Saga plc Annual Report
and Accounts
2025
STRONG POSITION
.
CLEAR FOCUS
.
GROWING MOMENTUM
.
Saga’s purpose is to deliver exceptional products and
service to meet the needs of older people.
We strive to constantly develop our understanding
of our customers, allowing us to provide them with the
products they want, alongside the exceptional service
they deserve.
Financial highlights
£768.2m
Total Underlying Revenue
1
2023/24 – £732.7m
£588.3m
Revenue
2023/24 – £564.6m
2
£47.8m
Total Underlying Profit Before Tax
1
2023/24 – £38.2m
(£160.2m)
Loss before tax from
continuing operations
2023/24 – (£123.8m)
£37.2m
Underlying Profit Before Tax
1
from continuing operations
2023/24 - £34.3m
2
£137.1m
Trading EBITDA
1
2023/24 – £116.5m
£109.6m
Available Operating Cash Flow
1
2023/24 – £143.8m
£590.5m
Net Debt
1
31 January 2024 – £637.2m
4.7x
Leverage Ratio
1
31 January 2024 – 5.4x
BUILDING THE
MOST-TRUSTED
BRAND FOR OLDER
PEOPLE IN THE UK
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 183-185 of the Alternative Performance
Measures Glossary
2
The prior year has been represented to reflect the impact of the transaction with wholly owned UK subsidiaries
of Ageas SA/NV (
Ageas
), with Insurance Underwriting and all associated accounting adjustments now classified
as discontinued operations
4
Saga at a glance
6
Chairman’s Statement
8
Group Chief Executive Officer’s
Strategic Review
14
Our strategy
16
Key performance indicators
18
Market review
20
Purpose and business model
22
Engaging with stakeholders
24
Group Chief Financial Officer’s Review
39
Environmental, Social and Governance
47
Risk management
49
Principal risks and uncertainties
53
Viability Statement
54
Key disclosure statements
Strategic Report
Financial statements
Additional information
Governance
Corporate Governance Statement
56
Governance at a glance
57
Key statements and Application of the
UK Corporate Governance Code
58
Chairman’s introduction to governance
60
Board of Directors
62
Board activities
66
Board leadership and Company purpose
67
Division of responsibilities
68
Composition, succession and evaluation
69
Nomination Committee Report
71
Audit Committee Report
75
Risk Committee Report
Directors’ Remuneration Report
77
Annual Statement
80
Remuneration at a glance
82
Annual Report on Remuneration
94
Directors’ Report
97
Statements of responsibilities
98
Independent Auditor’s Report to the
Members of Saga plc
Consolidated financial statements
106
Consolidated income statement
107
Consolidated statement of
comprehensive income
108
Consolidated statement of financial position
109
Consolidated statement of changes in equity
110
Consolidated statement of cash flows
111
Notes to the consolidated
financial statements
Company financial statements of Saga plc
177
Balance sheet
178
Statement of changes in equity
179
Notes to the Company financial statements
183
Alternative Performance Measures Glossary
186
Glossary
190
Shareholder information
IN THIS
REPORT
Our 2025 reporting suite
This report, alongside our 2025 Environmental, Social and Governance (
ESG
) Report,
can be accessed digitally by scanning the QR code or visiting our website
www.corporate.saga.co.uk/investors/results-reports-presentations
Saga plc Annual Report
and Accounts
2025
STRONG POSITION
.
CLEAR FOCUS
.
GROWING MOMENTUM
.
Saga plc
ENVIRONMENTAL,
SOCIAL AND
GOVERNANCE
REPORT 2025
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
3
DELIVERING
GROWTH
Our ambition is to be the most-trusted
brand for older people in the UK.
Our strategy
Having spent the past 12 months creating
a strong foundation to build on, we are
now focussed on driving sustainable
long-term growth.
We will achieve our ambition through the
delivery of our strategy, which has evolved
to reflect the foundations now in place, and
is focussed on the following four priorities:
1
Maximising the growth
of our existing businesses
2
Driving incremental growth
through new business lines
and products
3
Growing our customer base
and deepening those
relationships
4
Reducing debt, while
simplifying our operations
1
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
2
These are our businesses which are focussed on the specific needs and wishes of our unique customer group. In our segmental financial reporting, Cruise and Holidays are
presented as one, while Money and Publishing form part of Other Businesses
3
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
Cruise
Holidays
3
Insurance
Money
Contribution to Group Underlying Revenue
1,2
Underlying
Revenue
1
by
business unit
Contribution by
business unit
£286.1m
£167.8m
£294.8m
£5.6m
37.2%
21.8%
38.5%
0.7%
Publishing and
CustomerKNECT
£13.9m
1.8%
Saga at a glance
Saga plc
Annual Report and Accounts 2025
4
Cruise
Holidays
5
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, exploring a host of destinations
further afield; and
our fleet of smaller River Cruise ships, exploring Europe’s
beautiful waterways.
Our award-winning Holidays
5
business takes customers all over the
world, offering:
hosted holidays to specially selected European hotels, delivering
only the highest standards;
escorted group tours, showcasing not just the sights, but the
destination’s history, culture and character; and
independent tours, self-drives and tropical beach holidays
personalised to meet the needs of each and every customer.
£48.9m
Ocean Cruise Underlying
Profit Before Tax
4
2023/24 – £35.5m
£10.7m
Underlying Profit Before Tax
4
2023/24 – £ 1.5m
£4.0m
River Cruise Underlying
Profit Before Tax
4
2023/24 – £3.0m
Find out more in our Group Chief Executive Officer’s Review
on page 9
Find out more in our Group Chief Executive Officer’s Review
on page 10
Insurance
Money
Publishing
Our Insurance business, which is focussed
on providing customers with peace of mind,
comprises:
Insurance Broking, offering a range of
products primarily focussed on motor,
home, travel and private medical
insurance; and
Insurance Underwriting
6
, representing
our in-house underwriter, Acromas
Insurance Company Limited (
AICL
).
Our Money business, which has been serving
the personal finance needs of people aged
over 50 for more than 20 years, offers:
savings products;
equity release;
legal services, including wills, probate and
lasting powers of attorney;
mortgages; and
investments.
Our Publishing business delivers
insightful and engaging content to
readers through our:
award-winning Saga Magazine, which
is available through both monthly
subscription and in selected stores
across the UK;
regular digital newsletters; and
popular Saga Magazine website.
£14.4m
Total Insurance Broking Underlying
Profit Before Tax
4
2023/24 – £39.8m
£0.7m
Underlying Profit Before Tax
4
2023/24 – £1.1m
(£0.3m)
Underlying Loss Before Tax
4
2023/24 – (£0.2m)
Find out more in our Group
Chief Executive Officer’s Review
on pages 10-11
Find out more in our Group
Chief Executive Officer’s Review
on page 11
Find out more in our Group
Chief Executive Officer’s Review
on page 12
4
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
5
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
6
Following agreement for the sale of AICL to Ageas, Insurance Underwriting, and all associated accounting adjustments, have been classified as discontinued operations
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
5
This has been an extremely important year
for Saga. The strategic actions we took,
together with the progress we made
across our existing businesses, have
created a solid platform upon which we
can now build sustainable long-term value
for our shareholders and provide even
more excellent products and service for
our customers.
For the year ended 31 January 2025, Saga
has delivered a strong underlying financial
performance, growing both revenue and
Underlying Profit Before Tax
1
, supported
in particular, by another strong year in
both our Cruise and Holidays
2
businesses.
Our Net Debt
1
and Leverage Ratio
1
continued
to reduce and remain a key priority for the
future. Our strategic review has now been
completed and led to a transformative
20-year Insurance partnership agreement
with wholly owned UK subsidiaries of Ageas
SA/NV (
Ageas
), the sale of our Insurance
Underwriting business and the successful
refinancing of our corporate debt.
Our Travel
2
businesses are all performing
well and continuing to grow. Our partnership
with Ageas, and the sale of our Insurance
Underwriting business, will transform our
two main lines of insurance, being motor
and home, with that business moving to
a significantly lower risk, less complex
commercial model, with Ageas as an excellent
partner for growth. Our new credit facilities,
with a six-year maturity horizon, provide
long-term flexible financing to support our
growth ambitions.
Our excellent Ocean Cruise business
continues to progress with increasing
success, delivering outstanding occupancy
levels, alongside growing ticket prices, as a
result of our unique customer proposition,
exceptional customer service and continued
strong demand. We have continued to narrow
the gap between the experience we deliver
on our river cruises with those provided on
our ocean cruises. This approach is reflected
in our occupancy and ticket prices for River
Cruise, which have also continued to grow
year on year.
Our Holidays
2
business had an excellent year
and, on a comparable basis
3
, revenue and
passenger numbers increased significantly
when compared with the previous year.
POSITIONING
SAGA FOR
SUCCESS
“The strategic actions we took,
together with the progress we made
across our existing businesses, have
created a solid platform upon which
we can now build sustainable long-term
value for our shareholders and provide
even more excellent products and
service for our customers.”
Sir Roger De Haan
Non-Executive Chairman
In summary
A strong financial result, reflecting growth in both revenue and Underlying Profit
Before Tax
1
, alongside continued debt reduction.
Significant strategic progress, having reached agreement with Ageas for a 20-year
partnership and the sale of our Insurance Underwriting operations.
Successful refinancing of the corporate debt, which strengthens the Group’s
financial position.
Changes to Board composition, following the successful Insurance agreement with
Ageas, reflecting the Group’s new simplified business model.
Chairman’s Statement
1
Refer to the Alternative Performance Measures
Glossary on pages 183-185 for definition and
explanation
2
Following the consolidation of leadership across
our Cruise and Travel businesses, Travel will now
be referred to as ‘Holidays’, with the existing Cruise
and Travel umbrella becoming ‘Travel’
3
Restated to exclude the revenue and passengers
from our discontinued Titan third-party river cruise
offering in the prior year
Saga plc
Annual Report and Accounts 2025
6
Our Travel
4
businesses are all performing
well and our Money business is also very
well positioned. I am equally excited about
the new opportunities we might now have
available to us, as we build even more
products designed to meet the evolving
needs of our customers. Understanding and
meeting those needs has always been at the
heart of what we do, and continuing to deliver
on that promise remains key to our strategy.
Sir Roger De Haan
Non-Executive Chairman
15 April 2025
In Insurance, we reached several significant
milestones, with the signing of our 20-year
Broking agreement with Ageas and the sale
of our Insurance Underwriting business.
These are transformational changes for our
Insurance business. Ageas brings the scale,
infrastructure and capabilities of a first-class
insurance operator that, when combined
with Saga’s brand, customer insight and
marketing strength, create a powerful
combination for success. We will soon no
longer take any underwriting or pricing risk
in motor and home, and Ageas will take on the
administration of around 1.1m of our policies.
The customer data and relationships will
continue to be retained by Saga and we will
maintain responsibility for marketing. This
agreement allows us to move away from the
highly volatile risk-based Insurance model
we have today, to a lower risk, less complex
model, which will leverage Saga’s and Ageas’s
combined strengths to better serve our
customers and, in doing so, provides the
opportunity to return that part of our
business to growth.
In Money, awareness of our newer products
has grown and there remains significant
growth opportunity across our more
established savings and equity release
products. The number of customers we serve
in this area has grown significantly this year
and is a clear sign of the value customers
attribute to our personal finance offering
and our increasing credibility.
Our Publishing business continues to
produce engaging and insightful content
for the readers of our Saga Magazine.
The fast-growing distribution of our popular
weekly newsletters continues, with more
readers signing up to receive our regular
and insightful content than ever before,
and our new Saga Magazine website has
proven to be incredibly popular, with monthly
visitor numbers now in excess of one million.
Peter Bazalgette, Senior Independent
Director, and Steve Kingshott, both resigned
from the Board with effect from 9 April 2025.
These changes to the Board follow the
successful Insurance agreement with Ageas
and reflect the Group’s new simplified
business model.
I would like to thank them both for all their
hard work over the past years and the
significant contributions they have each
made. Their expertise in their respective
fields of media and insurance have proven
invaluable as we have reshaped Saga. We
wish them well in their future endeavours.
Mike Hazell has made great strides this year
and I am excited about the opportunities
he has teed up for us. He has taken action
to address the challenges in our Insurance
business and we are excited about the growth
potential our partnership with Ageas brings.
Reasons to invest in Saga
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 focusses on people aged 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 products and service
to meet 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 the delivery of long-term returns
to shareholders.
Confidence in future delivery
We have a clear and compelling strategy,
focussed on returning the business to
growth through maximising the growth
of our existing businesses; driving
incremental growth from new business
lines and products; growing our customer
base and deepening those relationships;
and reducing debt, while simplifying our
operations. It is this focus that will cement
Saga as the most-trusted brand for older
people in the UK.
£109.6m
Available Operating Cash Flow
6
4
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
5
Office for National Statistics – 2021-based interim population projections for 2024
6
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
26.4m
individuals in the UK
aged over 50
5
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
7
A strong financial performance,
with significant strategic progress
I am very pleased with the progress we have
made this year and the positive position our
business is now in. Our overall performance
was strong, with underlying profitability
growing year on year and the strategic
actions we have taken position us well for
future growth.
We completed our strategic review, which led
to the successful agreement of a new 20-year
insurance partnership with wholly owned UK
subsidiaries of Ageas SA/NV (
Ageas
) and the
sale of our Insurance Underwriting business,
which remains on track to complete in the
coming months. This partnership significantly
changes the shape of our Insurance business,
providing a route to a less volatile, lower risk
and less complex business model moving
forwards. The combination of these
achievements meant that we were able to
refinance our corporate debt, replacing our
2026 maturities with new six-year credit
facilities that provide significant headroom
and flexibility as we move forward.
DELIVERING
AGAINST OUR
GROWTH PLAN
“The past 12 months has been a period
of significant progress as we laid the
foundations that will underpin our plans
for long-term growth.”
Mike Hazell
Group Chief Executive Officer
Group Chief Executive Officer’s Strategic Review
In summary
An outstanding year for Travel
1
, with continued strong customer demand and growth
across all key metrics.
Completion of the Insurance Underwriting sale expected in Q2 2025 and transition
to the new partnership arrangement with Ageas on track for Q4 2025.
Repaid our 2026 debt maturities early, following the year end, after the successful
refinancing of our corporate debt.
Clear route to deliver an annual Underlying Profit Before Tax
2
of at least £100m in the
next five years, while reducing the Leverage Ratio
2
to below 2.0x.
1
Following the consolidation of leadership across our
Cruise and Travel businesses, Travel will now be referred
to as ‘Holidays’, with the existing Cruise and Travel
umbrella becoming ‘Travel’
2
Refer to the Alternative Performance Measures Glossary
on pages 183-185 for definition and explanation
Growing demand for Travel
1
and
Insurance performance in line
with guidance
Our Travel
1
businesses had an outstanding
year, continuing to drive strong customer
demand and delivering growth across all key
metrics. Earnings for our Insurance Broking
business reduced in the year, driven by lower
opening policy volumes and the measures
taken to rebalance our competitiveness,
as we invested in pricing and marketing to
support longer-term growth. After a difficult
period, our Insurance Underwriting business
also returned to an Underlying Profit Before
Tax
2
. Alongside this, our Money business
continued to grow the number of customers
it serves and deepen its engagement with
those customers through its successful
newsletters and webinars. Publishing,
which continues to play a pivotal role in
driving customer engagement, also saw
a record number of visits to our Saga
Magazine website.
Underlying Revenue
2
and profit
growth, alongside continued
debt reduction
Saga delivered a significantly improved
underlying financial performance for the year
ended 31 January 2025, with total Underlying
Revenue
2
of £768.2m and total Underlying
Profit Before Tax
2
of £47.8m, reflecting
growth of 5% and 25% respectively.
Following agreement for the sale of Acromas
Insurance Company Limited (
AICL
) to Ageas,
Insurance Underwriting and all associated
accounting adjustments have been classified
as discontinued operations. Excluding these
items, Underlying Revenue
2
was £588.6m,
3% higher than the prior year, while
Underlying Profit Before Tax
2
was £37.2m,
reflecting 8% growth.
The Group reported a loss before tax from
continuing operations of £160.2m, reflecting
the impairment of assets, including the
previously reported write-down of Insurance
Broking goodwill and those that will no longer
deliver economic benefit following the move to
the new Insurance partnership, restructuring
costs and other exceptional items.
The reduction of Net Debt
2
remains a key
strategic focus and we made further
progress with this. At 31 January 2025, Net
Debt
2
was £590.5m, a £46.7m reduction from
the £637.2m reported at 31 January 2024.
Available Cash
2
, also at 31 January 2025 was
£79.3m, compared with the £169.8m at the
same time in the prior year. In addition to this,
and following the successful refinancing of
our corporate debt, the Group has further
liquidity available through a £50.0m Revolving
Credit Facility (
RCF
) and £100.0m undrawn
delayed-draw term loan, both provided
by certain funds, entities (or affiliates or
subsidiaries of such funds or entities) and/or
accounts managed, advised or controlled
by HPS Investment Partners, LLC or its
subsidiaries (
HPS Funds
).
Saga plc
Annual Report and Accounts 2025
8
This, alongside other continual enhancements
to our offering, continues to support our
strong forward bookings position and, at
6 April 2025, the booked load factor for
the first half was 94% and the per diem was
£392, 5ppts and 7% ahead of the 89% and
£365 at the same point in the prior year.
For the full year, and at the same date, the
load factor was 78%, 2ppts ahead of the
prior year and the per diem was £396,
8% ahead.
Our River Cruise business continues to go
from strength to strength, having delivered
an Underlying Profit Before Tax
3
of £4.0m,
a 33% increase on the £3.0m reported
in the prior year. Revenue also grew 13%,
from £43.8m to £ 49.4m, supported by a
load factor of 89% and a per diem of £326
reflecting a 4ppt and 14% increase when
compared with the 85% and £285 achieved
in the prior year.
Similar to the trend observed in Ocean
Cruise, our River Cruise tNPS also
increased in the year, from 59 to 60,
reflecting growth in the scores relating to
the journey from a customer’s home to the
ship and the online booking experience,
following significant improvements to
documentation.
At 6 April 2025, the River Cruise booked
load factor and per diem for the first half
of 2025/26, for our current fleet of ships,
were 89% and £362, 5ppts and 6% ahead
of the 84% and £341 at the same time in the
prior year. We are scaling the River Cruise
business and are delighted that Spirit of the
Moselle joins the fleet in July 2025. Boasting
four passenger decks and a capacity of
172 guests, our newest ship will deliver the
same luxury and exceptional experience as
her sister ships, Spirit of the Rhine and
Spirit of the Danube. Including bookings
on this new ship and mirroring the approach
to revenue management used in Ocean
Cruise, which optimises load factors on a
month-by-month basis by prioritising the
earlier months first, the load factor for the
year ending 31 January 2026, at the same
date, was 67%, 4ppts behind the prior year,
with the per diem of £361, 6% ahead.
For the 12 months ended 31 January 2025,
our Ocean Cruise business delivered
exceptional growth in Underlying Profit
Before Tax
3
, which was £48.9m, 38% higher
than the £35.5m in the prior year.
We continued to generate strong customer
demand, achieving record levels of
occupancy with the current two Ocean
Cruise ships. This translated into a 91%
load factor and £357 per diem, which were
3ppts and 8% higher when compared with
the 88% and £331 in the previous year.
After accounting for the cost of operating
the ships, Trading EBITDA
3
was £89.2m,
representing growth of 19%.
Our customer transactional net promoter
score (
tNPS
) for Ocean Cruise increased
to 82, from 80 in the prior year, reflecting
improvements to the shore excursions
included within the ticket price and our
pre-departure administration processes.
Alongside this feedback from our customers,
we were delighted to have been awarded
‘Best Luxury Cruise Line’ at the British Travel
Awards and the number one rated cruise
line by Which?, achieving recommended
provider status for the fifth year in a row.
For 2025/26, we are continuing to expand
our included VIP chauffeur service, from
the current 300-mile range to nationwide,
ensuring that all our customers, irrespective
of where they live, benefit from hassle-free
comfort and exceptional service from the
very start of their Ocean Cruise holiday.
1
Maximising the growth of our existing businesses
Our strategy
Having spent the past 12 months creating
a strong foundation to build on, we are now
focussed on driving sustainable long-term
growth. Our existing businesses have detailed
five-year plans in place that demonstrate
strong growth potential and the strategic
actions taken allow us to now pursue growth
opportunities beyond these plans, building
new revenue streams for the long term.
With this in mind, our priorities have
evolved to introduce a fourth strategic
pillar, focussed on driving incremental value
from new business lines and products.
Our ambition is to be the most-trusted
brand for older people in the UK and we
will achieve this through the delivery of our
strategy, which is focussed on the following
four priorities:
1
Maximising the growth of our
existing businesses
2
Driving incremental growth through
new business lines and products
3
Growing our customer base and
deepening those relationships
4
Reducing debt, while simplifying
our operations
An update on our progress during the year
in each of these areas is set out below.
Cruise
What our
customers
think
Saga is a company we can
trust and we feel valued.
The cruise was even
better than our
expectations and we
wouldn’t hesitate to cruise
again with Saga, hopefully
in the near future.”
Anonymous
Customer survey,
Q2 2024
3
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
£48.9m
Ocean Cruise Underlying
Profit Before Tax
3
2023/24 – £35.5m
£4.0m
River Cruise Underlying
Profit Before Tax
3
2023/24 – £3.0m
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
9
1
Maximising the growth of our existing businesses continued
Our strategy continued
Holidays
4
Insurance
Our Holidays
4
business had an excellent year,
generating revenue of £167.8m, compared
with £156.3m in the prior year, representing
growth of 7%, or 19% on a comparable
basis
5
. On the same basis
5
, the number of
passengers who travelled with us was 54.8k,
9% higher, with the average revenue per
passenger also 9% higher. This led to a
significant step change in Underlying Profit
Before Tax
6
, which grew from £1.5m in the
prior year, to £10.7m.
Our commitment to providing exceptional
holidays for our customers continues to be
recognised industry-wide, having recently
received 32 awards at the 2024 British
Travel Awards, including gold in the ‘Best
Tour Operator’ category. This, alongside
continual enhancements to the range of
products we offer, contributed to our strong
pipeline of future bookings. At 6 April 2025,
50.7k passengers had booked with us for
2025/26, which was 14% ahead of the
same time last year, generating revenue
of £157.6m, which was also 14% ahead.
Supporting the strong forward bookings
position is our growing tNPS, which
increased to 45, from 34 in the prior year.
