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(SAGA) Share Chat

Discussion in 'General Share Chat' started by Groucho, Jun 11, 2019.

  1. Groucho

    Groucho Member

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    4 April 2019

    Saga plc


    Preliminary Results for the full year ended 31 January 2019

    Saga to refocus on its heritage as a direct to consumer brand with membership at its core


    Saga plc ("Saga" or "the Group"), the UK's specialist in products and services for life after 50, announces its preliminary results for the twelve months ended 31 January 2019.


    Lance Batchelor, Group Chief Executive Officer, said:

    "Over recent years Saga has faced increasing challenges from the commoditisation of the markets in which we operate, especially in Insurance. This has had an impact on both customer numbers and profitability. Although Underlying Profit Before Tax for the 2018/19 financial year is in line with our expectations, the long-term challenges we face and the results demonstrate that Saga cannot grow without a clearly differentiated offering to its customers.


    In response, today we are launching a fundamental change to the Group's strategy to return the whole business to its heritage as an organisation that offers differentiated products and services. This will give our customers and members a compelling reason to come to us and stay with us.


    As a first step, we are announcing the launch of a new approach to Insurance. This focuses on direct channels and products that offer attractive innovative features, moving the conversation from price to value. Our new three-year fixed price insurance offering is a powerful indication of our change in approach.


    As a result of lower margins in Insurance, a change in approach to renewal pricing, lower reserve releases and investment in new products, Underlying Profit Before Tax for the 2019/20 financial year is expected to be between £105m-120m. Therefore, we have taken the difficult decision to reduce our final dividend and write down goodwill. The fundamental changes we are making are essential to address the long-term challenges facing our business. They will support future growth in customers and profits, and generate attractive cash flows for Saga."


    Financial highlights
    53E1401B-73CA-4C1C-B625-D4CD7426776A.jpeg


    Performance in 2018

    · Underlying Profit Before Tax down 5.4% at £180.3m reflecting strong reserve releases but disappointing Retail Broking result

    - Retail Broking down 19.1% at £105.8m

    - Underwriting up 9.3% at £86.7m, supported by underlying reserve releases of £78m

    - Travel up 2.4% at £21.1m, with strong forward bookings in Cruise

    - Emerging businesses and central costs (excluding finance costs) improved by 21.5% to (£21.6m)

    · Loss before tax of (£134.6m) after Goodwill impairment of £310m

    · Available operating cash flow £180.6m

    · Net debt reduced to £391.3m with net debt to trading EBITDA at 1.7x

    · Proposed full year dividend reduced to 4.0p with expected future payout of approximately 50%



    Strategic Change

    · Fundamental shift in strategy to address long term challenges

    · Saga to refocus on its heritage as a direct to consumer brand with membership at its core, providing differentiated products and services that customers can't get elsewhere

    · Launch of new Insurance approach focused on growing direct channels, with the launch of a 3 year fixed price proposition, and with a new approach to renewal pricing

    · Accelerating transformation of Tour Operations

    · Continue the Cruise transformation

    · Investment behind new products and membership to build on early signs of traction

    · 2019/20 Underlying profit before tax expected to be £105-£120m due to a reduction in reserve releases, as well as a decline in Broking gross margins (less marketing costs) from £80 to between £71-£74 per policy

    · Action on dividend and amendments to banking facilities provide robust balance sheet to support strategic change

    https://corporate.saga.co.uk/media/1274/saga_ar19_03_strategic-report.pdf
     
    Last edited: Jun 11, 2019
  2. Groucho

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    11 June 2019


    Saga plc announces savings partnership with Marcus by Goldman Sachs

    Saga plc ("Saga" or "the Group"), theUK'sspecialist in products and services for life after 50, today announces that Marcus by Goldman Sachs ("Marcus") is to become its new long-term savings partner. Saga and Marcus will launch new products together from autumn 2019.


    Marcus launched in theUKin September 2018 with an easy-access savings account. It has been praised for its strong customer service and, to date, has attracted over 250,000 customers in theUK.


    This announcement is one of several strategic initiatives by the Group that are aimed at returning Saga to its heritage of delivering high quality products and services to its customers.


    Lance Batchelor, Chief Executive Officer of Saga said: "This is an exciting time for Saga and our customers as we announce our new long-term savings partnership. We know that our customers hold a large proportion of their wealth in savings and want to know that they're getting a great return with a brand they can trust.


