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Looking at my in-tray this morning to file my share holdings into the manic depressive drawer which holds Saga,Avon Protection,IAG and Rolls Royce but looking forward to putting my Mitie share holding into the todger pulling drawer alongside BP,Shell and Imperial Brands..lol
At last..Saga's marketing & PR dept has awoken from it's 3 year hibernation!..Many a time I wondered if I'd lose all of my holding and even now I'm averaging £6.00 per share after consolidation. ...Cpt Batchelor managed to hit 4 icebergs along the way and flooded 4 watertight compartments but we stayed afloat..There's an army of pensioners chomping at the bit to splash out on with their unspent pension stockpiles and it's all about confidence..with Sir Rodge in charge I think that I might break even in 2022..it's been a rollercoaster riding along on the crest of a slump these last 3 years so hopefully we can be rewarded for all those sleepless nights.
Looking ahead at the cruise business I think that Saga will have a distinct advantage in the market as all their cruises start and end up at Southampton and therefore won't be exposed to getting stranded in a foreign country or left wallowing about in the Pacific ocean for weeks on end..combine this with a probable vaccine at the end of 2020 that will prioritize health workers and more vulnerable senior citizens who are generally more cautious and want to stay closer to home for the foreseeable future..those factors alone should see Saga's fortunes head northwards over the coming months and into 2021..fortunately the revenues from it's insurance business will offset any deficit in cruise ship income but I'd be extremely worried if 100% of revenue relied on the latter.
Looking on the plus side Saga don't have an expansive commercial property portfolio to maintain,cash flow appears pretty decent and the recent sale of non-core assets will provide a buffer to weather the current cyclone emanating from China..most of their profits for the current financial year will have been accounted for although I suspect that forward cruise bookings will have fallen off a cliff..hopefully the pandemic in Europe will peak by April/May and confidence will return in the summer..expect the share price to languish in the 20-30p range but it would appear that Saga are in a better financial position that a lot of others on the FTSE and all will be affected in one way or another.
Considering that there a over a billion people in China and yet there are only 80,000 Coronavirus cases, it would appear that there has been a complete overreaction by the markets as a result of all the media hype..all this from some dodgy bloke in downtown Wuhan who's been busy collecting diseased and virus infested wildlife ready to fry in a Wok and serve on a bed of noodles...time then to sit back and wait for confidence to return which will only happen when the number of new virus transmissions shows a continued decline..could be a fair few months though.
If I remember rightly there was an article published to say that it was sold for £16million back in the summer of 2019...that should appear on this years final results..Net debt at the original stockmarket floatation was over £700million and they’ve been merrily chipping away ever since..new cruise ships should accelerate the debt repayment and future looks a lot brighter since Commodore Bachelor departed after the front end of his submarine imploded..
I'm expecting a pretty stormy meeting and hard to justify the continuation of LB as CEO..SP might head north if he goes but the volatility in the Travel & Insurance markets at the moment means it will probably rollercoaster along between 40-60p until their next trading update in August..not expecting any divi this year and a further goodwill writedown is inevitable but confidence will return if interim results show an improvement..knowing our luck though the Spirit of Discovery will strike an uncharted rock in the Mediterranean on it's maiden voyage and disappear beneath the waves.
I can't see anything that will give investors any confidence in the short-term and the SP will languish around the 50-60p margin until the next trading update although I think that there would certainly be an upswing if LB was shown the door and a more hands-on CEO appointed as opposed to the current one who has been asleep at the helm of his submarine and been very economical with the truth in the process..let's hope that the blue-rinse brigade continue to put trust into the brand as most of them were there at the IPO and, like me, must be aghast at Saga's performance since the start of 2017.
LB stated that there were long-term challenges and this sends a shudder down my spine:
Are there more skeletons in the cupboard that we don't yet know about?...Is the cashflow deteriorating to such an extent
that they are looking to sell Titan Travel & Destinology to shore-up the finances?..Why haven't any of the BOD's purchased any holdings to give some confidence back for the brand?..the slashing of the final divi indicates panic..what is he hiding????
Many of the shares bought at IPO were SAGA customers (including myself) and there is a big danger that they will
now see the brand as toxic and head for the exit door...LB is currently on par with Gerald Ratner..question is,on current performance will they go bust?
It's becoming increasingly apparent from financial analysts that LB needs to go and a new CEO be appointed..if he stays then the company will be viewed as a basket case and I'm going to sit on my holding for the moment to see if he falls on his sword..considering he's presided over a catastrophic collapse of the SP then I'm afraid that it'll continue heading downwards and will stay there if he remains..I'll be offloading mine if he does.