The improvement reflects growth across
our escorted group tours and hosted
holidays, arising from the enhancements
made to pre-departure administration for
customers, alongside positive trends in hotel
quality scores, following action taken to set
clearer customer expectations during the
booking process.
Building on the growth in Holidays
4
over the
past couple of years, we made the decision
to consolidate the leadership across Cruise
and Holidays
4
, with the Holidays
4
business
now being led by our Chief Executive Officer
(
CEO
) of Cruise, now the CEO of Travel
4
.
This move will more closely align the
customer experience between the two
businesses, deliver operational synergies
and better position both businesses for
further growth.
For the year ended 31 January 2025,
Insurance Broking reported a total
Underlying Profit Before Tax
6
of £14.4m,
materially lower than the £39.8m in the
prior year, but in line with our guidance.
Following the agreement to sell our
Insurance Underwriting operations to
Ageas, AICL and all associated accounting
adjustments, including the Insurance
Broking written to earned adjustment, have
been classified as discontinued operations.
Excluding these, Underlying Profit Before
Tax
6
from continuing operations was £14.5m,
compared with £34.5m in the prior year.
Coming into the year, our policies in force
were 9% lower than in the prior year. We
took early action to improve our competitive
position and rebalance the business for a
return to policy growth in future years,
however, the lower volume of policies
available to renew, and the wider market
pressures, adversely impacted in-year policy
sales. As a result, the number of policies sold
across all products, was 1.4m, 14% lower
than the 1.6m in the prior year. The number
of policies in force at the year end was,
therefore, also lower, falling by 15%.
The above dynamics for motor and home
meant that the margin per policy reduced
to £51, compared with £55 in the preceding
year. Customer retention was 77% across
these lines, 4ppts lower than the 81%
reported in the previous year.
For motor insurance, while our pricing
actions showed early encouraging results,
market-wide price reductions outpaced
those from our panel of underwriters,
dampening our competitive position. This,
and fewer policies coming into the year,
meant that policy sales were 13% lower than
in the prior year. Motor margins increased,
as higher margins from reducing net rates
on our three-year fixed-price products more
than offset the impact of our pricing action
on standard one-year policies.
Group Chief Executive Officer’s Strategic Review continued
4
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
5
Restated to exclude the revenue and passengers from our discontinued Titan third-party river cruise offering in the prior year
6
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
£10.7m
Holidays
4
Underlying
Profit Before Tax
6
2023/24 – £1.5m
54.8k
Holidays
4
passengers
2023/24 – 50.3k
5
Saga plc
Annual Report and Accounts 2025
10
In Insurance Underwriting, which is classified
as a discontinued operation following the
agreement with Ageas for its sale, the pricing
action taken to mitigate the impact of recent
claims inflation continued to flow through
and benefit the financial result. Subsequently,
we reported an Underlying Profit Before Tax
7
of £10.7m, which compares with an
Underlying Loss Before Tax
7
of £1.4m in the
prior year. Within this, the net current year
combined operating ratio improved to
100.7%, representing a 16.4ppt reduction
when compared with the 117.1% in the
prior year.
Consistent with our ambition to return
the Insurance business to growth, on
16 December 2024, we announced that
we had reached an agreement with Ageas
for a 20-year partnership for motor and
home insurance, alongside the sale of AICL,
our Insurance Underwriting business.
The new partnership is designed to deliver
best-in-class insurance services to our
customers, driving growth in our motor
and home business through differentiated
products, first-rate customer service and
value for money.
The sale of AICL remains subject to
regulatory approval, however, as previously
stated, we expect this to complete in the
second quarter of 2025. Furthermore,
the preparation work required ahead of
the transition to the partnership model is
progressing well and on track for the new
arrangement to go live in the fourth quarter
of 2025. Once fully transitioned, this
partnership, and the sale of AICL, will mean
that we no longer face the underwriting risk
that we have previously been exposed to
and will operate a significantly less complex
model, supported by Ageas in those areas,
as our motor and home insurance partner.
£14.4m
Total Insurance Broking Underlying
Profit Before Tax
7
2023/24 – £39.8m
£10.7m
Insurance Underwriting Underlying
Profit/(Loss) Before Tax
7
2023/24 – (£1.4m)
Money
For the year ended 31 January 2025, Money
reported an Underlying Profit Before Tax
7
of
£0.7m, slightly lower than the £1.1m reported
in the prior year, reflecting investment in our
newer products, combined with an inability
to grow our savings book, following the
government delay in approving an increase to
the ring-fence limit applicable to investment
banks in the UK, with such legislation finally
being passed in February 2025.
We are continuing to build awareness
of our newer products, with our digital
newsletter reaching more than 700k
customers every week and increased
demand for our insightful webinars, which
promote financial wellbeing.
7
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
£0.7m
Money Underlying Profit
Before Tax
7
2023/24 – £1.1m
In home, policy sales were 17% behind the
prior year, again reflecting fewer available
renewals and reduced competitiveness
following the necessary price increases
to mitigate the effect of continued net rate
inflation. Alongside this, home margins
reduced, reflecting pressure on our
three-year fixed-price products in the
current high inflation environment.
The contribution from our other broking
products was lower than in the prior year,
reflecting the increasingly competitive travel
insurance market, with increased marketing
activity and higher levels of discounting
observed among our competitors, and
market wide net rate inflation on private
medical insurance.
The tNPS for Insurance Broking for the
full year was 57, broadly consistent with
the 58 in the prior year, with significant
improvement observed in the fourth
quarter, which scored 61, following our
pricing action and the introduction of our
additional contact centre in South Africa.
I understand the
partnership is a fantastic
move for the business and
I am here to support that.”
Anonymous
Colleague survey,
December 2024
What our
colleagues
say
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
11
Saga’s success over the past 74 years was
built on continually assessing the needs of
our customers and developing and evolving
products to meet those needs. While we
have detailed growth plans in place for each
of our existing businesses and product lines,
the strategic actions taken over the past
year now give us the opportunity to build
on these plans and explore incremental
growth, through new products and business
lines not currently provided by Saga.
The work to deliver these opportunities
begins now and updates will, therefore, come
as and when we are further progressed
with these activities. Our approach will
be disciplined and leverage partnership
opportunities, in line with our strategy.
Increasing the number of customers we
serve and the quality of our interactions
with them remains a key strategic priority
for the Group. Our extensive customer
database continues to be one of our most
valuable assets, providing us with an
unrivalled wealth of information on people
aged over 50 in the UK, and allowing us
to develop and refine our products to
meet our customers’ changing needs.
At 31 January 2025, our database consisted
of 9.4m individuals and, following action
taken to drive more meaningful engagement,
we are now able to contact 7.8m of them.
Our Publishing business continues to be
key to growing our customer base and
deepening our customer relationships,
through the provision of engaging and
insightful content across a variety of
channels. Our award-winning magazine is
now being trialled in selected high street
stores, with good early progress. Building
on the success of the magazine, we continue
to generate high levels of traffic to the
website, which represents a significant
opportunity as we look to maximise digital
engagement and insight in an increasingly
digitally savvy customer market. Following
its launch in May 2024, the website now
regularly sees over 1.0m visits per month
and continues to grow.
Alongside the magazine, our popular
newsletters are key to driving customer
engagement to support our insight. We now
send 10.7m newsletters a month to our
engaged audience, covering a range of
topics, including travel, personal finance and
lifestyle, with industry-leading open rates of
46%, an increase when compared with the
44% in the prior year.
Our strategy continued
Group Chief Executive Officer’s Strategic Review continued
2
Driving incremental
growth through new
business lines and
products
3
Growing our customer base and deepening
those relationships
More ways for our audience
to read our insightful and
engaging content
Alongside our popular printed Saga Magazine,
which has been in publication for more than
40 years, we are now bringing the same
insightful and engaging content to our audience
in even more ways. We have seen great
customer engagement with the Saga Magazine
website since re-launching it in May 2024.
Site traffic has grown quickly and we now
have over 1.0m monthly visits. In addition, our
twice-weekly newsletter has industry-leading
open rates, which regularly exceed 50%.
We work hard to bring our customers the
stories that matter to them across a range
of topics – from health, to homes, travel,
money and more – and look forward to adding
even more content to the site during 2025.
Saga Magazine website visits
7.4m
2023/24 – 3.4m
I believe that
the changes
implemented
always have the
best interests
of the business
at heart.”
Anonymous
Colleague survey,
December 2024
What our
colleagues
say
Saga plc
Annual Report and Accounts 2025
12
Watch our Group
CEO, Mike Hazell,
presenting our
full year results
During the year, we made significant
progress with our ambition to reduce our
debt. At 31 January 2025, Net Debt
8
was
£590.5m, £46.7m lower than 31 January
2024 and included within this was £79.3m
of Available Cash
8
. As a result of our
reduced Net Debt
8
position, alongside
growth in Trading EBITDA
8
, the Leverage
Ratio
8
also reduced to 4.7x, from 5.4x at
the same time last year.
In January 2025, we announced that we
had successfully refinanced the Group’s
corporate debt in full, having reached
agreement with HPS Funds for a series
of new long-term credit facilities. These
comprise a £335.0m term loan facility, a
£100.0m delayed-draw term facility, which
can be used to fund Ocean Cruise ship debt
repayments or growth investment, and a
new £50.0m RCF. The debt attached to the
Ocean Cruise ships remains unchanged.
Following the year end, the new £335.0m
term loan was drawn and used to repay the
£250.0m bond, maturing in July 2026,
alongside the £75.0m drawings under the
loan facility provided by Roger De Haan.
Not only does the new capital structure
significantly enhance the Group’s liquidity
position, but it also increases the covenant
headroom, providing flexible funding
certainty for the next six years as we
execute our growth plans.
The strategic action taken over the past
year and, in particular, the agreed
transaction with Ageas, provides a pathway
to remove some of the historic risks and
complexity within the Group. Alongside this,
we believe there is further opportunity to
simplify our legacy operations and create
a more agile and entrepreneurial approach
moving forward, seeking partnerships to
support us in this journey, where it makes
sense to do so.
Strengthening our
exceptional culture
We recognise that our ability to provide
customers with exceptional products
and service is only possible with the support
of our colleagues. As such, we believe it is
important to continually listen to their
feedback and views and respond appropriately
to ensure that we create the best possible
culture, where colleagues can be their
authentic selves.
We were proud to be recognised as the
sixth best employer in the UK by the
Financial Times, following a survey of around
20,000 employees, who were asked about
working conditions, reward and potential for
development. Our own internal colleague
surveys supported this, showing that
engagement increased from 6.6 in January
2024, to 7.9 out of 10 in December 2024,
reflecting a growing sense of advocacy among
our colleagues, underpinned by greater
leadership visibility and responses to
colleague feedback.
Significant growth potential
The past 12 months has been a period of
significant progress as we laid the
foundations that will underpin our plans
for long-term growth. We have a group of
established businesses, with detailed growth
plans in place for each of them and a new
partnership with Ageas that significantly
reduces the risk, complexity and earnings
volatility in our Insurance business. Our
partnership strategy will continue to support
and amplify this growth, leveraging partner
capabilities and infrastructure, where this
complements our existing plans, and
unlocking new opportunities for products
that meet customer needs.
Looking ahead, there is no shortage of growth
potential, with our current plans providing a
clear route to deliver a material step change
in financial performance within the next five
years. Over that timeframe, we believe there
is a path to deliver at least £100.0m of annual
Underlying Profit Before Tax
8
, while reducing
the Leverage Ratio
8
to below 2.0x.
Of course, none of this would be possible
without our excellent colleagues, who work
hard every day to give our customers the best
possible experience, our loyal customers and,
of course, our investors and partners, who
continue to support us.
Mike Hazell
Group Chief Executive Officer
15 April 2025
4
Reducing debt,
while simplifying
our operations
Net Debt
8
£590.5m
2023/24 – £637.2m
8
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
Saga provided a
wonderful holiday in
a beautiful location,
staying in a fantastic
hotel. I couldn’t have
asked for more!”
Anonymous
Customer survey,
Q4 2024
What our
customers
think
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
13
Saga does a good job of
clearly communicating
the goals and strategies
set by senior leadership,
ensuring that colleagues
are aligned with the
organisation’s direction.”
Anonymous
Colleague survey,
December 2024
What our
colleagues
say
OUR GROWTH
PLAN
Now that we have strong foundations in place, we are
focussed on driving sustainable long-term growth.
As such, we have evolved our growth plan to introduce a fourth strategic priority,
focussed on driving incremental value from new business lines and products.
Our ambition is to be the most-trusted brand for older people in the UK and we
will achieve this through the delivery of our strategy, which is focussed on the
following four priorities.
Our strategy
1
Maximising
the growth of
our existing
businesses
Objective
Deliver differentiated
products that drive
greater scale and
profitability in our
existing businesses.
4
Reducing debt,
while simplifying
our operations
Objective
Focus on reducing
debt, while leveraging
internal synergies
and partnership
opportunities to
simplify our business.
2
Driving incremental
growth through
new business lines
and products
Objective
Create new products
and business lines that
deliver incremental
scale and growth,
seeking partnership
opportunities to amplify
our core strengths.
3
Growing our
customer base and
deepening those
relationships
Objective
Use our insight to
engage customers,
drive our business
and develop broader
customer engagement
across our product
ranges.
Saga plc
Annual Report and Accounts 2025
14
OUR LONG-TERM
INSURANCE BROKING
PARTNERSHIP WITH AGEAS
In line with our ambition to return the Insurance business to growth,
in December 2024, we announced that we had reached an agreement
with wholly owned UK subsidiaries of Ageas for a 20-year partnership
for motor and home insurance, alongside the sale of AICL.
The partnership will combine the
strength of the Saga brand, our
marketing skills and customer
base with Ageas’s extensive and
growing UK insurance operations.
Designed to deliver best-in-class
insurance services to our
customers, the new partnership
will drive growth in our motor and
home insurance business through
differentiated products, while
providing first-rate customer
service and value for money.
Under the new arrangement,
Ageas will be responsible for
price-comparison website
distribution, pricing and
underwriting, claims and
customer servicing activities,
with Saga retaining responsibility
for brand and direct marketing.
Our existing partnerships for
travel and private medical
insurance will remain in place.
April 2024
Confirmed that we were
exploring opportunities for
a strategic partnership
in Insurance
October 2024
Announced exclusive
negotiations with Ageas to
establish a 20-year partnership
for motor and home insurance,
alongside the sale of AICL
December 2024
Reached agreement
with Ageas for a 20-year
partnership for motor
and home insurance,
alongside the sale of AICL
March 2026
Contingent consideration
of up to £30.0m payable,
subject to certain policy
volume and profitability
targets being met
Q4 2025 – Q1 2026
Partnership expected to
commence in Q4 2025,
generating £80.0m
consideration in Q1 2026,
subject to the satisfaction
of certain conditions
Q2 2025
Base consideration receivable
on completion of the AICL sale
2
with a further £2.5m payable
once the partnership
commences. The sale will not
impact our customers
Q1 2027
All policies will have been
migrated to Ageas’s platform
January 2028
First financial year end
reflecting the new
operating model
March 2032
Contingent consideration of
up to £30.0m payable, subject
to certain policy volume and
profitability targets being met
£65.0m
1
£80.0m
Up to
£30.0m
Up to
£30.0m
1
Approximately £22.0m of the £65.0m base consideration will be used for deductions relating to properties transferred to the Group,
AICL’s Section 75 debt and transaction costs, leaving around £43.0m of net proceeds
2
The sale of AICL is subject to regulatory approval
Strategic rationale
Consistent with our aim
to move towards a more
capital-light business model
Provides a stable, low-risk
income stream
Reduces complexity
Supports growth
Crystallises value
Reduces debt
Enhances long-term value
for our shareholders
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
15
POSITIVE
MOMENTUM
During the financial year, the following key performance
indicators (
KPIs
) were used to assess the financial and
operational performance of the Group against our
strategic growth plan.
Key performance indicators
1
Since the year end, the strategic pillars evolved, reflecting the strategic progress made over the past 12 months and our focus on driving long-term sustainable growth.
The strategic pillars that applied during the 2024/25 financial year were set out in the 2024 Annual Report and Accounts. These were: maximising our core businesses;
reducing debt through capital-light growth; and growing our customer base and deepening our customer relationships
2
Only the 2024/25 bonus KPIs reported at a Group level are included. Full details of the KPIs used to determine executive remuneration can be found on pages 83-84
3
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
4
Underlying Profit/(Loss) Before Tax from continuing operations from 2022/23 is reported under International Financial Reporting Standard (
IFRS
) 17 and is, therefore,
not directly comparable with the prior years, which were reported under IFRS 4
5
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
Financial KPIs
1
Maximising the
growth of our
existing businesses
1
Key
4
Reducing debt,
while simplifying
our operations
1
2
Driving incremental growth
through new business lines
and products
1
3
Growing our customer
base and deepening
those relationships
1
2024/25 Bonus KPIs
2
Total Underlying
Profit/(Loss) Before Tax
3
£47.8m
Purpose and definition
Total Underlying Profit/(Loss)
Before Tax
3
is the Group’s
primary KPI and a meaningful
representation of underlying
trading performance. It is defined
as loss before tax, excluding items
which are not expected to recur.
Refer to page 183 for full definition
and explanation.
Performance
Increase of £9.6m when compared
with 2023/24, reflecting continued
Cruise and Holidays
5
momentum
and strengthening of Insurance
Underwriting. This was, however,
partially offset by a lower Insurance
Broking result, reflecting continued
difficult conditions.
Loss before tax from
continuing operations
(£160.2m)
Purpose and definition
Loss before tax from continuing
operations as presented in
accordance with UK-adopted
international accounting standards.
Performance
Loss before tax from continuing
operations of £160.2m, £36.4m
higher when compared with the
prior year, reflecting higher asset
impairments, including the
write-down of Insurance Broking
goodwill and those that will no
longer drive economic benefit
under the new Insurance
partnership, restructuring costs
and other exceptional items.
£17.1m
(£6.7m)
£15.5m
4
£38.2m
4
£47.8m
4
2021/22
2022/23
2023/24
2020/21
2024/25
(£61.2m)
(£23.5m)
(£272.7m)
4
(£123.8m)
4
(£160.2m)
4
2021/22
2022/23
2023/24
2020/21
2024/25
1
1
Available Operating
Cash Flow
3
£109.6m
Purpose and definition
Available Operating Cash Flow
3
represents net cash flow from
operating activities, which is not
subject to regulatory restriction,
after capital expenditure but before
tax, interest paid, restructuring
costs and other non-trading items.
Refer to page 185 for full definition
and explanation.
Performance
Lower Available Operating
Cash Flow
3
, reflecting the smaller
contribution from Insurance
Broking and reduced dividends
from Insurance Underwriting,
alongside the one-off prior year
benefit from River Cruise and
Holidays
5
moving to an escrow
arrangement.
Net Debt
3
£590.5m
Purpose and definition
Net Debt
3
represents the sum of
the carrying value of the Group’s
debt facilities, less the amount
of Available Cash
3
it holds. Refer
to page 185 for full definition
and explanation.
Performance
Net Debt
3
reduced £46.7m when
compared with 31 January 2024,
reflecting continued repayments
across the Ocean Cruise ship
facilities but lower Available Cash
3
following repayment of the 2024
bond, which was only partially
funded by drawdown on the facility
provided by Roger De Haan. Refer
to page 36 of the Group Chief
Financial Officer’s Review for
full details.
4
£3.4m
£75.8m
£54.9m
£143.8m
£109.6m
2021/22
2022/23
2023/24
2020/21
2024/25
£760.2m
£729.0m
£711.7m
£637.2m
£590.5m
31 Jan 22
31 Jan 23
31 Jan 24
31 Jan 21
31 Jan 25
1
4
Saga plc
Annual Report and Accounts 2025
16
Insurance policies in force
1.3m
Purpose and definition
Insurance policies in force refers
to the number of core insurance
policies, across all products, in
force at any given financial year end.
Performance
At 31 January 2025, policies in force
was 0.2m lower than at the same
point in the prior year, reflecting a
reduction across motor, home and
other insurance broking, due to
fewer policies for renewal coming
into to the year, alongside continued
challenging conditions.
Ocean Cruise load factor
6
91%
Purpose and definition
Load factor is the most sensitive
driver of Cruise profit before tax
and represents the booked
proportion of the total capacity
across our ships. It is calculated
by dividing the number of
berths booked by the total
berths available.
Performance
The Ocean Cruise load factor
increased 3ppts, to 91%, reflecting
continued strong customer
demand for our unique offering.
68%
75%
88%
91%
2021/22
2022/23
2023/24
2024/25
Non-financial KPIs
1
3
Holidays
7
passengers
8
54.8k
Purpose and definition
Holidays
7
passengers represents
the number of customers that
travelled on either a Saga or
Titan holiday during a given year.
Performance
In 2024/25, the number of
passengers who travelled with us
increased 9% when compared
with the prior year, reflecting
continued growth across our
escorted group tours and hosted
holidays products.
Customer transactional
net promoter score (
tNPS
)
59
Purpose and definition
Customer tNPS represents
the willingness of customers to
recommend Saga products and
services to family, friends and
colleagues following a recent
transaction. The score is calculated
by analysing customer survey
responses, then subtracting
the percentage of detractors
(those scoring six or less) from
the percentage of advocates
(those scoring nine or more).
Performance
Customer tNPS was 59, flat when
compared with the prior year,
reflecting higher scores across
Cruise and Holidays
7
, but lower
scores in Insurance and Money
arising from the impact of inflation
on customer pricing.
Colleague engagement
10
7.9
out of 10
Purpose and definition
Colleague engagement provides
an indication of how committed
and enthusiastic colleagues are
towards Saga and their work.
It is measured through responses
to colleague surveys hosted by
an independent third party.
Performance
The latest score reflects a
growing sense of advocacy
and commitment across Saga
colleagues, underpinned by
improvements in leadership
visibility and listening and
responding to colleague feedback.
Customer consent
capture
11,12
37%
Purpose and definition
Customer consent capture
represents the percentage of
customers asked who have
consented to receive marketing
emails from Saga, allowing us to
email them about our full range of
products and services across all our
business units. Consent is requested
during customer interactions with
our individual businesses, either
on the telephone or online.
Performance
To grow our customer base and
deepen the relationships with our
customers, we changed our
approach to capturing marketing
consent during 2024/25. Previously,
we could only market products by
specific business areas, however,
we now ask for broader Group
consent, allowing us to promote
a wider range of products from
across the Group to a larger
number of customers.
