Saga Share Discussion Threads

[pete160] 19/6/2019 14:15

Most people are ill informed. How many check that they are comparing last years policy cover with this year's, or their renewal quote with like for like cover from a cheaper provider? The value of insurance is whether it pays out when you need it.

[bigger is better] 19/6/2019 13:19

Guys Staf is reversing from a -93% decline. it was down -8% and now positive very big volue, 28m shares in issue 1.6m traded so far

[justiceforthemany] 19/6/2019 13:01

Any feedback from the AGM?

[nav_mike] 19/6/2019 12:44

All insurers seem to play the same game when it comes to renewal...ive been with Admiral 7 years and each year they are too expensive, and each year they match what Ive found on Comparethemarket Same again this year - they want £90 more, when the cheapest (Hastings and AA) are around £50 less They seem to bank on people being ill-informed and its a rather dubious business practice imho

[glavey] 19/6/2019 12:37

The cruise industry is a high fixed-cost business (like airlines) that requires very high occupancy to be profitable. This is one reason why several operators went out of business very quickly after 9/11 when there was a sudden drop in business.

[ignoble] 19/6/2019 12:35

The comment about Insurance retentions is interesting. Yes I am still with Saga but their renewal invitation was high compared to others using Compare the Market. I did call and let them know and they matched my cheapest quote as near as matters Compare the Market gave me quotes some 30% cheaper from memory Yes the retained my business and price matched ...

[nametrade] 19/6/2019 12:31

Am I reading this right that membership is up 50% from this time last year, also cruises are 30% better filled to date.

[stewart64] 19/6/2019 12:23

Gregpeck7 it's priced for a better than evens chance of Administration imo. Not withstanding, it might be worth a punt; only 33p left to lose and a much bigger upside. Whether the Market pessimism has this right or wrong, no idea.

[american idiot] 19/6/2019 12:01

Good posts Edmondj, thanks !

[gregpeck7] 19/6/2019 11:52

Looks a no brainier recovery play at these levels.

[justiceforthemany] 19/6/2019 11:42

16M volume already. Average in a full day is 6M.

[edmondj] 19/6/2019 11:32

Russ Mould, investment director at AJ Bell, said: “Saga is having a hard job digging itself out of a massive hole. “Having issued several profit warnings in the past few years, changed its insurance strategy, and announced plans to part ways with its chief executive, the business has come back with a patchy trading update. “In its defence, the turnaround plan is still fairly new and it will take time to see if the strategy works. “A warning from its travel business isn’t helping sentiment towards the business – already at rock bottom, judging by how its share price is performing.” hxxps://www.expressandstar.com/news/uk-news/2019/06/19/over-50s-holiday-favourite-saga-blames-brexit-for-fall-in-bookings/

[andycapp1] 19/6/2019 11:21

Well if you are looking at EV you need to consider EBITDA/cash generation. The two new boats apparently will generate EBITDA of £40m each. I don’t know what the existing business does but if pre tax I’d say £110m then EBITDA could be £175m+. So steady state EBITDA might be £220m+ on an EV of £1.2bn?? So 5-6x which seems ok. Not howlingly cheap but not hideously expensive. Equity highly geared tho.