    "This is an important strategic partnership for Saga that will help us provide innovative and high- quality products that will be designed not just to meet our customers' needs, but to exceed their expectations."


    Harit Talwar, Global Head of Marcus by Goldman Sachs, said: "We are excited to collaborate with brands such as Saga and to provide savings products to their customers. This partnership is an example of our ambition to bring our global scale and deep capabilities to meet a broad range of personal finance and investment needs."
     
  3. Groucho

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    67C097E3-DDF0-4DF2-87A7-C0B01393E155.jpeg

    Chair of the Remuneration Committee, Gareth Williams said in relation to the voting results of the Resolution 2:

    "I am pleased that a significant majority of shareholders have voted in favour of the Annual Report on Remuneration. However, the Committee has noted that approximately 28% of shareholders voted against the Report.

    We started consulting with shareholders on 1 May 2019 on changes to the future performance conditions for our Long-Term Incentive Plan to align with our new Strategy. I issued an update on this consultation through an RNS Announcement issued on 12 June 2019 in which I stated our intention to continue the consultation process to enable this dialogue between the Committee and shareholders to continue. This extension to the process will allow us to receive replies from some shareholders who had not responded prior to 12 June and to continue discussions with others on the performance conditions.

    We will now extend this consultation to ask those shareholders who voted against the Annual Report on Remuneration the reasons for their vote. In line with the UK Corporate Governance Code we will issue an announcement on the feedback received from those shareholders and the action the Committee intends to take within six months of the date of this Annual General Meeting; with a full explanation set out in the Remuneration Report for 2019/20."

    SAGA Plc - Result of AGM @SagaUK https://www.voxmarkets.co.uk/rns/announcement/41b3414c-e46d-4be1-8b4a-60d0362d0a29
     
  4. Groucho

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    upload_2019-6-20_9-51-5.png
    Daily Mail 20/6/19
     

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  5. Groucho

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    Mail on Sunday 14/07/19
     
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  6. Groucho

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    Activist fund manager Elliott has taken a 5 per cent stake in Saga, the travel and financial services company that has seen its shares fall from a peak of around 225p to less than 50p. Saga says ‘we have good and open relations with all of our shareholders and expect to be in contact with Elliott shortly.’ Observers speculate that Elliott could propose a split of the company’s tour operating and financial services businesses.
    http://www.langtoncapital.co.uk/
     
  7. Groucho

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    City AM 18/07/19
     
  8. Groucho

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    Sunday Telegraph 01/09/19
     
  9. Groucho

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    Chairman's statement

    Saga has made good progress in returning to its heritage as a company that delivers high quality, differentiated products and services that resonate with its core customer group. It is early days in our transformation programme and there remains much to do but what we have seen so far gives us confidence that we are pursuing the right strategy. This, plus a focus on the profitability of our core Travel and Insurance businesses, are the things that will help us return to sustainable growth and, over time, restore significant value for our shareholders.

    The Board is actively looking at ways to improve efficiency and accelerate the implementation of the strategic direction set out in April. I am pleased to report that, in their first year, new members of the Board have brought their considerable experience to bear. In Insurance Julie Hopes and Gareth Hoskin have been integral to our plans to build on the early success of 3-year fixed price, and Eva Eisenschimmel has helped lead discussions around the future of the Saga brand and customer proposition.

    The Search for a Group CEO is progressing well. We are targeting a leader who can drive the next phase of Saga's transformation and deliver a sustainable and growing business.

    While there are still challenges, the business has made a good start in addressing the issues we described in April. There is strength in the Saga Brand for our core target market, where it has a clear role to represent and deliver trusted service and peace of mind. We know that, in order to realise the value of our strategy and maximise the benefits of our brand, we must serve our customers well with the right products and great service so that we continue to deserve the trust they place in Saga.

    On behalf of the Board, I thank all our employees sincerely for their intensive effort in helping us make such a strong start in resetting our direction, and for their advocacy of our customers. Getting back to growth will require exceptional commitment and execution from everyone at Saga. I remain confident the business will rise to the challenge.


