SAGA PLC

Annual Report

and Accounts 2024

Strategic Report

4

Chairman’s Statement

5

Group Chief Executive Officer’s

Strategic Review

10

Key performance indicators

12

Market review

14

Purpose and business model

16

Engaging with stakeholders

18

Group Chief Financial

Officer’s Review

37

Environmental, Social and

Governance

44

Risk management

46

Principal risks and uncertainties

50

Viability Statement

51

Key disclosure statements

Governance

Corporate Governance Statement

53

Application of the UK Corporate

Governance Code and

key statements

54

Chairman’s introduction

to governance

56

Board of Directors

58

Board activities

61

Board leadership and

Company purpose

62

Division of responsibilities

63

Composition, succession

and evaluation

64

Nomination Committee Report

67

Audit Committee Report

71

Risk Committee Report

Directors’ Remuneration Report

74

Annual Statement

77

Annual Report on Remuneration

92

Directors’ Report

95

Statements of responsibilities

96

Independent Auditor’s Report

to the Members of Saga plc

Financial statements

Consolidated financial statements

105

Consolidated income statement

106

Consolidated statement of

comprehensive income

107

Consolidated statement of

financial position

108

Consolidated statement of

changes in equity

109

Consolidated statement of

cash flows

110

Notes to the consolidated

financial statements

Company financial statements of Saga plc

181

Balance sheet

182

Statement of changes in equity

183

Notes to the Company

financial statements

Additional information

187

Alternative Performance

Measures Glossary

189

Glossary

193

Shareholder information

In this report

What we offer our customers

1

1

These are our businesses which are focused on the specific needs and wishes of our unique customer group. In our segmental financial reporting, Cruise and Travel

are presented as one, while Money and Publishing form part of Other Businesses

Saga’s purpose is to deliver exceptional experiences every day to

serve the needs of older people.

We strive to constantly develop our understanding of our customers, allowing us to provide them with

the products and services they want, alongside the exceptional service they deserve.

Our Cruise business

offers a wide range of

luxury experiences

on board:

our two boutique

ocean cruise ships,

Spirit of Discovery

and Spirit of

Adventure; and

our fleet of smaller

river cruise ships,

exploring Europe’s

waterways.

Cruise

Find out more in our

Group Chief Financial

Officer’s Review on

pages 22-23

Our award-winning

Travel business takes

customers all over the

world, offering:

hotel holidays;

escorted tours; and

tailor-made travel.

Travel

Find out more in our

Group Chief Financial

Officer’s Review on

pages 22-23

Our Insurance business,

focused on providing our

customers with peace

of mind, comprises:

Insurance Broking,

offering a range of

products primarily

focused on motor,

home, travel and

private medical

insurance; and

Insurance Underwriting,

representing our

in-house underwriter,

Acromas Insurance

Company Limited

(

AICL

).

Insurance

Find out more in our

Group Chief Financial

Officer’s Review on

pages 24-26

Our Money business

offers a range of financial

products, including:

savings accounts;

equity release;

legal services,

including wills,

probate and lasting

powers of attorney;

mortgages; and

investments.

Money

Find out more in our

Group Chief Financial

Officer’s Review on

page 27

Our Publishing business

delivers insightful and

engaging content to

customers through:

our award-winning

Saga Magazine; and

our regular digital

newsletters.

Publishing

Find out more in our

Group Chief Financial

Officer’s Review on

page 27

1

Alternative Performance Measures

In addition to statutory measures, the Group also measures performance using Alternative Performance Measures. These are reconciled to statutory measures

of performance on pages 30-31 of the Group Chief Financial Officer’s Review and defined in full on pages 187-188

2

The prior year has been restated to reflect the adoption of International Financial Reporting Standard (

IFRS

) 17 ‘Insurance Contracts’

DELIVERING

SIGNIFICANT

GROWTH

Our focus on delivering exceptional experiences

for our customers every day, alongside greater

optimisation of our businesses, has resulted in strong

cash generation, significant revenue growth and

underlying profitability of more than double that in

the prior year. Looking ahead, we remain committed

to continuing to reduce our level of debt as we

position Saga for long-term sustainable growth.

