Good brand and market stronger as a result of covid fallout. £150m price tag was mentioned before covid value I did not think was there
Started my comparison with Hastings which was brought in August for £1.66bn. Really difficult read across as Hastings is mainly motor (7% of market as opposed to 1% home), doesn't seem to re-insure, has other income streams as does SAGA but not sure on comparibility, ignoring ship their debt is similar . I will tease you !! The last full year results available Saga Insurance profit seems to be £109.9m and Hastings £109.7m !! Our insurance wont be valued comparatively at £1.66bn but its will be a lot more then the current MCAP of £400m. I will refine in due course
Insurance profits currently cover cruising suspension costs

I cant see what's not to like on this share - De Hann has de risked it and got forbid we could survive another year or two of lockdown. If things are back to normal spring and we are sailing with positive forward looks in RNS my serious prediction.

£9 by 31st December 2021 !!!
First time I have given an opinion on any share

Dofus / anyone. In terms of accouts reporting on segments is river cruising Tours or cruises ? I cant work it out.

This week i want to sit down and do a vauation of Saga insurance through accounts and report infomation and comparing with Hastings. Im an accountant but public sector green books managing public money but fine on accounts. . l m very sketcy on speciics re solvancy re- insurance underwriting etc so it might need input from others

Pappalaz thats a shame the more the merrier.

In terms of your recent Saga posts. Gremlins RHs list should provide some insight . For me its restriction of cutomer funds which ive posted on ad nausea sorry.
You also mention overheads all figures in my posts are after charging overheads . They willl increase with Covid but likely to be one off e.g refits and meet the criteria of exceptional not impacting EPS. Fuel is not a significant cost see sensitivity in 4th November presentation.

Stay and keep posting Banbury

Sorry horses negated to add based on your £304 ticket price and the base of £235 thats £69.
Sesatvity at 300k adds £23m to the annulised base case and its all to the bottom line as depreciation / finacing are fixed.
Yes a fair chunk will go as they discout final sales and covid costs but still again demonstrates high level of derisking.

Bring in extra capacity at £1m per 1% and remember thats at base of £235 so is closer to £1.3m.

If the figures are anywhere near accurate in the 4tb November this will absolutely fly.
Great to see so much interest and great reseach. Horses thanks again for all your work and Gooner for important clarifications / assurance.

Gooner / horses great insight.
The best presentation on the economics of cruises is 4th november 2019 virtual tour on IR sight. Highlights are

Target £40m EBITD on each ship.
This is based on a £235 per day ticket price and 80.2 % load
Sensativities are at the end a 1% inrease in load is plus £1m and £1 increase in ticket 300k.
£40m reduces by £8m depreciation and £8m financing and £4m central overheads to £20m bottom line contribution.

My simple read is if covid constrains us to 80% load we have met the modelling assumption and this is a play on ticket price short term with £235 being baseline.

Get comments about insurance yes its neglected but safe. Im focused on risk and mitigations and my read of the above is sailing post covid £40m per ship is very safe. Welcome others views
RH slide 17 has a good summary of ship financing.

Banbury

RH - i know you are well intentioned but your Table caused a big debate which various posters never really agreed on and was probably nugtory. Most long termers are famiier with most of the issues that are on your list. For me its about new stuff and the really insisive comments from dofus rogue and others. You have lots of admirers / followers and post here in very intensive bursts generating lots of traffic . I get some will be less informed but really hope your list doesnt crowd out that new information and commentb that i and others are here for in the first place.
Have i got a point ?would be good to gauge by likes. Or maybe im justbbeing humbug.

For me its
£ size of reduced claims bonus and what this will be used for.
Value of and propsed Titan sale
Explanation of ring fencing arrangenents on tours which led to a large outflow in the first half accouts and a change in accouting policy. What does this mean for future.
Forward cruise bookings.

Thanks Banbury

Interesting dofus. You seem to be ruling out any sale of cruising. I like you think its unlikely. Do you have a view of insurance ? Would they hive that off if the right bid came in ? Say £1bn on 10 times earnings . Pay off ship debt and say £3 special dividend. Again all highly unlikely. I guess my main question is do you beleive the overarching strategy for the long term is keeping intact the three legs - insurance / cruise and tour and keeping them together ? On the plus side there are obvious cross selling synagies and as the pademic has shown some real protection as the income streams are diversified and have different risk profiles . Might be going too far but maybe a perfect business model for 2021 :)

Idad lets forgive Dofus that small oversight.
His posts are informative and usefull and he clearly has considerable industry expertise. Keep up the good work Dofus.

Dofus as ever informed and reassuring post. Thanks

Dofus as