    Group CEO's statement

    Overview

    At the beginning of this year we relaunched our strategy and in the first 6 months of the year we have made good progress in both our Insurance and Cruise businesses. Our 3-year fixed price product has now sold over 175,000 policies and we have launched, on time and on budget, the first of our two new cruise ships, Spirit of Discovery. Customer feedback on our Cruise offering has been fantastic. Forward bookings of over 50% to date, of the significantly increased capacity we are offering for 2020/21, underpin our EBITDA target for each new ship of £40m per annum. Nonetheless, we have more to do to continue this early progress in stabilising our Insurance business and strengthening our direct customer relationship.

    As we expected, Underlying Profit Before Tax2 for the first half declined to £52.8m (H1 2018: £107.5m) reflecting the lower level of reserve releases from AICL, lower margins in our Retail Broking business, and the short-term impact of the retirement of Saga Pearl II in the first half. Reported profit before tax declined to £52.6m (H1 2018: £109.7m) which was driven by the trading factors described above and the £2.3m gain on fair value of derivatives offset by £2.2m of restructuring costs. Our full year guidance for Underlying Profit Before Tax of between £105m and £120m remains unchanged.

    Group Available Operating Cash Flow2 was £24.9m, 28.6% of Trading EBITDA2. The decrease of £65.3m compared to the previous year is due to a reduction in broking earnings and a decrease in dividends from AICL, as well as two non-recurring effects with a combined impact of £40m. These were expected and more detail is included in the Operating and Financial Review. Excluding these two one-offs, Group operating cash would have been around 75% of Trading EBITDA for the first half.

    Insurance

    Retail Broking

    We have seen encouraging signs of progress in Retail Broking despite a tough market environment in UK personal lines insurance. The business has stabilised after a challenging second half of last year.

    The launch of 3-year fixed price products in Motor and Home continues to progress as we expected. As of 8 September we have sold over 175,000 3-year fixed price policies, of which over 70,000 relate to new business and 105,000 relate to renewals. More than half of our direct new Saga branded Home and Motor customers have chosen the 3-year fixed price product. This has allowed us to increase our direct distribution, and over 50% of our new customers are now coming to us direct compared to 44% in H2 last year.

    Saga branded Home and Motor policies slightly declined by 1.9% to 811k due to a 1 ppt increase in retention offset by lower new business volumes. Motor and Home margins (after marketing expenses) were £75.5 per policy, in line with expectations for the first half. Our Home and Motor retention rates have increased as a result of several initiatives to retain customers for longer.

    We will build on this early success by continuing to enhance our direct distribution model, repositioning our PCW strategy to complement our direct strategy, improving customer retention further and expanding our insurance footprint in both Home and Motor. A key element will be a broader underwriting footprint and so I am pleased to see Sabre join our Motor panel.

    Underwriting

    AICL has achieved a reported COR (excluding quota share) of 81.7% (H1 2018: 61.5%), generating profit before tax of £21.3m (H1 2018: £45.6m). Claims inflation is running slightly ahead of expected levels in relation to theft and some other smaller components of risk, but this is within normal ranges overall and the level of reserve releases in the first half is in line with our expectations.

    Travel

    The first passenger cruise of Spirit of Discovery was a major milestone and the culmination of many years of work for the Saga team and our ship yard partner Meyer Werft. We are less than a year away from the delivery of our second ship, Spirit of Adventure, which will complete the transformation of our Cruise business. We have now achieved the full year revenue and booking targets for 2019/20, with forward bookings of over 50% of our sales target for 2020/21. This underpins our ambitious plans for £40m of EBITDA per annum from each new ship.

    The performance of our Tour Operations business reflects challenging markets in which the continued Brexit uncertainty has impacted customer demand. The Underlying PBT of £4.2m has been impacted by lower gross profits resulting from fewer passengers and a high level of discounting across the industry. These factors are not expected to continue into the second half given our visibility over forward bookings.

    Possibilities

    We have made steady progress with our membership programme, Possibilities, with a 61% increase in the number of members who are engaged (more than three responses). We are now able to email half of our 1.1m members and response rates remain at very high levels. Marketing consent remains at around 90%.

    We have strong evidence of the value of membership as a route to our customers. We have sold 3,500 cruise passenger bookings to members in the first half compared with our aspiration to sell 4,000 Travel passenger bookings by the end of the year. Importantly, over 65% of these bookings were first time Cruise travellers with us.

