Member Info for rupans

Https://www.which.co.uk/reviews/cruise-lines/article/best-cruise-lines-aXDfX7O9uJEz

https://www.independent.co.uk/travel/news-and-advice/best-cruise-lines-passengers-survey-b2709430.html

From these articles I definitely think there is plenty of room to increase per diem prices on Saga cruises.

If you look at other top all inclusive cruise lines they have a much higher per diem.

This would greatly increase Saga's bottom line.

Agree with you Graviton and kinda disagree with zccax77.

we know that in 1 year the profit in travel has gone from £1.5m to at least £6m. This is on an increase in 9% passenger numbers and 15% revenue. This shows that growth in travel will have a significant effect on the bottom line. So investment here is good.

Now zccax77 point is low margin on relatively high revenue which is a fair point but also the profit is on a very capital light investment. So an ideal way to increase profit and revenue with very little extra capital employed ....

Well we know that there will be a writedown in the final results as it was mentioned at the 6 month figures.

However not much more to writedown after that and also the writedown was done in conjuction with the upcoming Ageas deal. So I do not believe there will be an additional writedown.

Dont believe it will go back to £1.00 as suggested as each time there is a dip it is higher than before ... (looking at the charts ...)

I think Saga needs to and will push the travel side of the business. I have seen more Saga/Titan people carriers and adverts (LBC) recently. I think going forward there is significant growth and profitability here.

Amazed that this is still going back to 120p (8p in old money)

Z,

Euan was a disaster. Mike seems to be doing the right things

Rogue, Bug, Graviton etc,

I am not an accountant but trying to predict forward earnings is difficult, but some thoughts:

Positives,

the increase in pricing regarding ocean and river cruises should drop to the bottom line.

In other words if prices increase 7% and the revenue for each ship is circa £100M then that is another £14M pure profit at the bottom line.

obviously the cash generation will be good this year and next which should save us 11.25% on £70M this year(2025/2026). Remember that Saga will pay off expensive debt first. No idea about next year.

Negatives:

The new finance deal is expensive at 11.25% and that will increase financing costs. Rogers loan was 10%. But more importantly the bond of 5.5%. Also not sure in accounting if the actual cost of the bond has been showing up as a finance cost in previous accounts as it is paid on maturity and not on a yearly basis. Could someone help with that?

Overall looking at this with the Ocean cruise and River cruise having such good price rises and the debt reduction it should easily offset increase in financing costs and drop in profitability of insurance. But the calculation of next years profit (2025/2026) is way over my head.

The sudden price drop on FRiday looks to be due to Peel Hunt dropping its target price from 130p to 120p.

Agree £5 million is about right but covid is a once in a lifetime shock. the £66M and some was taken of the share price

Z,

well a bit simplistic. I remember before covid titan travel alone was worth £100M. so I suspect the £1.5M was just travel recovering ...

Https://www.youtube.com/watch?v=TYDsnukc1a0

Rogue,

I have had the same feeling for over a year now. It keeps going up and down like a yo yo on tiny amounts of trades.

Still ridiculously cheap now. Have noticed that insurance prices have fallen dramatically. This should be good for all those 3 year deals Saga has sold.

https://www.gbnews.com/lifestyle/cars/car-insurance-prices-drop-drivers-relief

Also notice the big increase in holiday inflation which is good:

https://travelweekly.co.uk/news/air/increased-demand-and-rising-costs-drive-higher-package-holiday-prices

At a guess a great hedge against purchasing Saga bonds. Say you buy bonds of Saga with a 10% return due to risky nature. This is a hedge which could cover losses if there is a casatrophic failure even if unlikely thereby guaranteeing a return of a little less than 10% but wether the worst happened. Obviously looking at current bond prices likely that there is no catastrophic failure

Https://corporate.saga.co.uk/investors/financial-calendar/

Nope it is in the calendar for the 30th

Not sure Roger is considering his average price he paid for 29% of Saga (around 240p??). However even 240p is relatively cheap considering the assets that Saga owns (mainly the 2 cruise ships)

Hi Rogue,

Yes I am fine. Just been in Saga for a long time and still perplexed at why this share is so cheap.

But willing to wait until it is correctly priced in my opinion.

Graviton,

Hope you are right. Of course not sure how the rightdown effects all this. But after refinancing and dust settles, £70M net profit is quite achievable.

Rogue,

Obviously you are right as can be seen by the SP. Just difficult to believe due to glaring value proposition here. Hopefully financing fixes this.

Z,

But it also highlights how cheap Saga is. 2 cruise ships alone worth £900M. Lets say £800M after depreciation

Saga debt £600M, saga market Cap £163M. Total enterprise value of £760M

plus travel business, insurance business, AICL (to be sold for £67.5M) plus 3 river ships ....

refinancing has to be the last key ... i hope

Yes I am expecting more jam tomorrow as well. Bit worried about another writedown.

I am not sure how a partnership in cruise would work.

Sale and leaseback is all very well but not sure how we can get another cruise ship this way.

But the sp is so damn cheap even at current performance. Hopefully a few rate cuts and gilt yields coming down should help Saga refinance a bit cheaper. Dont think we will be able to get 5.5% though like the current bond ....

Hope so. this is up and down like a yo-yo but looking more and more undervalued by the day