Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
  1. Homepage
  2. Equities
  3. United Kingdom
  4. London Stock Exchange
  5. Saga plc
  6. News
  7. Summary
    SAGA   GB00BMX64W89

SAGA PLC

(SAGA)
  Report
Real-time Estimate Quote. Real-time Estimate Cboe Europe - 10/19 08:17:26 am
308.7 GBX   -1.25%
09/23SAGA : 2021-22 Interim Results Statement vf.pdf
PU
09/22FTSE : 100 gains as banks, commodity-linked stocks jump; Entain at record high
RE
09/22FTSE 100 Closes Higher on Wednesday But BOE Meeting Looms
DJ
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector news

Saga : 2021-22 Interim Results Statement vf.pdf

09/23/2021 | 11:02am EDT

22 September 2021

Saga plc

Interim results for the six months ended 31 July 2021

Continued strategic progress positions Saga to emerge stronger from the pandemic

Successful resumption of Cruise; robust Insurance performance

Saga plc ("Saga" or "the Group"), the UK's specialist in products and services for people over 50, announces its interim results for the six months ended 31 July 2021.

31 July 2021

31 July 2020

Change

Underlying (Loss)/Profit Before Tax1

(£2.8m)

£15.9m

(118%)

Profit/(loss) before tax

£0.7m

(£55.5m)

101%

Available Operating Cash Flow1

£41.9m

(£23.2m)

281%

Adjusted Net Debt (excl. Cruise)1

£226.8m

£410.7m

(45%)

Leverage ratio (Adjusted Net Debt1 to Adjusted Trading EBITDA1)

2.4x

3.6x

(1.2x)

Group and financial highlights

  • Performance in line with expectations against backdrop of continuing COVID-19 challenges.
  • Strong liquidity position; available cash of £175.3m and £100m undrawn revolving credit facility.
  • Positive operating cash flow of £41.9m, reflecting the resumption of Cruise operations.
  • Travel monthly cash burn rate of £5.9m, below guidance of £7m-£9m; overall Cruise cash flow positive.
  • Financial position further strengthened with issuance of five-year £250m fixed-rate bond, repayment of £70m term loan and £100m tender of existing bond, driving increased liquidity, greater covenant flexibility and extension of debt maturity profile.
  • Leverage ratio (Adjusted Net Debt to Adjusted Trading EBITDA) of 2.4x, 0.3x lower than 31 January 2021.
  • Steve Kingshott, new CEO of Saga Insurance, joining on 8 November 2021.
  • Supported colleagues with focus on safety and wellbeing first, through continued home working, additional holiday entitlements and enhanced mental health support.

Divisional performance

Insurance - robust performance across all KPIs

Retail Broking

  • 835,000 motor and home policies sold, 0.5% improvement versus the prior period.
  • Retention remains strong at 80.6%, 0.7ppts ahead of the prior period, supported by increased uptake of three-yearfixed-price product, accounting for 45% of all motor and home policy sales.
  • Improved motor and home margin per policy of £76, versus £74 in the year ended 31 January 2021.
  • 58% of new business acquired directly.
  • Final recommendations of FCA market study in line with expectations; further progress made with preparations.

Underwriting

Current year combined operating ratio of 88%; continued benefit from reduced claims frequency.

Underwriting Underlying Profit Before Tax of £31.1m, 11% ahead of prior period, including £18m reserve releases.

New pricing models have driven footprint expansion and return to policy growth in the second quarter, the first time since 2012.

1 Refer to the Alternative Performance Measures (APM) Glossary on page 62 for definition and explanation 1

Travel - successful Cruise restart and phased return to Tour Operations

  • Successful restart of Cruise from June 2021, with international sailing underway from end of August 2021.
  • Spirit of Adventure naming ceremony held on 19 July 2021 and inaugural cruise on 26 July 2021.
  • Current booked Cruise load factors at 70% for 2021/22, following government capacity restrictions on early cruises, and 59% for 2022/23 departures; bookings for next year ahead of pre-pandemic levels.
  • Cruise per diems ahead of expectations at £302 for 2021/22 and £306 for 2022/23 bookings.
  • Tour Operations bookings for 2021/22 of £18m and £109m for 2022/23. Whilst bookings for 2022/23 are also ahead of pre-pandemic levels, there remains some uncertainty within the travel industry surrounding the longer-term impact of COVID-19.