8.4k
47.2k
50.3k
9
54.8k
2021/22
2022/23
2023/24
2024/25
7.7
8.0
6.6
7.9
Nov 21
Nov 22
Jan 24
Dec 24
1.7m
1.7m
1.7m
1.5m
1.3m
31 Jan 22
31 Jan 23
31 Jan 24
31 Jan 21
31 Jan 25
1
1
3
3
1
3
1
3
6
No comparative data prior to 2021/22 has been provided, as operations were suspended for much of 2020/21, with the offering prior to that not comparable with our current proposition
7
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
8
As River Cruise was historically reported within Holidays, no comparable data is available prior to 2021/22
9
Restated to exclude the passengers from our discontinued Titan third-party river cruise offering in the prior year
10
During 2020/21, Saga appointed a new third-party survey provider. As such, the data prior to this is not comparable
11
The tracking of customer consent capture began in 2024/25 and, as such, no comparable data is available prior to this
12
The KPIs presented have been updated to align with those used to determine executive remuneration and the most sensitive drivers of profit in our significant businesses.
As a result, ‘customer consent attempts’ has been removed and replaced with ‘customer consent capture’
67
67
61
59
59
2021/22
2022/23
2023/24
2020/21
2024/25
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
17
Saga provides people aged over 50 with
a range of products and services, tailored
specifically to meet their needs, accompanied
by exceptional experiences. This unique
group is the fastest-growing and most
affluent
2
segment of the UK population.
We understand that the ageing process
changes peoples’ views, needs and priorities,
and it is for this reason that we strive to
continually adapt to these changes.
Through our unique insight, extensive
database and growing capabilities, we
provide our customers with compelling
and relevant products and services that
offer value, support and peace of mind.
We continue to face a high level of
competition in the commoditised markets
we operate in, however, we use our unique
understanding to offer our customers
exceptional experiences.
Cruise
We provide our customers with truly
all-inclusive cruises, on board our luxury ships.
Marketplace and position
While we have a significant number of
competitors in both Ocean and River Cruise,
we are the only operator to cater exclusively
for people aged over 50, designing itineraries
and experiences for this under-served group.
Key competitors
Fred. Olsen, Cunard, P&O Cruises, Riviera
and Viking
Holidays
4
We offer hosted holidays, escorted group
tours and bespoke independent tours,
underpinned by our unique insight into our
customers, which allows us to continually
expand the range of destinations on offer.
Marketplace and position
In a highly competitive and commoditised
market, we are one of the market-leading tour
operators for people aged over 50 in the UK.
Key competitors
On the Beach, TUI, Trailfinders and
Newmarket Holidays
Insurance
We provide customers with reassurance and
peace of mind through a series of motor, home,
travel and private medical insurance products.
Marketplace and position
The insurance market, while cyclical in nature,
continues to be extremely competitive,
demonstrated by continuing consolidation
of some of our peers. We continue to be
well-placed, being the sole provider of
insurance exclusively for people aged over 50,
further strengthened by the agreement of
a strategic partnership with Ageas, which
provides an opportunity for growth.
Key competitors
Admiral, Hastings, LV, NFU Mutual, Direct Line
and Aviva
Money
We offer customers support through
alternative financial solutions in the form
of savings products, equity release, legal
services, investments and mortgages.
Marketplace and position
We are the only provider of financial products
and services designed exclusively for people
aged over 50 in the UK.
Key competitors
Post Office and John Lewis Money
Publishing
We deliver engaging content to our unique
audience, creating regular and insightful
interactions with this group.
Marketplace and position
Saga Magazine is one of the UK’s most loved
and respected monthly lifestyle publications,
generating regular coverage in the print and
digital press.
Key competitors
Good Housekeeping and The Oldie
Our customers
Our businesses
3
1
Office for National Statistics – 2021-based interim population projections
2
Office for National Statistics – Wealth and assets survey
3
These are our businesses, which are focussed on the specific needs and wishes of our unique customer group. In our segmental financial reporting, Cruise and Holidays are
presented as one, while Money and Publishing form part of Other Businesses
4
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
OPPORTUNITY
FOR GROWTH
Saga operates in highly attractive markets, serving
the fastest-growing demographic, with significant
opportunity for growth.
Market review
There were an estimated
26.4m
individuals in the UK aged
over 50 during 2024
1
…and this age group is expected
to grow faster than any other
over the next 10 years
1
1.8m
additional 50+ year-olds by 2034
1
2.0
1.0
–
(1.0)
(2.0)
2024
2026
2028
2030
2032
2034
0-29-
year-olds
30-49-
year-olds
50+
year-olds
Predicted population growth
by age group (
m
)
Saga plc
Annual Report and Accounts 2025
18
Background
The Ocean Cruise business is regulated by
the International Maritime Organization and
the Maritime and Coastguard Agency, and
is a member of the Cruise Lines International
Association, the UK Chamber of Shipping and
the Association of British Travel Agents (
ABTA
).
The River Cruise and Holidays
5
businesses
are regulated by the Civil Aviation Authority
and are a member of ABTA as well as
Accredited Agents of the International Air
Transport Association. Our Insurance
Broking and Money businesses are regulated
by the Financial Conduct Authority (
FCA
),
with the Insurance Broking business also
regulated by the Jersey Financial Services
Commission (
JFSC
). The discontinued
Insurance Underwriting business is
regulated by the Gibraltar Financial
Services Commission and JFSC and has
a passporting branch in the UK under the
Solvency II Directive.
Saga also operates processes and
procedures to comply with other regulations
and legislation that apply to its business
including, but not limited to, the UK General
Data Protection Regulation 2021, the Data
Protection Act 2018, the Equality Act 2010,
financial crime legislation and health and
safety legislation.
Developments during the year
For the Cruise business, FuelEU Maritime
came into force in January 2025. This
regulation encourages the adoption of low or
zero carbon fuels, with penalties if reductions
cannot be made. This has been accounted
for within our financial plan and forecasts,
along with the use of biofuels.
The Consumer Duty sets high standards
of consumer protection across financial
services. In July 2024, Saga’s Insurance
Broking and Money businesses produced
their first annual Consumer Duty board
report which sets out the results of their
monitoring of customer outcomes, along
with actions taken to further improve
those outcomes.
The boards of those businesses were
satisfied that the obligations of the Consumer
Duty were met and approved the reports on
that basis. The first half of 2024 also saw Saga
prepare for the Consumer Duty go-live date
for closed books (products that are no longer
sold, but still held by existing customers),
which came into force on 31 July 2024 and
was fully embedded, alongside the open
products and services.
In March 2025, the FCA’s rules on operational
resilience came into effect. Their purpose is
to prevent business disruptions from causing
harm to customers, firms and the wider
markets. Saga’s Insurance Broking and
Underwriting businesses met the key
deadlines over the past two years, such as
mapping their important business services,
determining impact tolerances, completing
their self-assessment and embedding
operational resilience plans.
Geopolitics
The escalating tensions in the Middle East,
and the ongoing conflict between Russia
and Ukraine, elevated geopolitical risks and
heightened national security threats to
countries in those regions. Although the
impact on wholesale energy prices has
stabilised, there remains a risk of further
intensification and wider economic spillovers,
with greater uncertainty in financial markets.
The possibility of greater trade fragmentation
and increased restrictions from the Trump
Presidency could also lead to a large-scale
trade war, which would drive up inflation and
lead to the global economy shrinking. The key
sectors that would affect Saga would be oil,
transportation services, food and metals,
all impacting our costs. These global factors
will continue to be monitored for their
potential financial and operational impacts
to travel plans.
Labour market
The increase in National Insurance
Contributions represents an increase to
labour costs, which will be fully absorbed
by the business.
While many firms are increasing their
presence in offices, Saga continues to offer
flexible working arrangements.
Technological changes
Technological changes have altered Saga’s
digital risk exposure, ranging from cyber
threats to data leaks. However, this rapid
evolution and emergence of artificial
intelligence systems offers opportunities
to innovate and adapt to a digital world.
As technology continues to evolve, Saga
must stay updated on the latest trends,
ensuring that we have the skills needed
to harness our technological potential,
without falling behind our competitors.
Regulatory and legislative developments
Macroeconomic conditions
5
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
19
Our strengths
Our businesses
1
Our colleagues and culture
Our people are what makes us special and we are
committed to building a culture that creates a true
sense of belonging, enabling our colleagues to feel
empowered and inspired to do their best work.
Our brand
The Saga brand is exceptionally well recognised among
people aged over 50 in the UK and is often a key point
of differentiation in the highly competitive markets
we operate in. Our commitment to excellent service
provides peace of mind and reassurance for our
customers, building trust and creating loyalty, which
in turn encourages them to return time after time.
Our customers and insight
Our customers are the reason Saga exists and we aim to
provide them with truly exceptional experiences at each
and every interaction with us. Supported by our unique
insights, we continually strive to develop high-quality
products and services specifically tailored for this
fast-growing, under-served and ever-changing group.
Supplier partnerships
We aim to develop deep, mutually beneficial, long-term
relationships with our partners and suppliers, allowing
us to leverage their specialist expertise, resources and
capital. These partnerships are integral in providing the
best possible products and services to our customers.
Proprietary data and technology
The size of our customer database, and the depth of
information we hold, is one of the Group’s core assets.
The continual expansion and enhancement of this data
enables us to increase the frequency and quality of
the communication with our customers, providing
an opportunity to not only attract new customers,
but also promote a greater range of products and
services to our existing customers.
Each of our businesses operate autonomously,
while leveraging our core strengths across the
Group to build deeper, long-lasting relationships
with our customers.
What we do
We provide our customers with ocean and river cruises to a wide
range of destinations on board our fleet of boutique, luxury ships.
How we add value
We offer customers a truly all-inclusive cruising experience,
including fine dining and drinks, gratuities, a chauffeur service,
private balconies with all cabins and selected shore excursions.
Customers sail with additional peace of mind through our
included travel insurance, price promise guarantee and
‘Love it first time’ guarantee for newcomers.
Cruise
What we do
We offer our customers a variety of award-winning and handcrafted
experiences, including hosted holidays, escorted group tours and
bespoke independent tours.
How we add value
We offer customers ease and reassurance through home-to-airport
pick-up across our touring range, local hosts at our hotels and
flexible dining for our bespoke getaways.
Further peace of mind is provided through a ring-fenced
arrangement, which safeguards customer money until they return
from their holiday.
Holidays
2
91%
Ocean Cruise load factor
2023/24 – 88%
89%
River Cruise load factor
2023/24 – 85%
54.8k
Customers travelled
2023/24 – 50.3k
3
THE FOUNDATION
FOR GROWTH
Our purpose is to deliver exceptional products and service to meet the needs
of older people. We are a marketing, content and distribution business with
unique customer insights that help us build deep and long-lasting relationships.
Purpose and business model
1
These are our businesses which are focussed on the specific needs and wishes of our unique customer group. In our segmental financial reporting, Cruise and Holidays are
presented as one, while Money and Publishing form part of Other Businesses
2
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
3
Restated to exclude the passengers from our discontinued Titan third-party river cruise offering in the prior year
Saga plc
Annual Report and Accounts 2025
20
Creating value
Saga is committed to maximising
value for our key stakeholders.
Find out more about engaging with
stakeholders on pages 22-23
Customers
Partners and suppliers
Colleagues
Communities
Shareholders and investors
Delivering for our customers is at the heart of
everything we do. We aim to deliver exceptional
products and service for this unique group every
day, while building trust and providing reassurance.
Through our partnerships, suppliers benefit from
access to our well-known and trusted brand,
alongside knowledge and insight into our unique
customer group.
To enable colleagues to do the best work of their
lives, we are focussed on their development
and wellbeing, creating a culture of belonging
and recognition.
Saga strives to have a positive impact on our
communities through clear and transparent
communication, colleague volunteering schemes
and charitable giving.
Saga is committed to creating long-term value for
our shareholders and investors by maximising our
businesses, delivering sustainable growth and
reducing our debt.
What we do
We provide our customers with tailored insurance products,
principally motor, home, private medical and travel insurance.
How we add value
We offer products to suit a variety of needs, from our lower-cost
standard one-year motor and home policies through to our
premium three-year fixed-price products.
Alongside our in-house underwriter, AICL, we use a third-party
panel of underwriters to ensure that customers receive the best
possible price.
What we do
We partner with specialist third parties to deliver a range of personal
finance products, including savings accounts, equity release, legal
services, mortgages and investments.
How we add value
We offer customers easy-to-use products and services tailored
to them, with the added security and support of the Saga brand,
providing confidence and trust.
We use our expertise in sourcing and managing partners to
provide customers with unique offers and exceptional experiences.
What we do
We offer insightful interactions with our audience through the
award-winning Saga Magazine, and new website, alongside regular
updates in the form of our increasingly popular digital newsletters.
How we add value
We combine the experience of our magazine columnists and design
team with high-profile guest exclusives to deliver purposeful and
insightful content which informs, inspires and entertains our readers.
Our digital newsletters provide high-quality and accessible articles
across a range of topics.
Insurance
Money
Publishing
158k
Money customers
2023/24 – 144k
1.3m
Insurance policies in force
31 January 2024 – 1.5m
7.4m
Saga Magazine website visits
2023/24 – 3.4m
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
21
What matters to them
What matters to them
What matters to them
Value-for-money products and
services that are designed specifically
for their needs.
Exceptional customer service at
every interaction with Saga.
Clear and informative communication
in a format that suits them.
We aim to increase the frequency of
engagement with our customers and
become part of their everyday lives.
We engage with our customers through
telephone and email interaction, social
media, the Saga Magazine, webinars and
our Experienced Voices customer panel.
Customer satisfaction is monitored at
each interaction through our tNPS.
The Board receives regular reports from
the Group Chief Executive Officer (
CEO
),
Operating Board and management, based
on insights and feedback.
A clear strategy, including a link to how
colleagues can support its delivery.
An inclusive and welcoming
environment, where colleagues can
bring their full selves to work.
A culture which promotes wellbeing
and supports colleagues with finding
the right balance.
Open and transparent communication,
enabling colleagues to speak up and
share their feedback.
Fair and transparent reward
and benefits.
We communicate with colleagues in a
collaborative way and through a range
of forms. These include our internal
communications platform, Workplace,
regular engagement surveys, colleague
roadshows, Group CEO sessions, regular
one-to-one meetings with managers,
collaborative team events, and through
the People Committee.
Julie Hopes, one of our Non-Executive
Directors, is our nominated People
Champion and attends our People
Committee meetings regularly, alongside
our Group CEO and members of our
Operating Board. The Board are also
kept informed through updates from
our Chief People Officer.
Long-term reliable relationships that
support their strategic ambitions.
Regular and informative updates,
including two-way feedback.
Innovation that encourages simplicity
and efficiency, where possible.
Our relationships with our supply chain,
which are managed and controlled by our
individual business units, are governed by
our Supplier Relationship Management
and Supplier Risk Management policies,
which provide a framework for our
operations. This approach ensures
consistent communication with suppliers,
allowing us to continually develop our ways
of working.
The Risk Committee is kept informed of
any changes to supplier risk management
through our Operating Board and
Internal Audit and Assurance Director,
with matters escalated to the Board
as appropriate.
How we engage
How we engage
How we engage
Board oversight
Board oversight
Board oversight
Find out more in our
2025 ESG Report
Find out more about our
colleague stories
Customers
Our customers are at the heart of our
business. Our success relies on the
engagement of new customers and
deepening the connection with our
existing customers.
Colleagues
Our colleagues, and the culture we create,
are incredibly important to us at Saga.
Our values, which act as guiderails on
how we do things, ensure that colleagues
remain focal to everything we do.
Partners and
suppliers
To deliver exceptional products and
service for our customers, we depend
on the support of our partners and
suppliers. We continue to prioritise the
development of long-term, mutually
beneficial relationships with this group.
DEEPENING OUR
CONNECTIONS
Engaging with stakeholders
Saga plc
Annual Report and Accounts 2025
22
What matters to them
What matters to them
What matters to them
Clear and open communication,
ensuring that they are aware of our
strategy and plans, as well as any
potential impact to them.
The opportunity to share what is
important to them and how we may
be able to support that.
A chance to share knowledge and
skills between our colleagues and the
wider community.
We hold community meetings to provide
updates on developments that may
impact them. Meanwhile, our colleagues
are encouraged to take one paid
volunteering day per year, allowing them
to support a cause of their choice.
Our Group CEO attends each community
meeting, allowing him to feedback directly
to the Board.
Creation of long-term value.
Active engagement with the
Group CEO, Group Chief Financial
Officer (
CFO
) and Investor
Relations (
IR
) team.
Regular updates on the Group’s
financial performance and progress
against our strategy.
We communicate with our shareholders
and investors through results
announcements, press releases, updates
to our corporate and shareholder
websites, group events, one-on-one
meetings and ad hoc email and
telephone interaction.
At each Board meeting, the agenda
includes review of an IR report, providing
an update on shareholder interaction and
feedback received. Our Group CEO and
Group CFO meet with investors regularly,
assisted by our Director of IR and Treasury.
Alongside this, our Non-Executive
Chairman is available on request and the
Chair of our Remuneration Committee
meets with shareholders throughout the
year, providing the Board with any feedback.
In-person events, such as the Annual
General Meeting and results presentations,
also provide an opportunity for the Board
to meet with shareholders and investors.
Proactive and transparent
communication.
Protection of our customers and the
industries we operate in.
Increasing the trust of the public and
encouraging market competition.
Relationships with our regulators are
maintained at subsidiary level and
monitored by the respective audit,
risk and compliance committees.
Subsidiary boards and their committees
report as necessary to the Risk
Committee, which is responsible for
escalating any matters of strategic or
reputational importance directly to the
Board. The Chairs of our financial services
regulated businesses, Saga Personal
Finance Limited (
SPF
), Saga Services
Limited (
SSL
) and AICL are also
Directors and report on our relationships
with regulators.
Find out more in our Risk Committee
Report on pages 75-76
How we engage
How we engage
How we engage
Board oversight
Board oversight
Board oversight
Communities
To fulfil our purpose, and best serve the
needs of older people, it is important that
we understand and carefully consider the
impact of each decision we make on the
communities in which we operate.
Shareholders
and investors
We are focussed on delivery against
our strategic plan to deliver long-term
sustainable value for our shareholders
and investors. We aim to treat all
shareholders fairly, providing them with
opportunities to express their views.
Regulators
Our regulators set the framework within
which we operate, and it is therefore
vital that we maintain strong relationships
with them.
139k
direct and corporate sponsored
nominee shareholders
114
days of colleague volunteering
time given
Find out more in our
2025 ESG Report
The Board considers the impact on all stakeholders when making decisions.
Find out more in Board activities on pages 62-65
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
23
I am pleased to report that, for the 12 months ended 31 January 2025,
the Group delivered a strong set of underlying financial results. Total
Underlying Profit Before Tax
1
was £47.8m, 25% higher than the year
before, reflecting continued momentum in our Travel businesses and
improvements in the performance of Insurance Underwriting, but the
continuation of challenging conditions in Insurance Broking remained.
Following agreement of the transaction with wholly owned UK subsidiaries
of Ageas SA/NV (
Ageas
), which includes the sale of Acromas Insurance
Company Limited (
AICL
) and the move to a 20-year partnership for motor
and home insurance, our Insurance Underwriting operations, alongside all
associated accounting adjustments, have been classified as discontinued
operations. As a result, the Underlying Profit Before Tax
1
from our
continuing operations was £37.2m, £2.9m higher than in the prior year.
After accounting for the impairment of assets, including the previously
reported Insurance Broking goodwill write-down and other smaller one-off
exceptional items, the Group reported a loss before tax from continuing
operations of £160.2m.
Our Travel businesses had an outstanding year, with each delivering a step
change in earnings. In Ocean Cruise, growing customer demand saw us report
record load factors since acquiring our current two ships, alongside growing
per diems, resulting in a 38% increase in Underlying Profit Before Tax
1
, to
£48.9m. Our River Cruise business reported a similar growth in Underlying
Profit Before Tax
1
, of 33%, to £4.0m, also reflecting growing demand, following
actions taken to more closely align the customer experiences to those in
Ocean Cruise. Our Holidays business saw growing customer numbers, on a
like-for-like basis, which resulted in growth in Underlying Profit Before Tax
1
of £9.2m, from £1.5m in 2023/24, to £10.7m in 2024/25.
While our Insurance Underwriting business saw a significant improvement
in the financial result and returned to an Underlying Profit Before Tax
1
,
following pricing action taken during the recent inflationary environment,
conditions in Insurance Broking remained challenging, as expected. As a
result, the business reported a total earned Underlying Profit Before Tax
1
of £14.4m, compared with £39.8m in the prior year. While the contribution
from motor insurance increased, arising from higher margins on our
three-year fixed-price products, the contribution from home and other
broking reduced, reflecting net rate pressures and increased competition
in the travel and private medical insurance (
PMI
) markets.
Looking at the statement of financial position, we made significant progress
in reducing the level of Net Debt
1
. At 31 January 2025, this was £590.5m,
which was £46.7m lower than at 31 January 2024 and, in combination with
the increase in Adjusted Trading EBITDA
1
, meant that the Leverage Ratio
1
reduced from 5.4x, to 4.7x.
The Group continues to remain highly cash-generative, with Available
Operating Cash Flow
1
of £109.6m, despite the material reduction in the cash
contribution from the Insurance Broking business. As a result, the Group
held £79.3m of Available Cash
1
at the year end, in addition to further available
liquidity through the £50.0m undrawn Revolving Credit Facility (
RCF
) and
the £10.0m undrawn portion of the loan facility provided by Roger De Haan.
We also reached a significant milestone ahead of the year end, having
successfully refinanced our corporate debt. Through the new facilities,
provided by certain funds, entities (or affiliates or subsidiaries of such
funds or entities) and/or accounts managed, advised or controlled by
HPS Investment Partners, LLC or its subsidiaries (
HPS Funds
), we secured
funding certainty for the next six years, with no corporate debt maturities
falling due until January 2031. This, alongside the enhanced flexibility and
incremental liquidity that the facilities provide, places us in a strong position
as we deliver the next phase of our growth plans.
On 27 February 2025, the new £335.0m term loan provided by HPS Funds was
drawn, with the funds used to repay the £250.0m unsecured corporate bond
that was set to mature in July 2026, and the £75.0m drawn portion of the loan
facility provided by Roger De Haan maturing in April 2026, with the facility
then cancelled. The existing £50.0m RCF, which was to mature in March 2026,
was also replaced with a facility of the same value, provided by HPS Funds.
