Saga H2 2025 Earnings Report

Saga EPS Results

• Actual EPS: GBX 23.20
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Saga Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Saga Announcement Details

• Quarter: H2 2025
• Date: 4/9/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, April 9, 2025
• Conference Call Time: 4:30AM ET

Saga (LON:SAGA) exists to deliver exceptional experiences for our customers every day, whilst being a driver of positive change in our markets and communities.

Saga H2 2025 Earnings Call Transcript

Key Takeaways

• Saga delivered an 8% increase in underlying PBT from continuing operations to £37.2m, alongside a net debt reduction of £46.7m to £590.5m and a leverage reduction from 5.4x to 4.7x.
• The travel division was outstanding, with Ocean Cruise achieving a 91% load factor (+3pts) and 8% per diem growth, River Cruise revenue +13% (per diems +14%), and Holidays delivering 19% like-for-like revenue growth.
• Strategic review complete, with the sale of the underwriting business to Aegis creating a lower-risk insurance model, complemented by a fast-growing travel arm and a personal finance business with significant growth prospects.
• New six-year financing facilities secured, providing funding certainty through February 2031 at a blended effective interest rate of ~7.6%, despite one-off debt issue costs of £15-20m in FY2026.
• Medium-term targets set to achieve at least £100m underlying profit and reduce net leverage below 2x by January 2030.

Presentation

[Mike Hazell, Group CEO at Saga]

Good morning, everybody, and welcome to Saba's results for the year ended 01/31/2025. My name is Mike Hazel. I'm the group CEO, I'm joined today by Mark Watkins, our Group CFO. This has been a transformational year for Saga. We've delivered a strong financial performance and at the same time taken strategic action to fundamentally change the shape of our group.

[Mike Hazell, Group CEO at Saga]

As a result, we're in a better position than we have been for many years to deliver long term and sustainable growth. We have reported growth in underlying profit ahead of our previous guidance and continued net debt reduction and strong cash flow generation. Our travel businesses, comprising cruise and holidays, have had another outstanding year, with more and more customers choosing to take their holiday with Saga. We've completed our strategic review, outlined our plans and delivered on those plans. The result is a go forward group that comprises a lower risk insurance business, now set for growth, a highly successful and fast growing travel business, and a personal finance business, with significant growth potential ahead of it.

[Mike Hazell, Group CEO at Saga]

This is a strong position to end the year in, A position further strengthened by our new long term financing arrangements, providing funding certainty for the next six years. In recognition of this progress, we are today announcing some medium term targets. We expect underlying profits to reach at least £100,000,000 within the next five years, and leverage to fall below two times. Before I hand to Mark to go through the financials, I've highlighted on this page some of our key trading metrics. The progress we are making is clear, particularly in our travel businesses.

[Mike Hazell, Group CEO at Saga]

Mark will now talk you through this performance in more detail.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

Thanks, Mike. Good morning, everybody. It's a pleasure to be here today. I'll spend the next few minutes covering the financial results for the group for the year ended thirty first January twenty twenty five. I'll then follow that with the outlook for the remainder of the year.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

I'm delighted to report that Saga delivered a strong set of financial results with growth across revenue, trading EBITDA and underlying PBT. This growth was driven by the continued momentum in our cruise and holidays businesses, alongside an improved performance in insurance underwriting. Before we get too far into the detail, I should just highlight that throughout our financials, you'll see that we've introduced a split between continuing and discontinuing operations. This arises from the agreement for the sale of our insurance underwriting business to Aegis, as announced at the end of last year. This means that the performance of that business and the associated written to earned accounting adjustment are now classified as discontinued.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

Alongside the growth I mentioned a moment ago, strong cash generation continued, albeit this was lower than in the prior year due to the expected reduction in the contribution from insurance broking alongside some one off positive inflows that benefited the prior year. Net debt also continued to reduce and is now £590,500,000 at 01/31/2025. This is £46,700,000 lower than at the same point last year and ahead of our previous guidance. Reflecting this lower net debt and alongside the higher trading EBITDA, the leverage ratio reduced from 5.4 times to 4.7 times. Turning now to the drivers of the growth in underlying PBT.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

