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A couple of years ago, when results were FAR worse and transparency going forward was utterly lacking, Saga was trading between 300p and 400p. If I recall correctly the CEO bought £200,000 worth of shares at just under £3.90.
Now, with travel almost fully on track and cruise booming, why all this gloom from the markets?
Insurance has been under pressure over the last couple of years, but all the talk in the media over the last couple of days has been about motor policy prices rocketing.
So why the gloom?
https://sharecast.com/news/news-and-announcements/saga-says-annual-profit-set-to-more-than-double--15995692.html
Saga says annual profit set to more than double
Saga said on Tuesday that it expects full-year underlying pre-tax profit to more than double on the previous year as it hailed an "outstanding" year for the cruise and travel businesses.
In an update for the period from 1 August 2023 to 29 January 2024, Saga - which specialises in products and services for the over-50s - said it now expects revenue growth of between 10% and 15%.
Ocean Cruise revenue is expected to grow by around 30% year-on-year, it said, delivered through a load factor of 87% and per diem of £331, both significantly ahead of the 75% and £318 seen a year earlier.
As a result, and in line with previous guidance, the group expects to exceed its target of £40m Ocean Cruise trading EBITDA per ship.
Meanwhile, the river cruise segment is expected to return to underlying profit, supported by a load factor of 85% and a per diem of £285. This equates to revenue of around £44m and 17,000 passengers, up from £29m and 12,000 a year earlier.
Travel revenue growth is expected to be between 40% and 45%, with 58,000 passengers, up more than 20% on the prior year. In line with previous guidance, travel - when combined with the river cruise business for consistency with previous reporting - is on track to return to pre-pandemic underlying pre-tax profit, it said.
Chief executive Mike Hazell said: "For 2023/24, Saga remains on track to deliver significant growth in revenue, in addition to an underlying profit more than double that of the prior year, exceeding our previous guidance.
"Our cruise and travel businesses have had an outstanding year, having taken around 120k passengers on holiday, with customers continuing to be drawn to the strength of the Saga brand and offer. As a result, these businesses will return to profitability, in line with expectations. In insurance, the market-wide inflationary environment and declining policy volumes are continuing to impact our performance.
"The year ahead will see a continuation of these trends across our business. Bookings for the new seasons in cruise and travel are robust, showing good overall progress."
Saga confirmed at the end of last week that it was considering options for its cruse business, including a partnership arrangement.
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updated: 21 dec 2023
best and worst all-inclusive holiday providers
from companies with ****tails on tap to those that won’t even give you a can of coke, we rate the biggest, best and worst all-inclusive package providers.
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our survey of nearly 2,000 holidaymakers found that those who picked the cheapest all-inclusive holiday provider ended up forking out a whopping £367 more per week on extras.
lastminute.com’s customers found that their ‘all-inclusive’ resort was anything but. on average they spent an extra £128 a week in the resort, and £239 outside the resort on things like meals out and food and drink from the supermarket. that’s £367 in total.
they also had a pretty poor experience, rating their holiday just two stars out of five for accommodation, organisation, transfers, included benefits and customer service. lastminute.com’s 63% customer score puts it firmly at the bottom of the table of all-inclusive providers.
at the top of the table, jet2holidays’ customers had a very different experience. the restrictions on what you could eat and drink, and when, were the lowest of any brand. ‘the package included everything we needed and desired’, said one happy customer.
long haul specialist, kuoni, and over 50s operator saga also received excellent customer scores in our survey, with four stars for the benefits included in the price of their holiday.
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saga 80%
saga holidays are only available to those who are over 50. saga says it hand-picks its hotels, making sure they meet its exacting standards. judging by our survey, they met yours too. it was one of only two brands with a four-star rating for its accommodation.
guests also praised the ‘excellent standard’ of the food and drink and told us they had everything they needed. they spent very little on average outside the resort - just £44 per week.
which? verdict with high ratings across the board, and the lowest spend on extras, saga is truly all-inclusive for the over 50s.
I don't post often these days, but just a comment in passing in addition to my humorous observation yesterday.
I will be celebrating in no party until at least £8 imho. And, even then, just cream tea with scones. Otherwise we're wrongly celebrating the abject failure of an irrational stock market that is undervaluing a great British brand that is in its earliest phase of post-Covid recovery.
We need to have faith that the current board of directors knows what it is doing and will return the business to strong profit growth over the next few years. And if the CEO needs to be assessed in his performance, then the Chairman is perfectly capable of doing that without our input.