For a 60 year old well established company to have sustained a 45% drop in share value as it didn't meet market expectations in 2017 is a complete over-reaction in a currently jittery market..Debt levels have reduced considerably over the past 4 years,dividends have been maintained comfortably and the insurance underwriting has performed strongly with order books filling up well for the new cruise ships..My own view is that there will be an upswing in their travel business with the BREXIT fallout as senior citizens don't like uncertainty and will prefer a safe pair of hands without taking any risks..The recent upswing in the SP over the past month or so seems to have unnerved JPM and perhaps they want the SP to fall inorder to make bigger gains for their clients over the longer term..Either way the SP should be around £1.70-£1.80 for this sector of the market so we'll all need to be patient for us to be proven right.
Hopefully the momentum will continue and anyone selling with a 6p ex-divi less than a month away must be crazy given the solid results posted a week ago...I'm still trying to work out where I am as I bought in @ 138/127/122/108 together with some at original floatation and think I might now be in positive territory...gut feeling is to keep hold of them as I can see SP topping 200p next year.
Both the Saga Sapphire & Saga Pearl are ageing cruise ships that have spent a fair proportion of their time in wet & dry dock for refits/repairs over recent years and I think that replacements due in 2019 and 2020 are going to have a serious positive impact on future profitability and customer retention..The cruise ship market is rapidly heading towards saturation point and they are now of a size that more senior citizens are avoiding as they don't want screaming kids tearing around the ship 24/7...Saga have, in my opinion, identified a proper niche in the market here by opting for smaller vessels that won't require maintenance for many years to come and provide a more personalized itinerary without being overcrowded..judging by the success of it's current fleet then the income potential is going to increase significantly and that doesn't include bolt-ons such as travel insurance etc...the majority of cruise ship goers are in the 50+ age bracket and go several times a year so SAGA have the ability to tailor destinations to the respective demand of it's passengers...it's a sound strategy which will have prove to be winner in terms of future profitability.
The SP had been ticking along quite nicely this week until 11.45am this morning when an avalanche of selling occurred..obviously someone doesn't want the SP exceeding 116p...good news is that there are still plenty of buyers and we haven't had a 2nd profits warning so expecting results to be as per LB's statement..I've no doubt that the SP has been deliberately manipulated and the only reason I can think of at the moment is that a takeover bid might be on it's way.
It's been a bit of a rollercoaster ride since December but I'm positive that the SP will re-bound and we don't get a 2nd profits warning before the yearly results are out on April 12th..Markets are very jittery after a spate of recent collapses but this company is in far better shape in terms of it's balance,debt ratio etc and a PE of less than 8 makes this ridiculously cheap..Reading between the lines I think that a few c*ck-ups have been going on in it's insurance arm, hence the arrival of Patrick O'Sullivan who has a decent track record and will be able to steady the helm..If the results are as LB states then confidence in the brand will return and us PI's will eventually see a decent return on our holdings and think that the final dividend will be at least the same @ 5.8p or marginally better @ 6p...It'll probably take a couple of years for the SP to return to it's original value so I'm going to be putting these away for a while as it makes depressing daily reading watching the SP head off on a downward path, the majority of which hasn't been caused by smaller shareholders, and there are plenty of buyers which is a good sign.
I've always maintained that the SP is being deliberately manipulated and has been since the beginning of Jan..recent news from across the pond suggests that focus has now turned to other areas for the moment, hence the rise today when virtually everyone else has fallen..There will be a few twists & turns to come but should see a marked upturn as the dividend date approaches..recommend continuing to hold these shares as long term they represent exceptionally good value...short-term investors should look elsewhere though as the SP will flatline for a while yet..plenty of buyers still and that's a good sign.
Originally bought a small stake on floatation and added more @ 138 after CEO bought a wad..added more again @ 127 and 122...tempted to do so again but feeling very nervous now at dipping into more savings...S/P is ridiculous considering company is on a sound footing and profits only marginally short of expectations..is the price being driven down for a takeover bid in the offing??
It would appear to me that there is a heavy dose of manipulation going on here..Since market opening there have been 6 occasions where the SP has taken off on an upward path and been pegged back by sudden flood of unusual selling to peg back the price, firstly at 124p and then at 125p after a robust period of buying, usually on an hourly cycle and, as an educated guess,confined to a small group of big players...don't know how long they're going to keep this up as the volume of shares being bought has been markedly above those being sold and there won't be any left at this rate.