Underlying Revenue

1

£

732.7

m

2022/23 – £648.9m

2

Underlying Profit Before Tax

1

£

38.2

m

2022/23 – £15.5m

2

Loss before tax

(£

129.0

m)

2022/23 – (£272.7m

2

)

“I believe there is an exciting future

for Saga as we continue to reduce our

debt, explore strategic partnerships,

new opportunities and grow our

core businesses.”

Sir Roger De Haan

Non-Executive Chairman

I’d like to thank them all for their

contribution to Saga during their time

here. Julie Hopes, an existing NED and

Chair of the Risk Committee now chairs

the Remuneration Committee. Mike

Hazell, who was appointed as Group CEO,

and Mark Watkins, Group CFO, bring a

wealth of experience to their new roles

and I am very pleased to see the progress

they are making in leading Saga through

its current phase of development.

At Saga, we are at our best when we

provide exceptional service to our

customers, alongside innovative,

meaningful and good value products that

are tailored to suit their needs. We will

continue to leverage our insight and

data capabilities, and the considerable

collective buying power of the millions

we have on our customer database.

With the excellent team we have, and

our developing strategy, I believe there is

an exciting future for Saga as we continue

to reduce our debt, explore strategic

partnerships, new opportunities and

grow our core businesses.

Sir Roger De Haan

Non-Executive Chairman

16 April 2024

Our Underwriting business has applied

price increases in the last 18 months that

have strengthened its position and we are

expecting this to lead that business back

to profitability.

We made the decision to reduce our

central operating expenses and exit

some of our smaller, loss-making activities.

We are committed to, and continue to

invest in, providing our customers with

engaging purpose-led content through

the Saga Magazine and our increasingly

popular newsletters. In addition, Saga

Money, which in the past has reported

relatively small returns, is positioned for

growth, with the aim of becoming a far

more meaningful proportion of the

Group’s earnings over time.

Our current Ocean Cruise operations will,

in time, become restrained through a lack

of capacity. We are exploring options to

continue to grow this business with the

support of a partner. We are also in the early

stages of considering potential partnership

opportunities that could support growth

in our Insurance operations.

Throughout the past year, there have

been a number of changes to the Board.

Euan Sutherland, our former Group Chief

Executive Officer (

CEO

), and James Quin,

our former Chief Financial Officer (

CFO

),

resigned. Eva Eisenschimmel, an

independent Non-Executive Director (

NED

)

and Chair of the Remuneration Committee,

made the decision to step down.

I am pleased to report that for the year

ended 31 January 2024 Saga delivered

a strong financial result. Cash flows and

underlying profit were significantly higher

than in the prior year, driven by growth

within our Cruise and Travel businesses,

alongside actions taken to lower the cost

of our central functions. We were also able

to reduce our level of debt by £74.5m.

Our Ocean Cruise business had an

outstanding year, with exceptional levels

of customer satisfaction and occupancy,

allowing us to take more customers on

holiday and exceed our financial targets.

Bookings for the year ahead are even

stronger than at the corresponding point

last year.

Our River Cruise and Travel businesses

also performed well and the growth in

passenger numbers helped both

businesses return to profit for the

2023/24 financial year.

Our Insurance operations continued to be

challenged by inflation, that has impacted

both margins, particularly for our older

three-year fixed-price policies, and policy

volumes. Looking forward, we are

repositioning this business by investing

in price and implementing efficiencies

to improve our competitive position to

stabilise our policy volumes and build a

platform for growth.

An exciting future ahead

Our investment case is designed to create value for shareholders through the delivery of sustainable long-term,

capital-light growth, alongside continued debt reduction.

How we are different

Saga focuses on people over 50, the

fastest-growing, most affluent and

influential segment in the UK. Our deep

customer insight gives us a unique view

into our customers’ lives. We exist to

deliver exceptional experiences every day

to serve the needs of older people.

The model works

We offer differentiated products which

are underpinned by a trusted brand

and exceptional customer service.

Our business model is cash generative,

providing the flexibility to balance

investment in our brand and businesses

with debt reduction and delivery of

long-term returns to shareholders.

Confidence in future delivery

We have a clear and compelling strategy,

focused on returning the business to growth

through maximising our core businesses;

reducing debt through capital-light growth;

and growing our customer base, while

deepening our customer relationships.