    Our activities in the second half will be focused on improving the membership programme's digital experience and regional availability, two areas identified by non-engaged members as key.

    Regulation

    The Group continues to monitor developments in the regulatory environment, including the outcome of the market study that is being conducted by the UK Financial Conduct Authority (FCA). The FCA has indicated that they expect to publish a preliminary outcome from this study in the next month. Saga welcomes the work being undertaken by the FCA and has taken proactive steps to improve renewal pricing for long-tenured customers and to further improve pricing practices. We will evaluate the outcome of the FCA review during the second half of the year.

    Outlook

    We have made sufficient progress in the first half to confirm our confidence in achieving Underlying Profit Before Tax of between £105m and £120m for the full year. Our focus over the next six months will be in building on this to ensure that we can grow our core businesses and continue to improve cost and capital efficiency.


    SAGA Plc - Interim Results @SagaUK https://www.voxmarkets.co.uk/rns/announcement/87444511-a087-4f05-b086-1b43198f76e9
     
  10. Groucho

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    City AM 26/09/2019
     
  11. Groucho

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    2 October 2019

    Saga plc

    Saga launches new savings products with Marcus by Goldman Sachs

    Saga plc ("Saga") today launches two new savings products with its recently appointed savings partner, Marcus by Goldman Sachs. The two specialist products provide customers with the ability to make the most of their everyday savings without sacrificing interest rates.

    · Saga Easy-Access Savings Account is designed for customers who want regular, easy access to their savings. It delivers a highly competitive interest rate of 1.4% AER* (variable) with no penalties for everyday withdrawals.

    · Saga 1 Year Fixed Rate Saver offers security and certainty to customers with the guarantee of a 1.15% AER** (fixed) interest rate on deposits.

    Exclusively available direct from Saga, both products benefit from Saga's telephone support service for customers and access to its membership programme, Saga Possibilities.

    Lance Batchelor, Chief Executive Officer of Saga said: "We are excited to collaborate with Marcus by Goldman Sachs to offer our customers these exciting new savings products. Our strategic partnership with Marcus by Goldman Sachs supports our commitment to delivering highly differentiated, competitively priced products designed to meet the unique needs of our over 50s customers."

    Notes:
    *Interest rate is 1.4% AER / 1.39% gross, variable, and includes a bonus rate of 0.25% which ends after 12 months. Rate correct as at 02/10/19.

    **Rate correct as at 02/10/19.
     
  12. Groucho

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    4 November 2019

    Saga plc

    ("Saga")

    Site tour of Spirit of Discovery

    Saga, the UK's specialist in products and services for people aged 50 and over, is hosting a site tour for analysts and investors today onboard its new cruise ship, Spirit of Discovery in Southampton. The event is being hosted by Robin Shaw (CEO, Saga Travel).

    No new material trading information will be released. Presentation slides from the visit will be available on Saga's corporate website https://www.corporate.saga.co.uk/investors/.
     
  13. Groucho

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    19 November 2019

    Saga plc

    ("Saga" or "the Group")

    Directorate and Management change

    Appointment of CEO of Insurance and Chief Operating Officer

    Saga, the UK's specialist in products and services for people aged 50 and over, is pleased to announce two new senior management roles. Cheryl Agius will join the Board of Saga on 1 January 2020 as CEO of Insurance and Gilles Normand joins the executive team as Chief Operating Officer on 25 November 2019.

    CEO of Insurance

    Cheryl will lead all aspects of our insurance business and will be responsible for our insurance strategy, building on the early success of our innovative 3-year fixed price product. Her experience and strong track record of delivery in senior strategic roles will be valuable as we bring together our Insurance Broking, Underwriting and Claims Management businesses.

    Cheryl joins from Legal & General with over 25 years' experience in insurance, retirement and pensions. At Legal & General, she was most recently Chief Executive Officer of its General Insurance business. She led an organisational transformation and change programme to separate the General Insurance and Life divisions and become recognised in the market as a leading data-driven, digitally-led business. She previously held roles as UK Strategic Retirement Director and UK International Development Director.

    Before Legal & General, Cheryl has held roles with Aon Hewitt, Lloyds TSB and Towers Watson. Cheryl is a Fellow of the Institute of Actuaries.