Saga delivered an underlying PBT from continuing operations of £37,200,000 which was 8% higher than the prior year. This was driven by a 59% increase across our combined travel businesses, but materially lower earnings from insurance broking, which is consistent with our previous guidance. Finance costs increased as a result of the utilisation of the loan facility provided by Roger De Haan as part of the repayment of the £150,000,000 bond in May 2024. Central costs reduced following the actions taken in the second half of last year. After accounting for our discontinued insurance underwriting business and the written to earned adjustment that arises due to the ownership of that business, the group reported a total underlying PBT of GBP 47,800,000.0, 20 5 percent higher than the prior year.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

I'll now go into a bit more detail of each of our core businesses. Ocean Cruise continued to build on the momentum from 2023, '20 '20 '4, reporting a load factor of 91%, which was three percentage points higher and a per diem of GBP $3.57, which was 8% higher. This drove an increase in underlying revenue of 10%, and due to the operating leverage within the business, the majority of this flowed through to gross profit, which was 20% higher. After the modest increases in marketing and other operating expenses to support this growth, Ocean Cruise reported an underlying PBT of £48,900,000 30 8 percent higher than in the prior year. Looking ahead to the forward bookings for twenty fivetwenty six, the load factor in the first half is currently 94%, five percentage points higher than at the same time last year, and the per diem is 7% higher.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

For the full year, the load factor is currently two percentage points higher than at this time last year, with a per diem 8% higher. Our River Cruise business reports a similar growth story. Revenue increased 13%, driven by a four percentage point increase in load factors and a 14% increase in per diems. This resulted in gross profit and underlying PBT increasing by a third. As we've spoken about before, there is a significant opportunity to scale this business with the addition of chartered ships to our existing fleet of two Spirit class river vessels.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

As part of this strategy, we're pleased that our newest ship, Spirit of the Mazel, joins the fleet in July, which will bring incremental capacity on an annualized basis. Looking ahead, the forward bookings position is strong with load factors in the first half of twenty twenty fivetwenty twenty six, five percentage points ahead of the same time last year, with the per diems 6% ahead. The booked load factor for twenty fivetwenty six full year is 67%, slightly lower than at the same point in the prior year, with the per diems 6% higher. This reflects the same revenue management approach used in our cruise business, Ocean Cruise business, which optimizes load factors on a month by month basis beginning with the early months. The full year load factor is expected to be at least equal to that of twenty fourtwenty five.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

Turning now to our holidays business. Revenue grew 7% and on a like for like basis, after excluding the discontinued Titan river cruises in the prior year, this was approximately 19%, driven by 9% more customers traveling with us and average revenues that were also 9% higher. This, when combined with the one off costs, which impacted the prior year, meant that we reported a step change in underlying PBT, which went from £1,500,000 to £10,700,000 The growth in this business is only expected to continue, demonstrated by our strong forward bookings position for twenty twenty fivetwenty twenty six, with revenue and passengers both significantly ahead of the prior year at 14% each. Consistent with our previous guidance, insurance broking reported a written underlying PBT that was materially lower than that of the prior year at GBP 14,100,000.0. This reflects an increase in the contribution in motor insurance of GBP 6,700,000.0, reflecting higher margins per policy with the margin increase arising from net rate reductions on our three year policies more than offsetting the impact of pricing action taken on our one year policies.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

The contribution from home insurance, however, reduced by GBP 22,200,000.0 and more than offset the motor increase. This reflects lower policies available for renewal coming into this year, alongside continued inflationary pressure on net rates, which impacted our competitiveness, policy sales and margins. Our other broking products being primarily private medical and travel insurance also remained under pressure with net rate inflation in PMI and increasing competitive market in travel impacting the contribution from these products, which when combined reduced by £6,000,000 These were, however, partially offset by reduced operating expenses following the restructuring in the second half of last year. Our insurance underwriting business, ACL, while discontinued following the agreement of its sale to Aegis, delivered a strong performance following several challenging years. The pricing action taken in response to elevated levels of claims inflation during this time resulted in the business returning to a profit, reporting an underlying PBT of £10,700,000 compared with a loss of £1,400,000 in the year before.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

