Insider: bosses pump over £2m into this high-profile stock

A £2 million Saga (LSE:SAGA) stake has been bought by chair Roger De Haan after the holidays-to-insurance business set out its ambition to double profits to £100 million.

The move by Saga’s former chief executive and son of founder Sidney lifts his shareholding to 27%, having returned to the board in 2020 as part of a £150 million capital raise.

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Chief executive Mike Hazell also made an investment of £97,000 in the wake of annual results, which showed a consensus-beating 25% increase in underlying profits to £47.8 million.

The progress in the year to 31 January was driven by Saga’s Travel businesses, with “especially high levels of customer demand” for its ocean and river cruise offers.

A significant year for the FTSE All-Share company also included a 20-year partnership with Ageas, which materially reduces the risk and complexity of Saga’s insurance business.

The deal paved the way for Saga to replace its 2026 debt maturities with new long-term credit facilities, giving it significant financing headroom and flexibility.

Hazell, who joined the business in October 2023, said the foundations for growth were in place as he looks for a step change in financial performance within the next five years.

He revealed an ambition to grow underlying profits to at least £100 million, with strong cash generation forecast to drive a reduction in leverage to less than two times underlying earnings from the 4.7 times in last week’s results.

Against a backdrop of stock market volatility, the results and 2030 guidance lifted shares over the last week by 15% to 138p. They traded at 439p in 2021 and were 236.7p the last time De Haan disclosed a purchase of the company’s shares in March 2022.

He joined the business in 1966, aged 17, as its 11th employee and later served as chairman and chief executive from 1984 until he sold the company in 2004.

De Haan returned to the business in 2020 as his strategic investment helped to shore up the company’s finances during the pandemic.

The fundraising heightened the pain for shareholders who had backed Saga’s 2014 flotation, with shares already 90% lower than their starting point and then diluted by the capital raise.

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Deutsche Numis recently lifted its price target by 20% to 185p, noting that the sale of the underwriting business to Ageas had reduced capital intensity and earnings risk.

It added: “Longer term, if Ageas is able to provide competitively priced motor and home insurance policies, we think Saga should be in a good position to drive growth in policy sales and therefore commission revenue.”

Peel Hunt last week reiterated a Hold recommendation after leaving its medium-term estimates unchanged. It said the long-term ambition to deliver £100 million of profit was more than it expected as the focus turns to growth in Travel.

In the near term, the broker is braced for a drag on results as the insurance business transitions to a pure broking model. Saga said in the results that a material increase in financing costs in 2025/26 will mean that underlying profits are below 2024/25, before returning to growth.

The company expects to deliver progress reducing net debt from the current level of £590.5 million, with an acceleration in the pace of reduction after that.

The company said: “Our vision is to be the most-trusted brand for older people in the UK, supported by the quality of products and the service we deliver to our customers.

“The actions taken over the past 12 months put us in a strong position to deliver this vision and, in turn, create sustainable growth and value for our shareholders.”

Hazell bought his shares on Wednesday at 124p, while De Haan made his investment at 135.1p.

Small-cap chiefs spend big

Under pressure TT Electronics (LSE:TTG) shares have received £75,000 of boardroom support after the company scrapped its dividend, changed leadership and flagged downside risks.

The group, which provides electronics for performance-critical applications across industries including aerospace, defence and the medical sector, posted delayed results on Thursday showing a 17.1% drop in underlying profits to £37.1 million in 2024.

Soft demand in North American components and operational issues in Kansas City and Cleveland offset progress in Europe and Asia and the benefit of its Project Dynamo efficiency plan.

US tariffs and their impact on demand mean the board sees a wide range of potential outcomes for 2025, with operating profit in a range of £32 million and £40 million. It does not expect to achieve a 12% operating margin in 2026, having seen a fall to 7.1% in 2024.

The company, which has paused dividend payments, also announced that chief executive Peter France has stepped down with immediate effect after 18 months in the role.

Eric Lakin, who was appointed finance director in January, is the acting CEO. He is the former chief financial officer of Ceres Power, having previously spent 10 years at Smiths Group.

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Lakin marked his appointment by spending £50,000 on TT shares, while chair Warren Tucker also made a purchase of £25,000 in the wake of the results. They did so at prices near to 76p after shares fell as much as 10% on the back of the presentation.

The price compares with the cash and shares proposal of 139.6p tabled by AIM-listed Volex (LSE:VLX) in November. The maker of critical power and data transmission products had wanted to create a “scaled and diversified leader” in specialist electronics but dropped its £248.6 million takeover plan after it failed to gain TT’s support.

Volex last week reported growth and profit ahead of market expectations for the year to 30 March, triggering a rebound for its shares from below 200p to Friday’s close of 224.5p.

Executive chair Nat Rothschild increased his Volex stake to 25.4% in the wake of the update, making three separate investments worth a total of £225,000 at an average price of 220p.