[shinnas] 19/6/2019 10:58

The last time I covered the Saga (LSE: SAGA) share price, I concluded it might be best to give the firm a wide berth for the next two years. That would give us time to see if management’s turnaround plan yielded results. Since my last article on 6th April, shares in the business have fallen a further 44%, excluding dividends. So it looks as if this was the right advice. However, today’s trading update seems to suggest Saga is making headway in dealing with the primary issues affecting the business. I think there’s a good chance this could mark the start of the firm’s turnaround. Positive update Ahead of its annual general meeting, Saga’s trading update for the period from 1 February to 18 June, claims the group is “making progress in the implementation of the strategy announced in April.” And despite challenging conditions, “trading for the period is broadly in line with expectations.” Most importantly, Saga’s insurance business, which has been the group’s problem child for the past two years, seems to have stabilised. The volume of direct home and motor policies the company sold during the first few months of 2019 “are running well above the run rate level in the second half of the 2018/19 financial year,” the statement notes. Also, an improvement in retentions means the number of core Saga-branded home and motor policies in force at the end of May “were flat at 564k.” This is hardly a transformative turnaround, but at least the business has stopped shrinking, and that’s something. Unfortunately, Saga’s travel business is still shrinking. According to the update, booked revenues were down 4% for the full year as of 15 June compared to the same period last year. That said, the firm’s new cruise business is proving to be “more resilient” with bookings “in line” with management forecasts for the year. During the second half of 2019, management is planning a “significant step up in marketing activities” for this business to “coincide with the launch of the Spirit of Discovery,” its new cruise vessel. Summing up today’s update, outgoing CEO Lance Batchelor said: “Against challenging headwinds in both travel and insurance, we see early signs of progress in stabilising our retail broking business and forward bookings for the cruise business have been resilient.“ What’s next? Overall, I think today’s update from Saga is broadly positive. While the company is still fighting fires across the business, it’s encouraging that things haven’t gotten any worse since April. That’s not to say that the group is entirely out of the woods just yet. City analysts believe the firm’s profits will decline by around 37% this year (compared to fiscal 2018), and I don’t see this outlook changing following today’s update. Nevertheless, I’m cautiously optimistic Saga has turned the corner, and its new business plan is starting to yield results. If the company can keep this up for the rest of the year, it might be worth considering the stock for your portfolio. Based on current City projections, the stock is trading at a bargain valuation of just 4.5 times forward earnings compared to the market average of 12.7. That implies if growth returns, the Saga share price could double from current levels. Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2019

[stewart64] 19/6/2019 10:53

It's not about earnings, it's about a huge balance sheet with debt, and is it serviceable. Market cap same as Spirit of Adventure cost.