Wider strategic progress

  • Improved colleague engagement score of 7.5 out of 10, with record 93% participation rate.
  • On track to build data and digital capabilities ahead of brand relaunch later this year.
  • Brand Net Promoter Score improved to 47, an increase of 3pts from 31 January 2021, reflecting delivery against our customer-focused strategy.
  • Encouraging results from recent product improvements, including mid-term adjustment re-broking process, online self-serve functionality and our new motor price-comparison website product.
  • Development of product enhancements, ahead of launch in H2.

Euan Sutherland, Saga's Group Chief Executive Officer, said:

"Over the past six months we have made strong progress across Saga, continuing to deliver for our customers, strengthening our balance sheet and delivering the foundations for future growth. We have achieved this performance at a time of unprecedented challenge for our businesses, and I would like to thank each of my colleagues for their hard work and dedication.

"We have successfully recommenced our Travel operations, including the launch of our newest ship, Spirit of Adventure. I am delighted with the positive feedback received so far and encouraged by the strong pipeline of future bookings. In Insurance, customer retention remains strong, and the attraction of our offer is borne out by the increased uptake of our new three-yearfixed-price product. From a financial perspective, we further strengthened our position through a series of financing transactions, including the recent completion of our bond issue.

"Following the successful restart of operations in our Travel business, we continue to work towards a full return to service, while remaining mindful of future potential volatility relating to COVID-19. As we have demonstrated through the last 18 months, we will continue to take an agile, proactive approach to navigate any challenges.

"As we plan to relaunch our brand in the coming months, I am confident that we have the right strategy, team and structure in place to return Saga to sustainable growth and create significant long-term value for all our stakeholders."

END

A presentation for analysts and investors will be available to view on Saga's corporate website from 7.00am today. The webcast can be found at www.corporate.saga.co.uk/investors/results-reports-presentations/.

Euan Sutherland and James Quin will hold a conference call for analysts and investors at 9.30am today. The conference call can be accessed on UK: +44 (0) 20 3936 2999, all other locations: +44 (0) 20 3936 2999. Participant access code: 109182.

A separate live presentation for retail investors will be held via the Investor Meet Company platform on 24 September 2021 at 11.30am. The presentation is open to all existing and potential investors. Questions can be submitted pre-event via the Investor Meet Company dashboard up until 9.00am on 23 September, or at any time during the live presentation. Investors can sign up to Investor Meet Company for free and follow Saga plc via www.investormeetcompany.com/saga-plc/register-investor. Investors who already follow Saga plc on the Investor Meet Company platform will automatically be invited.

2

For further information please contact:

Saga plc

Emily Roalfe, Head of Investor Relations

Tel: 07732 093 007

Email: emily.roalfe@saga.co.uk

Headland Consultancy

Susanna Voyle

Tel: 07980 894 557

Will Smith

Tel: 07872 350 428

Tel: 020 3805 4822

Email: saga@headlandconsultancy.com

Notes to editors

Saga is a specialist in the provision of products and services for people over 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

Appendix

This statement is published in accordance with Provision 4 of the UK Corporate Governance Code which states that companies should publish an update of the actions taken following a vote against an AGM resolution of 20 per cent or more.

At the Saga plc AGM on 14 June 2021, Resolution 2 - to approve the Directors' Remuneration Report received support of 77.72 per cent from shareholders. Whilst the Company is pleased that the majority of shareholders supported the resolution, the Remuneration Committee took various steps to understand the reasons behind the votes against.

In the week after the AGM, the Remuneration Committee Chair wrote to the largest shareholders who voted against the resolution to understand the reasons for their vote. The Remuneration Committee ("the Committee") appreciates and values time taken by investors who expressed their views and understands that the views expressed were primarily connected to the payment of formulaic bonuses when taking into account

the range of circumstances experienced by the Company during the year.