I worked at Saga for over 25 years in a senior role, so I can understand the history and the evolution of the business model that is now underway.
We had major office buildings in Kent and Sussex. Enbrook Park was a huge purpose-built complex with a separate pavilion for a staff restaurant and other office and tertiary facilities, another large building in Folkestone town centre known as Middelburg and a smaller office block in Cheriton with about another 400 employees there.
In addition to that, we had a huge contact centre in Thanet and another large complex in Hastings.
All of these buildings are now gone, replaced by a work from home model supported by very small office hubs in Folkestone, Ashford and London.
These enormous reductions in costs will surely feed through at some point, along with the sale of all of these properties, which are happily in a booming area.
The groundwork for next-gen Ocean and River cruising has been completed. Capital costs have of course been absorbed onto the balance sheet but the true, rather than projected, benefits have yet to be seen.
Roger de Haan is no fool. I have been in meetings with him over the years and have always been impressed by him. If he is backing this over the long term, then so will I.
Happily buying Saga stock at these ludicrous prices.
I'm off to enjoy a beautiful summer.
Good luck to all and see you in a few months.
FJ
Re: "If you bought at £3 I’d be astounded if you made a profit in 12-18 months…..any insight as to why you think the share price will double over that period?"
I'll answer that on his behalf, if I may.
Perhaps because ... :
a) he isn't short selling like some on here
b) the SP here is still artificially extremely low, trading at just 10p per share in old money. Even compared to RDH's rescue price which was around 27p
c) every metric is in far greater shape than 20 months ago when the share price was a depressed 450p. The cruise ships had been mothballed for nearly a year at that point.
But, by all means, increase your short that lost you another 6% today if that makes you feel happy.
Good luck to you - you'll need it when common sense returns shortly.
Hi RDH,
You posted yesterday:
"What was better? Revenue was up slightly and they paid down a little debt, but excluding the goodwill write down from last year's numbers they lost more, and that was comparing to 2020 which was the height of covid. So barring an accounting entry the business managed to generate less profit when operating more? How is that a step forward?"
An appallingly unpleasant poster called Cleverinvester on Advfn posted (ref 23 Mar '22 - 09:01 - 20742 of 20770):
"What was better? Revenue was up slightly and they paid down a little debt, but excluding the goodwill write down from last year's numbers they lost more, and that was comparing to 2020 which was the height of covid. So barring an accounting entry the business managed to generate less profit when operating more? How is that a step forward?"
Sounds a bit similar eh?
So are you happy for that chap to be copying your posts? If you don't object to this plagiarism, are you the same poster under yet another different name after getting banned from this site before?
This dodgy character jedclampit has always been a negative poster on this share whilst pretending to be invested.
Now we have all seen his real position. Not only massively negative, but also completely thick as a plank. Doesn't even understand the difference between a share price and a market cap - and yet it still posts on this board - ludicrous!
Go away jedclampit, you've been rumbled and you are a complete joke. Not very clever at all.
That is the opposite of what I hear from my contacts. Some staff may be a bit fed up of working from home, but employment opportunities in the area are very limited and most will be content to be in relatively secure jobs.
I also have a close friend that has applied for 4 IT jobs at Saga in the last 6 months and he has not even managed to get through to the interview stage despite having very strong and relevant experience for the roles offered. That suggests a healthy supply of applicants for the roles on offer.
I suppose it may just come down to who one's contacts are?
It was a really weak and lazy article - certainly not worth worrying about in full. They even used a picture of a Saga cruise ship that was 10 years out of date.
But here is some of it as requested.
Saga is cruising towards a strong recovery in demand
Strong demand for Saga’s cruise holidays has given the over-50s travel and insurance group hope that bookings have not been permanently damaged by the pandemic.
In a trading update for the six months to January 26, the company said that the load factor on its vessels was standing at 86 per cent for the first half of its new financial year.
It said that its cruise business had generated positive earnings on a load factor of 68 per cent, but ship depreciation and refinancing costs would mean that the division was likely to suffer an underlying pre-tax loss of between £45 million and £50 million.
Euan Sutherland, Saga’s chief executive, said that while the Omicron coronavirus variant had affected the company’s travel bookings in December and January, “our outlook for Cruise in 2022-23 and beyond is positive”.
Hi Banbury,
The Saga Contact Centre building in Ramsgate (which is in Thanet in north-east Kent) is still up for sale and has recently been used for the Covid-19 Booster vaccination program. It was visited by Boris a few weeks ago in between his parties at No 10.