It is this focus that will position Saga as the

largest and most-trusted brand for older

people in the UK.

Reasons to invest in Saga

“It is clear that there is a significant opportunity

to drive long-term sustainable growth for

all our stakeholders through maximising our

core businesses, reducing debt as we move

towards capital-light business models, growing

the number of customers we serve and

deepening the connection we have with them.”

Mike Hazell

Group Chief Executive Officer

Positioning Saga for growth

Significant opportunity

When I joined Saga back in October 2023,

I had clear views about the strength of the

business and the brand, based on what

was already evident to me. Fast-forward to

today, and with the benefit of the visibility

I now have, those opinions have only

strengthened. It is clear that there is a

significant opportunity to drive long-term

sustainable growth for all our stakeholders

through maximising our core businesses,

reducing debt as we move towards

capital-light business models, growing

the number of customers we serve and

deepening the connection we have with

them. I believe these objectives can be

amplified by the work we are doing to

explore partnerships.

Strong demand in Cruise

and Travel but Insurance

remains challenging

During 2023/24, we generated strong

customer demand in our Cruise and

Travel businesses; however, conditions

in Insurance remained challenging.

Saga Money launched four new products,

allowing us to serve more customers,

and we continued to enhance our data

and marketing capabilities. Alongside this,

we maintained a disciplined approach to

our cost base, identifying efficiencies and

moving towards a leaner central model.

2023/24

2022/23

(restated

2

)

Underlying Revenue

1

£732.7m

£648.9m

Revenue

£741.1m

£663.7m

Trading EBITDA

1

£116.5m

£92.5m

Underlying Profit Before Tax

1,3

£38.2m

£15.5m

Underlying Profit Before Tax (Under Previous IFRS)

1

£45.3m

£21.5m

Loss before tax

3

(£129.0m)

(£272.7m)

Available Operating Cash Flow

1,3

£143.8m

£54.9m

Net Debt

1,3

£637.2m

£711.7m

Leverage ratio

5.4x

7.5x

Financial performance

1

Refer to the Alternative Performance Measures Glossary on pages 187-188 for definition and explanation

2

The prior year has been restated to reflect the adoption of IFRS 17 ‘Insurance Contracts’

3

Refer to the key performance indicators on pages 10-11 for definition and explanation

Growth in underlying

revenue and profit

I am delighted to report that, for the year

ended 31 January 2024, Saga delivered

a strong financial result. Underlying

Revenue

1

was £732.7m, representing 13%

growth when compared with the prior year

and, on a statutory basis, revenue was

£741.1m, 12% higher.

Following the adoption of International

Financial Reporting Standard (

IFRS

) 17,

we report an Underlying Profit Before Tax

1

of £38.2m, more than double the £15.5m

2

in the prior year. This was also the case

for Underlying Profit Before Tax (Under

Previous IFRS)

1

, which was £45.3m

compared with £21.5m in the prior year.

This result reflects a return to profit

for Cruise and Travel, but continued

challenges in Insurance.

After reflecting a £104.9m impairment

of Insurance goodwill and £40.3m of

restructuring costs, alongside other

smaller one-off below-the-line items,

we report a loss before tax of £129.0m,

which compares with a loss of £272.7m

2

in the prior year.

Debt reduction continues to be a key

strategic priority for the Group and we

have continued to make progress in this

area. Net Debt

1

at 31 January 2024 was

£637.2m, £74.5m lower than the £711.7m

at the same point last year. The Group also

continued to hold sufficient liquidity with

Available Cash

1

of £169.8m, alongside the 

£85.0m loan facility with Roger De Haan

and the £50.0m Revolving Credit Facility

(

RCF

), both of which remained undrawn

at the year end.

Cruise

Objective

Build Ocean Cruise into an exceptional

experience every day, while optimising

our returns, and build a River Cruise

proposition that mirrors Ocean.

Progress in 2023/24

For the year ended 31 January 2024,

our Ocean Cruise business delivered an

Underlying Profit Before Tax

4

of £35.5m,

a £36.2m improvement when compared

with the Underlying Loss Before Tax

4

of

£0.7m in the prior year.

