The cruise business is still growing, based on current projections on occupancy and per diems the PBT is likely to double in the next 2 years. The current year PBT would have been 5.9m higher if not for what happened in November.
Their travel business is a joke, 1.5m profit on 150m of revenues in a good year. In a bad year like COVID they were be losing 20-40m a year. Someone explain to the BoD the concept of risk adjusted returns. Their cost base is disproportionately high for such a tiny business.
Will sir Roger be happy about losing the ships from Folkestone?
At £360 per diem, these ships should be the most profitable in the UK, yet they barely will make £30-40m EBITDA pa each. It would be better to sell the entire business to someone who can leverage it and increase the fleet size. Saga management are too incompetent to get anything right.
They could have sold titan travel now for £100m but instead decided to consolidate the business within the wider saga travel business in 2021, spent about £20m in restructuring costs at the time. Euan was truly clueless
What Sir Roger is charging is cheaper than getting commerical rates from the banks, the 2% arrangement fee is similar to what the banks usually charge, the chairman did not conjer it out of thin air. Even Saga's 2026 bonds are trading at 80% of Par. Add that to the 5.5% coupon and see what YTM you get.
You see the 10% interest on the De Haan loan is only £5m, and that is if they utilise the facility, most RCF's are not fully utilised.
If they refinanced the ship debt, it would likely be an additional £20m a year. The current rate on the ship debt is about 4% pa for the next decade or so. If they refinanced this they would likely pay 8+%. Thats a lot more money over the term of the loan.
They did not reduce headcount nor did they claim furlough, the latter would have been worth 50M, weird that is the amount they need for working capital purposes post payment of the 150m bond.
Thanks Hounddog10, that is a great explanation.
I think you forgot to add the client relations as a asset, let's say a conservative 100gbp for each client (only 1.3m of these are current accounts) so about gbp270m (2.7m *100) which reduces the deficit slightly.