Enbrook Park in Folkestone has been repurposed and revamped for the new model of remote working with hot-desk provisioning and team/group meeting attendance on site. Anyone attending this year's AGM will be really impressed with the site and its magnificent grounds which are fully open to the local people.
The 2 unused buildings in Folkestone - which are Middelburg and Cheriton Park - have now had Saga branding, logos etc completely removed. The former has definitely been sold (perhaps subject to contract and completion, I'm not entirely sure) and the latter I do not know but it does not appear to be for sale any longer.
The reduction in facilities management liabilities must be huge compared to the newly added technical costs associated with remote working. These must surely be starting to work through to the accounts soon, let alone the proceeds of the property sales.
I don't follow stocks as closely these days, but if I hear anything about these properties I will post back here.
All the best to all of you.
Ditto from South Africa:
Https://www.cityam.com/coronavirus-blessing-in-the-sky-omicron-may-be-very-positive-news-for-the-world-if-new-covid-mutation-kills-off-more-lethal-delta-variant/
Blessing in disguise: Omicron variant may be ‘very positive’ news for the world if new Covid mutation kills off more lethal Delta coronavirus
TUESDAY 30 NOVEMBER 2021 10:45 AM MICHIEL WILLEMS
Extract
Hospitals and GPs across Southern Africa are increasingly reporting that the symptoms of the aggressive new Covid strain Omicron are “unusual but very mild,” according to various media in South Africa this weekend.
Around 90 per cent of all new infections in the Johannesburg region are now caused by the Omicron strain but, so far, the Covid death rate and even hospital admissions appear not to be increasing significantly, local media report.
Some experts are therefore cautiously optimistic that – if Omicron turns out to be less lethal but more contagious and dominant than the Delta variant – the new mutation may actually be a blessing in disguise.
Mild symptoms
Hundreds of infected people across Southern Africa reportedly complain of nausea, headaches, fatigue and a high pulse rate, but none seem to suffer from a loss of taste or smell, which has been the case with most other Covid mutations.
Moreover, more and more medics across Southern Africa are confirming that most Omicron-infected patients merely have a severe headache, nausea or dizziness.
Dr Angelique Coetzee told various newspapers in South Africa: “Symptoms are so different and so mild from [non-Omicron] Covid patients I have treated before.”
A GP for over three decades, and chair of the South African Medical Association, she was the first African doctor to suggest to local authorities Covid had mutated into a new strain.
Coetzee reportedly said the symptoms “did not make immediate sense”, with patients including young people of different backgrounds and ethnicities with fatigue and a young child with a high pulse rate.
Blessing in disguise
Looking at the first data coming out of Southern Africa, virologist Marc van Ranst said this weekend that “if the omicron variant is less pathogenic but with greater infectivity, allowing Omicron to replace Delta, this would be very positive.”
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Apologies for the wrong link in my previous post - here is the correct one and more of that article:
Https://www.bbc.co.uk/news/uk-59442141
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Like Prof Semple, Prof Sir Andrew Pollard, the director of the Oxford Vaccine Group, expressed cautious optimism that existing vaccines could be effective at preventing serious disease from the Omicron variant.
He told the Today programme that while it would still be weeks until scientists properly understood the effects of Omicron's mutations, most of them were similar to those seen in other variants.
"Despite those mutations existing in other variants, the vaccines have continued to prevent serious disease as we've moved through Alpha, Beta, Gamma and Delta," he said.
"At least from a speculative point of view, we have some optimism that the vaccine should still work against a new variant for serious disease but really we need to wait several weeks to have that confirmed.
"It's extremely unlikely that a reboot of a pandemic in a vaccinated population like we saw last year is going to happen."
Asked whether it was possible to update the vaccines if deemed necessary, Prof Pollard added: "The processes of how one goes about developing a new vaccine are increasingly well oiled. So, if it's needed, that is something that could be moved very rapidly."
The UK currently has no known cases of the Omicron variant.
The travel ban for southern African countries is designed to maintain that for as long as possible, and Health Secretary Sajid Javid said the government "won't hesitate to act" if further measures are needed.
"One of the lessons of this pandemic has been that we must move quickly, and at the earliest possible moment," he told MPs on Friday. "We're heading into winter and our booster programme is still ongoing, so we must act with caution."
But asked whether the government could switch from its current, minimal Covid restrictions to its Plan B for winter, Mr Javid said the current rules "remain the policies that I think we need at this time".