In addition to this, the current year combined operating ratio improved significantly to 100.7% from 117.1 in the prior year. Turning now to look at net debt in a bit more detail. Net debt closed the year at GBP 5 and 90,500,000.0, which was GBP 46,700,000.0 lower than the previous year end. This, when combined with the increase in trading EBITDA, resulted in the leverage ratio materially reducing from 5.4x to 4.7x. This reflects continued strong cash generation with £109,600,000 of available operating cash flow, which was only partially offset by capital expenditure, debt service and some restructuring costs.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

I'll now cover the outlook for twenty fivetwenty six, taking earnings first. We expect the Travel businesses to continue their momentum, with further expected growth across ocean, rivers, load factors and per diems, alongside increasing passengers in holidays. In line with our previous guidance, insurance broking earnings are expected to fall in twenty fivetwenty six as we transition to the new partnership model with Aegis, with growth expected from twenty sixtwenty seven onwards. Overall, we expect underlying PBT to be lower than that of twenty fourtwenty five before returning to growth thereafter. Trading EBITDA, which excludes the increased finance costs that we have guided to previously, is, however, expected to be broadly consistent with that of twenty fourtwenty five.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

In twenty twenty fivetwenty twenty six, as we embed our new capital structure and transition to the Aegis partnership, there are a few changes and one off items that it's worth highlighting as that will impact the group's net debt position. Firstly, the combination of the new term loan facility with HPS, which was drawn at the February, and the undrawn GBP 100,000,000 delayed draw facility results in the group having secured its financing through to 02/1931 with incremental flexibility. When looking at the impact of this refinancing, the group's blended effective pro form a interest rate, including the ship debt, is around 7.6%. Applying this to our total gross debt of around GBP $660,000,000 results in total interest of around GBP 50,000,000, with around GBP 35,000,000 of this relating to the corporate facilities. Also in relation to the refinancing, we incurred between GBP 15,000,000 and GBP 20,000,000 of one off debt issue costs, which, while amortized over the life of the facility for the P and L, will be paid during twenty fivetwenty twenty six.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

If we now take the Aegis transaction, we expect around GBP 45,500,000.0 of net proceeds from the Aecor disposal, being in the total consideration of 67,500,000.0 less the deductions we previously guided to around £22,000,000 These include the discharge of AECOL's Section 75 pension liability, the transfer of properties owned by AECOL and some transaction costs. Finally, and also arising from the partnership with AGS, we expect to incur cash implementation costs of around £25,000,000 also consistent with our previous guidance. Looking ahead, these one off items will reduce the deleveraging pace during twenty fivetwenty six, but we still expect net debt at the end of the financial year twenty fivetwenty six to be lower than the 01/31/2025. Deleveraging remains a strategic priority for the group. And from January 2026, the pace of reduction is expected to accelerate.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

I'll now hand back to Mike.

[Mike Hazell, Group CEO at Saga]

Thanks, Mark. We've delivered a strong performance this year, but I want to spend the rest of this presentation standing back and looking at the strategic progress, which has been equally strong. Since joining Saga, I've been keen that we reinstill the core values and principles that made Saga successful. Being clear on these principles and who our customer is, is key to our success. Nobody knows this customer better than us.

[Mike Hazell, Group CEO at Saga]

And we have a wealth of insight and experience to support us in what we do for them. This is a busy slide, and so I won't talk to every point, but it helps demonstrate the opportunity and potential for Saga. You can see on the left hand of the page, there are currently 26,400,000 people 50 in The UK. And, with an aging UK population, this is expected to grow to over 31,000,000 by 02/1950. They are an affluent group, with time and money to spend.

