Saga – Getting Ready To Sail Again As Premiums Fall

0
Saga – Getting Ready To Sail Again As Premiums Fall
geralt / Pixabay

In a brief trading update Saga PLC (LON:SAGA) said insurance policy sales were down around 2% in the key motor and home markets, though recent improvements mean sales are expected to be flat at the half year. Travel policies are down about 5%. Customer retention was 80% and margins per policy were in line with last year at £74 per policy.

Get The Full Series in PDF

Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q1 2021 hedge fund letters, conferences and more

A Further Boost In Current Year Loss Ratio

The Insurance Underwriting division is recording fewer motor claims, which ought to boost the group’s current year loss ratio by around 5 percentage points. Saga is also appointing Steve Kingshott as Insurance CEO, who will be joining from Tesco in the Autumn.

Carlson Capital’s Double Black Diamond Strategy Gains 5.3% On Jewelry Play

Black DiamondCarlson Capital's Double Black Diamond fund added 3.09% net of fees in the second quarter of 2021. Following this performance, the fund delivered a profit of 5.3% net of fees for the first half. Q2 2021 hedge fund letters, conferences and more According to a copy of the fund's half-year update, which ValueWalk has been Read More


The Travel division’s monthly cash burn came in at the lower end of the £7m-£9m guidance range in the four months ending 31 May. Cruising will resume on 27 June, and demand has been “outstanding” with 73% of cancelled bookings retained.

Saga has £78m in available cash and £100m in undrawn credit. Net debt (excluding ship debt) currently stands at £246m, or 2.9 times cash profits (EBITDA).

The shares fell 0.6% following the announcement.

Saga's Appointment Of Steve Kingshott As Insurance CEO Wil Increase Momentum

William Ryder, Equity Analyst at Hargreaves Lansdown:

“Saga’s AGM update shows how unpredictable trading conditions still are. The insurance divisions are performing pretty well, and despite a slight fall in Motor and Home premiums, customer retention is strong and this part of the business is heading the right direction. The company is clearly hoping that the appointment of Steve Kingshott as Insurance CEO, who joins from Tesco, will increase momentum in this division.

The plan is for cruising to resume this month, but the new Delta variant may impede progress. It seems the UK is going to delay the final easing of pandemic restrictions, which could delay or disrupt trading. An extension to the currently mooted four-week delay would pile on yet more pressure. Fortunately, the division’s cash burn is at the lower end of expectations, but an extended period of uncertainty could significantly increase costs.

Saga has enough liquidity for the time being, but is still in a precarious position. If the cruise division can get back up and sailing and insurance continues to make progress the group could recover, but it will take time to heal the scars left the pandemic.”


About Hargreaves Lansdown

Over 1.6 million clients trust us with £132.9 billion (as at 30 April 2021), making us the UK’s largest digital wealth management service. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.

Previous article How Local Businesses Can Stand Out in Search
Next article Top 5 Tricks to Repel Cyber Criminals From Attacking Your Enterprise
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

No posts to display