Looking ahead, the building momentum in our Travel businesses, combined
with the strategic action taken over the last 12 months, positions the
business for long-term success. While 2025/26 will be a transitional year,
with Underlying Profit Before Tax
1
expected to be lower than in 2024/25
as we prepare for the move to the new Insurance arrangement and embed
the new capital structure, there is a clear opportunity for material growth
thereafter. Within the next five years, we believe that there is a route to
deliver at least £100.0m of annual Underlying Profit Before Tax
1
, while
reducing the Leverage Ratio
1
to below 2.0x.
A CLEAR ROUTE
TO GROWTH AND
DELEVERAGING
“Within the next five years,
we believe that there is a route
to deliver at least £100.0m
of annual Underlying Profit
Before Tax
1
, while reducing the
Leverage Ratio
1
to below 2.0x.”
Mark Watkins
Group Chief Financial Officer
Group Chief Financial Officer’s Review
1
Refer to the Alternative Performance Measures Glossary on pages 183-185 for
definition and explanation
In summary
A strong set of underlying financial results, reflecting growth
in total Underlying Profit Before Tax
1
.
Significant progress with debt reduction, with Net Debt
1
now
£46.7m lower than a year ago.
Successful refinancing of our corporate debt facilities,
alongside the move to our new capital structure, which
provides greater flexibility and enhanced liquidity.
Ambition to deliver at least £100.0m of Underlying Profit
Before Tax
1
within the next five years, while reducing the
Leverage Ratio
1
to below 2.0x.
Saga plc
Annual Report and Accounts 2025
24
Group income statement
12m to Jan 2025
12m to Jan 2024
£m
Continuing
operations
Discontinued
operations
Total
Change
Continuing
operations
Discontinued
operations
Total
Underlying Revenue
2
588.6
179.6
768.2
4.8%
572.4
160.3
732.7
Underlying Profit/(Loss) Before Tax
2
Travel
63.6
–
63.6
59.0%
40.0
–
40.0
Insurance Broking (earned)
14.5
(0.1)
14.4
(63.8%)
34.5
5.3
39.8
Insurance Underwriting
–
10.7
10.7
>500.0%
–
(1.4)
(1.4)
Total Insurance
14.5
10.6
25.1
(34.6%)
34.5
3.9
38.4
Other Businesses and Central Costs
(14.2)
–
(14.2)
16.5%
(17.0)
–
(17.0)
Net finance costs
3
(26.7)
–
(26.7)
(15.1%)
(23.2)
–
(23.2)
Underlying Profit Before Tax
2
37.2
10.6
47.8
25.1%
34.3
3.9
38.2
Impairment of Insurance Broking goodwill
(138.3)
–
(138.3)
(104.9)
–
(104.9)
Other exceptional items
(59.1)
8.5
(50.6)
(53.2)
(9.1)
(62.3)
(Loss)/profit before tax
(160.2)
19.1
(141.1)
(9.4%)
(123.8)
(5.2)
(129.0)
Tax (expense)/credit
(18.5)
(5.3)
(23.8)
(248.8%)
15.8
0.2
16.0
(Loss)/profit after tax
(178.7)
13.8
(164.9)
(45.9%)
(108.0)
(5.0)
(113.0)
Earnings/(loss) per share
Underlying Earnings Per Share
2
18.1p
5.1p
23.2p
(22.7%)
26.9p
3.1p
30.0p
(Loss)/earnings per share
(127.2p)
9.8p
(117.4p)
(45.9%)
(77.2p)
(3.6p)
(80.8p)
Operating performance
The Group’s business model is based on providing high-quality and
differentiated products to its target demographic, predominantly
focussed on travel and insurance. The Travel businesses comprise
Ocean Cruise, River Cruise and Holidays. The Insurance business
operates mainly as a broker, sourcing underwriting capacity from
selected third-party insurance companies, and, for motor and home,
also from the Group’s in-house underwriter. Other Businesses
include Money, Publishing and CustomerKNECT, a mailing and
printing business.
Underlying Revenue
2
Underlying Revenue
2
increased 4.8% to £768.2m (2024: £732.7m),
mainly due to increased load factors and per diems across our Cruise
businesses, alongside a 13.2% increase in average revenue per
passenger in our Holidays business.
Underlying Profit/(Loss) Before Tax
2
The Group generated a total Underlying Profit Before Tax
2
of £47.8m
in the current year, compared with £38.2m in the prior year. This is
primarily due to a:
£23.6m increase in Travel, moving to an Underlying Profit
Before Tax
2
of £63.6m (2024: £40.0m), with £13.4m driven
by Ocean Cruise;
return to an Underlying Profit Before Tax
2
in Insurance
Underwriting of £10.7m (2024: Underlying Loss Before Tax
2
of £1.4m); and
£2.8m improvement in Other Businesses and Central Costs
following the cost-reduction programme actioned in the second
half of the prior year.
These were partially offset by a £25.4m reduction in Insurance
Broking profitability due to difficult trading conditions, particularly
within home.
Net finance costs
3
in the year were £26.7m (2024: £23.2m), which
excludes finance costs within the Ocean Cruise business of £18.4m
(2024: £18.2m) and Insurance Underwriting business of £8.8m
(2024: £2.5m).
2
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
3
Net finance costs exclude Ocean Cruise and Insurance Underwriting finance costs and Travel net fair value losses on derivatives
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
25
Loss before tax
The total loss before tax for the year, of £141.1m, includes a £138.3m
impairment to Insurance Broking goodwill and other exceptional items
of £50.6m, consisting of:
impairments to assets, other than goodwill, of £30.8m including
software assets that will no longer drive economic benefit to the
Group following the transition to the Insurance Broking
partnership with Ageas;
restructuring costs of £32.2m, including a provision for the
expected costs of restructuring of the Group’s Insurance
Broking business operations, ahead of the Ageas partnership
becoming operational;
costs and amortisation of fees relating to the loan facility provided
by Roger De Haan of £3.6m;
fair value losses of £0.3m on derivatives;
a negative International Financial Reporting Standard (
IFRS
) 16
‘Leases’ adjustment of £0.5m on River Cruise ships;
£1.7m additional Ocean Cruise dry dock costs and customer
compensation relating to Spirit of Adventure;
profit share due to AXA on cessation of the PMI contract of £2.6m;
foreign exchange gains on River Cruise ship leases of £0.6m;
onerous contract provisions net positive of £14.8m on three-year
fixed-price products and on insurance contracts under IFRS 17
‘Insurance Contracts’;
fair value gains on debt securities of £5.1m; and
a £0.6m positive change in discount rate on non-periodical
payment order (
PPO
) insurance liabilities.
The total loss before tax in the prior year, of £129.0m, includes a
£104.9m impairment to Insurance goodwill and other exceptional
items of £62.3m, comprising:
restructuring costs of £40.3m, arising from the cost reduction
programme initiated in the second half and the decisions to exit
some of our smaller, loss-making activities and rationalise our
property portfolio;
impairments to assets, other than goodwill, of £11.9m (net of
amounts recoverable under quota share arrangements);
£12.1m onerous contract provisions on three-year fixed-price
products and insurance contracts under IFRS 17;
fair value gains on debt securities of £3.5m;
a £1.0m positive change in discount rate on non-PPO insurance
liabilities;
discretionary customer ticket refunds and related costs within
Ocean Cruise of £1.0m;
costs and amortisation of fees relating to the loan facility provided
by Roger De Haan of £0.4m;
£0.3m costs on the acquisition and disposal of The Big Window
Consulting Limited (the
Big Window
);
fair value losses of £1.4m on derivatives; and
foreign exchange gains on River Cruise ship leases of £0.6m.
Tax
The Group’s tax expense for the year was £23.8m (2024: £16.0m
credit), representing a negative tax effective rate of 850.0% (2024:
positive 66.4%), excluding the Insurance Broking goodwill impairment
charge. In both the current and prior years, the difference between the
Group’s tax effective rate and the standard rate of corporation tax
was mainly due to the Group’s Ocean Cruise business being in the
tonnage tax regime. In addition, in the current year it is also due to all
temporary differences at 31 January 2025 not being considered
recoverable and, therefore, no deferred tax assets were recognised
for these temporary differences. This is the result of the change in mix
of profitability within the Group, where the majority of the Group’s
profits now come from the Ocean Cruise business, whereas the
Insurance Broking business has been in decline.
In the prior year, there was also an adjustment for the over-provision
of prior year tax of £4.5m. Excluding the impact of the Ocean Cruise
business being in the tonnage tax regime, the Insurance goodwill
impairment, the adjustments to prior year tax and the non-recognition
of net deferred tax assets, the tax effective rate for the current year is
21.4% (2024: 19.9%).
Earnings/(loss) per share
The Group’s Underlying Basic Earnings Per Share
4
was 23.2p
(2024: 30.0p). The Group’s reported basic loss per share was 117.4p
(2024: loss of 80.8p).
We have now
experienced six Saga
holidays in the last
three years and have
enjoyed great value for
money every time.”
Anonymous
Customer survey,
Q4 2024
4
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
What our
customers
think
Group Chief Financial Officer’s Review continued
£47.8m
Total Underlying Profit Before Tax
4
2023/24 – £38.2m
(£160.2m)
Loss before tax from
continuing operations
2023/24 – (£123.8m)
Saga plc
Annual Report and Accounts 2025
26
5
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
12m to Jan 2025
12m to Jan 2024
£m
Ocean
Cruise
River
Cruise
Holidays
Total
Travel
Change
Ocean
Cruise
River
Cruise
Holidays
Total
Travel
Underlying Revenue
5
236.7
49.4
167.8
453.9
9.1%
215.9
43.8
156.3
416.0
Gross profit
97.7
15.1
41.7
154.5
26.2%
81.1
11.3
30.0
122.4
Marketing expenses
(13.8)
(5.7)
(10.9)
(30.4)
(15.6%)
(12.3)
(4.4)
(9.6)
(26.3)
Other operating expenses
(16.6)
(5.8)
(21.2)
(43.6)
(12.7%)
(15.1)
(4.0)
(19.6)
(38.7)
Investment return
–
0.4
1.1
1.5
87.5%
–
0.1
0.7
0.8
Finance costs
(18.4)
–
–
(18.4)
(1.1%)
(18.2)
–
–
(18.2)
Underlying Profit Before Tax
5
48.9
4.0
10.7
63.6
59.0%
35.5
3.0
1.5
40.0
Average revenue per passenger (£)
5,543
2,923
3,062
3,968
14.9%
4,683
2,639
2,704
3,452
Ocean Cruise load factor
91%
91%
3ppts
88%
88%
Ocean Cruise per diem (£)
357
357
7.9%
331
331
River Cruise load factor
89%
89%
4ppts
85%
85%
River Cruise per diem (£)
326
326
14.4%
285
285
Passengers (’000)
42.7
16.9
54.8
114.4
(5.1%)
46.1
16.6
57.8
120.5
Ocean Cruise
The Ocean Cruise business owns two Ocean Cruise ships, Spirit of
Discovery and Spirit of Adventure.
The business achieved a load factor of 91% (2024: 88%) and a per
diem of £357 (2024: £331). These two factors, when combined,
equated to Underlying Revenue
5
growth of 9.6% and resulted in a
37.7% increase in profitability, from an Underlying Profit Before Tax
5
of £35.5m in the prior year, to £48.9m in the current year.
River Cruise
The River Cruise business has 10-year charters in place for two
boutique purpose-built River Cruise ships, Spirit of the Rhine and
Spirit of the Danube, alongside two other shorter-term charters.
The business achieved a load factor of 89% (2024: 85%) and a per
diem of £326 (2024: £285). This resulted in Underlying Revenue
5
growth of 12.8% and a 33.3% increase in profitability, to an Underlying
Profit Before Tax
5
of £4.0m (2024: £3.0m).
Holidays
The Holidays business, which includes both the Saga Holidays and
Titan brands, generated higher revenue per passenger in the current
year, increasing by 13.2% from £2,704 to £3,062, but saw slightly
reduced volumes when compared with the prior year, with passenger
numbers decreasing from 57.8k to 54.8k.
This led to Underlying Revenue
5
growth of 7.4% and an increase in
profitability, from an Underlying Profit Before Tax
5
of £1.5m in the
prior year, to £10.7m in the current year.
On a comparable basis and, therefore, excluding the discontinued
Titan third-party river cruise product, which is included in the prior
year numbers, revenue grew 19.1% on a passenger base that
grew 8.9%.
Forward Travel sales
The Ocean Cruise load factor for 2025/26 is 2ppts ahead of the
same point last year for 2024/25, with an improved load factor in the
first half, but reduced load factors in the second half, reflecting our
strategic focus to optimise revenue across the full year. The per diem
for 2025/26 is 7.6% higher than the same point last year, reflecting
strong customer demand.
Ocean Cruise bookings for 2026/27 are also ahead of the prior year,
with the load factor 4ppts ahead and the per diem 13.7% ahead.
The River Cruise load factor for 2025/26 is marginally behind the
same point last year, by 4ppts, reflecting a higher load factor in the
first half of the year, but a lower load factor in the second, arising from
the mirroring of the revenue management approach used in Ocean
Cruise, which optimises load factors on a month-by-month basis,
prioritising the earlier months first. The per diem for the full year
is 6.5% ahead, reflecting increased customer demand.
Looking ahead to 2026/27, the River Cruise booked load factor
is marginally ahead of the prior year position, with the per diem
8.0% ahead.
Holidays bookings for 2025/26 are ahead of the same point last year
by 13.6% and 13.9% for revenue and passengers respectively.
The increased revenue is due to higher passenger numbers, reflecting
increased uptake across our short- and long-haul touring ranges,
alongside an uptick in stays.
Holidays bookings for 2026/27 reflect a revenue position that is
40.1% ahead of the same point in the prior year, with passengers
54.3% ahead.
Travel
Our Travel business comprises our Ocean Cruise, River Cruise and Holidays operations.
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
27
Travel continued
6
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
Group Chief Financial Officer’s Review continued
Current year departures
Next year departures
6 April
2025
Change
7 April
2024
6 April
2025
Change
7 April
2024
Ocean Cruise revenue (£m)
217.6
9.8%
198.1
76.8
38.6%
55.4
Ocean Cruise load factor
78%
2ppts
76%
26%
4ppts
22%
Ocean Cruise per diem (£)
396
7.6%
368
407
13.7%
358
River Cruise revenue (£m)
40.8
(0.5%)
41.0
2.0
17.6%
1.7
River Cruise load factor
67%
(4ppts)
71%
3%
1ppt
2%
River Cruise per diem (£)
361
6.5%
339
380
8.0%
352
Holidays revenue (£m)
157.6
13.6%
138.7
22.7
40.1%
16.2
Holidays passengers (’000)
50.7
13.9%
44.5
5.4
54.3%
3.5
£48.9m
Ocean Cruise Underlying
Profit Before Tax
6
2023/24 – £35.5m
£4.0m
River Cruise Underlying
Profit Before Tax
6
2023/24 – £3.0m
£10.7m
Holidays Underlying
Profit Before Tax
6
2023/24 – £1.5m
We trust Saga as a
company and we love
sailing with them. Being
picked up from home
and taken back again is
a big bonus and the staff
are so caring, helpful
and professional.”
Anonymous
Customer survey,
Q2 2024
What our
customers
think
Saga plc
Annual Report and Accounts 2025
28
7
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
8
Third-party underwriter’s share of the motor panel for policies
Insurance encompasses our motor, home and other broking operations and
our in-house Insurance Underwriting business.
Insurance Broking
The Insurance Broking business provides tailored insurance
products, principally motor, home, PMI and travel insurance. Its role
is to price the policies and source the lowest risk price, whether
through the panel of motor and home underwriters or through solus
arrangements for PMI and travel insurance. The Group’s in-house
insurer, AICL, sits on the motor and home panels and competes
for that business with other panel members on equal terms.
AICL offers its underwriting capacity on the home panel through
a coinsurance deal with a third party, so the Group takes no
underwriting risk for that product. Even if underwritten by a third
party, the product is presented as a Saga product and the Group
manages the customer relationship.
Insurance
12m to Jan 2025
12m to Jan 2024
£m
Motor
broking
Home
broking
Other
broking
Total
Change
Motor
broking
Home
broking
Other
broking
Total
Gross Written Premiums
7
Brokered
134.2
155.1
123.7
413.0
1.3%
114.1
162.4
131.0
407.5
Underwritten
160.0
–
1.8
161.8
(18.5%)
195.5
–
3.0
198.5
Gross Written Premiums
294.2
155.1
125.5
574.8
(5.1%)
309.6
162.4
134.0
606.0
Broker revenue
13.1
6.2
39.9
59.2
(21.1%)
4.5
25.4
45.1
75.0
Instalment revenue
3.3
3.5
–
6.8
1.5%
3.4
3.3
–
6.7
Add-on revenue
7.2
7.7
0.1
15.0
(14.8%)
8.1
9.5
–
17.6
Other revenue
25.2
15.7
(4.4)
36.5
(11.2%)
27.1
17.3
(3.3)
41.1
Written Underlying Revenue
7
48.8
33.1
35.6
117.5
(16.3%)
43.1
55.5
41.8
140.4
Written gross profit
42.1
33.1
42.8
118.0
(16.4%)
35.9
55.5
49.7
141.1
Marketing expenses
(9.1)
(6.0)
(5.8)
(20.9)
2.3%
(9.6)
(6.2)
(5.6)
(21.4)
Written Gross Profit After
Marketing Expenses
7
33.0
27.1
37.0
97.1
(18.9%)
26.3
49.3
44.1
119.7
Other operating expenses
(31.9)
(25.0)
(26.1)
(83.0)
2.7%
(36.6)
(29.6)
(19.1)
(85.3)
Written Underlying Profit/(Loss)
Before Tax
7
1.1
2.1
10.9
14.1
(59.0%)
(10.3)
19.7
25.0
34.4
Written to earned adjustment
0.3
–
–
0.3
(94.4%)
5.4
–
–
5.4
Earned Underlying Profit/(Loss)
Before Tax
7
1.4
2.1
10.9
14.4
(63.8%)
(4.9)
19.7
25.0
39.8
Policies in force
602k
506k
166k
1,274k
(15.0%)
700k
605k
194k
1,499k
Policies sold
655k
528k
168k
1,351k
(14.2%)
750k
633k
192k
1,575k
Third-party panel share
8
40.7%
7.1ppts
33.6%
Reconciliation to continuing
operations:
Earned Underlying Profit/(Loss)
Before Tax
7
1.4
2.1
10.9
14.4
(63.8%)
(4.9)
19.7
25.0
39.8
Written Underlying Profit Before Tax
7
from discontinued operations
0.1
–
0.3
0.4
300.0%
0.1
–
–
0.1
Written to earned adjustment
(0.3)
–
–
(0.3)
94.4%
(5.4)
–
–
(5.4)
Underlying Profit/(Loss) Before
Tax
7
from continuing operations
1.2
2.1
11.2
14.5
(58.0%)
(10.2)
19.7
25.0
34.5
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
29
Insurance Broking written Underlying Profit Before Tax
9
, which
excludes the impact of the written to earned adjustment deferring the
revenue on policies underwritten over the term of the policy, reduced
to £14.1m, from £34.4m in the prior year. Underlying Profit Before Tax
9
from continuing operations reduced to £14.5m from £34.5m. The
written to earned adjustment will no longer be required when the
Underwriting business is disposed of.
A key metric for the Insurance Broking business is Written Gross
Profit After Marketing Expenses
9
, before deducting overheads.
This reduced from £119.7m in the prior year, to £97.1m in the current
year, mainly due to lower renewal volumes and margins on home, lower
renewal margins on PMI and lower new business volumes and margins
on travel. This was partially offset by an improvement in motor margins
as net rate inflation slowed. Written Gross Profits After Marketing
Expenses
9
fell by £22.2m in home and £7.1m in other broking, partially
offset by an increase in motor of £6.7m.
For motor and home insurance, in terms of the total Written Gross
Profit After Marketing Expenses
9
, the new business proportion
reduced by £4.4m and the renewal proportion by £11.1m.
The reduction in profitability of the home business is attributable
to significant inflationary pressure in the net rates charged by panel
underwriters, which have increased at a faster pace than the price
that can be charged to consumers in a competitive marketplace.
This was accentuated by the fact that a significant number of home
policies are on three-year fixed-price deals, which fix the customer
price for two renewals. Lower new business volumes in the prior year
also led to a 14% reduction in the level of renewal volumes in the
current year.
The three-year fixed-price product remains significant, with 411k
policies sold in the year, compared with 582k policies in the prior year.
This represented 35% of total motor and home policies (2024: 42%),
with 29% of direct new business customers taking the product
(2024: 28%). These policies remain highly attractive to our customer
base and, while current profitability has been impacted by high
industry inflation, this is a short-term challenge, as all policies will be
repriced over the next few years.
The challenging home environment was partially offset by an
improvement to the motor environment which led to the average
gross margin per policy for motor and home combined, calculated
as Written Gross Profit After Marketing Expenses
9
divided by the
number of policies sold, reducing to £50.8 in the current year,
compared with £54.7 in the prior year.
In addition, customer retention reduced from 81% to 77%, overall
motor and home policies in force decreased 15% when compared
with 31 January 2024, and direct new business sales increased 2ppts
to 45%.
Written profit and gross margin per policy for motor and home are
stated after allowing for deferral of part of the revenues from
three-year fixed-price products, which is then recognised in profit or
loss when the option to renew those policies at a predetermined fixed
price is exercised or lapses, recognising the inflation risk inherent in
these products. At 31 January 2025, £8.9m (2024: £10.6m) of income
had been deferred in relation to three-year fixed-price products,
£7.3m (2024: £8.9m) of which related to income written in the period
to 31 January 2025.
Motor broking
Gross Written Premiums
9
decreased 5.0% due to a 12.7% reduction
in core policies sold, partially offset by an 8.8% increase in average
premiums. Gross Written Premiums
9
, from business underwritten
by AICL, decreased 18.2% to £160.0m (2024: £195.5m), due to a
22.2% decrease in core policies sold, offset by a 5.1% increase in
average premiums.
Written Gross Profit After Marketing Expenses
9
was £33.0m
(2024: £26.3m), contributing £50.4 per policy (2024: £35.1 per policy).
The increase in renewal margins was partially offset by lower new
business margins, a 13.8% reduction in renewal policies sold and a
7.5% decrease in new business policies sold.
Home broking
Gross Written Premiums
9
decreased by 4.5% due to a 16.6%
reduction in core policies sold, partially offset by a 14.5% increase
in average premiums.