[Mike Hazell, Group CEO at Saga]

Saga is the brand for this age group, and you can see in the middle of the page, we have 93% brand awareness. Once experiencing our products, our most loyal customers stay with Saga for eighteen years on average. And our diverse product range means we can deepen our relationship with those customers, encouraging multi category product holdings. Our database is key here. On the right of the page, you can see we hold rich and valuable insight into 9,400,000 customers, and were able to communicate with 7,800,000 of them.

[Mike Hazell, Group CEO at Saga]

So we're operating with a market leading brand, loyal customers, and a growing market, into which we have extensive reach and insight. The opportunity for growth is clearly there. The actions we have taken this year mean we are now in a great position to deliver on this opportunity. Our cruise and holidays businesses are now all profitable, and growing strongly. The sale of our underwriting business, and new partnership with Aegis, moves us to a significantly lower risk, less complex insurance model, with a fantastic partner to support our growth ambitions.

[Mike Hazell, Group CEO at Saga]

And our refinancing means we have secure and flexible financing in place for six years and a runway to now focus on growth. Our vision will support this growth and guide our actions. We want to be the most trusted brand for older people in The UK, and our growth plans will deliver this vision. Each of our businesses is well positioned, and we are now also able to look beyond our existing businesses, exploring new and relevant opportunities outside our proposition today. With this in mind, we've added a fourth strategic priority to the priorities we have previously talked to.

[Mike Hazell, Group CEO at Saga]

Focus on driving incremental value from new business lines and products. There are a range of areas today where older people are not well served. Our insight and experience in delivering great products and services, designed for that customer group, represents clear growth potential. Now let's spend a few minutes talking to each priority. Our existing businesses, which comprise cruise, holidays, insurance, and money, each have a vital role to play in our future growth, and all are now well set.

[Mike Hazell, Group CEO at Saga]

In cruise, we continue to see increasing demand for both our ocean and river holidays, and there remains significant growth potential across those products. Load factors and per diems are growing strongly, and we improve our proposition each year to further drive growth. We also welcome our newest river ship, Spirit of the Mazel, to the fleet later this year. Our holidays business is also growing well. Having addressed the operational challenges that were holding that business back, there is much we can do to build on this and further develop our already much loved holiday experiences.

[Mike Hazell, Group CEO at Saga]

We have consolidated our travel leadership team with Nigel Blanks, formerly CEO of our cruise business, now taking overall responsibility for travel. In order to better take advantage of the synergies we have available across those businesses. Our insurance business enters a transitional year, as we complete the sale of Aecol around the end of Q2, and prepare to go live with our Aegeus partnership at the end of the year. These are exciting changes that transform the shape of our insurance business, and represent significant growth potential as we develop that partnership. And our money business remains an area with significant growth potential.

[Mike Hazell, Group CEO at Saga]

Growth that will be supported by falling interest rates, and the UK Government's recent change to the ring fence limit for investment banks. Together with the bedding in of our newer personal finance products. As I mentioned earlier, the second pillar of our strategy represents the incremental opportunity we believe there now is to grow beyond what we do today, and build on the plans we already have in place for our existing businesses. Our primary focus will be on delivering our existing growth plans, but we also believe there are opportunities to meet the needs of older people in ways we do not currently do today. Our partnership strategy gives us a low risk, capital light route to explore these opportunities.

[Mike Hazell, Group CEO at Saga]

And we believe, and we have already seen from the partnership discussions we've had this year, that our brand and insight is attractive to potential partners. The work to explore such opportunities begins now, and will evolve over time. Updates will therefore come as and when we have further progressed and able to speak about anything specific. Everything we do comes back to our customer. Understanding our customer, engaging with our customer, and delivering products and services built on what we know about our customer.