Following this valuable exchange with shareholders, the Committee has determined that the points raised were items which were considered when the relevant bonus decisions were made and where possible,

were taken into account in the setting of the targets. In addition, the Committee considers bonuses in the full context when determining whether a payment should be made, will continue to do so for future bonuses and thus does not consider the voting outcome to be indicative of a structural or systemic problem with the bonus design, nor the Remuneration Policy as a whole. The Committee will continue its constructive dialogue with shareholders and seek to incorporate this feedback into future remuneration decisions.

3

Chairman's Statement

Saga has reported a robust performance for the first half of the year, and has continued to achieve the strategic objectives set out by the management team in September 2020.

I am pleased that, despite the challenges posed by the COVID-19 pandemic, we are in a far stronger position than we were a year ago. Our Insurance Broking and Underwriting divisions, the mainstay of our business, have performed resiliently, meeting our expectations in all key areas. Unfortunately, we had to wait until the end of June before we were able to begin our cruise operations and, even then, were subject to a restricted capacity on our early sailings and we invested in special measures to maintain a safe environment for our passengers and crew.

Both our cruise ships are now sailing with fewer restrictions and are achieving satisfactory levels of occupancy. Guests are giving us exceptionally positive feedback. We have begun a phased resumption of our tour operations. However, COVID-19 is still affecting them and we expect to take far fewer customers on holiday than we would normally in the second half of our financial year.

We are encouraged by the fact that confidence is returning in overseas travel for next year and that the Government is continuing to relax the COVID-19 rules relating to travel and have therefore now increased our marketing activity.

In July 2021, we successfully issued a new £250m bond, set to mature in 2026. The proceeds have been used to repay debt, buy back a proportion of our existing bond and significantly improve our cash position. This places us in good stead for the future.

On behalf of the Board, I would like to thank our colleagues for all they have achieved and for their continued dedication to giving the very best service to our customers. Due to their hard work, the strength of our strategy and the progress being made, I am confident that Saga is on track to deliver long-term, sustainable value for our shareholders.

Finally, I would like to thank our loyal customers for their ongoing support. We will be working hard to continue to provide them with exceptional experiences every day, as we emerge stronger from the pandemic.

4

Group Chief Executive Officer's Statement

The last six months have seen us make further significant progress against our strategic priorities. For this, I am hugely thankful to each and every one of my colleagues for their hard work and continued support.

Whilst the external environment has remained volatile, we successfully navigated the return to service within the Travel business and continued to deliver against our strategy, laying the foundations for future growth.

Following the continued suspension of the Travel business for much of the first half of the year, we reported an Underlying Loss Before Tax of £2.8m, which was in line with our expectations. This reflects stable performance within Insurance, offset by the aforementioned Travel suspension, restricted capacities on early Cruise sailings and the incremental costs associated with the restart of that business. Overall, the Group reported a profit before tax of £0.7m, after reflecting the profit on a property disposal.

The Insurance business continued to deliver against all KPIs, with positive results across both the Broking and Underwriting businesses. Despite the disruption in the early part of the year and capacity restrictions on our early sailings, the Cruise business is once again operating with fewer restrictions, bringing both peace of mind and exceptional experiences to our customers.

Strategic update

Delivery continued against the turnaround plan announced in September 2020, Transforming Saga - Experience is Everything, with strong progress made against all five strategic priorities.

1. People and culture step change

In the first half of 2021/22, we continued to provide colleague support through a number of channels focused on safety and wellbeing. These include delaying the return to our newly refurbished office space in order to continue to protect not only our colleagues, but also their loved ones, additional holiday entitlements and encouragement to participate in our numerous charitable events.

We continue to see improved engagement from our colleagues. The latest survey reported a record score of 7.5 out of 10, with a participation rate of 93%.

2. Data, digital and brand transformation

During the first half of the year, progress against our data, digital and brand transformation was focused on the build and preparation required ahead of our brand relaunch later this year.