    Chief Operating Officer

    Gilles will shape and lead the Group's transformation programme. With the Saga brand and its customers at the centre, he will focus on improving alignment and execution across the business, digital and marketing transformation and creating a simpler and more efficient Group.

    Gilles has spent the last 10 years in executive positions driving change at several companies within the Covéa Group, the largest personal lines insurance group in France. Most recently, he was Group CEO at Swinton, Covéa's retail insurer in the UK, leading its simplification and digitalisation, with a focus on Swinton's strong direct franchise.

    Before Covéa, Gilles held senior positions in marketing and strategy for the French Banking Federation and Crédit Agricole.

    Lance Batchelor, Chief Executive Officer, said

    "These are two important appointments as we continue the transformation of Saga, and both Cheryl and Gilles will help drive the new strategy we announced in April. They both have strong and very relevant experience of strategic delivery and will build on the momentum we have already created."

    Cheryl Agius said

    "I am delighted to be joining Saga to lead the next phase of growth. Saga has a great brand and has demonstrated market leading innovation. I am looking forward to working as part of a strong team and applying our collective skills, to grow the business and develop leading solutions for all our stakeholders."

    Gilles Normand said

    "I'm excited to be joining Saga, a much-loved brand which is going into its next chapter as it progresses the new strategy. I look forward to working with the talented team as we continue the transformation."
     
  14. Groucho

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    11 December 2019

    Saga plc

    ("Saga" or "the Group")

    Directorate change

    Euan Sutherland appointed as Saga Group CEO

    Saga, the UK's specialist in products and services for people aged 50 and over, is pleased to announce the appointment of Euan Sutherland as Group Chief Executive Officer with effect from 6 January 2020. As announced earlier this year, Lance Batchelor is retiring and will continue as a statutory Director until he leaves the business on 31 January 2020.

    Euan has substantial experience having led major consumer-facing businesses, including financial services, through periods of change, both in the UK and internationally. Most recently he was the CEO of Superdry plc, the global digital brand, for five years. In that time Euan led a strategy focused on customer insight, innovation and digital, international and wholesale expansion.

    Prior to this Euan was the Group CEO of The Co-op Group, the mutual retailer, insurance and funeral services business where he led a significant transformation programme resulting in a more efficient and profitable business. Before that, he was Group COO & CEO UK at Kingfisher plc, and also has a background in global FMCG brands having worked at Mars and Coca-Cola earlier in his career. He is a non-executive director of Britvic plc.



    Patrick O'Sullivan, Chairman, said

    "I am very pleased that Euan is joining Saga at this important time in the development of the business. He has substantial experience across several consumer-facing businesses that will be invaluable as we continue the Saga transformation, with our customers at the heart of our strategy.

    "Alongside the recent appointments of Cheryl Agius as CEO of Insurance and Gilles Normand as COO, the Board has every confidence in the team now in place to lead and accelerate Saga's turnaround strategy. On behalf of the Board I would like to thank Lance for focusing on reinvestment over the last six years and for launching our membership scheme, Saga Possibilities, and wish him well for the future."



    Euan Sutherland said

    "I am hugely excited to join Saga. This is a unique British brand that has a strong heritage, great people and significant potential. I look forward to working with the Board and the whole of the Saga team to further unlock this potential and deliver for our customers and shareholders."

    Euan does not currently have any interest in shares in Saga. There is no further information which would require disclosure under 9.6.13R of the Listing Rules of the UK Listing Authority.
     
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    Mail on Sunday 19/01/2020
     
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    Daily Mail 22/01/2020
     
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    28 January 2020

    Saga plc

    ("Saga" or "the Group")

    Trading update

    Saga plc ("Saga" or "the Group"), the UK's specialist in products and services for life after 50, provides the following update on trading covering the period from 1 August 2019 to 27 January 2020.

    Current year trading

    We continue to focus on disciplined execution of the strategy set out in April, against a backdrop of a challenging external environment in Insurance and Travel. We expect full year Underlying Profit Before Tax ("Underlying PBT") to be in line with our previous guidance.

    Insurance

    The Insurance Broking business continues to show clear signs of progress:

    · As of 26 January 2020, we had sold 317k 3-year fixed price policies, with over 60% of direct new business customers choosing this product since it was fully launched.

