Saga Regulatory News (SAGA)

5 March 2020

Saga plc

("Saga" or "the Group")

Sale of Patricia Whites and Country Cousins & Trading Update

Sale of Patricia Whites and Country Cousins

Saga announces it has completed the sale of Patricia Whites and Country Cousins for an enterprise value of £14m to Limerston Capital. Patricia Whites and Country Cousins are introductory care agencies.

This is consistent with the stated objective to reduce leverage and simplify the business through the disposal of non-core assets.

As at 31 January 2020, and based on unaudited financial information, the Group's net short-term bank debt was around £110m, reduced from £148m as at 31 July 2019. Since the end of January, the Group has announced two disposals which are expected to generate net cash proceeds of around £37m in the first half of this year. The cash from disposals will be used to further reduce short-term bank debt. 

Trading in February

Saga is closely monitoring the evolving situation with respect to COVID-19 and our focus is to ensure customers, guests and colleagues are safe and reassured in all circumstances. We have taken significant steps to safeguard everyone and will continue to do so throughout this time.

Saga has seen a robust start to trading in our Insurance business with both the Retail Broking and Underwriting businesses trading as expected. The Insurance business continues to make good progress in execution of the strategy set out last April.

Trading in the Travel business has been impacted by recent developments surrounding COVID-19. 

For our Cruise business, bookings until recently have been very strong, with forward sales for the current year of 80% of the full year revenue target as of 29 February. The remaining 20% of our full year revenue target is weighted towards Q3 and Q4 2020 cruises. While we have seen a higher level of cancellations for departures in the near-term and more generally a lower level of bookings for departures further out, our two most recent departures had load factors of around 80%. The Cruise business continues to only depart and return to UK ports and we have flexibility on destinations visited.

Our Tour Operations businesses have experienced an increase in cancellations and suppressed demand in line with the industry. Forward passenger bookings for 2020/21 were down around 20% versus the prior year, with a more significant impact in recent weeks. However, given our relatively low level of cost commitments and lower exposure to Northern Europe and Far East destinations we are able to react to changes in demand and flex elements of our cost base for the remainder of the year.

Outlook

The evolution of COVID-19 and the impact this will have on full year earnings for 2020/21 cannot be predicted with any certainty at the current time. While our Travel business will be impacted, the Group expects the performance and cash generation of the Insurance business to be largely unaffected. There are a range of actions the Group can take to mitigate against weaker trading in the Travel business, such as the cost efficiency actions already underway and announced in the recent trading statement.

The Group will provide a full update with full year results for the year ended 31 January 2020 on 2 April 2020 and reiterates that underlying profit before tax is expected to be in line with expectations.

ENDS

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Notes to editors

About Saga

Saga is a specialist in the provision of products and services for life after 50. The Saga brand is one of the most recognised and trusted brands in the UK and is known for its high level of customer service and its high quality, award winning products and services including cruises and holidays, insurance, personal finance and publishing. www.saga.co.uk