Written Gross Profit After Marketing Expenses
9
was £27.1m
(2024: £49.3m), equating to £51.3 per policy (2024: £77.9 per policy).
The reduction in written gross profits, and margin per policy, was
mainly due to the adverse impact of net rate inflation on home
renewal profitability.
Other broking
Other broking primarily comprises PMI and travel insurance.
Gross Written Premiums
9
reduced by 6.3% as a result of lower
average premiums and a reduction to policy sales, to 131k, (2024: 146k)
in travel insurance. For PMI, policy sales decreased to 30k (2024: 33k).
As a result, Written Gross Profit After Marketing Expenses
9
relating
to travel insurance products decreased by £2.5m.
While sales of PMI reduced slightly, there were net rate inflation
pressures in the current year, reducing renewal margins and leading to
Written Gross Profit After Marketing Expenses
9
decreasing by £3.5m.
9
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
Group Chief Financial Officer’s Review continued
£14.1m
Insurance Broking Written
Underlying Profit Before Tax
9
2023/24 – £34.4m
£50.8
Motor and home margin
per policy
2023/24 – £54.7
Insurance continued
Saga plc
Annual Report and Accounts 2025
30
£10.7m
Insurance Underwriting
Underlying Profit/(Loss)
Before Tax
10
2023/24 – (£1.4m)
100.7%
Gross current year COR
2023/24 – 117.1%
10
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
Insurance Underwriting (classified as a discontinued operation)
12m to Jan 2025
12m to Jan 2024
£m
Gross
Re-
insurance
Net
Gross
change
Gross
Re-
insurance
Net
Insurance Underlying Revenue
10
A
194.5
(17.1)
177.4
14.5%
169.8
(17.0)
152.8
Incurred claims (current year)
B
(143.1)
(5.3)
(148.4)
16.3%
(170.9)
22.3
(148.6)
Claims handling costs in relation to
incurred claims
C
(17.8)
–
(17.8)
(14.1%)
(15.6)
–
(15.6)
Changes to liabilities for incurred claims
(prior year)
D
52.5
(41.2)
11.3
443.1%
(15.3)
33.9
18.6
Other incurred insurance service expenses
E
(12.4)
–
(12.4)
15.6%
(14.7)
–
(14.7)
Insurance service result
73.7
(63.6)
10.1
257.0%
(46.7)
39.2
(7.5)
Net finance (expense)/income from
(re)insurance (excludes impact of change
in discount rate on non-PPO liabilities)
(16.8)
8.0
(8.8)
(200.0%)
(5.6)
3.1
(2.5)
Investment return (excludes fair value
gains on debt securities)
9.4
–
9.4
9.3%
8.6
–
8.6
Underlying Profit/(Loss) Before Tax
10
66.3
(55.6)
10.7
251.7%
(43.7)
42.3
(1.4)
Reported loss ratio
(B+D)/A
46.6%
77.3%
63.1ppts
109.7%
85.1%
Expense ratio
(C+E)/A
15.5%
17.0%
2.3ppts
17.8%
19.8%
Reported combined operating ratio (
COR
)
(B+C+D+E)/A
62.1%
94.3%
65.4ppts
127.5%
104.9%
Current year COR
(B+C+E)/A
89.1%
100.7%
29.4ppts
118.5%
117.1%
Number of earned policies
487k
(9.6%)
539k
Policies in force – Saga motor
358k
(22.7%)
463k
The Group’s in-house underwriter, AICL, underwrites around 60%
of the motor business sold by Insurance Broking, alongside a smaller
proportion of business on other panels. Alongside this, AICL
underwrites a portion of Saga’s home panel, although all home
underwriting risk is passed to third-party insurance and reinsurance
providers. AICL also has excess of loss and funds-withheld quota share
reinsurance arrangements in place, relating to its motor underwriting
line of business, which transfer a significant proportion of motor
insurance risk to third-party reinsurers.
In line with the wider market, AICL experienced a prolonged period
of elevated claims inflation in 2022 and 2023, with the significant price
rises applied over that time having now materially earned through to
insurance revenue.
Gross insurance Underlying Revenue
10
in the current year increased
14.5% to £194.5m (2024: £169.8m), reflecting a 26.8% increase in
average earned premiums. This was partially offset by a 9.6%
reduction in the number of earned policies underwritten by AICL,
particularly those underwritten for Saga as opposed to other panels.
The pricing and other management action taken during 2022 and
2023 resulted in significant improvement in the gross insurance
service result year on year, with a 29.4ppt reduction in the current
year gross COR to 89.1% (2024: 118.5%). After allowing for
reinsurance arrangements, this increased to 100.7% (2024: 117.1%).
This result was in line with expectations, recognising the fact that the
gross current period motor surplus generated during the current year
is shared with reinsurance partners.
Motor claims severity inflation during the current year reduced to 6%,
in line with pricing expectations.
Positive changes to liabilities for incurred prior year claims reduced
from £18.6m in the prior year to £11.3m in the current year. Both years
benefited from favourable large claims movements (net of excess of
loss reinsurance), albeit more so in the prior year. The net impact of
our quota share reinsurance arrangements switched from a net
benefit in the prior year to a net cost in the current year, with 80%
of the favourable development in the most recent accident years
ceded to quota share reinsurance partners.
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
31
I feel comfortable with
Saga. I trust Saga and
at age 87 that is what
I need.”
Anonymous
Customer survey,
Q2 2024
£0.4m
Other Businesses Underlying
Profit Before Tax
11
2023/24 – £0.9m
(£41.3m)
Central Costs
2023/24 – (£41.1m)
What our
customers
think
Group Chief Financial Officer’s Review continued
Other Businesses and Central Costs
The Group’s Other Businesses include Money, Publishing and
CustomerKNECT.
Underlying Profit Before Tax
11
for Other Businesses, when combined,
reduced slightly, by £0.5m, from £0.9m in the prior year to £0.4m
in the current year. Underlying Revenue
11
in Money reduced £0.8m
due to market-wide equity release challenges arising from the
inflationary environment.
Central operating expenses reduced to £24.4m (2024: £28.3m).
Gross administration costs, before Group recharges, decreased
by £0.8m in the year. Net costs decreased by a further £3.1m due
to higher Group recharges to the business units.
12m to Jan 2025
12m to Jan 2024
£m
Other
Businesses
Central
Costs
Total
Change
Other
Businesses
Central
Costs
Total
Underlying Revenue
11
Money
5.6
–
5.6
(12.5%)
6.4
–
6.4
Publishing and CustomerKNECT
13.9
–
13.9
13.0%
12.3
–
12.3
Total Underlying Revenue
19.5
–
19.5
4.3%
18.7
–
18.7
Gross profit
6.9
6.1
13.0
6.6%
7.2
5.0
12.2
Operating expenses
(6.5)
(24.4)
(30.9)
10.7%
(6.3)
(28.3)
(34.6)
Investment income
–
3.7
3.7
(31.5%)
–
5.4
5.4
Net finance costs
–
(26.7)
(26.7)
(15.1%)
–
(23.2)
(23.2)
Underlying Profit/(Loss) Before Tax
11
0.4
(41.3)
(40.9)
(1.7%)
0.9
(41.1)
(40.2)
Net finance costs in the year were £26.7m (2024: £23.2m), which
excludes finance costs included within the Ocean Cruise business
of £18.4m (2024: £18.2m) and Insurance Underwriting business of
£8.8m (2024: £2.5m). The increase was predominantly driven by the
drawdown on the loan facility provided by Roger De Haan to support
repayment of the £150.0m bond in May 2024 and the higher interest
rate attached to that facility.
11
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
Saga plc
Annual Report and Accounts 2025
32
12
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
13
Trading EBITDA includes the line-item impact of IFRS 16 with the corresponding impact to net finance costs included in net cash flows used in financing activities
Cash flow and liquidity
Available Operating Cash Flow
12
£m
12m to
Jan 2025
Change
12m to
Jan 2024
Group Trading EBITDA
12
137.1
17.7%
116.5
Less Trading EBITDA
12
from restricted businesses
(34.3)
411.9%
(6.7)
Group Trading EBITDA
12,13
from unrestricted businesses
102.8
(6.4%)
109.8
Working capital and non-cash items
2.2
(92.8%)
30.5
Dividends and intercompany repayments from restricted businesses
23.0
(20.7%)
29.0
Capital expenditure funded with Available Cash
12
(18.4)
27.8%
(25.5)
Available Operating Cash Flow
12
109.6
(23.8%)
143.8
Restructuring costs
(21.3)
26.0%
(28.8)
Interest and financing costs
(43.3)
(10.2%)
(39.3)
Tax receipts
7.5
63.0%
4.6
Other payments
(5.8)
–
(5.8)
Change in cash flow from operations
46.7
(37.3%)
74.5
Change in bond debt
(150.0)
(100.0%)
–
Change in loan facility debt
75.0
100.0%
–
Change in Ocean Cruise ship debt
(62.2)
–
(62.2)
Cash at 1 February
169.8
7.8%
157.5
Available Cash
12
at 31 January
79.3
(53.3%)
169.8
£m
12m to
Jan 2025
Change
12m to
Jan 2024
Available Operating Cash Flow
12
by business unit
Ocean Cruise
92.4
0.3%
92.1
River Cruise
1.4
(78.8%)
6.6
Holidays
12.6
50.0%
8.4
Insurance Broking
8.1
(80.6%)
41.8
Insurance Underwriting
9.0
(35.7%)
14.0
Other Businesses and Central Costs
(13.9)
27.2%
(19.1)
Available Operating Cash Flow
12
109.6
(23.8%)
143.8
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
33
Available Operating Cash Flow
14
is made up of the cash flows from
unrestricted businesses and the dividends paid by, and intercompany
repayments from, restricted companies, less any cash injections to
those businesses. Unrestricted businesses include Insurance Broking
(excluding specific ring-fenced funds to satisfy Financial Conduct
Authority (
FCA
) regulatory requirements), Other Businesses and
Central Costs, and the Group’s Ocean Cruise business. Restricted
businesses include Insurance Underwriting, River Cruise and Holidays.
As a result of a reduction in cash generation from Insurance Broking
and dividends paid by Insurance Underwriting, Available Operating
Cash Flow
14
fell from £143.8m in the prior year to £109.6m the
current year.
The Ocean Cruise business reported an Available Operating Cash
Flow
14
of £92.4m (2024: £92.1m), with an increase in advance
customer receipts of £12.0m (2024: £13.7m) and net trading income
of £97.3m (2024: £82.2m), partially offset by capital expenditure of
£5.4m (2024: £3.8m) and cash collateralised Association of British
Travel Agents bonding of £11.5m (2024: £nil). Net of interest costs of
£15.8m (2024: £15.2m) and exceptional costs of £1.7m (2024: £1.0m),
the Ocean Cruise business reported a net cash inflow, before capital
repayments on the ship debt, of £74.9m for the year, compared with
£75.9m in the prior year.
The River Cruise business repaid the Group £1.4m in the year
(2024: £6.6m). The reduction is a result of all intercompany loans
that arose following the impact of COVID-19 having now been repaid.
For any further excess cash to be paid back to the Group, dividends
will only be paid following an approval process with the Civil Aviation
Authority (
CAA
). This is likely to commence by the end of 2025/26,
when enough distributable reserves will have accumulated. The
business continues to be under an escrow trust arrangement as part
of its CAA licence. At 31 January 2025, the business held cash of
£13.9m, of which £8.8m was held in escrow. The business must hold
a minimum of £1.7m of cash outside of escrow within the business,
as agreed with the CAA.
The Holidays business repaid the Group £12.6m during the year
(2024: £8.4m). This increase arose due to a change in its CAA licence,
moving from an escrow trust arrangement, where 70% of customer
cash was held in escrow and a minimum cash balance of around £5m
was required within the business, to an arrangement where 70% of
customer cash is held within the business rather than in escrow with
no minimum cash balance.
The Insurance Broking business reported an Available Operating
Cash Flow
14
of £8.1m (2024: £41.8m). The decrease of £33.7m is
the result of two significant adverse movements in the year. The first
significant adverse movement is in relation to the home product,
which faced not only a reduction in policy volumes of 105k in the year,
but also a reduction to margins of £27 per policy. The margin reduction
was the result of average net written premiums (
NWP
) increasing
by 42% in the year, compared to average GWP increasing by 17%.
The impact of these, in combination, was a £22.1m decrease in EBITDA
on the home product, which is 89% of the £24.8m overall reduction
to EBITDA. The second significant adverse movement was driven
by working capital within the motor product. In 2023/24, there was
a large increase in NWP, which drove a high working capital inflow.
In 2024/25, there was a reduction in NWP, which drove a working
capital outflow, resulting in the movement year on year being adverse.
This was partially offset by a corresponding reduction in GWP, which
drove positive movement in working capital year on year. The overall
year on year adverse movement on working capital was £13.2m.
Both of these adverse movements were partially offset by a reduction
in capital expenditure in the current year of £4.3m.
The Insurance Underwriting business paid dividends to the Group of
£9.0m (2024: £14.0m), with the reduction in line with expectations.
Other cash flow movements
Interest and financing costs increased in the current year,
predominantly driven by the drawdown on the loan facility provided
by Roger De Haan to support repayment of the £150.0m bond in
May 2024 and the higher interest rate attached to that facility.
The Group continued to make the agreed payments to the defined
benefit pension fund as part of the deficit recovery plan of £5.8m
(2024: £5.8m), which are included within other payments.
In the current year, the Group repaid in full its £150.0m corporate
bond at maturity, drew down £75.0m of the available £85.0m loan
facility provided by Roger De Haan and continued to make capital
repayments against its Ocean Cruise ship debt facilities, with two
payments totalling £30.6m (2024: £30.6m) on Spirit of Discovery’s
debt facility and two payments totalling £31.6m (2024: £31.6m)
on Spirit of Adventure’s debt facility.
14
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
Group Chief Financial Officer’s Review continued
£109.6m
Available Operating Cash Flow
14
2023/24 – £143.8m
£79.3m
Available Cash
14
at 31 January
2023/24 – £169.8m
I love the positive spotlight
Saga puts on the over 50s,
trying to break the ageist
stereotype.”
Anonymous
Colleague survey,
December 2024
What our
colleagues
say
Saga plc
Annual Report and Accounts 2025
34
15
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
Goodwill
On 1 January 2022, new pricing rules arising from the implementation
of recommendations included in the FCA’s General Insurance Pricing
Practices market study came into effect. As a result, and against the
background of a highly competitive motor insurance market, the
Group saw a fall in policy volumes in the period to 31 July 2023 and
year to 31 January 2024. At 31 July 2024, high net rate inflation from
our underwriting panel continued to have an adverse impact on the
expected future profitability of the Insurance business. In December
2024, the Group also announced it had entered into a binding
agreement with Ageas, to establish a 20-year partnership for motor
and home insurance (the
Affinity Partnership
), which is expected
to impact future cash flows of the business. Management, therefore,
considered it necessary to perform impairment assessments of goodwill
attaching to the Insurance Broking business at each of these dates.
Forecast cash flows were modelled and, as a result, management took
the decision to impair Insurance goodwill by £138.3m at 31 July 2024,
following total impairments recognised in the year to 31 January 2024
of £104.9m. No further impairment was identified at 31 January 2025.
Consistent with the approach taken in previous years, this impairment
is not included within Underlying Profit Before Tax
15
.
Carrying value of Ocean Cruise ships
At 31 January 2025, the carrying value of the Group’s Ocean Cruise
ships was £570.6m (31 January 2024: £586.7m). Trading performance
in the current year was very positive and, with strong bookings for
2025/26, the Directors concluded that there were no indicators
of impairment at 31 January 2025.
Statement of financial position
Investment portfolio
The majority of the Group’s financial assets are held by its Insurance Underwriting entity and represent premium income received and invested
to settle claims and meet regulatory capital requirements.
The amount held in invested funds increased by £1.2m to £253.1m (31 January 2024: £251.9m). At 31 January 2025, 100% of the financial assets
held by the Group were invested with counterparties with a risk rating of BBB or above, consistent with the prior year end, reflecting the
relatively stable credit risk rating of the Group’s investment holdings.
Credit risk rating
At 31 January 2025
AAA
£m
AA
£m
A
£m
BBB
£m
Unrated
£m
Total
£m
Investment portfolio
Deposits with financial institutions
–
1.0
10.5
–
–
11.5
Debt securities
22.8
53.2
52.4
50.3
–
178.7
Money market funds
62.9
–
–
–
–
62.9
Total invested funds
85.7
54.2
62.9
50.3
–
253.1
Derivative assets
–
0.2
0.9
–
–
1.1
Total financial assets
85.7
54.4
63.8
50.3
–
254.2
Credit risk rating
At 31 January 2024
AAA
£m
AA
£m
A
£m
BBB
£m
Unrated
£m
Total
£m
Investment portfolio
Debt securities
23.9
59.2
70.4
65.6
–
219.1
Money market funds
32.8
–
–
–
–
32.8
Total invested funds
56.7
59.2
70.4
65.6
–
251.9
Derivative assets
–
–
0.3
–
–
0.3
Total financial assets
56.7
59.2
70.7
65.6
–
252.2
Insurance reserves
Analysis of insurance contract liabilities at 31 January 2025 and 31 January 2024 is as follows:
At 31 January 2025
At 31 January 2024
£m
Gross
Reinsurance
assets
Net
Gross
Reinsurance
assets
Net
Incurred claims – estimate of the present value
of future cash flows
235.9
(88.9)
147.0
286.4
(141.3)
145.1
Incurred claims – risk adjustment
33.7
(28.2)
5.5
40.2
(33.7)
6.5
Remaining coverage – excluding loss component
46.3
9.3
55.6
56.6
3.1
59.7
Remaining coverage – loss component
1.8
–
1.8
16.1
(1.3)
14.8
Total
317.7
(107.8)
209.9
399.3
(173.2)
226.1
The Group’s total insurance contract liabilities, net of reinsurance assets, decreased by £16.2m in the year to 31 January 2025 from the previous
year end, primarily due to a £17.1m reduction in net remaining coverage claims reserves. This was partially offset by a £0.9m increase in net
incurred claims reserves. The reduction in net remaining coverage claims reserves reflects favourable experience on large bodily injury claims
relating to prior accident years.
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
35
Financing
At 31 January 2025, the Group’s Net Debt
16
was £590.5m, £46.7m lower than at the start of the financial year. Net Debt
16
is analysed as follows:
£m
Maturity date
17
31 January
2025
31 January
2024
3.375% Corporate bond
May 2024
–
150.0
5.5% Corporate bond
July 2026
250.0
250.0
RCF
March 2026
–
–
Loan facility provided by Roger De Haan
April 2026
75.0
–
Spirit of Discovery Ocean Cruise ship loan
June 2031
143.0
173.6
Spirit of Adventure Ocean Cruise ship loan
September 2032
201.8
233.4
Less Available Cash
16,18
(79.3)
(169.8)
Net Debt
16
590.5
637.2
Financial covenant compliance
The Group’s Leverage Ratio
16
, at 31 January 2025, was 4.7x (31 January 2024: 5.4x), within the 6.0x covenant under the existing RCF facility at
31 January 2025.
£m
31 January
2025
31 January
2024
Net Debt
16
590.5
637.2
Adjusted Trading EBITDA
16
126.0
117.5
Leverage Ratio
16
4.7x
5.4x
The Group’s interest cover ratio, at 31 January 2025, was 4.3x (31 January 2024: 3.9x), in excess of the 3.0x covenant under the existing RCF
facility at 31 January 2025.
£m
31 January
2025
31 January
2024
Adjusted Trading EBITDA
16
126.0
117.5
Total net cash interest
29.1
29.9
Interest cover ratio
4.3x
3.9x
The Group also has financial covenants associated with its Ocean Cruise ship debt facilities, being a debt service cover ratio and an interest
cover ratio. The debt service cover ratio, at 31 January 2025, was 1.4x (31 January 2024: 1.0x), in excess of the 1.0x covenant under the Ocean
Cruise ship debt facilities at the same date. The interest cover ratio, at 31 January 2025, was 7.9x (31 January 2024: 5.4x), in excess of the 2.0x
covenant under the ship debt facilities at the same date.
£m
31 January
2025
31 January
2024
ST&H Group consolidated pro forma Trading EBITDA
16
103.9
80.3
ST&H Group consolidated debt service
75.3
77.2
Debt service cover ratio
1.4x
1.0x
£m
31 January
2025
31 January
2024
ST&H Group consolidated pro forma Trading EBITDA
16
103.9
80.3
ST&H Group consolidated total net cash interest expenses
13.1
15.0
Interest cover ratio
7.9x
5.4x
Group Chief Financial Officer’s Review continued
16
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
17
Maturity date represents the date that the principal must be repaid, other than the Ocean Cruise ship loans, which are repaid in instalments
18
Refer to Note 25 of the financial statements for information as to how this reconciles to a statutory measure of cash
Saga plc
Annual Report and Accounts 2025
36
Changes to facilities
During the first half of the year, the Group repaid in full its £150.0m
corporate bond at maturity and drew down £75.0m of the available
£85.0m loan facility provided by Roger De Haan. The Group also made
repayments on its Ocean Cruise ship debt facilities in March 2024
and September 2024 for Spirit of Adventure and in June 2024 and
December 2024 for Spirit of Discovery, totalling £31.6m and
£30.6m respectively.
To support the transition to our new Insurance Broking operating
model, in September 2024, we concluded discussions with the lenders
behind our RCF at the year end to provide the Group with greater
financial flexibility. As a result, the following amendments were agreed,
in addition to other smaller changes:
Extension to the maturity date from 31 May 2025 to 31 March 2026.
Leverage Ratio
19
test to now be conducted on a Group basis,
including the Net Debt
19
and Trading EBITDA
19
in relation to
Ocean Cruise.
Reduction in the Leverage Ratio
19
covenant from 6.25x to 6.0x
until maturity.
In addition, a series of amendments were made to the loan facility
provided by Roger De Haan. These included an extension to the facility
maturity, from 31 December 2025 to 30 April 2026, a reduction to the
notice period required for drawdown of the loan, to 10 business days,
and an increase in the maximum number of permitted utilisations, to 10.
On 30 January 2025, we announced that we had secured new
credit facilities, with HPS Funds, that would materially enhance the
Group’s liquidity position, significantly increase covenant headroom
and provide funding certainty as we execute our growth plans.
The new facilities comprise:
a £335.0m term loan;
a £100.0m delayed-draw term loan (
DDTL
), which is available for
three years and can be drawn for repayment of amortisation on
the Ocean Cruise ship debt facilities, mergers and acquisitions
and capital investment; and
a £50.0m RCF.