    · Around 57% of new business customers are coming to us on a direct basis, compared to 50% in the year ended 31 January 2019.

    · Customer retention across home and motor business of 75% is around two percentage points better than in the prior period, reflecting a range of initiatives.

    For the full year ended 31 January 2020 we expect Saga branded home and motor policies to be approximately 3% lower than the prior year, reflecting a highly competitive market and a disciplined approach to new business. Home and motor margins are expected to be at the higher end of our £71-£74 range, reflecting the lower new business strain.

    For the Insurance Underwriting business, reserves in aggregate are tracking in line with expectations, with continued favourable experience on large bodily injury claims. In line with other insurers, we are seeing higher inflation on third party damage and theft costs, with overall inflation running at around 7% compared to longer-term expectations of around 5%. This trend is not expected to have a significant impact on the current year but will have a modest adverse impact on future year margins if retail pricing conditions remain competitive.

    Travel

    In Cruise, we are building on the excellent progress over the first half of the year:

    · The first six months of operation for the Spirit of Discovery have been successful. Customer feedback has been very positive and we expect the new ship to achieve EBITDA of more than £20 million for the second half.

    · The build programme for the Spirit of Adventure is on track and we remain on time and on budget for delivery in August 2020.

    · We have forward bookings for 2020/21 of 76% of full year target levels and we remain fully on track with our expectations for £40 million of EBITDA per new ship.

    For Tour Operations, revenues are expected to be down around 5% compared to the prior year, in line with trading at the half year. We are seeing a much more resilient picture in those parts of the business where our customer proposition is truly differentiated, notably in escorted tours. The administration of Thomas Cook in the second half has resulted in approximately £4 million of one-off costs which will be taken below Underlying PBT.

    FCA Market Study

    Saga welcomes the work being undertaken by the FCA and believes that, over the long-term, it will be positive for Saga's customers and our place in the market. As previously announced, we have been implementing a proactive strategy to improve renewal pricing for our long-standing customers and improve pricing practices.

    The FCA published its interim report in October 2019 and the final report is expected to be published in Q1 2020. There is a wide range of potential outcomes for the industry and the Board will consider these once the final report has been published.

    Strategy

    The strategy we set out in April was focused on returning Saga to its heritage as a company that delivers high quality, differentiated products and services that resonate with its core customers. Our experience since April gives us confidence that the Group is taking the right actions, and we are seeing good progress and a significant improvement in the quality of execution. The Insurance business is in a much more stable position than a year ago and our Cruise business is fully on track. Our customers are responding well to what we are doing and it is clear that the Saga brand remains strong with our core target market.

    There remains much to do to continue to improve our capabilities in all areas of the business and to respond to changing customer behaviours, across both Insurance and Travel.

    With the recent appointments of Euan Sutherland as Group CEO, Cheryl Agius as Insurance CEO and Gilles Normand as Group COO, we have a strong team in place to improve Saga's operational and financial performance. The Board and the executive team, with Euan's leadership, are looking at where performance and cost efficiency can be improved. The Group is also reviewing all aspects of its capital allocation priorities and where balance sheet deleveraging can be accelerated. We will update on our progress with the announcement of our preliminary full year results.

    Euan Sutherland, Group CEO, said

    "I'm delighted to have joined Saga and to be working with a strong executive team. Although Saga continues to face challenging markets in Insurance and Travel, we have a clear focus on improving performance and cost efficiencies within the Group, while strengthening our financial position and reducing debt."
     
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    17 February 2020

    Saga plc ("Saga")

    Sale of Bennetts Motorcycling Services Limited ("Bennetts")

    Saga, the UK's specialist in products and services for life after 50, announces it has reached agreement for the sale of Bennetts, an insurance broker for motorcycles, for an enterprise value of £26m to Atlanta Investment Holdings C Limited ("Atlanta"). Atlanta is part of The Ardonagh Group, one of the largest independent insurance brokers in the UK. Completion is subject to receiving regulatory approval and other closing conditions.

    Saga were advised by Fenchurch Advisory Partners in connection with the transaction.

    Euan Sutherland, Group Chief Executive Officer, said:

    "As Saga seeks to focus on our core branded business, I am pleased to announce we have agreed the sale of Bennetts. This is a good outcome for Saga shareholders and Bennetts customers who will find a good home in The Ardonagh Group."
     

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