[Mike Hazell, Group CEO at Saga]

Our third strategic pillar therefore emphasizes the importance of customer relationships, and the insight we have into our customers. Our publishing business is pivotal in this process, providing insightful and engaging content through a variety of formats. Alongside our award winning print magazine, our new magazine website now regularly sees more than 1,000,000 visits per month. Building on this demand, this year we will introduce a new quarterly digital version of the magazine, available free to all Saga customers, hugely extending the reach of this fabulous product. And our digital newsletters, which cover a range of topics from travel, money and lifestyle, are also proving incredibly popular.

[Mike Hazell, Group CEO at Saga]

The 10,700,000 newsletters we sent in January achieved industry leading open rates of 46%, with minimal unsubscribe rates. These channels provide important feedback loops for us, supporting the continual replenishment of our database. That database currently holds the details of 9,400,000 customers, with a communicable base of 7,800,000. With the power of this database, we are able to understand our customers better, communicate more intelligently with them, and design products with their needs in mind. Finally, we have our fourth strategic pillar, focused on reducing debt and simplifying our operations.

[Mike Hazell, Group CEO at Saga]

Mark has already covered debt reduction, which remains key. So I'll focus on the simplification component. Our business has historically been a complex, highly regulated operation, with revenue streams experiencing significant volatility due to the risk based nature of our insurance model. This complexity drove an increasingly siloed approach across our businesses, impacting efficiency. Our systems and infrastructure were designed to serve this complexity, resulting in a rigid and costly operating model.

[Mike Hazell, Group CEO at Saga]

The strategic action that we have taken over the past year will significantly simplify our insurance business, Adopting a lower risk model that removes much of this legacy complexity. And growth through partnerships will mean that we don't reintroduce unnecessary complexity as we grow. Mindset and culture are important here. Our recent changes in leadership and the platform we have built for the business gives us the opportunity to encourage a more agile, entrepreneurial approach to business, with efficiency and simplicity a key objective in the way that we do business. In short, we are creating a more streamlined and agile business, with a lower risk, higher quality earnings profile, capable of exploiting the growth opportunities ahead of us.

[Mike Hazell, Group CEO at Saga]

That growth opportunity is clear. With our businesses all profitable, our refinancing complete, and our new lower risk insurance model being implemented, we are now in a strong position to deliver long term and sustainable growth. The projections you can see on this page are supported by detailed growth plans for each of our businesses. They don't include new business lines or products we may introduce in the future. The chart on the left shows the expected profile of underlying profit before tax.

[Mike Hazell, Group CEO at Saga]

Beginning with twenty fourtwenty five's continuing operations as the base. Mark has already mentioned twenty fivetwenty six will be a transitional year, reflecting the Group's new capital structure, with incremental financing costs resulting in lower underlying profitability, but broadly flat trading EBITDA. Thereafter, having implemented our partnership with Aegis, we see a clear path to growth across each of our existing businesses, alongside lower financing costs as we reduce our level of debt. Our cruise and holidays business businesses are already performing strongly, and we expect this momentum to continue. Our insurance business will operate from a lower cost, lower risk model, with benefit from the strength of our new partner Aegis.

[Mike Hazell, Group CEO at Saga]

And our money business has significant future potential from its newly launched products, and the recently lifted savings ring fence, that will support growth in our highly successful savings product. We are therefore confident in the outlook this gives us, and our medium term target of underlying profit before tax of at least £100,000,000 by 02/1930. This growth in profits and the continued strong cash flow generation means that we expect net debt to continue to reduce significantly, with leverage falling below two times by January 2030. There's no shortage of growth potential here, and we are now in a position to deliver on that growth. And so finally, to wrap up, before we move to questions.

[Mike Hazell, Group CEO at Saga]

We've made significant progress this year. We've delivered a strong financial performance, growing underlying profits and continuing to reduce our debt. We've taken significant strategic action. And as a result the business is in a great position to grow. All of our businesses are profitable, and we have detailed five year growth plans in place for each.

