The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
I find EBITDA to be a good proxy for cashflow, per page 40 of the R&A the EBITDA for tours appears to be -32.9m for the 12m eneded Jan 2021. Therefore cashburn of about circa 3m per month. so over the last last year they have burnt GBP48m (16months*GBP3m) on their tour business.
https://www.corporate.saga.co.uk/media/1378/saga-annual-report-2021.pdf
Banbury I really cannot see how you get your cash burn figure for travel. Per their segmental on page.36 it is GBP36.9m.
https://www.corporate.saga.co.uk/media/1378/saga-annual-report-2021.pdf
Banbury - The 2% reduction in premiums. Is this a 2% reduction in volume of policies underwritten or a 2% reduction in monetary terms? Without actual GBP numbers is it hard to tell. One positive is that their brokerage revenues at 74GBP remains constant.
From what i understand they charge between £225-265 per night and the costs are £110 per night per berth. This does not include depreciation, tax, interest or central costs, therefore more of an ebitda figure. Someone like P&O charge half what SAGA charge.
The board are far too blinkered to see this. I hope the large institutional holders can see the correlation versus the rest of their portfolios and vote no. The problem is the PE vultures waited far too long to make an offer and now the market is in a far better place then when they first turned up, if they made this offer 2-3 months ago it would have made sense however at this point in time the AA are no longer in need of a rescue.
The vaccine is almost here and credit market conditions have improved markedly. Therefore I think AA will be able to re-finance on better terms than was the case when the PE interest was initially announced when the market was in a bad place. I hope the institions decline the offer and refinance.
https://www.ft.com/content/e24ef81b-38d1-405c-a692-91f83512f558
Companies hit hard by coronavirus including American Airlines, cruise ship operator Carnival and German flag carrier Lufthansa are racing to raise billions of dollars, taking advantage of market optimism that an effective vaccine is close.
https://news.sky.com/story/revealed-cerberus-in-talks-to-buy-struggling-co-operative-bank-12134851
One insider suggested that Cerberus might seek to pay as little as £200m for the company, which has 3.3m personal banking customers across the UK.
Its current shareholders are said to be reluctant to underwrite the issuance of MREL-qualifying debt themselves.
This is the risk, if current rental values are 30-50% lower than pre-covid then the auditors will be forcing them to write-down their IFRS-16 lease asset by £190m-£300m. This is a real possibility and one of the analysts mentioned in the Q2 call.
"The Metro business model is a busted flush if it wasn’t then Metro would be opening more banks every week on new Covid Rental levels (30-50%) lower than the rents Metro agreed to tie themselves into Precovid lock down. All in my opinion of course and people should do their own research."
Campbell good points, just need some clarification:
Average remaining lease is 20 years
They have spent £5m on leasehold improvements in each location. Are they really going to abandon sites where they have invested a kings ransom making improvements to the landlords property?
Remember this is a bank which has to hold minimum capital so is constrained in doing things other retailers can.
Looks like no one told Neil Faulkner about the 20 year average lease term on those stores.
“An acquirer might look to retain as many of Metro Bank’s customers as possible, while closing as many branches as it can get away with. RateSetter’s technology and people would certainly be an efficient way for another bank to expand its lending too.”
This for you Theo:
https://www.p2pfinancenews.co.uk/2020/11/02/analyst-speculates-metro-bank-could-become-the-target-of-an-acquisition/
Guys do you know how they will check whether you are flying for business or pleasure. I am flying out to Ecuador to work from there for the next few months.
Jinny I would say better quality management and a business model with is sustainable. Hopefully one of them takes this out at £1 and that will be the end of this pile of dog poop.