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I think what puts it into persperctive for me is that Saga is currently only valued at around 12p in old money which was the heavily discounted rights price during the hieght of the dispair during the pandemic. I also note the De Haan bought a huge chunk at the same time at 27p (someone remind me with correct details) and of course his rights at 12p and any unused rights at 12p. So although it looks like it has risen really quickly it is still dirt cheap. My hope is however that they sell AICL soon which would then change the whole dynamic of the current valuation ... for the better.

unhooked, just rehashed info from yesterday but here are the highlights:

"Saga, which has ambitions to become “the superbrand for older people”, unveiled patchy operating figures, with strong bookings in its cruises business offset by a big rise in costs in its insurance underwriting division."
"It said cash at the year’s end would be £140 million, lower than it had expected, while net debt would be “slightly higher” than the £721 million figure recorded in July. The worsening cash position was because of margin calls on fuel hedging and a short-term reduction in advance receipts from cruises."

"It is in a race to find the cash to repay a £150 million bond due in 2024. Sutherland, 53, said he was confident the operating businesses would deliver the necessary cash."

"Investors took heart from comments about “an encouraging pipeline” of new business in travel and trading in line with expectations in insurance broking, pushing up shares in Saga by 15½p, or 10.2 per cent, to 168p."

https://www.thetimes.co.uk/article/credit-deal-eases-pressure-on-saga-as-it-plots-recovery-g5jcnrq37

https://www.thetimes.co.uk/article/saga-downgrades-forecasts-after-insurance-rocks-the-boat-g5jcnrq37

From the article regarding cashflow:

The worsening cash position was because of margin calls on fuel hedging and a short-term reduction in advance receipts from cruises. This was the legacy of the cancellation of a 83-night cruise in Latin America because of Covid.

Hi Banbury,

I agree with you ... lets hope it is a one of cost as you say.
Hopefully going forward things improve. Difficult to conclude anything from a lukewarm trading update

Saga PLC (LSE:SAGA) said the rebound in cruise and travel revenues, post-pandemic, has continued to drive revenue growth.

As a result, the company which specialises in products and services for people over 50, remains on track to report underlying pre-tax profits between £20mln and £30mln, in line with previous guidance.

In a trading update covering the period from 1 August 2022 to 23 January 2023, Saga said revenue is expected to be between 40% and 50% ahead of last year, driven by the recovery in the cruise and travel industry following the Covid crisis.

The company said its Ocean Cruise business achieved strong load factors and per diems in the second half of the year with an encouraging pipeline of bookings.

The load factor for the second half of 2022/23 is expected to be 84%, delivering a full year figure of 75% in line with guidance and up from 68% in the prior year.

Per diem for the full year is anticipated to be £318, in line with guidance, and up from £299 a year ago while the booking position for 2023/24 is strong, with a load factor and per diem of 60% and £337 respectively at 22 January 2023, the company noted.

But despite a tenfold increase in revenue in the travel business this is expected to report a small underlying loss, in line with guidance, and reflecting marketing and administrative expenses.

Touring bookings for the 2023/24 year are strong, with increased demand for long-haul destinations while incoming call volumes over the first three weeks of January are ahead of pre-pandemic levels.

Insurance Broking is expected to be broadly in line with guidance with total policies in force, at 31 January 2023, expected to be 3% behind the prior year, with policy sales also 3% behind.

In the underwriting business, which Saga said yesterday it is looking to sell, the underlying current year combined operating ratio for the full year, excluding quota-share reinsurance, is expected to be around 125%.

Saga also said it has concluded talks with its lending banks to amend the covenants in relation to its revolving credit facility (RCF), giving greater flexibility in relation to liquidity used for short-term working capital purposes.

From sharecast:Saga reiterated its guidance for half-year profits as sales in Cruise and Travel continued to recover from the pandemic.Nonetheless, chief executive officer Euan Sutherland described conditions in the UK motor insurance market as still "challenging", adding that there had been "some pressure" on the company's underwriting business.Despite the latter, Saga's Retail Broking unit was expected to deliver results in line with expectations.

