Member Info for Banburyboy

Yes marcus . Put another way old co now worth £177M less £140m raise or £37m.
1.1bn old shares so old money we are down at 3.3p !!

£1.30 but ive been saying that from £3 downwards in new money so a bit of a mug punter. Seriously some good posts on here re patiance, rights overhang and the price being 'technically," low as untaken rights clear. Hope there right as up to my neck in this and wrong means two more years at work.

Dont think the three year fix would be approriate for Joe. The Don doesnt need insurance he just sues everyone.

Thanks Smorty Yes i would consider myself a bit of a Joe Biden compared to Matalot who remind me a litle of the Donald. Fast and frequent posters capitals and a lot of issues. Wonder if old joe is ripped off in his insurance !!!

18 monrhs old article matalot. The three year insurance was arguably one of their very few success stories as some people know they are beibg ruooed off but cant be bothered to change. They have also announced they will return excess profits from covid to loyal customers much to my ire. Think you are being a tad unfair suggesting saga are an outlier in terms of sharp market practices

Good post join the dots and at a strategic level bang on. Short term though why not claim furlough and keep the cash from reduced claims and protect the company

I know i'm posing lots of questions but Saga don't seem to help themselves :
- £30m of covid reductions in claims to be returned to customers for loyalty !! Estimate based on 500k policy and £60 LV experience
- AR&A's have £10m a month spend on staffing. 5,200 staff and 2,400 travel so say £4m a month travel. Furlough would have brought in £2m a month anyone know if they claimed it ?

You know I think they were using Tour customer deposits to fund operations and when new bookings stopped it broke the circuit and they had to stump up the cash. Evidence in the cash flow statement of interim accounts £81m repaid and a new statement that they ow ring fence like cruise. Company should not have done this and auditors perhaps should have been more explicit
Tour good will is now nil valuing Titan / Destinology at zero. Travel news reported in Jan 20 strategic review had them for sale at £100- £150m !!!
Wishfull thinking !! Looks like Titan cost £20m in 2009 and destinolgy £27m in 2014.
Presumably now you cannot give them away and they will act as a drag for quite a while.
I like the cruise and at 80% capacity they begin to make some big bucks. If covid means they have to operate at 50% capacity prices will need to rise but I believe the demand is there. So we either have pre covid numbers or restrictions with premium price I think both work.
Not convinced on Tour at all and would suggest they give it away or for ay price if they can get it - or consider taking a hit on complete closure -- i'm assuming the £6-8m cash burn will take a one off hit but fall thereafter.

Anglette £800m intangable all insurance. Travel goodwill written down to nil at 31st july half year - quite rightly. Read across from Hastings values s aga insurance as circa £1bn. Might need reducing as regulator has tightened controls but not worthless. Problem is divesting criuse / insurance. If they were desperate as motley fool suggests they could hive off the underwritting businesd. Which is more seperable. Thats a floor under goodwill of £400m. So you are overstating debt and understating good will in my opinion .

Great informed post slow and steady. If they sell £18m at say 9p old money means a £6m loss. Still in profit but not £10m. Gallows humour but good news they the professionals read it wrong as well

Tiger good post do we know how much of pi rights not taken were picked up by mr de hann.

I concur. Racking my brains for negatives. Titan and destinology now at nil goodwill. Meaning we can give them away. Or would we have to pay someone to take them or incur a large extroadinary cost of closure. Insurance we know, cruises a gamble on covid. Is the tours after allreazdy taking £81m of cashflow as we spend customers advances prior to paying suppliers that is the problem ?