We continued to generate strong

customer demand, which supported a

load factor (being the proportion of our

total capacity that was filled) of 88% and

a per diem (being the average price

charged per customer per day) of £331.

This was 13ppts and 4% higher than the

75% and £318 respectively in the prior

year. These factors, when combined,

meant that we exceeded our target of

£40.0m Ocean Cruise Trading EBITDA

(Excluding Overheads)

4

per ship,

delivering £45.0m per ship.

In Ocean Cruise, we work hard to set

ourselves apart from others in the market

and we are continually exploring new ways

to enhance the inclusivity of our offering

and increase our differentiation. For

departures in 2024/25 and beyond, we

made the decision to increase the reach

of our VIP chauffeur service, allowing

more customers from further afield to

experience what we have to offer.

Bookings for 2024/25 are significantly

ahead of the prior year, with a load

factor of 78% and per diem of £367 at

14 April 2024. This is 4ppts and 9% ahead

of the 74% and £338 at the same point

in the prior year, which in itself was a year

of significant growth.

Given this strong momentum in demand

for our boutique cruise offering, the

business is approaching optimum capacity

with our current two ocean cruise ships.

We are exploring opportunities to further

optimise the business, including potential

partnership arrangements that, consistent

with our move to a capital-light business

model, would support further growth,

crystallise value, reduce debt and enhance

long-term returns for shareholders.

Group Chief Executive Officer’s Strategic Review

continued

Maximising our core businesses

1

In line with previous guidance, our River

Cruise business returned to profit,

reporting an Underlying Profit Before Tax

4

of £3.0m for the year, an improvement of

£8.1m when compared with the Underlying

Loss Before Tax

4

of £5.1m in the prior

year. We achieved a 43% increase in the

number of customers sailing with us and

a load factor and per diem of 85% and

£285 respectively.

River Cruise continues to see strong

growth and bookings for 2024/25

are ahead of the same point last year.

At 14 April 2024, the booked load factor

was 72%, with a per diem of £339.

This compares with 66% and £299

at the same time in the prior year.

Unlike our current Ocean Cruise business,

we are able to scale River Cruise in a

capital-light way, allowing us to offer our

luxury cruises to an increasing number of

customers. We are, therefore, delighted to

have welcomed Spirit of the Douro to our

programme in March 2024, with our third

purpose-built ship, Spirit of the Moselle,

to follow in July 2025.

The financial performance of the Ocean

and River Cruise businesses is driven

by our ability to deliver exceptional

experiences for our customers every day.

Our key metric for monitoring customer

satisfaction is transactional net promoter

score (

tNPS

), which improved significantly

during the year to 74, from 58 in the

previous year, reflecting a considerable

improvement in the rating for River Cruise

following the steps taken to more closely

align the customer experience to that of

our Ocean Cruise experience.

Challenges

Geopolitical factors requiring

amendments to itineraries

or destinations.

Financial, regulatory and physical

impacts associated with

climate change.

Restricted capacity, derived from

capital-intensive two-ship model,

limiting scalability.

Our strategy

Our ambition is to become the

largest and most-trusted brand

for older people in the UK. We will

achieve this through the delivery

of our growth plan, which has

evolved, in line with our ambition,

as we continually develop the

business to support the changing

needs of our customers. This

plan is focused on the following

three priorities:

We plan to drive our core businesses

of Cruise, Travel, Insurance and Money,

through business-led growth strategies,

supported by our extensive data and

Publishing marketing platform.

We plan to deliver capital-light growth

across our businesses by leveraging

strategic partnerships and reducing debt.

Maximising our

core businesses

Reducing debt through

capital-light growth

We aim to not only grow the number of

customers we serve, but also enhance the

frequency and quality of our interactions

with them.

Growing our customer

base and deepening our

customer relationships

1

2

3

4

Refer to the Alternative Performance Measures Glossary on pages 187-188 for definition and explanation

Cruise Underlying

Profit/(Loss) Before Tax

Insurance

Objective

Create a long-term sustainable

insurance proposition, built on growing

customer numbers and deeper

relationships, offering a differentiated

suite of products and services,

designed with our customer in mind.

Progress in 2023/24

Reflecting the continued impact of the

market-wide inflationary headwinds and

declining policy volumes, Insurance

Broking reported Underlying Profit

Before Tax

5

of £39.8m on an earned basis,

a decline of £31.7m when compared with

£71.5m

6

in the prior year.