[edmondj] 19/6/2019 10:48

Saga PLC (SAGA:LSE): Last: 32.74, down 4.86 (-12.93%), High: 36.10, Low: 31.78, Volume: 14.10m 11:28 am BE Okay, so it's a sharp fall on not much really. 11:28 am BE FY "broadly" in line 11:28 am BE You already know "broadly" means "not", but it's at most a guide towards the lower end of the range. 11:29 am BE Based on travel. Outlook says "ooh, Brexit" mostly. 11:29 am BE So we get a £3m operating loss at cruises, which tilts the company towards a reliance on a second half improvement that might not appear ..... 11:30 am BE .... and we also get some talk of competition around insurance 11:30 am BE To remind, Saga rejigged insurance sales in April to focus on direct and stop shoving inventory through price comparison sites. 11:31 am BE (Is "inventory" the right word for insurance? You know what I mean.) 11:31 am BE That's led to travel and pet insurance and stuff like that falling off, while home and motor seem to be stabilising. The result is a headline 8% fall in policies, but a lot of churn. 11:32 am BE Forecasts aren't really changing and there's nothing new on strategy, so the share price fall looks to be on the increased risk of H2 not coming through .... 11:33 am BE .... and with the cruise ship peak debt thing happening over the next few years, that amplifies equity moves. 11:34 am BE Here's Peel Hunt. 11:34 am BE Saga states trading is broadly in line with expectations in the quarter as it rolls out its new ‘back to basics’ affinity broking strategy. There are no changes to downgraded 2019/20 targets outlined at the full-year results. Insurance broking is seeing some momentum as new products are rolled out across the core Motor & Home book and Cruise bookings are resilient. There is some weakness in the small Tour operations, but the main catalyst is Cruises and the success of the new ship launch in July. It is still early days, the shares remain undervalued (P/E 5x 2019E), whilst the search for a new CEO has already kicked off. 11:34 am BE The core Saga-branded Motor & Home policies were flat yoy (564k), helped by slightly improved retention rates as the company rolls out its new three-year fixed policies. As of mid-June, 60k of three-year fixed policies have been sold, of which half is new business and in line with Saga’s assumptions. There is however weakness in Motorbike & Travel insurance, driving overall policy volumes down 6% for the period to 753k as Saga prioritises rate over volume. The gross margins for the Motor & Home broking are in line with the target range, suggesting broker margin pressure is in line with expectations. The Travel business is mixed, with the Tour operations (a modest contributor to revenue and earnings) seeing revenue pressure driven by discounting (revenues -4% slightly below -3% expectations in April). However, Cruise booking are proving to be resilient. Around 86% of targeted bookings for 2019/20 departures have been made for the first new cruise ship Spirit of Discovery, whilst forward bookings for 2020/21 are broadly on track (31% for the two new ships). Cruise will make a small loss in 1H 19 (£3m), in line with the business plan, as the new ship is launched and the old one decommissioned. Finally, the membership scheme (1.1m members) is seeing growing engagement (+15% in the past two months to 208k), which suggests the new marketing campaigns are starting to have an impact. This is very much core to Saga’s strategy in our view, with membership engagement the key driver for improving the revenue base. Whilst it is still early days since the April profit warning, there seems to be some improved momentum in the business and the next catalyst will be the success of the launch of the new ship in July, with each new vessel targeted to contribute an annual £40m of EBITDA in the coming years, materially reducing Saga’s reliance on the insurance broking business. 11:35 am BE And JPMorgan. 11:36 am BE Trading overall seen as "broadly in line". Saga states that it is making progress against the strategy outlined in early April, with Insurance delivering in line with expectation. Saga states that it has seen an uptick in the proportion of new business sold direct (60%) vs. (50% for FY19), with over half of new direct customers opting for the new 3-year fix product. Travel has been more difficult, with political uncertainty resulting in a very competitive market backdrop. 11:37 am BE Insurance delivering in line with new plans. Saga states that its gross margins per policy in Home and Motor are in line with the target range [£71-74], and claims trends in the underwriter are in line with expectations. 60,000 3-year fix products have now been sold [c11% of Home/Motor policies], of which 30,000 relate to new business. Saga states that the new strategy continues to be rolled out on a test-and-learn basis. 11:38 am BE Travel seeing increasingly competitive conditions. Saga states that its Tour Operations in particular have seen pressure, with booked revenue for the FY down 4% YoY and competitive discounting having an impact on margins. Cruise bookings have been more resilient, with bookings for FY20/21 described as “broadly on track". A significant step up in marketing activities is expected in the next few months to coincide with the launch of the first new cruise ship. Saga also states that Cruise will contribute an operating loss of £3m in H1 (in line with plans), which we believe will overall result in a slight second half weighting to group PBT. 11:38 am BE And Numis. 11:38 am BE Trading is described as broadly in line with expectations, with good early progress from newly launched insurance products and cruise bookings broadly in line with targets. The tours business is seeing challenging conditions although this is relatively small in the group context. The key motor and home insurance businesses appear to be trading in line with rebased targets set out at the finals in April. There is no comment on expected group profit for the year so we feel comfortable Saga remains on track for an outcome within the previous target range of £105-120m, albeit the worsening in tours probably means it is now more likely profit will be towards the lower end of the range. At the bottom end of the guidance range the shares currently trade on a P/E of 4.7x and a yield of 10.9% (based guidance payout of around 50%). 11:39 am 11:40 am https://ftalphaville.ft.com/marketslive/2019-06-19/

[spotdog40] 19/6/2019 10:44

3rd piece of good news in a row that's been punished by the market. 1 "Marcus" link up SELL 2 Lance Batchelor, who has presided over the poor performance of the company and the share price, has left SELL 3 "Trading for the period is broadly in line with expectations" SELL I'd imagined that the drop to 40p might have been a signalling a disastrous trading update - so "broadly in line" sounds pretty good to me. The "chart" says I'll have to pay to get my shares taken away by the end of July. I'm aware of the debt (but there's now £300m less of it that when the company first floated), but there's still enough profit to make today's share price look derisory.

[buywell3] 19/6/2019 10:32

Several idiots posting drivel I note today SAGA is a share in trouble It has dropped 55% since buywell gave a heads up on april 4th 2019 on this thread The chart bottom is not yet in dyor

[imastu pidgitaswell] 19/6/2019 10:29

Posts 2183 and 2295. It's risky and not terribly cheap. Anyway, enough, I'll leave it there.

[knowing] 19/6/2019 10:29

Being lazy but what is the debt figure?

[careful] 19/6/2019 10:28

Pre tax profit of £100m could give x8 = £800m in normal times. Simplistic but thee are cheap if this profit has the potential to rise.

[gripfit] 19/6/2019 10:27

So what does it equate to ?

[gripfit] 19/6/2019 10:26

And ,,,,,,