RE: A solid update 👏👏👏👏24 Sep 2025 09:14
Having asked ChatGPT to review the RNS, it says:
Positives
Trading ahead of expectations: First half performance was stronger than forecast, mainly due to very strong Travel (Ocean, River Cruises, and Holidays).
Return to profit: Reported profit before tax was £3.7m vs. a £116.9m loss last year.
Revenue & EBITDA growth: Revenue up 9%, Trading EBITDA up 8%.
Travel business booming: Travel underlying profit before tax was 33% higher than last year. Ocean Cruise and River Cruise both reported double-digit profit growth, with high load factors and rising per diem rates.
Debt reduction: Net debt fell by £102m year-on-year, leverage ratio improved from 4.8x to 4.3x, and management now expects full-year leverage below last year.
Strategic progress:
Debt refinanced with longer-dated maturities (to 2031).
Insurance Underwriting sale to Ageas completed (delivering £17m more cash than guided).
New 20-year Insurance Broking partnership with Ageas on track to launch Q4.
New partnership with NatWest Boxed for financial products.
Cash flow: Operating cash flow up 64% to £89.4m.
Caveats
Underlying profit before tax down slightly: £23.5m vs. £24.8m last year, due to higher financing costs from refinancing at higher interest rates.
Insurance Broking weaker: Profit contribution fell (home insurance remains challenging), although still better than internal expectations.
Full-year guidance: Underlying PBT expected to be “in line with prior year” (i.e., no profit growth this year, but ahead of earlier expectations given finance cost headwinds).
Exceptional costs: Transition, restructuring, and disposal costs are still material, which depress statutory profit.
Outlook
Management reiterated confidence in hitting their £100m+ PBT target by 2030 with leverage under 2.0x.
Travel forward bookings are strong, supporting H2 momentum.
Insurance transition to Ageas and investment in sales/marketing will weigh on H2 profitability, but management frames this as laying foundations for future growth.
👉 Bottom line: The update is broadly positive – Saga is delivering stronger trading than expected, has reduced debt, returned to profit, and its Travel division is performing extremely well. The main negatives are higher finance costs and ongoing challenges in home insurance, but these seem manageable in context.
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