The term loan and DDTL, which offer significant early repayment
flexibility, will mature in January 2031 and are subject to a margin based
on our net Leverage Ratio
19
, priced with an initial margin of 6.75% over
the Sterling Overnight Index Average rate, and reducing as we de-lever.
The new facilities, when combined with our existing Ocean Cruise ship
facilities which remain unchanged, result in an initial blended pro forma
interest rate of around 7.6%.
Following the year end, the £335.0m term loan was drawn, with the
funds used to:
repay and cancel the £250.0m bond, maturing July 2026; and
repay the £75.0m drawn proportion and cancel the £85.0m loan
facility provided by Roger De Haan, maturing April 2026.
At the same point, the Group’s existing £50.0m RCF was cancelled.
Pensions
The Group’s defined benefit pension scheme liability, as measured on an International Accounting Standard 19R basis, decreased by £8.1m to a
£39.8m liability at 31 January 2025 (31 January 2024: £47.9m).
£m
31 January
2025
31 January
2024
Fair value of scheme assets
200.1
204.5
Present value of defined benefit obligation
(239.9)
(252.4)
Defined benefit pension scheme liability
(39.8)
(47.9)
The movements observed in the scheme’s assets and obligations were
impacted by macroeconomic factors during the year where, at a global
level, there were rising inflation and cost of living pressures, as well as
shifts in long-term market yields. The present value of defined benefit
obligations decreased by £12.5m to £239.9m, primarily as a result of
increases in bond yields over the year, partly offset by an increase in
future expectations for inflation. The fair value of scheme assets
decreased by £4.4m to £200.1m, largely driven by the recovery plan
payment being more than offset by lower returns on assets from the
fall in interest rates in the year.
Net assets
Since 31 January 2024, total assets decreased by £294.5m and total
liabilities decreased by £128.7m, resulting in an overall decrease in
net assets of £165.8m.
The reduction in total assets is primarily due to:
a decrease in goodwill of £138.3m, following an impairment to
Insurance Broking goodwill in the year;
a decrease in intangible fixed assets of £26.4m, following an
impairment to Insurance Broking systems, Guidewire and 1insurer
in the year;
a decrease in property, plant and equipment of £10.6m, of which
£23.2m relates to depreciation in the year, £0.2m of disposals
and a £0.1m impairment, partially offset by £6.9m of additions and
£6.0m transferred from assets held for sale;
a decrease in financial assets of £239.6m, of which £241.6m
relates to amounts transferred to assets held for sale;
a decrease in deferred tax assets of £49.4m, as they are no
longer recoverable;
a decrease in reinsurance assets of £173.2m, which have been
transferred to assets held for sale;
a decrease in trust accounts of £29.1m due to the Holidays business
agreeing with the CAA to remove the escrow trust arrangement;
a decrease in cash and short-term deposits of £59.5m, mainly
as a result of the repayment of the £150.0m corporate bond at
maturity, partially offset by the £75.0m drawdown of the available
£85.0m loan facility provided by Roger De Haan;
an increase in trade and other receivables of £16.0m; and
an increase in assets held for sale of £419.5m, due to the
classification of the Insurance Underwriting business as held
for sale.
The decrease in total liabilities largely reflects:
a decrease of £399.3m in insurance contract liabilities, which have
been transferred to liabilities held for sale;
a decrease of £138.3m in financial liabilities, which is mainly due
to a reduction of £134.0m in bonds, bank loans and other loans,
as a result of the repayment of the £150.0m corporate bond and
£62.2m of capital repayments on Spirit of Discovery and Spirit
of Adventure facilities, partially offset by the £75.0m drawdown
of the available £85.0m loan facility provided by Roger De Haan;
an increase of £17.0m in contract liabilities due to the improved
future bookings outlook in Travel;
an increase of £54.0m in trade and other payables, which includes
an amount from discontinued operations of £54.4m; and
an increase in liabilities held for sale of £346.9m due to the
classification of the Insurance Underwriting business as held
for sale.
19
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
37
Going concern
The Directors performed an assessment of going concern to
determine the adequacy of the Group’s financial resources over
the period from the date of signing these financial statements to
30 April 2026.
This assessment is centred on a base case overlaid with risk-adjusted
financial projections which incorporate scenario analysis and stress
tests on expected business performance.
On 30 January 2025, the Group announced that it had agreed new
credit facilities, comprising a £335.0m term loan facility, a £100.0m
DDTL facility and a £50.0m RCF. The term loan facility and DDTL
facility both mature on 29 January 2031 and the RCF matures on
29 July 2030. Subsequent to the year end, on 27 February 2025,
the Group drew down the £335.0m term loan facility and utilised the
proceeds to repay the £250.0m senior unsecured notes maturing
in July 2026, and the £75.0m drawn under the £85.0m loan facility
provided by Roger De Haan. This refinancing substantially reduced
the Group’s exposure to debt maturities in the near term and secured
access to additional sources of liquidity to provide the Group with
financial flexibility over the coming years.
The Group’s base case modelling assumes continued strong
performance in Cruise on the back of continued high load factors and
growth in per diems. Our Holidays business is also expected to achieve
further growth in profits. The Insurance division reflects the expected
disposal of the Group’s Underwriting business later this year, together
with a plan for the Broking business, that sees it leveraging strategic
partnerships to meet the needs of the over-50s, while migrating to a
new operating model for motor and home that will facilitate a return
to longer-term growth.
The Group’s severe but plausible stressed scenario incorporates a
reduction in load factors of 1-2% for Cruise and a reduction in touring
customer volumes of c.2,500 per annum in the Holidays business.
Downside risks modelled for Insurance include the impact of a possible
delay in the timing of the expected sale of the Underwriting business.
The modelling indicates that, under both scenarios, and incorporating
drawdowns against its new £50.0m RCF, but no drawdown against the
£100.0m DDTL facility, the Group expects to make all Ocean Cruise
debt principal repayments as they fall due over the period to April
2026 and to retain sufficient levels of Available Cash
20
to service its
liquidity requirements across the assessment period. In addition, it
expects to meet the financial covenants relating to its secured Cruise
debt and to remain below the 8.8x Leverage Ratio
20
covenant attached
to its new £50.0m RCF. It also expects to remain below the 8.0x
Leverage Ratio
20
covenant attached to the new £335.0m term loan
and to the £100.0m DDTL facility, enabling it to draw down on this
currently undrawn facility to support the repayment of Ocean Cruise
debt repayments should the need arise.
Noting that it is not possible to accurately predict all possible future
risks to the Group’s trading, based on this analysis and the scenarios
modelled, the Directors concluded that the Group will have sufficient
funds to continue to meet its liabilities as they fall due at least until
30 April 2026. They have, therefore, deemed it appropriate to
prepare the financial statements to 31 January 2025 on a going
concern basis.
Dividends and financial
priorities for 2025/26
Dividends
Given the Group’s priority of reducing Net Debt
20
, the Board of
Directors does not recommend payment of a final dividend for the
2024/25 financial year, nor would this currently be permissible under
financing arrangements and while the ship debt facility deferred
amounts are outstanding.
Financial priorities for 2025/26
The Group’s financial priorities for the current financial year are to
reduce Net Debt
20
via capital-light growth, continue to build on the
momentum in our Travel businesses and optimise Insurance Broking
performance ahead of the transition to the partnership with Ageas.
Mark Watkins
Group Chief Financial Officer
15 April 2025
I feel reassured that
Saga is reputable and
trustworthy. Any time
I have phoned I have
spoken relatively
quickly to a real-life
person – that in itself
is a huge plus!”
Anonymous
Customer survey,
Q3 2024
What our
customers
think
Group Chief Financial Officer’s Review continued
20
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
Saga plc
Annual Report and Accounts 2025
38
“Looking ahead, we continue
to prioritise the environmental
performance of our Cruise
fleet, including establishing
a pathway to achieving
net zero emissions.”
Mike Hazell
Group Chief Executive Officer
OUR COMMITMENT
TO ESG
At Saga, we recognise the importance of Environmental, Social and
Governance (
ESG
) and continue to make progress with our ESG agenda.
Environmental, Social and Governance
Governance
A governance framework that ensures how we work is as important as what we do and why we do it.
In 2023, we launched Saga’s ESG strategy,
ensuring that the business, and its
stakeholders, are clear on our priorities and
where we can improve in the coming years.
In 2024, we continued to make progress
against our key performance indicators (
KPIs
)
and targets, through which we track and
report on our ESG journey.
Our highlights during the year included the
calculation of our Scope 3 emissions footprint
and collection of colleague diversity data,
enabling us to consider setting informed
targets around diversity, equity, inclusion
and belonging (
DEI&B
).
We have launched our exciting new partnership
with Kent Wildlife Trust, helping them to
drive important action in protecting nature
and biodiversity.
ESG remains a priority for our business and
we believe it is essential to the future success
of our brand. There is always more to do, and
we hope our ongoing efforts will continue to
drive positive change.
Looking ahead, we continue to prioritise the
environmental performance of our Cruise
fleet, including establishing a pathway to
achieving net zero emissions by 2050, in line
with the United Kingdom (
UK
) commitment
to the 2015 Paris Agreement.
Refer to our 2025 ESG Report for further
information on ESG performance and progress
against our KPIs during the year
KPIs
KPIs
KPIs
Customer transactional net
promoter score
Proportion of customers determining
that it is ‘extremely easy’ to deal
with Saga
Trustpilot score
Proportion of colleagues completing
training on the basics of ageing
Calculation of carbon baseline,
including Scope 3 emissions
Development of net zero pathway
Cruise ship environmental ratings
Proportion of Cruise ship fleet with
shore power connection
Partnerships on oceans and
biodiversity
Female representation in
leadership positions
Female Board representation
Ethnic minority Board representation
Completion of colleague diversity review
Related Sustainable Development Goals
(
SDGs
)
Related SDGs
Related SDGs
Championing
positive ageing
The ambition to enhance the lives of older
people is at the heart of everything we do.
Strengthening our
exceptional culture
An engaged, inclusive and diverse culture
encourages our colleagues to thrive.
Acting on
climate change
and biodiversity
As we provide opportunities for older
people, we must ensure that we protect
our environment.
Our ESG framework
Purpose
Saga exists to deliver exceptional experiences every day to serve the needs of older people.
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
39
Environmental, Social and Governance continued
Our climate-related
financial disclosures
We recognise the importance of the
Task Force on Climate-related Financial
Disclosures (
TCFD
) in providing a framework
for transparent reporting around
climate-related risks and opportunities.
In support of the framework, and in line with
our obligations under Financial Conduct
Authority UK Listing Rule (
UKLR
) 6.6,
the following pages set out our disclosures
consistent with the TCFD recommendations
on climate-related financial disclosures,
including the TCFD guidance for all sectors.
During the year, we ensured that changes
to our business model, relating to our
response to sustainability-related risks,
were incorporated into our business planning
processes, which formed the basis of
certain key judgements linked to financial
performance and the integration of climate
risk into our viability modelling.
The Board oversees climate-related risk
exposure within its risk management
framework. The Board is informed of
climate-related issues on a regular basis,
through management reporting and
escalation through its Committees.
The Board has overall accountability for risks
associated with climate change and commits
to including climate-related risk formally on
the Board agenda, including the oversight
of emissions performance and embedding
climate resilience into risk management,
as part of the wider ESG strategy. Our ESG
Champion, Gemma Godfrey, provides
Board-level advocacy for ESG, including
factors related to climate change.
The Risk Committee examines climate-
related risk as part of its consideration of
principal risks and uncertainties (
PRUs
).
The Risk Committee also meets to discuss
the Group’s overall risk tolerance, strategy
and ability to detect new risks, including those
related to climate change. The Committee
Chair reports their recommendations to
the Board, outlining the PRUs, how they are
identified and any mitigating actions.
The Audit Committee monitors the integrity
of the Group’s financial statements and
works with the Risk Committee to oversee
the effectiveness of internal control systems.
4
Metrics and targets
Find out more on pages 45-46
1
Governance
Find out more to the right
2
Strategy
Find out more on pages 41-44
3
Risk management
Find out more on page 45
The Operating Board is tasked with ESG
delivery, including climate-related risk
assessment, and ensuring that action and
performance management for climate issues
are delivered throughout the organisation.
It also holds responsibility for overseeing
major capital expenditure, acquisitions and
divestitures. The Operating Board reports to
the Board through the Group Chief Executive
Officer (
CEO
).
Find out more in division of
responsibilities on page 67
In 2023, we developed our ESG strategy,
which includes a focus on acting on climate
change. Both the Operating Board and plc
Board were engaged in the strategy
development process and approval.
Management incentives are tied to the
achievement of the ESG targets described
within our 2025 ESG Report. We are
considering alignment of senior management
incentives with emissions targets, once
established, as part of our net zero emissions
transition planning.
We have an established ESG Steering
Committee, with representation from senior
leaders across each of our business units
and key Group functions. This Committee
is chaired by the Chief People Officer and
has responsibility for implementing ESG
initiatives, including measures relating to
climate change.
Board and Committee responsibilities
Task Force on Climate-Related Financial Disclosures Report
1
Governance
Board
Overall accountability for management of climate-related risks and opportunities. Discussed bi-annually and
as needed, following escalation from its Committees.
Audit
Committee
Oversees
framework of
internal controls,
including those on
climate-related
risk. Discussed
annually as part
of year-end
reporting.
Risk
Committee
Oversees risk
management
framework,
including
climate-related
risk management.
Discussed as part
of PRUs review.
Remuneration
Committee
Sets
performance-
linked pay
schemes, including
implementation
of ESG-related
incentives.
Nomination
Committee
Links policy on
DEI&B to strategy
and promotes
diversity in new
appointments.
Operating
Board
Implements ESG
strategy and
ensures integration
of climate-related
actions within
strategies, budgets
and operating
plans. Discussed
quarterly.
ESG Steering
Committee
Supports and
monitors delivery
of ESG priorities
and targets and
drives ESG
accountability
across the
business unit and
Group functions.
Saga plc
Annual Report and Accounts 2025
40
Reducing carbon emissions
We are exploring ways in which we can reduce our
emissions footprint, particularly those associated with
our Cruise fleet which forms the dominant portion of
our Scope 1 emissions. During the year, we continued
installation of shore power connectivity for our fleet,
allowing our ships’ engines to be turned off when in port,
reducing emissions when compared with using marine
fuel. We are aiming to convert our entire fleet to this
technology by the end of 2026.
We also continued trials of fatty acid methyl ester
(
FAME
) biofuel on board our ocean fleet. Our ships
continue to maintain their A-ratings in key international
energy efficiency rating schemes. Other measures
taken during the year include application of slick paint
compounds to our ship hulls, to improve sailing
efficiency, and the creation of digital data models
of our ships, enabling us to test carbon efficiency
measures virtually prior to real-world application.
Our ESG strategy includes a commitment
to act on climate change and biodiversity,
supported by targets focussed on calculating
Scope 3 emissions, setting a net zero target
in line with the science on climate change and
introducing low-carbon technologies to our
ship fleet.
As reported in our 2024 Annual Report and
Accounts, we completed scenario analysis
to assess the resilience of the Group against
potential future climate change impacts
and intend to refresh this analysis every
two years.
Our scenario analysis (as detailed on page 44)
involved engagement with each of our
business units, facilitated by key central
functions, including risk and finance and
supported by external advisers.
We assessed climate-related risks across our
business units and within our key operating
regions. The timeframes used in our scenario
analysis were chosen for their relevance, both
to our own operations, including the lifespan
of our assets, and to international pledges on
emissions reductions.
Risks and opportunities were evaluated on a
sectoral and geographical basis in alignment
with the climate-related risk and opportunity
categories described within tables A.1.1 and
A.1.2 of the TCFD Implementation Guidance.
Our most significant risks and opportunities
are described in the table overleaf.
50%
of our Saga-branded
Cruise fleet is fitted with
shore power connectivity
2
Strategy
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
41
Environmental, Social and Governance continued
2
Strategy continued
Description
Growing exposure to regulatory requirements,
including emissions taxation, carbon pricing and
reporting burden, increases costs across all
business units. Potential reputational damage,
and litigation, arise due to incidents of
non-compliance with more rigorous regulation.
Description
Adaptation to lower-carbon practices, including
retro-fit of ships (Cruise), use of sustainable
aviation fuels (Holidays
1
), incentives for
low-emissions home improvements (Insurance)
and digital media products (Publishing) drive
increasing costs and product pricing. Failure
to adapt could lead to reputational damage
and competitive disadvantage.
Mitigation
Saga has tracked emissions for several years,
building an understanding of emissions sources.
Our Cruise fleet is relatively new and less polluting
than industry counterparts. Saga is positioned to
establish decarbonisation plans towards 2050,
while existing practices, including sulphur
scrubbing, enhanced hull cleaning and shore power
connectivity, are reducing emissions over time.
Mitigation
Saga can promote sustainable holiday options
and will proactively implement strategic initiatives,
including net zero planning focussed on maintaining
competitiveness. The ongoing transition to digital
media products, alongside media content focussed
on environmental protection, aligns with an
increasingly climate-conscious customer base.
Category
T
Transition
Business units
Cruise, Holidays
1
,
Insurance, Money
and Publishing
Time horizon
Policy and legal
Market and technology
Task Force on Climate-Related Financial Disclosures Report continued
Category
T
Transition
Business units
Cruise, Holidays
1
,
Insurance and
Publishing
Time horizon
Risks
Description
Increasingly severe rain, drought, heat and storm
events cause supply chain disruption, leading to
reduced customer experience and increased
business costs. Incidents of severe weather
affect Cruise and Holidays
1
itineraries and
availability of supplies across business activities.
Increased insurance claims for property damage
(motor and home lines), and risks to health
(private medical and travel lines) affect claims
frequency, profitability and reinsurance costs.
Damage to customers’ assets may also lead to
withdrawals from savings accounts.
Description
Sea level rise and altered weather patterns
result in increased coastal erosion and
flooding. Port operations (Cruise), beach front
destinations (Holidays
1
), property (Insurance)
and general supply chains (including Publishing)
are disrupted. Consequent flooding and
infrastructure damage leads to general
disruption and complaints.
Mitigation
Cruise and Holidays
1
itineraries are continually
reviewed and updated in response to incidents,
including those related to weather. Insurance
control measures are largely dependent
on third-party underwriters, although we
have greater control over our in-house
underwritten book.
Mitigation
The Cruise and Holidays
1
business models
allow flexibility in the sites visited and
accommodation used, enabling adaptability to
changing weather patterns. Insurance control
measures are largely dependent on third-party
underwriters, although we have greater control
over our in-house underwritten book.
Communication with customers around
delays to the Saga Magazine delivery may
mitigate reputational impact.
Category
P
Physical
Business units
Cruise, Holidays
1
,
Insurance and
Publishing
Time horizon
Category
P
Physical
Short term
(up to 2030)
Short term
(up to 2030)
Medium term
(2031–2040)
Medium term
(2031–2040)
Long term
(2041–2050)
Long term
(2041–2050)
Business units
Cruise, Holidays
1
,
Insurance, Money
and Publishing
Time horizon
Acute physical
Chronic physical
Short term
(up to 2030)
Medium term
(2031–2040)
Long term
(2041–2050)
Short term
(up to 2030)
Medium term
(2031–2040)
Long term
(2041–2050)
1
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
Saga plc
Annual Report and Accounts 2025
42
107,766 tCO
2
e
Scope 1 and 2 emissions
2023/24 – 110,708
2
tCO
2
e
Love the Saga brand,
feels a safe way to
travel, good value.”
Anonymous
Customer survey,
Q3 2024
What our
customers
think
Energy and resource efficiency
Products and services
Market resilience
Opportunities
Description
Collaboration with supply chains, including ship
technology providers and fuel suppliers, will
enable the introduction of energy savings to
Cruise activities.
Increased use of low-emission drop-in fuels,
improved ship specifications on new vessels,
and retro-fit of technology to existing vessels can
improve asset efficiency, extending asset life and
ensuring Cruise products remain relevant into
the future.
The ongoing shift to digital media products,
from traditional paper products, will reduce
operational costs and improve climate resilience
by simplifying supply chains.
Description
The physical impacts of climate change may open
new geographies for travelling and incentivise
innovative travel offerings at differing times of
the year.
Customer involvement in sustainability-focussed
holidays, media products focussed on sustainability
themes, and other avenues, provide a growing
method of engagement with our customer base.
ESG themes can increasingly feature in product
portfolios, including within insurance and
investment products.
Description
Group-wide net zero planning provides an
opportunity to improve resilience, through
understanding decarbonisation routes and
opportunities to engage with, and strengthen,
supply chains.
Climate-conscious financial products can be tailored
to reward customers for sustainable behaviours.
2
Figures restated to account for the use of FAME fuels more accurately within Scope 1 emissions associated with marine fuel
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
43
Environmental, Social and Governance continued
Task Force on Climate-Related Financial Disclosures Report continued
Scenario analysis
During 2023, we undertook scenario analysis
aligned to the recommendations of the TCFD.
We utilised a range of scenarios across both
normative and exploratory pathways. We
intend to refresh this analysis on a regular
basis going forward, with the next review
planned for 2025.
Climate scenarios
Our scenario analysis examined three
Shared Socioeconomic Pathway (
SSP
)
scenarios from the Intergovernmental
Panel on Climate Change (
IPCC
) and three
transition scenarios from the International
Energy Agency (
IEA
). We also considered
sector-specific transition guidance from the
International Maritime Organization (
IMO
)
and UMAS. These scenarios were selected
as the most current projections of future
climate change relevant to Saga’s
business activities.
Geographic regions
We selected four key global regions, as
defined by the IPCC, as the focus of our
scenario analysis, based on their significance
to the operations of our business units.
These were:
UK;
Mediterranean;
Europe; and
Eastern North America.
The UK region is significant as the base for the
majority of our operations and as the location
of the majority of our assets, customers, and
insured properties and vehicles. The other
global regions selected collectively
contribute the majority of revenue for our
Cruise and Holidays
3
business units as
destination locations.
Time horizons
We considered the following time horizons:
Short term (up to 2030)
Medium term (2031–2040)
Long term (2041–2050)
Time horizons up to 2050 were assessed, due
to the significance of this date for transition
scenarios, in alignment with international
pledges on emissions reductions and the
expected manifestation of significant physical
climate impacts by this date.
Methodology
We conducted an initial desktop study to
identify Saga’s resilience to potential climate
impacts, based on our selected climate
scenarios, across our chosen regions and
time horizons.
