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Summary
- For the insurance business, SAGA had witnessed just a 2% drop in motor and home policy sales during the first four months of FY22.
- The average load factor stood at 77% for FY22 and around 48% for FY23 as of 05 June 2021.
- Steve Kingshott will join the Company as insurance CEO from Autumn 2021.
Saga PLC (LON:SAGA) is the consumer stock listed on the London stock exchange. SAGA’s shares have generated a return of 43.99% in the last 12 months. Moreover, it is a constituent of the FTSE All-Share index.
Company Overview
Saga PLC (LON:SAGA) is the leading provider of services for customers aged over 50 years through two major business divisions – Insurance and Travel.
Trading Update (from 01 February 2021 to 13 June 2021, as of 14 June 2021)
Decent recovery in the Insurance division – Despite challenging conditions, SAGA had shown just a 2% drop in motor and home policy sales during the first four months of FY22 as compared to an equivalent period of FY21. Furthermore, customer retention remained around 80%, with an underlying margin of approximately £74 per policy during the period.
Appointment of new CEO – The Company had announced the appointment of Steve Kingshott as the Insurance CEO. Moreover, he will join the Company in Autumn. Till then, Euan Sutherland will remain as the Interim CEO.
Restart of the Travel Business – SAGA would start the travel business on 27 June 2021. Moreover, the cruise business for UK itineraries would resume from 27 June 2021. The inaugural cruise of Spirit of Adventure would be scheduled for 26 July 2021, while European sailing was planned from mid-August 2021. Moreover, the Company had reported an average load factor of 77% for FY22 and around 48% for FY23, as of 05 June 2021.
Net Debt Reduction – SAGA had managed to keep its leverage position well beyond the banking covenants even in the period of travel suspension supported by the management actions taken over the last 12 months. Moreover, the net debt to EBITDA stood at 2.9x as of 31 May 2021. On the liquidity front, the Company had an available cash balance of £78.0 million as of 31 May 2021.
One Year Chart
(Data Source: EODHD/Others)
SAGA shares were trading at GBX 405.80 and were down by around 1.12% as of 14 June 2021 at 01:56 PM GMT. The 14-day RSI stood at ~56.17, while the 20-day simple moving average was around GBX 396.59. SAGA’s 52-week Low and High were GBX 118.50 and GBX 429.80, respectively. The market capitalization of SAGA is approximately £574.98 million.
Business Outlook
The travel arm of SAGA had seen a gradual recovery as tour bookings represented almost 60% of FY22 revenue targets and around 27% of the FY23 targets. Moreover, the YTD cash burn rate per month remained at the lower end of guidance ranging from £7.0 million to £9.0 million. SAGA would prioritize the resumption of sailing for both ships. In a nutshell, the Company remained confident of delivering sustainable growth in future driven by several strategic initiatives.