The inflationary environment, and the

resulting impact on our pricing, led to the

number of policies in force at the end of the

year, across all products, declining by 9%,

when compared with the prior year, to 1.5m.

Similarly, total policy sales during the year

were also 9% lower.

Revenue generated from the sale of travel

insurance remained broadly flat when

compared with the previous year, with

increased margins per policy offsetting

an 8% fall in the number of policies sold,

driven by price increases applied in the

second half of the year.

Private medical insurance revenue,

however, increased 5% when compared

with the prior year, despite policy sales

falling by 3%. This reflects the benefit

from a one-off contribution in relation to

the new partnership secured with Bupa.

Over time, this relationship is expected

to open up exciting new opportunities for

a digital health and wellbeing proposition

that will not only enhance the offering

for our existing customers but also be

a key point of differentiation when

attracting new customers.

Travel

Objective

Create a market-leading, more digital

travel business, from a low-cost

operating platform, to accelerate

growth and modernise the business.

Progress in 2023/24

For 2023/24, Travel generated revenue of

£156.3m, 44% higher than the year before,

and returned to profit for the first time

since the pandemic. The business

reported an Underlying Profit Before Tax

5

of £1.5m, an improvement of £5.6m when

compared with the Underlying Loss Before

Tax

5

of £4.1m in the prior year, reflecting

strong passenger growth of 22%, having

taken more than 57k customers on holiday.

Innovation continues to be a key differentiator

for Saga and it is the continual development

of our offering that has led to industry-wide

recognition, most recently through 28 wins

at the 2023 British Travel Awards.

Looking ahead to 2024/25, our pipeline

of future bookings continues to grow.

At 14 April 2024, booked revenue

was £140.7m from 45.3k passengers,

representing growth of 12% and 4%

respectively when compared with the

same point in the prior year.

Challenges

Geopolitical factors requiring

amendments to itineraries

or destinations.

Potential for cost of living increases

to reduce levels of discretionary

spending from our customer group.

Changes to itineraries, financial and

regulatory impacts associated with

climate change.

Travel Underlying

Profit/(Loss) Before Tax

5

£

1.5

m

2022/23 – (£4.1m)

In motor and home, inflation impacted

both our volumes and margins. Our pricing

approach, addressing increased net rates

from our panel of underwriters, resulted

in a 9% drop in policies in force and policy

sales compared with the prior year, with

customer retention of 81%, 3ppts lower.

Our margin per policy was £55, compared

with £69

6

in the year before, mostly driven

by our three-year fixed-price policies that

fix the price the customer pays for two

further renewals.

The dynamics within Insurance remain

challenging and, as a result, we need to

ensure that we balance the business

effectively between protecting and, in time,

growing the number of policies sold and

the delivery of sustainable profitability.

We are investing in price to improve our

market competitiveness and this will

impact profitability in the short term,

as will the acquisition costs arising from

attracting a higher number of new

business policies. While we expect this

approach to drive greater long-term

profitability, the anticipated impact of

these changes, when compared with

previous growth projections, has resulted

in the goodwill allocated to the Insurance

Broking business being impaired by a

further £36.8m. This is in addition to the

£68.1m impairment in the first half of the

year. At 31 January 2024, £344.7m of

goodwill remained on the statement of

financial position.

Looking ahead, we are focused on scaling

the business and the number of customers

we are able to serve, creating the

foundation for a sustainable insurance

business model. As part of this, and

consistent with our move towards

capital-light models, we are exploring options

for partnerships within our Insurance value

chain. While still in the very early stages,

we believe that such partnerships could

benefit our customers and support us in

delivering our Insurance growth ambitions.

Our Insurance Underwriting business

reported an Underlying Loss Before Tax

5

,

after expected recoveries from reinsurance

arrangements, of £1.4m, a decline of £12.1m

when compared with an Underlying Profit

Before Tax

5

of £10.7m

6

in the prior year.

5

Refer to the Alternative Performance Measures Glossary on pages 187-188 for definition and explanation

6

The prior year has been restated to reflect the adoption of IFRS 17 ‘Insurance Contracts’