We then conducted workshops with Risk,
Finance and operational subject matter
experts, across each of our business units
and key Group functions.
Scenario models utilised
Scenario summary
Low-emission
(best-case)
scenario
Physical climatic impacts are minimised and are less
severe than in the medium- and high-emission scenarios.
Advancements in technical and operational efficiency
temper growth in energy demand across sectors and
alternative fuels contribute the majority of supply to the
shipping sector.
Physical: IPCC SSP1-2.6: projected global
temperature increases of 1.3°C–2.4°C by 2100.
Transition: IEA Net Zero Emissions Scenario –
1.5°C; UMAS – 1.5°C; IMO – 1.5°C to below 2°C.
Medium-emission
(most likely)
scenario
Physical climatic impacts are more severe than in the
low-emission scenario but less severe than in the
high-emission scenario. Significant emission reductions
occur within electricity generation, despite a doubling
of demand driven by increased electrification. Transport
and industry see a less-marked fall in emissions, with
increased energy demand in regions without net zero
pledges partially offsetting emissions reduction.
Physical: IPCC SSP2-4.5: projected global
temperature increase of 2.1°C–3.5°C by 2100.
Transition: IEA Announced Pledges
Scenario – 1.7°C.
High-emission
(worst-case)
scenario
Physical climatic impacts are more severe than in the
medium-emissions scenario. The energy mix of fossil
fuels falls slightly, although overall energy demand is
increased, driven by growing populations, higher incomes
and rising temperatures increasing demand for space
cooling (e.g. air conditioning).
Physical: IPCC SSP5-8.5: projected global
temperature increase of 3.3°C–5.7°C by 2100.
Transition: IEA Stated Policies Scenario – 3.5°C.
Based on the outputs of these workshops,
risks were assessed for their impact
and likelihood and aligned to Saga’s
risk management framework and
scoring mechanism.
Summary of findings
Our findings highlighted the shorter-term
adaptation to a low-carbon economy and
increasing exposure to regulatory
requirements, including emissions taxation
and carbon pricing, as well as a growing
reporting expectation, as key transition risks
to the Group. In the longer term, we found
that the increasingly severe acute and
chronic impacts of climate change could
disrupt supply chains, leading to negative
impacts on customer experience, higher
insurance premiums and supply chain issues.
Our findings identified that our strategy
remains appropriate, based on the risks
and opportunities identified within each
scenario, although we recognise the need
to continue to develop our climate resilience
going forward.
Summary of scenarios analysed
2
Strategy continued
3
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
Saga plc
Annual Report and Accounts 2025
44
Process for identifying and
scoring risks
Climate risk considerations are built into the
Group risk management framework, which is
applied across our business units. Risks are
identified and assessed against the Group
risk assessment matrix, which scores
frequency and probability of risks against
their impact. An ESG category is included
within the risk assessment matrix used
across the Group, ensuring ESG
considerations (including climate-related
impacts) are captured. Climate-related risks
are scored based on the significance of their
financial, operational and regulatory impact,
consistent with other categories of risk.
Climate-related risks are documented
alongside key controls used to mitigate risk.
Risk appetite status and action plans to
resolve out-of-appetite risks are reported
to the Risk Committee on a regular basis.
Accountability for management of
climate-related risks is held by the relevant
business unit leadership team and, at the
Group level, by the Group CEO.
Find out more in risk management on
pages 47-48
Our published set of ESG targets focus on the
key themes of our ESG strategy, including
acting on climate change. Our executive
remuneration plans are partially tied to
performance against these ESG targets,
which include the following:
Identify material Scope 3 greenhouse
gas (
GHG
) categories and calculate and
report against these by December 2024.
Develop a net zero pathway and net zero
target.
Maintain an A-rating on our owned ships
in the Energy Efficiency Existing Ship Index
(
EEXI
) and Carbon Intensity Indicator
(
CII
) ratings up to December 2026 and
investigate ways to improve EEXI and
CII scores beyond December 2026.
Process to manage
climate-related risks
Climate-related risks are considered at a
business unit level by management and
reported to the relevant boards and risk
committees. Risks are escalated as required.
ESG and climate change are treated as one of
Saga’s PRUs, which are considered by the
Risk Committee, comprising three
Non-Executive Directors.
The Board sets risk appetite and associated
metrics. Where risks are considered out
of appetite, or where mitigation measures
are insufficient, actions are assigned to
resolve this.
Introduce shore power capability on
100% of our River and Ocean Cruise
vessels by December 2025.
Saga uses a cross-industry GHG emissions
metric (tonnes of carbon dioxide equivalent
(
tCO
2
e
) per unit of Trading EBITDA
4
), and
we continue to develop our capability in
understanding our emissions performance
and areas for improvement.
We made progress in identifying and
calculating material Scope 3 emissions,
to inform our carbon baseline for net zero
planning, and we continue to calculate and
report emissions in alignment with the
GHG Protocol and UK Government
conversion factors for company reporting.
Further detail is available in our Streamlined
Energy and Carbon Report (
SECR
) below.
We signed the SBTi commitment letter,
confirming our intent to set a net zero target
by the end of 2025. Meanwhile, we will
continue to maintain the strong performance
of our Cruise fleet in line with the EEXI and CII
ratings, while retro-fitting carbon-efficient
technologies to our vessels.
The introduction of shore power capability
on our River and Ocean Cruise vessels is likely
to be delayed due to hardware supply issues.
Find out more about our
ESG KPIs and targets,
including GHG emissions,
in our 2025 ESG Report
Saga reports all emissions sources within
its operational boundary pursuant to the
Companies (Directors’ Report) and Limited
Liability Partnerships (Energy and Carbon
Report) Regulations 2018, which implement
the Government’s policy on SECR.
Further reporting on Scope 3 emissions
and energy efficiency is available in our
2025 ESG Report.
Greenhouse gas emissions in tCO
2
e
Emissions scope
2024/25
2023/24
Scope 1
5
107,015
5
109,647
6
Scope 2 (location-based)
751
1,061
Scope 2 (market-based)
219
307
Scope 3 (business travel)
126
101
Total Scope 1, 2 (location-based) and 3 (business travel)
107,892
110,809
6
Scope 1, 2 (location-based) and 3 (business travel) emissions
intensity per £m Trading EBITDA
4
787
951
6
Energy and carbon statement
4
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
5
Includes fugitive refrigerant emissions of 3,110 tCO
2
e (2024/25) and 73 tCO
2
e (2023/24) outside the required scope of SECR requirements, reported on a voluntary basis.
This increase in emissions associated with refrigerants was due to better reporting and data collection associated with cruise ship refrigerant gases
6
Figures restated to account for the use of FAME fuels more accurately within Scope 1 emissions associated with marine fuel
Methodology
Emissions calculations were based on the
UK Government’s Environmental Reporting
Guidance (2013), the GHG Protocol
(2004:2015) and the UK Government’s
GHG Conversion Factors for Company
Reporting (2024).
In limited instances, where primary data
for purchased energy was not available,
assumptions were made based on averages
for surrounding months within the same site
to account for energy performance and
seasonal variation.
3
Risk management
4
Metrics and targets
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
45
Emissions summary and rationale
Saga’s 2024/25 SECR-aligned emissions
footprint (covering fuel combusted in
Company controlled and owned vehicles and
sites, purchased electricity and business
travel related to rented vehicles) was
107,892 tCO
2
e, with an intensity of 787 tCO
2
e
per £m Trading EBITDA
7
. Our combined
Scope 1 and 2 footprint was 107,766 tCO
2
e.
Total energy consumption was 379,681
megawatt hours.
Between 2024 and 2025, the emissions
intensity of UK grid electricity changed by less
than 0.1% due to there being no significant
changes in the power supply. The average
temperature across the reporting period
decreased from 9.97 to 9.78 degrees Celsius.
During the reporting period, our emissions
associated with methane (
CH
4
) from marine
fuel totalled 45 tCO
2
e, our nitrous oxide (
N
2
0
)
emissions totalled 1,252 tCO
2
e and sulphur (
S
)
totalled 156 tCO
2
e. These all reduced from
2023/24, in line with the reduction in marine
fuel used on Spirit of Adventure and Spirit
of Discovery.
Emissions (tCO
2
e)
2024/25
2023/24
CH
4
45
47
N
2
O
1,252
1,316
S
156
161
We continued to trial the use of a FAME 5%
biofuel mix across 464 tonnes of fuel in our
cruise vessel, Spirit of Adventure.
Per tonne of fuel, this reduced emissions
by 7% compared with marine gas oil and 4%
when compared with marine fuel oil.
The IEA and International Renewable Energy
Agency predict that FAME will become a
more viable fuel alternative as production and
yield improve towards 2030.
Noting the targets set out in UKLR 6.6.6R(9),
the Board is committed to improving its
diversity in the coming years. At 31 January
2025, female Board representation was
22%, below the 40% recommendation
of the FTSE Women Leaders Review,
while the Board met the Parker Review
recommendation that one Non-Executive
Director identify as being from an ethnically
diverse background.
We do not yet meet the recommendation that
at least one of the CEO, Chief Financial Officer
(
CFO
), Senior Independent Director (
SID
) or
Chair roles be held by a woman.
Colleague gender identity or sex
Number of
colleagues
8
Percentage of
colleagues
Number of
senior managers
9
Percentage of
senior managers
9
Men
1,960
56%
24
56%
Women
1,538
44%
19
44%
Not specified/prefer not to say
–
–
–
–
Board and executive gender identity or sex
Number of
Board members
Percentage of
the Board
Number of
senior positions
on the Board (CEO,
CFO, SID, Chair)
Number in
executive
management
10
Percentage of
executive
management
10
Men
7
78%
4
8
80%
Women
2
22%
11
–
2
20%
Not specified/prefer not to say
–
–
–
–
–
Board and executive ethnic background
Number of
Board members
Percentage of
the Board
Number of
senior positions
on the Board (CEO,
CFO, SID, Chair)
Number in
executive
management
10
Percentage of
executive
management
10
White British or other White
(including minority-white groups)
8
89%
4
10
100%
Mixed/Multiple Ethnic Groups
–
–
–
–
–
Asian/Asian British
1
11%
–
–
–
Black/African/Caribbean/Black British
–
–
–
–
–
Other ethnic group, including Arab
–
–
–
–
–
Not specified/prefer not to say
–
–
–
–
–
DEI&B
7
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
8
Includes all colleagues, senior management, executive management and Board at 31 January 2025
9
While Provision 23 of the UK Corporate Governance Code defines ‘senior management’ as the layer below the Board and the Company Secretary and their direct reports,
we believe it most appropriate to disclose the gender balance of our Operating Board and Senior Leadership Team, at 31 January 2025
10
Defined as the Operating Board members and Company Secretary in accordance with UKLR 6.6.6R(10)
11
Peter Bazalgette, Senior Independent Director, and Steve Kingshott, Executive Director, both resigned from the Board with effect from 9 April 2025. These changes to the
Board follow the successful Insurance agreement with wholly owned UK subsidiaries of Ageas SA/NV and reflect the Group’s new simplified business model. At the date
of signing this report, female representation on the Board was 29%
We set externally published targets to
develop female representation on the Board
to at least 40% by 2027, and to maintain at
least one Director from an ethnically diverse
background by the same date.
In accordance with the UKLR, the tables
below detail the diversity profile of the Board
and executive management.
This data was collated from our colleague
database, populated using information
provided by each individual at recruitment
or during our diversity data collection
exercise. Our colleagues are asked to
select their relevant characteristics on
both sex/gender and ethnicity.
The Nomination Committee Report on
pages 69-70 sets out further detail on our
approach to Board diversity.
Gender pay report
We support the UK Government’s ambition
to address the gender pay gap. Our report
detailing our gender pay gap and
commitments can be found on our website
(www.saga.co.uk/gender-pay-review).
We set a target to increase female
representation across leadership positions
to 50% by 2027.
Environmental, Social and Governance continued
Saga plc
Annual Report and Accounts 2025
46
Effective risk management and control is achieved through application of the ‘three lines of defence’ model as follows:
Governing body
Accountability to stakeholders for Group oversight
Management
Actions (including managing risk)
to achieve organisational objectives
EXTERNAL ASSURANCE PROVIDERS
1
st
line roles
Provision of
products/services to
customers and managing risk
2
nd
line roles
Expertise, support,
monitoring and challenge
on risk-related matters
Internal Audit and
Assurance (
IAA
)
Independent assurance
2
nd
and 3
rd
line roles
1
Independent and objective assurance
and advice on all matters related to the
achievement of objectives
Expertise, support, monitoring and
challenge on risk-related matters
Governing body roles:
integrity, leadership and transparency
Board assessment of risk
management and internal control
Our Board has ultimate responsibility for
the Company’s risk management, internal
control and risk culture. It is also responsible
for regularly reviewing the effectiveness of
risk management and control systems,
ensuring that there is an ongoing systematic
process for identifying, evaluating, and
managing the emerging and principal risks
faced by Saga.
This system accords with the Financial
Reporting Council guidance on risk
management, internal control and related
financial and business reporting, and was
in place for the year under review and up to
the date of approval of this Annual Report
and Accounts.
Risk maturity is measured, and all business
units seek to continuously improve their
maturity over time, in line with the targets set.
Risk objectives are set for all members of
the Operating Board, with an end-of-year
assessment against the achievement of
these objectives.
Our governance framework
Risk framework
Saga has developed its risk management
framework to best suit the diversity of its
business units, regulatory requirements
and industry standards. This ensures
the required levels of risk maturity are
maintained in our financial services
businesses, while enabling our Cruise and
Holidays
2
businesses to put more focus
on the risk framework elements which are
appropriate for their business.
Our risk management framework is made
up of the following: risk strategy and plan;
risk governance; risk appetite; incident
management; and risk and control registers.
Risk maturity against each element of the risk
framework is assessed for each business unit
(
BU
) and Group function, with plans in place
to ensure continual improvement.
Risk strategy and plan
Our risk strategy and plan, which are aligned
with our overarching strategy, are considered
and approved annually.
Risk governance
The main consideration within risk
governance is the Board management of
risk and the subsequent delegation to risk
committees and other governance forums.
This ensures that risk is managed effectively
and that there is appropriate oversight
through reporting and accountability defined
within each committee’s Terms of Reference
and, where applicable, through the application
of the Senior Managers and Certification
Regime. Additionally, the suite of Saga risk
policies, including, but not limited to, conduct
risk, incident management and internal
control, define our risk management
framework and high-level expectations
of the 1
st
and 2
nd
line in respect of risk
management activity.
Incident management
The 1
st
line business areas are responsible
for raising risk incidents identified in a timely
manner, conducting appropriate root cause
analysis to prevent recurrence, and resolving
incidents promptly. The 2
nd
line oversees this
activity to ensure appropriate resolution of
incidents, fair customer outcomes, and that
the process is managed in line with policy.
1
2
nd
and 3
rd
line roles for AICL, SSL and SPF are separated in line with professional and best practice standards
2
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
Risk management
EFFECTIVELY
MANAGING OUR RISKS
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
47
Risk and control registers
Each BU and Group function is responsible
for identifying and managing its risks and
associated key controls, which are captured
on risk and control registers and scored
using a risk matrix that rates risk against
both likelihood and severity. Key controls
are subject to design and operational
effectiveness testing by the business and
validated through periodic 2
nd
line assurance
reviews, with action taken where controls are
found to be ineffective. Our risk registers help
to identify the top risks facing the various
companies, which in turn inform our principal
risks and uncertainties.
Risk appetites
Saga’s Board-approved appetite statements
focus on the most key areas of risk for Saga,
providing our Board with visibility and
oversight of our exposure to these risks
compared with appetite. In particular, the
Board oversight ensures that we promptly
and appropriately respond to any risks
which are out of appetite, or which are
moving towards becoming out of appetite.
Our risk appetites are designed to support
the achievement of our strategy, and to be
used in key decision-making.
Risk maturity
Each BU is assessed periodically against
our risk maturity matrix across both the
1
st
and 2
nd
lines of defence, with actions
agreed, and tracked, through to closure
for any areas where there is a desire to
increase risk maturity.
Process feedback
Outputs from the risk management cycle
are fed back to our risk committees and
boards by exception to ensure that the risk
framework remains effective and supports
our strategy, business model and
decision-making processes.
Independent process assurance
Saga’s IAA function is positioned centrally
within the Group, operating independently
of the BUs. It is therefore able to provide
independent assurance of the effectiveness
of the risk management procedures.
The objective of IAA is to help protect the
assets, reputation and sustainability of the
organisation by providing independent,
reliable, valued and timely assurance to the
Board and Operating Board. To preserve
the independence of the function, the
IAA Director’s primary reporting line is
to the Chair of the Audit Committee and
the Internal Audit team is prohibited
from performing operational duties for
the business. For risk management
responsibilities, the IAA Director also has
an independent reporting line into the
Chair of the Risk Committee.
All activities of the Company fall within the
remit of the IAA team, and there are no
restrictions on their work. IAA fulfils its role
and responsibilities by delivering the annual
risk-based audit plan. Each audit provides
an opinion on the control environment and
details of any issues found. IAA works with the
BUs to agree the remedial actions necessary
to improve the control environment and
these are tracked to completion. The Head
of Internal Audit submits reports to, and/or
attends, board and audit committee
meetings for the BUs, with the IAA Director
reporting to the Audit and Risk Committees.
Statement of review
As a result of its consideration and
contribution to risk management and internal
control activities, the Board is satisfied that
there is an appropriate framework for
identifying, evaluating, and managing the
Group’s risks and internal controls and it is
regularly reviewed. The Board’s statement
of review of the effectiveness of Saga’s risk
management and internal control system
is set out on page 57.
Our risk management framework and
systems are designed to manage, rather than
eliminate risk, and operate to facilitate the
achievement of our business objectives within
our stated risk appetites.
There was regular reporting to the Audit and
Risk Committees throughout the year on the
status and evolution of Saga’s risk framework.
Risk management continued
I love being a
company for our
older generation,
I feel proud to be
able to look after
this generation.”
Anonymous
Colleague survey,
December 2024
What our
colleagues
say
Saga plc
Annual Report and Accounts 2025
48
The matrix shows the
principal risks and
uncertainties (
PRUs
) facing
the Company, including
those that would threaten
its business model, future
performance, solvency
or liquidity.
The arrows on the heatmap show any
movement in the PRUs from the last
published Annual Report and Accounts.
The table on the following pages also
includes the mitigating actions taken to
manage these risks. The trend denotes the
anticipated future direction of each risk
after mitigation, which is influenced by known
key external or internal factors. Saga takes
a ‘bottom-up’ and ‘top-down’ approach to
developing and reviewing its PRUs, which
occurs at least twice a year with oversight
from the Operating Board and the Board.
Each PRU is aligned to the most relevant
strategic priorities.
Remote
Within 50 years
Unlikely
Within 10 years
Possible
Within 5 years
Probable
Within 2 years
Frequent
More than
one per year or
in the next year
Probability/timeframe
Minor
Moderate
Serious
Severe
Fundamental
Risk reward/impact
10
9
11
3
2
4
5
1
6
A
Strategic
B
Operational
C
Insurance
D
Financial
Key risk category
Our risks
1
Insurance pricing underwriting
and claims risk
B
C
2
Cyber
B
3
Regulatory action
B
4
Third-party suppliers
B
5
Delivery and execution
B
6
Liquidity risk/debt refinancing
D
7
Breach of Data Protection Act
(
DPA
)/General Data Protection
Regulation (
GDPR
)
B
8
Organisational resilience
B
9
Capability and capacity
B
10
Fraud and financial crime
B
11
Environmental, Social and
Governance (
ESG
)
A
B
“The PRUs were reviewed
at each meeting and
refreshed regularly during
the year, ensuring that new
and emerging risks and
opportunities were captured
and remained at the
forefront of the Group’s
strategic planning.”
Julie Hopes
Chair, Risk Committee
Principal risks and uncertainties
MITIGATING
EACH RISK
6
2
8
7
1
11
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
49
1
Risk trend represents the current view of the future three-month trend, and not the trend relative to the last published Annual Report and Accounts
2
Since the year end, the strategic pillars evolved, reflecting the strategic progress made of the past 12 months and our focus on driving long-term sustainable growth.
The strategic pillars that applied during the 2024/25 financial year were set out in the 2024 Annual Report and Accounts. These were: maximising our core businesses;
reducing debt through capital-light growth; and growing our customer base and deepening our customer relationships
Principal risks and uncertainties continued
Description
Risk that a cyber security breach occurs due
to failures in keeping pace with external threat
actor capabilities and regulatory expectations,
resulting in system lockdown, ransom demands
and/or compromise of substantial data. This could
result in customer/colleague compensation and
regulatory sanctions.
Mitigation
Robust vulnerability management programme,
including controls to actively detect and respond
to incidents, industry benchmarking and external
penetration testing to maintain security posture.
Cyber
2
Risk trend
1
Link to strategy
1
B
Scope
Saga plc
Risk category
B
Risk owner
Chief Information
Officer (
CIO
)
Description
Risk of business interruption, financial loss and
reputational damage arising from loss of key
third parties or a failure to manage and control
the performance of third parties.
Mitigation
Robust supplier risk management framework
ensures third-party partners are appropriately
selected and monitored, including their operational
and financial resilience.
Third-party suppliers
4
Risk trend
1
Link to strategy
1
2
3
Scope
Saga plc
Risk category
B
Risk owner
Group Chief
Financial Officer
(
CFO
)
and BU CEOs
Description
Risk of customer harm due to our actions/in
action or failure to implement regulatory
change correctly, which could result in
customer remediation, or regulatory scrutiny,
and/or sanction.
Mitigation
Robust controls, governance and reporting is in
place to ensure regulatory compliance and that
good customer outcomes are achieved.
Regulatory action
3
Risk trend
1
Link to strategy
1
B
Scope
Insurance and Travel
Risk category
B
Risk owner
Group and business
unit (
BU
) Chief
Executive Officers
(
CEOs
)
Key
B
Threat to
business model
Risk trend
1
Improving
Stable
Worsening
1
Maximising the
growth of our
existing businesses
2
4
Reducing debt,
while simplifying
our operations
2
2
Driving incremental growth
through new business lines
and products
2
3
Growing our customer
base and deepening
those relationships
2
Description
Risk that uncertainty in the Insurance Broking and
Underwriting businesses leads to material pricing,
reserving and/or underwriting issues that have
significant financial impact and/or customer harm.
Mitigation
Defined risk appetite statements and indicators,
which are rigorously monitored.