[Mike Hazell, Group CEO at Saga]

There is further opportunity for growth beyond these plans as we explore incremental opportunities. We're confident in our plans and the routes to delivering at least £100,000,000 of annual underlying profit before tax, and a leverage ratio below two times within the next five years. Our focus on customer, and being the most trusted brand for older people, will guide everything that we do. As we continue to deliver great quality, differentiated products designed to meet their needs. We'll now move to questions, taking questions in the room first and then moving online.

[Andreas van Embden, Research Analyst at Peel Hunt]

Thank you. Good morning. Andreas Fanender from Peel Hunt. Thank you very much for the presentation. Just exploring more the growth outlook.

[Andreas van Embden, Research Analyst at Peel Hunt]

I appreciate that the per diems, particularly in the travel business crews, are going up and that is sort of driving your revenue growth. On the other hand, you I don't think long term you can grow your business without growing your customer numbers. And if I look at travel, your customer numbers have come down in cruise as well, but your load factor has gone up. I just wonder how that works. You're guiding towards higher load factors, but I'm seeing lower customer numbers in travel business last year.

[Andreas van Embden, Research Analyst at Peel Hunt]

And you're also still shrinking your insurance book. So just wondering your long term outlook, what is your outlook for the growth in customer numbers? And how does that align with your increase in load factors? And the second question is on insurance. Within that transition going towards AGS, you've got this three year product which is still having a drag on margins particularly in the home business.

[Andreas van Embden, Research Analyst at Peel Hunt]

How is that product transition going to work when AGS becomes the sole underwriter of the business? And does that have any implications for long term growth and margins within the broking business?

[Mike Hazell, Group CEO at Saga]

By the duration of our cruises. So this year, we've got longer cruises, which means the number of passengers in any given week and on the number of cruises therefore might be impacted by that. But that doesn't change the strong load factor, think, when you're looking at cruise therefore. Is that breaking up or is that okay? When you're looking at cruise therefore, I'd encourage you to focus on load factors rather than custom numbers per se because depending on the itineraries in any given year, then the number of passengers traveling will go up or down in relation to that.

[Mike Hazell, Group CEO at Saga]

We've also had a dry dock this year, which will have also impacted the number of passengers we've been able to take. So we're very confident in the growth in load factors, the growth in customer numbers. You're seeing that coming through very strongly in our holidays business. As I say, the load factor for cruise is very strong. We're also adding additional capacity into our river business and we're seeing great early demand for that extra capacity.

[Mike Hazell, Group CEO at Saga]

So I don't think anybody should question the growth opportunity across our travel businesses, both on a revenue basis, load factor or passenger numbers. They're all coming through very strong and our early bookings for the new season are further evidence of that. In terms of your question around three year fixed, I think we're going to hand to Mark, but it might be worth just explaining how the three year fixed mixes with our underwriting and therefore, it's not an underwriting dynamic.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

Sure. So the three year product is a price guarantee. The underwriting aspect of that can change every single year, in fact, can change midterm as well. So, transition itself away from a panel structure is not in itself an issue for the three year fixed price product because that price guarantee is provided by the broking business.

[Mike Hazell, Group CEO at Saga]

So until we partner until we transition to the partnership with Aegis, then we'll continue to operate the model we have today. And then what Aegis does in the medium term with that product, obviously, will be up to discussions in the future. We won't give guidance on that right now, but the intention is that the product will continue. Any other questions in the room?

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

No?

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

Questions online?

[Analyst]

From insurance broking in twenty fivetwenty six. Could you provide some further guidance to this?

[Mike Hazell, Group CEO at Saga]

We're not going to give specific guidance, but we've given guidance on the trajectory that we've been on. The key dynamic we're focused on is transitioning to the partnership to adjust at the end of the year. In the meantime, we've come into the year with fewer renewals and that will impact, therefore sorry, fewer policies in place and therefore, that will impact our ability to renew policies in this year. In the meantime, we're focused on driving price and margin sorry, price and competitiveness to drive that volume. But the key change for the business will be the broking partnership at the end of the year.

[Mike Hazell, Group CEO at Saga]

Is there anything you want to add to that, Mark?