Progress to date continues to be recognised by our customers through a number of means including an increased Net Promoter Score of 47, 3pts higher than 31 January 2021, in spite of the suspension of the Travel business. Saga also continues to be recognised more widely with a magazine nomination for 'cover of the year', wins in seven categories at the recent Consumer Intelligence Awards and ranking seventh in the Institute of Customer Service's top 50 organisations for customer satisfaction.

3. Optimising our businesses

Insurance

The Insurance business continued to deliver a robust performance against all KPIs, with motor and home policy sales 0.5% ahead of the prior period. Offsetting the challenging new business market in the first half of the year, retention remained strong at 80.6%, an improvement of 0.7ppts versus the prior period, supported by increased uptake of our three-yearfixed-price product which accounted for 45% of all motor and home sales. The proportion of customers acquired directly, as opposed to through price-comparison websites stands at 58%. Our margin per policy has increased to £76, although is expected to reduce in the second half of the year as we invest in advertising to coincide with the brand relaunch.

Performance within Acromas Insurance Company Limited (AICL), our in-house Underwriting business, remains strong with policy growth in the second quarter for the first time in many years, representing the benefit of our new pricing models and expansion of our footprint. AICL also benefited from reduced current year claims costs following lower miles driven throughout the COVID-19 pandemic. Reserve releases continued, albeit to a lesser extent than in the first half of 2020/21, and we remain prudently reserved.

The final recommendations of the FCA's review into general insurance pricing practices were in line with our expectations and work continues in preparation for the new pricing rules required from 1 January 2022. Although the extent of the potential volatility in pricing across the market is as yet unknown, we continue to expect some short-term financial impact from the change, as pricing adjusts across both new business and renewals.

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Saga plc published this content on 23 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 September 2021 15:01:01 UTC.


© Publicnow 2021
All news about SAGA PLC
09/23SAGA : 2021-22 Interim Results Statement vf.pdf
PU
09/22FTSE : 100 gains as banks, commodity-linked stocks jump; Entain at record high
RE
09/22FTSE 100 Closes Higher on Wednesday But BOE Meeting Looms
DJ
09/22FTSE Rises, Halma Reports Strong Progress, But Peel Hunt Retains Reduce Rating
DJ
09/22Entain Faces Uncertainty After Draftkings Offer
DJ
09/22FTSE 100 gains as banks, commodity-linked stocks jump; Entain at record high
RE
09/22FTSE 100 Rises 1%, Led by Entain, Flutter
DJ
09/22London Stocks Seen Higher on Evergrande Hope as Fed Looms
DJ
09/22SAGA : next year cruise bookings cross pre-COVID-19 levels, post H1 profit
RE
09/22HTTPS : //www.corporate.saga.co.uk/media/1427/saga plc 2021 22 interim results statement v..
PU
More news
Analyst Recommendations on SAGA PLC
More recommendations
Financials
Sales 2022 423 M 584 M 584 M
Net income 2022 9,08 M 12,5 M 12,5 M
Net Debt 2022 739 M 1 019 M 1 019 M
P/E ratio 2022 37,2x
Yield 2022 -
Capitalization 438 M 601 M 604 M
EV / Sales 2022 2,78x
EV / Sales 2023 1,58x
Nbr of Employees 2 506
Free-Float 70,6%
Chart SAGA PLC
Duration : Period :
Saga plc Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends SAGA PLC
Short TermMid-TermLong Term
TrendsBearishBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 4
Last Close Price 312,60 GBX
Average target price 510,75 GBX
Spread / Average Target 63,4%
EPS Revisions
Managers and Directors
Euan Angus Sutherland Group Chief Executive Officer & Director
James Quin Group Chief Financial Officer & Executive Director
Roger Michael de Haan Chairman
Julius Christmas Group Director-Information Technology
Gilles Normand Chief Operating Officer
Sector and Competitors
1st jan.Capi. (M$)
SAGA PLC23.56%601
ALLIANZ SE-1.08%94 118
MARSH & MCLENNAN COMPANIES, INC.38.46%81 977
CHUBB LIMITED15.45%79 908
ZURICH INSURANCE GROUP LTD4.07%62 498
BAJAJ FINSERV LIMITED109.72%39 457