Saga, the specialist travel group and insurer for the over-50s, said today it would borrow more money from its chairman, ahead of a £150 million bond repayment, having dropped plans to sell its underwriting business.
Sir Roger De Haan will now lend the company up to £85 million, an increase of £35 million. Saga said the arrangement would “provide additional financial flexibility”. It was also extended until the end of 2025, with the bond due in May 2024.
It also said finance director, James Quin, is leaving the company after 5 years in the job, having helped it reduce net debt by £250 million. He will be replaced by Mike Hazell, who was recently interim CFO at the Co-Op Group.
Saga will make the bond repayment via “a combination of available cash resources and drawdown of the loan facility” with De Haan, who is the son of Saga’s founder, Sidney De Haan.
Saga dropped the underwriting sale, on concern that “current conditions within the motor insurance market” meant the deal “would not deliver the best value”. It said it would “continue to evaluate … options as the landscape evolves.” The potential buyer was Open Insurance of Australia.
Higher second-hand car costs and longer repair times have stoked inflation in the cost of claims across the car insurance industry.
Saga also reported a smaller pre-tax loss of £77.8 million for the six months to July 31, down from £261.8 million a year ago. Revenue rose 15% to £355.3 million. Its ocean cruise business returned to profit, of £12.9 million, from a loss of £6.9 million, as the over 50s took to the seas.
Its shares drifted south, down 1.4p to 120p, down 1.1%.