Mv shown here as £191m less £140m RI proceeds implies £51m value for old pre rights status. Old number of share 1.1bn implies on a comparative basis we are at 4.6p old money with Ri at 12p (closer to 18p really as RdH) paid 27p for a lot of his. Lots of comments around we are 25% below rights it far more. I really dont get this given we now have nil risk of bakfuptcy and arguabily a reserve of £30m + on reduced claims ( not recognised in accounts as they are paying back loyalty !!!! Why). £30m based on £50 per policy industry average and 500k policies. Maybe m blind to this but it feels like a stonking buy and huge profit for anyone at this level on cruise news

Thanks slow and steady i said three mobths after cruises start on the basis markets price in good news in advance. Chose three months as they can prove on say ten sailings across two ships they can manage mitigation. Fly in the ointment is when does sailing commence and can they manage mitigation. Guess work unfortunately

test

Thanks Toneman - you may well be right. Repayments were never going to be included in the £6-8m cash burn and on reflection you could be right on financing . The repayments role up the financing so the impact is probably nil My main point that I really want views on is that the company got caught with its pants down and was spending tour cash which was not ring fenced in advance of customer holidays. That led to a one off cash outflow of £81m which made an already difficult position calamitous - and the resultant cash call. Management have now changed the rules and are separating customer tour cash from the business which they already do for Cruise, also the hit is one off. I read this bit completely wrong in all my analyisis and I think but for this the company could have survived to March 21 without the RI and RdH intervention.
Water under the bridge and we are where we are. For new investors unless Covid is here until March 22 or later I think this is great value and cannot see any chance of it going bust.
Some one asked me about goodwill - I said I was an accountant but not that I was any good, my world is HMG and policy related issues our intangables are quality of life social impacts economic benefits from better health education so all very nebulous.
My view on the goodwill is not as an expert. All travel / cruise will now written off SoFP 31/7/20 and recorded as nil - that sounds right:)
Insurance goodwill £719m in same SoFP. Based on the recent sale of Hastings and some crude metrics reading across customer numbers I had the SAGA standalone insurance value as circa £900m with a 20% discount. This will take a hit because the regulator has now got his teeth into the market and travel insurance was proportionately very profitable. (I hope on travel their new covid ground breaking cover is underwritten or else that's the next big saga excuse the pun ). So my view further write downs unlikely but could be wrong. Three risks :
- corporate bond due in 24/25 £250m. company need to be back to normal to finance on reasonable terms
- your point toneman on ship repayments - the lender will I believe allow deferral at a reasonable cost
- big one for me is RdH takes this private at a song for his own benefit.
Everything I am reading about RdH is what a great guy he is and no Mike Ashley (who we love in the North East) but never say never !!
For what its worth this is 9.7p today I think 35p (3-4 fold increase) is probable three months into resuming sailing with both ships. Can we ride this out for another year or two worst case scenario yes.

Guys - long term holder who keeps averaging down. For new investors I really think there is lots to be made. I'm an accountant by trade and did not get the cash call when the insurance profits and sales of old ships , health care business and Bennetts easily covered £6-8m per month cash burn. The devil and explanation is in the cash flow statement of the interim accounts £46m and £25m plus £10m to come (£81m in total) which was used to pay back advances of tours not taken. In effect the business was spending this cash in advance of customer holidays and when new booking ceased cash out massively exceeded cash in. Not sure if this is sharp practices and not sure what the audit code is but that's partly why we are where we are. It seems a lesson has been learnt and this paragraph is really telling " Following discussions with the Civil Aviation Authority (CAA), the main regulator for the Tour Operations business, the Group is likely to create a trust arrangement for new and existing bookings within the current ring fence setup. On this basis, 100% of customer cash will be held in a separate trust and will only be available to pay suppliers and for other corporate uses once the customer has returned from holiday. The Group estimates that this will require an additional £10m of cash support to be provided to the ST&H legal entity. A move into trust should enable the CAA requirement to hold separate bonding facilities, which are in addition to the current 70% covenant, to be significantly reduced or removed altogether" So assuming this is one off and has now fully unwound by my calcualtions insurance profit and cash flow should keep the ship afloat for ever !! £6-£8m a month = £72m - £96m covered by insurance. This includes Financing for ships but not capital repayments. I got in too early and need £2.92 new money / 19.46p old money to break even. I do think the worst is over on cash flow and the Tour operations scenario above explains