Almost sold ....

https://www.thetimes.co.uk/article/saga-sells-underwriter-acromas-insurance-to-reduce-debts-32k3b83s2

mainly bokers

the 3 year policies could be an issue. But they are charged at a premium and Saga are just brokers who pass on the risk to third parties which should lower the impact

:-D
wishful thinking I think but you never know.

Ade,

Should be positive as investors and brokers have wanted Saga to sell the underwriters for a while. However they would have got more in the past. The rest of the news is known

As many people posted 1 or 2 years ago they should have sold then for circa £400 M even house broker recommeded it.
Any way the main points:

1. Try and sell the underwriting business for circa £90M (please see my post last week for the reasons etc)
2. Current total debt of Saga is £721M
3. Current market cap is £210M
4. Euan Sutherlans had done a bad job at Superdry and Co-op
5. Roger De Haan came back and bought £100M shares in Saga (partly through rights issue)
6. His father sold Saga for £1.3 Bn
7.Saga floated for £2Bn in 2014
8. Saga has been reducing the number of policies it underwrites through AICL to around 30%
9. Saga being advised by Numis
10. AICL made £16M for 6 months to July down from £31M a year before due to claims inflation
11. Saga will report on Tuesday. Will there be a cost of claims rise from car insurance and burst pipes like direct line?
12. Saga has a capital markets day on Tuesday.
13. Saga will launch Saga Media on Tuesday run by Aaron Asadi.
14 Saga Media aims to attract more customers than Saga Magazine which is about 0.5M
15. Its aim to be the the global number one consumer advice brand for people over 50
16 Saga closed on Friday at 150.5p up 1.5p

https://www.thetimes.co.uk/article/saga-seeks-to-raise-90m-to-cut-debt-tzjnslkbc

Great article must read

That's fair the over 50s market for Saga is growing. But retail broking and its margins seem to be in decline - the main underwriters such as direct line and aviva e.t.c are dealing with customers more directly and the margins for retail broking will decline also as comarison sites erode the margin. However Saga as a premium brand for more mature people is definitely a winner in my opinion. I do like the private jet holiday that Titan have created - definitely takes all the hastle out of travelling ;-)

So here are the reasons that Saga's biggest businesses - motor and home insurance retail broking remains in decline:

1. Saga Retail broking of Home and Car insurances from last update/results show that the number of policies in this area are falling.
2. Saga Retail broking of Home and Car insurances from last update/results show that the margins on these products are falling.
3. Historical circa £300M goodwill right off of the Saga Insurance due to declining margins in retail broking of home and car insurance policies - due to changing competitive market
4. Last results show a £269M goodwill right off the insurance business due to expected reductions in margin in retail broking of car and home insurance
5. Saga's whole business strategy for the last x years is to switch from the declining margins seen in Retail broking of car and home insurance policies to cruise, travel, saga money, equity release e.t.c. And from my point of view I can see it starting to work quite well.

I am not here to argue or nit pick but provided information for current and potential investors as I felt that some of the comments here need further in depth clarification. Personally I am very bullish on the turnaround plan for Saga.

Regarding the read across from the losses Direct Line got from the December freeze. Although AICL (Saga owned underwriter) does do some underwriting for home insurance they pass on the risk to other underwriters and third party insurance parties. AICL will however take a hit from motor claims.
However I am looking for positive noises for cruises, travel, equity release, travel insurance policies and health insurance plans.
However motor and home insurance retail broking remains Saga's biggest businesses which is in decline

https://www.ii.co.uk/analysis-commentary/stockwatch-should-you-keep-uk-insurance-shares-or-jump-ship-ii526583

Hi
Can someone explain the latest RNS please?

Hi Speedy,

Cheers for that makes me more confident in Saga. Got an email saying they have almost sold out on their £28000+ private tour holiday. Good to hear their cruises are selling well