Letter received of Saga today.30 Apr 2015 19:41
I am writing to give you an overview of our first set of results as a listed company and I am pleased to report that the business has performed very well.
We have generated more profit than last year from our continuing operations. Indeed, one of the key measures of this, Trading EBITDA, has grown by 6% to £227.4 million, slightly ahead of market expectations.
As we own many expensive assets, such as hotels, most of the profit we generate turns into cash and we have generated £170.9 million of available operating cash flow in the last year. This is important as it means we are well positioned to pay dividends to our shareholders at the same time as being able to invest in growing the business and reducing our debt, should we wish to do so.
As a result of this performance, we are in a position to recommend a dividend of 4.1p per share which will be paid on 30 June 2015, subject to approval by our shareholders at our Annual General Meeting. As Saga became a listed company part way through the financial year, this dividend only covers the period since the listing and is the equivalent of a dividend of 6.0p per share on a full-year basis.
The proposed dividend is at the upper end of the range we targeted at the time of the IPO, an achievement of which I am very proud. This, in combination with the bonus shares offered to shareholders on the anniversary of the IPO, and based on the original price of the shares of 185p, means that our eligible retail shareholders will see an annualised return of over 8%.
In January I laid out our strategy for delivering growth in the coming years. Put simply, we are focussed on releasing the potential in our core businesses. These are motor and home insurance, private medical and travel Insurance, personal finance, our award winning Travel operations and selected new areas where we can build relationships directly with our customers.
As a result of this renewed focus, we announced our intention to sell the public healthcare elements of Allied Healthcare. This part of the business is contracted to the NHS and local health authorities where we have no direct relationship with the customer. The sale has not yet taken place but you will have seen that we have treated this part of Allied as a discontinued operation resulting in the write down of its value to nil in our accounts. Together with the other charges in respect of this discontinued business, this has given rise to a charge of £220.2 million in our income statement which will not recur in future years. Although this results in a reported loss after tax for the year of £133.8 million, it is important to note it is a 'non-cash' item in the accounts. This means it does not require the outlay of any cash and has no impact on our day-to-day trading or the ongoing financial performance of the business.
I would like to thank you all for your ongoing support. The past year has been a significant and successful one and I am deligh
Sign In
Follow the stocks
