Market's view on Saga
Published on April 2024
- A potential deal involving cruises could be financially beneficial and yield significant profit due to their current zero goodwill value.
- Saga is facing financial struggles with rising interest rates, having to repay a £150 million bond and replace part of it with a more costly personal loan from the chairman, Sir Roger de Haan.
- Concerns are raised for 2026, when Saga must repay Sir Roger and an additional £250 million for an unsecured bond.
- The suggestion that private equity could acquire the company hints at underlying value obscured by current debt and bond repayments.
- A proposed strategy is selling and leasing back cruise ships to reduce debt and promote growth.
- Stock watchers speculate about the viability of a buyout bid below 300p, considering the company’s market cap and debt.
- Positive outlooks on long-term investment in the company are discussed, attributing value to its cruise and travel sectors and a potential turnaround in its insurance segment.
- There is anticipation of future financial stability with expected profits in line with the previous year, driven by growth in cruise and travel, despite a transitional year in insurance.