IC article about director buys20 Apr 2025 08:52
Https://www.investorschronicle.co.uk/content/86be7f36-fad6-484d-a4fc-e9e72a8e47a3
"Roger De Haan’s return to Saga (SAGA) has been anything but plain sailing.
De Haan had sold the company founded by his father, Sidney, to Charterhouse in 2004 for £1.35bn. The latter later agreed a deal with fellow private equity firms CVC and Permira to merge the business with the AA, and the combined entity was floated in 2014 for £2.1bn.
By the time De Haan was convinced to pump £100mn back into the business as part of a £150mn fundraising in September 2020, the company had “lost its way and lost its confidence”, he argued, with ex-chief executive Euan Sutherland blaming its former private equity owners for loading the business with debt and starving it of investment.
Saga has continued to lose money ever since, with De Haan adding an extra £85mn in loans, but there were signs of a brighter future in its recent results. The insurance underwriting business will soon be offloaded to Ageas (BE:AGS), and chief executive Mike Hazell this month spoke confidently of doubling adjusted operating profit to £100mn within five years.
This type of growth will be needed to eat into a debt pile that stands at £591mn, or almost five times Ebitda.
A refinancing agreed in January has bought Saga time (and allowed it to repay De Haan’s loans), but at a cost. The new lender, private credit firm HPS Investment Partners, is charging an effective interest rate of more than 11 per cent on £435mn of borrowings.
If Saga makes the type of profit that Hazell expects, this rate will be cut as debt is repaid. Both he and De Haan look confident that it will.
Hazell has bought £100,000-worth of shares, while De Haan has bought £2mn-worth. The latter equates to about 1 per cent of the company at its current valuation, bringing De Haan’s total stake to about 27 per cent."
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