[Analyst]

No. The next question is, you mentioned being in the market of The UK's fastest growing demographic. How do you think about cross selling with regards to this group? For example, how many touch points do you have across the business per customer? And is this something you target?

[Mike Hazell, Group CEO at Saga]

Yes, it's absolutely an opportunity. As I mentioned in my presentation, the our ability to encourage cross holding and cross sell, I think, has been impacted by the complexity across our different businesses in recent years, and that complexity has led to quite a siloed approach. But clearly, there are opportunities for our customers to engage across a range of products. We do see it, but we can definitely be encouraging that more. And that's the value of operating a portfolio business in the way that we do.

[Mike Hazell, Group CEO at Saga]

Our customers will come in through a number of different ranges across our business. And there is the opportunity to then broaden that relationship into other categories. So we see that to some extent today, but there's a clear opportunity to do more of that in the future.

[Analyst]

Thank you. Her third question is how are you thinking about inflationary headwinds with regards to the travel business in terms of pricing but also costs?

[Mike Hazell, Group CEO at Saga]

I think the important thing when it comes to inflationary headwinds is the resilient nature of our customer group. So this is an affluent customer base that have proven very resilient through whatever economic turmoil we've seen over the a good number of years. So they're an affluent group, and they've got time and money to spend. We don't expect that to continue. Our travel propositions are pretty price elastic as well.

[Mike Hazell, Group CEO at Saga]

So we can react to what we're seeing in the market and the our ability to that is pretty flexible. So a combination of price elasticity, a resilient and affluent customer base means that we don't expect to see a material impact from the inflation dynamics in travel.

[Analyst]

Thank you. There are no further questions.

[Mike Hazell, Group CEO at Saga]

Any other questions?

[Andreas van Embden, Research Analyst at Peel Hunt]

Just have a follow-up on Holiday. I think years ago, you had a target of getting to €20,000,000 underlying profit. You've bounced back this year to €11,000,010,700,000 Is that €20,000,000 target? I assume that's feasible. Is that beatable now with the new strategy?

[Mike Hazell, Group CEO at Saga]

Yes. Look, we obviously are performing very strongly across all of our travel propositions. Holidays is joining our cruise business in growth now. So previously, we had our ocean and river businesses performing very well, and travel was holidays was catching up. Holidays has really hit its straps this year.

[Mike Hazell, Group CEO at Saga]

We fixed the engine. So we've got the booking systems and the website and the digital journey, the call handling systems, etcetera, all working now. And you're seeing that benefit in the operational improvements coming through right now. The opportunity, therefore, is to build on that. We're seeing very strong bookings for the season ahead.

[Mike Hazell, Group CEO at Saga]

And you'll see from the guidance we've given in five year journey that we expect that growth to continue. So yes, the €20,000,000 target for our holidays business is not something we'd be concerned about in relation to that growth trajectory. We'll sell through that in that guidance. Any other questions before we wrap up? Good.

[Mike Hazell, Group CEO at Saga]

Well, look, I'll just close with a few closing remarks. We're very proud of this year. We've had a great trading year, and we've made significant progress across all of our businesses. But really excitingly, we've put in some strategic foundations that mean we can now focus on growth. We've got a lower risk insurance model, which takes out risk and complexity from our business.

[Mike Hazell, Group CEO at Saga]

We've got travel businesses that are growing, and we've got a six year financing facility in place that means we can now fully focus on growth without the near term pressures that we've had in the past. So we're excited about where this leaves us, and we look forward to taking you on the journey.

[Andreas van Embden, Research Analyst at Peel Hunt]

Thanks, everybody.

[Mike Hazell, Group CEO at Saga]

Thank you.

[Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director at Saga]

Thank you.

Participants

Executives

• Mike Hazell, Group CEO
• Mark Watkins, Group Chief Corporate Development Officer, Group CFO & Director

Analysts

• Andreas van Embden, Research Analyst at Peel Hunt
• Analyst