Defined strategy and metrics, with appropriate
governance, monitoring and reporting.
The Ageas transaction is expected to change the
nature of this risk, and reduce the risk exposure.
Insurance pricing underwriting and claims risk
1
Risk trend
1
Link to strategy
1
Scope
Insurance
Risk category
B
C
Risk owner
CEO of Insurance
Saga plc
Annual Report and Accounts 2025
50
3
Risk trend represents the current view of the future three-month trend, and not the trend relative to the last published Annual Report and Accounts
Description
The Group relies on a number of sources of
funding and, as such, is exposed to the risks
associated with repaying or refinancing this
funding as it reaches maturity.
Mitigation
Robust financial controls and reporting to assess
liquidity and support early identification of potential
risks to Group liquidity.
Refinancing the Group’s corporate debt has
reduced the risk exposure.
Liquidity risk/debt refinancing
6
Risk trend
3
Link to strategy
2
4
B
Scope
Saga plc
Risk category
D
Risk owner
Group CFO
Description
Risk that Saga fails to process and manage
customer data in accordance with their
expectations and in alignment with GDPR and
DPA 2018. This could be caused by non-compliant
data management practices, inappropriate use of
consent or colleagues not adhering to regulatory
obligations. This could result in customer harm,
compensation costs, reputational damage and
Information Commissioner’s Office fine.
Mitigation
Robust controls, governance and reporting is in
place to ensure compliance.
Breach of DPA/GDPR
7
Risk trend
3
Link to strategy
1
3
B
Scope
Saga plc
Risk category
B
Risk owner
Chief Data and
Strategy Officer
Description
Risk that key business change initiatives fail
to be delivered effectively, or at all, due to one
or a combination of the following:
resource capability or capacity;
unexpected business as usual risk issues;
new regulation; or
material defects in the delivery.
Mitigation
Robust change governance to ensure achievement
of strategically significant change.
Delivery and execution
5
Risk trend
3
Link to strategy
1
2
3
Scope
Saga plc
Risk category
B
Risk owner
Group and BU CEOs
Description
Risk of failure in one or more key resources,
supporting critical services or operations,
and inability to respond and recover within
defined parameters. This could be caused
either by an internal or external shock or stress
and could be exacerbated by the complex,
dynamic risk environment and ongoing change
and transformation.
Mitigation
Defined strategy and plans to maintain
organisational resilience, including response and
recovery planning, capability and coordination
plans, testing and crisis management tools.
Organisational resilience
8
Risk trend
3
Link to strategy
1
3
4
Scope
Saga plc
Risk category
B
Risk owner
CIO and BU CEOs
Description
Risk that the capability and capacity of colleagues
does not align to the significant organisational
change needed to deliver strategic objectives
due to failures in talent management, in line
with strategy.
Mitigation
Competitive employment packages, with
continued investment in pay, wellbeing and talent
management to attract, develop and retain
capability in key roles, develop future leaders and
drive internal career progression.
Capability and capacity
9
Risk trend
3
Link to strategy
1
2
4
Scope
Saga plc
Risk category
B
Risk owner
Group CEO
and Chief People
Officer (
CPO
)
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
51
Principal risks and uncertainties continued
4
Risk trend represents the current view of the future three-month trend, and not the trend relative to the last published Annual Report and Accounts
5
Since the year end, the strategic pillars evolved, reflecting the strategic progress made over the past 12 months and our focus on driving long-term sustainable growth.
The strategic pillars that applied during the 2024/25 financial year were set out in the 2024 Annual Report and Accounts. These were: maximising our core businesses;
reducing debt through capital-light growth; and growing our customer base and deepening our customer relationships
Key
B
Threat to
business model
Risk trend
4
Improving
Stable
Worsening
1
Maximising the
growth of our
existing businesses
5
4
Reducing debt,
while simplifying
our operations
5
2
Driving incremental growth
through new business lines
and products
5
3
Growing our customer
base and deepening
those relationships
5
Description
Risk that Saga does not maintain compliance
with increasing ESG-related regulation or fails
to deliver on its stated ESG strategy in line with
stakeholder expectations, due to a lack of
resource and/or business engagement, causing
reputational, customer and financial impacts.
Mitigation
Actively delivering against the ESG strategy,
with robust governance controls for ESG.
Ongoing monitoring and reporting against all
targets to the ESG Governance forums.
ESG
11
Risk trend
4
Link to strategy
1
3
Scope
Saga plc
Risk category
A
B
Risk owner
CPO
Description
Risk that we experience increased internal or
external fraud and financial crime, driven by
remote working, changes within the Group
and general macroeconomic conditions.
This could result in financial loss and potential
regulatory/legal sanction.
Mitigation
Financial crime framework and robust controls,
which are rigorously monitored and reported on.
Fraud and financial crime
10
Risk trend
4
Link to strategy
1
Scope
Saga plc
Risk category
B
Risk owner
Group CFO
and BU CEOs
Saga plc
Annual Report and Accounts 2025
52
The Directors considered the viability of the
Group over the five years to January 2030.
This period was selected as the most
appropriate timeframe as it:
a) is consistent with the planning horizon
over which the Directors normally
consider the future performance,
capital and solvency requirements
of the business;
b) includes the refinancing of the Group’s
corporate debt facilities in 2025; and
c) includes consideration of the annual
repayment obligations relating to the
Group’s ship debt facilities over this
timeframe.
In making this statement, the Directors
considered the resilience of the Group,
taking account of its current position, the
principal risks facing the business in severe
but plausible scenarios and the effect of
mitigating actions available to management.
The Directors considered each of the
Group’s principal risks and uncertainties
(
PRUs
) detailed on pages 49-52 to
determine which might threaten the
Group’s ongoing viability. Severe but
plausible outcomes for each were identified,
with an estimate of the potential financial
impact quantified. Assessments of the
potential financial impact were derived from
internal calculations and examples of similar
incidents in the public domain. In assessing
the viability of the Group, the Directors
considered appropriate management
actions that may be taken to manage the
solvency of the Group in the event of severe
but plausible downside scenarios. The
assessment reflects the early refinancing
of the £250.0m unsecured corporate bond
and the £85.0m loan facility provided by
Roger De Haan that took place in February
2025, through drawdown against the new
£335.0m term loan facility. The assessment
also assumes that, in severe but plausible
stressed scenarios, further drawdowns
against the Group’s new £50.0m Revolving
Credit Facility and £100.0m delayed-draw
term loan facility may be necessary.
The PRUs have been modelled individually,
as a probability-weighted average of all
possible scenarios and as a combination
of the top three risks identified.
The three largest sensitivities, in terms
of financial impact, were identified as
the following:
1. Delivery and execution risk in our
Cruise division: the risk of key business
change initiatives failing to be delivered
effectively. This was modelled as the
impact of a 10% reduction in Ocean
Cruise load factors across the
assessment period.
2. A breach of the Data Protection Act/
General Data Protection Regulations
(
GDPR
): This was assessed through
modelling the impact of a GDPR fine
equating to 2% of revenue in any year
of the assessment.
3. Operational resilience: pandemic or
business disruption arising from an
unforeseen event impacting Cruise
itineraries. This was assessed through
modelling the impact of one of our Ocean
Cruise ships and one of our River Cruise
ships being involved in an incident,
resulting in the cancellation of cruises for
75 days and consequent lost revenue in
any year of the assessment; in addition
to modelling the impact of a major
incident or civil unrest in a key Holidays
1
destination, resulting in all bookings to
that destination being cancelled for
six months.
Reverse stress testing was also conducted
to ascertain which PRU, or combination of
PRUs, might lead to a breach of covenant
and cash flow solvency thresholds.
The outcome of the modelling confirmed
that none of the top three PRUs in isolation
would compromise the Group’s viability
and, even in combination, the Group could
expect to be able to meet its debt covenants
and retain access to all available facilities
across the full assessment period. The
reverse stress test demonstrated that the
likelihood of occurrence of a combination
of PRUs sufficiently severe as to cause a
breach of debt covenants, or to fall below
minimum solvency thresholds, is remote.
Based on the above assessment, the
Directors have a reasonable expectation
that the Group will be able to continue in
operation and meet its liabilities as they
fall due over the next five years.
Viability Statement
1
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
53
An overview of our approach to environmental, colleague, social, human rights, anti-corruption and anti-bribery matters, including where
additional information can be found elsewhere in this report or in our policies, can be found in the table below.
Details of our business model can be found on pages 20-21, and our principal risks and uncertainties are on pages 49-52. Our standalone
Environmental, Social and Governance (
ESG
) Report, alongside key policies and further reading can be found on our corporate website
(www.corporate.saga.co.uk/about-us/environmental-social-and-governance).
Reporting
requirement
Our approach, key policies and outcomes
More information
Environmental
matters
Our ESG strategy defines our approach to environmental matters, including a focus on carbon
emissions, oceans and biodiversity. Our ESG strategy was informed by a double materiality
assessment and includes key performance indicators and targets to drive progress.
We have an ESG Champion on our Board and an established ESG Steering Committee, tasked with
supporting delivery of the ESG strategy.
Outcome
Successfully conducted a cruise ship biofuel trial, which confirmed compatibility of our ocean ships
with lower emissions biofuels.
Launched our charity partnership with Kent Wildlife Trust.
Partnership with marine conservation charity, ORCA.
ESG matters are considered an important part of all strategic discussions.
Environmental, Social
and Governance on
pages 39-46
2025 ESG Report
Climate-related
financial
disclosures
Our Task Force on Climate-related Financial Disclosures (
TCFD
) report provides details of our
climate-related governance arrangements; risks and opportunities; and targets.
Completed TCFD-aligned climate change scenario analysis and risk assessment.
Outcome
TCFD targets set and monitored closely, ensuring compliance with regulation.
Environmental, Social
and Governance on
pages 39-46
2025 ESG Report
Colleagues
Our Diversity, Equity, Inclusion and Belonging (
DEI&B
) Policy commits us to create a truly inclusive
culture, where all colleagues can bring their authentic selves to work.
We remain a committed member of the UK Disability Confident scheme and support the
advancement of employment for disabled persons in the UK.
Our Health and Safety Policy contains a clear set of principles and commitments which apply to
all colleagues, contractors and members of the public.
We are inclusive of age through our Grandparents’ Leave and Menopause policies.
Outcome
Participation rate in our most recent colleague engagement survey was 93%, with the score
increasing from 6.6 out of 10, to 7.9.
Our colleague diversity survey launched in May 2024, with a 44% participation rate.
Increased female representation in leadership positions from 42% to 44%.
Made progress towards our aim of being ‘Champions of Age’ at work in the UK, with 95% of
colleagues now trained on the basics of ageing.
An inclusive culture, which benefits from diversity of thought. Colleagues understand our purpose
and feel comfortable to voice their opinions.
Environmental, Social
and Governance on
pages 39-46
2025 ESG Report
DEI&B Policy
Social matters
We seek to understand and carefully consider our impact within our communities. We ensure open
dialogue with the community so they are aware of our strategy, as well as any impact to them.
We promote colleague involvement in the community through our Public Duties Policy, Reservist
Policy and through giving all colleagues paid time off to volunteer within the community.
Outcome
Over £6.1k charitable donations made during the year.
114 colleagues used their volunteer day, equivalent to 798 hours donated.
Saga takes the needs of the communities in which we operate into account and enables colleagues
to contribute.
Environmental, Social
and Governance on
pages 39-46
2025 ESG Report
Respect for human
rights
We support the rights of all people as set out in the Universal Declaration of Human Rights.
Our Labour Standards Policy sets out the human rights principles adopted across the Group,
alongside our commitments to working responsibly and with integrity.
Our Modern Slavery Statement provides detail on our approach to risk, due diligence, policies,
training and audit in this area.
Our Supplier Code of Conduct establishes the types of behaviour Saga expects from any entity
that supplies products or services to the Saga Group.
Outcome
No incidents of human rights violations or modern slavery were identified in 2024/25.
Our colleagues, suppliers and their employees are protected and our stakeholders are reassured
by our high standards.
Labour Standards and
Human Rights Policy
Modern Slavery
Statement
Supplier Code
of Conduct
Anti-bribery and
anti-corruption
Our zero-tolerance approach to bribery and corruption is set out in our Anti-Bribery and
Corruption Policy, setting out clear guidance for the assessment of risk of bribery and corruption
across our business.
All colleagues receive mandatory training on anti-bribery and anti-corruption.
Our Supplier Code of Conduct establishes the types of behaviour Saga expects from any entity
that supplies products or services to the Saga Group.
Outcome
There were no fines, penalties or settlements for corruption reported in 2024/25.
Our stakeholders can be assured that we operate a zero tolerance approach.
2025 ESG Report
Anti-Bribery and
Corruption Policy
Supplier Code
of Conduct
Key disclosure statements
Non-financial and sustainability information statement
Saga plc
Annual Report and Accounts 2025
54
This Strategic Report is presented to inform members of the Company and help them assess how the Directors have performed their duty
under S172(1). It has been approved by the Board and signed on its behalf by
Mike Hazell
Group Chief Executive Officer
15 April 2025
Duty to promote the success of the Company
The Directors had regard for the matters set out in Section 172(1)(a)–(f) of the Companies Act 2006 (
S172(1)
) when performing their duty under
Section 172. The Directors consider that they acted in good faith in the way that would be most likely to promote the success of the Company for
the benefit of its members as a whole, while also having regard to the S172(1) matters referred to below.
A description of how the Board engages with its key stakeholders can be found on pages 22-23 and the principal decisions made by the
Board during 2024/25, how stakeholders were considered and the likely consequences of these decisions over the longer term are set out
on pages 62-65. Further information on how S172(1) has been applied by the Board can be found in the table below.
S172(1) matter
Further information incorporated into this statement by reference
Likely consequences of any
decision in the long term
Chairman’s Statement
Pages 6-7
Group Chief Executive Officer’s Strategic Review
Pages 8-13
Environmental, Social and Governance
Pages 39-46
Principal risks and uncertainties
Pages 49-52
Chairman’s introduction to governance
Pages 58-59
Board activities
Pages 62-65
Nomination Committee Report
Pages 69-70
Audit Committee Report
Pages 71-74
Risk Committee Report
Pages 75-76
Directors’ Remuneration Report
Pages 77-93
The interests of the
Company’s employees
Group Chief Executive Officer’s Strategic Review
Pages 8-13
Market review
Pages 18-19
Purpose and business model
Pages 20-21
Engaging with stakeholders
Pages 22-23
Environmental, Social and Governance
Pages 39-46
Principal risks and uncertainties
Pages 49-52
Chairman’s introduction to governance
Pages 58-59
Board activities
Pages 62-65
Division of responsibilities
Page 67
Nomination Committee Report
Pages 69-70
Audit Committee Report
Pages 71-74
Directors’ Remuneration Report
Pages 77-93
The need to foster the
Company’s business
relationships with suppliers,
customers and others
Chairman’s Statement
Pages 6-7
Group Chief Executive Officer’s Strategic Review
Pages 8-13
Purpose and business model
Pages 20-21
Engaging with stakeholders
Pages 22-23
Environmental, Social and Governance
Pages 39-46
Principal risks and uncertainties
Pages 49-52
Board activities
Pages 62-65
Impact of the Company’s
operations on the community
and environment
Engaging with stakeholders
Pages 22-23
Environmental, Social and Governance
Pages 39-46
Board activities
Pages 62-65
The Company’s reputation for
high standards of business
conduct
Group Chief Executive Officer’s Strategic Review
Pages 8-13
Environmental, Social and Governance
Pages 39-46
Risk management
Pages 47-48
Board activities
Pages 62-65
Risk Committee Report
Pages 75-76
The need to act fairly as
between members of
the Company
Engaging with stakeholders
Pages 22-23
Chairman’s introduction to governance
Pages 58-59
Board activities
Pages 62-65
Board leadership and Company purpose
Page 66
Directors’ Remuneration Report
Pages 77-93
Section 172(1) statement
Strategic Report
Financial statements
Additional information
Governance
Saga plc
Annual Report and Accounts 2025
55
CORPORATE GOVERNANCE STATEMENT
1
Since the year end, the strategic pillars evolved, reflecting the strategic progress made over the past 12 months and our focus on driving long-term sustainable growth.
The strategic pillars that applied during the 2024/25 financial year were set out in the 2024 Annual Report and Accounts. These were: maximising our core businesses;
reducing debt through capital-light growth; and growing our customer base and deepening our customer relationships
2
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
Governance at a glance
IN THIS
SECTION
Governance
Board activities
Governance framework
Board allocation of time during the year
Maximising the growth of our existing businesses
1
Reducing debt, while simplifying our operations
1
Growing our customer base and deepening
those relationships
1
c.15%
c.40%
c.15%
Driving incremental growth through new business
lines and products
1
c.15%
People and culture
c.5%
Oversight of risk management
c.5%
c.5%
Environmental, Social and Governance (
ESG
)
Maximising the growth of our existing
businesses
1
Considered options to support our existing
businesses in their strategic growth, including
enhancement of customer offerings in Travel
2
and partnerships in Money.
Driving incremental growth through new
business lines and products
1
Built awareness of our newer Saga Money
products and took action to drive growth
in customer acquisition.
Growing our customer base and deepening
those relationships
1
Expanded the Saga Magazine customer reach.
Reducing debt, while simplifying our
operations
1
Agreed a 20-year partnership with
wholly owned UK subsidiaries of
Ageas SA/NV (
Ageas
) for our motor
and home Insurance Broking operations
alongside the sale of Acromas Insurance
Company Limited (
AICL
).
Successful refinancing of the Group’s
corporate debt, having secured new facilities.
Find out more in Board activities on
pages 62-65
Our governance structure remains streamlined,
enabling effective Board oversight.
Find out more in division of
responsibilities on page 67
Operating
Board
ESG
Steering
Committee
Data
Management
Committee
Board
Committees
Board
Corporate Governance Statement
57
Key statements and Application of the
UK Corporate Governance Code
58
Chairman’s introduction to governance
60
Board of Directors
62
Board activities
66
Board leadership and Company purpose
67
Division of responsibilities
68
Composition, succession and evaluation
69
Nomination Committee Report
71
Audit Committee Report
75
Risk Committee Report
Directors’ Remuneration Report
77
Annual Statement
80
Remuneration at a glance
82
Annual Report on Remuneration
94
Directors’ Report
97
Statements of responsibilities
98
Independent Auditor’s Report to the
Members of Saga plc
Saga plc
Annual Report and Accounts 2025
56
The Company seeks to comply with the Principles set out in the
Code, promoting good corporate governance to support the
long-term sustainable success of the Group.
Board leadership and Company purpose
Read more
on pages
A.
Board effectiveness
68
B.
Purpose, values, strategy and culture
1-23
,
39-46
and
66
C.
Board decision-making
58-59
and
62-65
D.
Engagement with stakeholders
22-23
,
55
and
62-65
E.
Oversight of workplace policies
and practices
40
,
53
,
66-67
,
68
and
73
Division of responsibilities
F.
Role of the Chair
66
and
68
G.
Independence and division of responsibilities
66-67
H.
External commitments and conflicts of interest
60-61
I.
Board resources
62
and
67-68
Composition, succession and evaluation
J.
Appointments to the Board and
succession planning
58-59
and
69-70
K.
Board composition and length of tenure
60-61
and
68
L.
Board and individual evaluation
68
and
70
Audit, risk and internal control
M.
Financial reporting
External audit and internal audit – independence
and effectiveness
71-74
N.
Fair, balanced and understandable assessment
57
and
73
O.
Risk management and
internal controls
42
,
47-48
,
57
and
75-76
Remuneration
P.
Remuneration philosophy
77-79
Q.
Directors’ Remuneration Policy
92-93
R.
Annual Report on Remuneration
82-93
Application of the UK Corporate
Governance Code
The Board believes that, during the reporting period, the Company was
in full compliance with all applicable Principles and Provisions of the Code,
save that:
Provision 3:
While the Non-Executive Chairman did meet with some
shareholders during the year on request, as he is a significant shareholder,
it was determined that it would be more appropriate for the Group Chief
Executive Officer (
CEO
) and Group Chief Financial Officer (
CFO
) to
regularly engage with major shareholders.
Provision 9:
Due to his shareholding in the Company, the Non-Executive
Chairman was not considered independent on appointment. Taking into
account Roger De Haan’s history with the Saga brand and business, his
proposed time commitment, the terms of the Relationship Agreement
between him and the Company and his letter of appointment, the
appointment was deemed to be in the best interests of the Company.
Provision 23:
While the Code defines ‘senior management’ as the layer
below the Board and the Company Secretary and their direct reports,
we think it is more appropriate to disclose the gender balance of the
Operating Board and Senior Leadership Team.
Provision 34:
Roger De Haan has waived his fee since becoming
Non-Executive Chairman in 2020.
Provision 38:
Pension contributions/payments in lieu for Executive
Directors are aligned with those of the majority of colleagues (6% of
salary). Colleagues can, however, opt to increase their contribution to
a maximum of 10%, which the Company will match. This does not apply
to Executive Directors.
Compliance Statement
The Board is committed to high standards
of corporate governance and, during the year, managed Saga’s
operations in accordance with the UK Corporate Governance
Code 2018 (the
Code
). A full version of the Code can be found
on the Financial Reporting Council’s website (www.frc.org.uk).
Saga publishes an annual UK Corporate Governance Code
Statement, providing further detail on the application of the
Code. This is available on our corporate website
(www.corporate.saga.co.uk/about-us/governance).
Viability Statement
The Viability Statement can be found in the
Strategic Report on page 53.
Going concern
The going concern basis of preparation can be
found in Note 4 of the financial statements on page 102.
Fair, balanced and understandable
In accordance with the Code,
the Board has established arrangements to evaluate whether the
information presented in the Annual Report and Accounts is fair,
balanced and understandable. Having taken advice from the
Audit Committee, the Board considers that the Annual Report and
Accounts, taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess the
Company’s position and performance, business model and strategy.
Assessment of risk
Through the risk management process
detailed on pages 47-48, the Board can confirm that it has carried
out a robust assessment of the emerging and principal risks facing
the Company, including those which would threaten our business
model, future performance, solvency or liquidity and reputation.
Statement of review
The risk management process detailed
on pages 47-48 was in place for the year under review and up to
the date of approval of this report. The Board recognises the
importance of appropriate systems of internal control and
risk management. The Group operates a ‘three lines of defence’
risk management framework, overseen and monitored by the
Risk Committee (see pages 75-76) and Audit Committee
(see pages 71-74). Work conducted by 2
nd
and 3
rd
lines, while
identifying some areas for improvement, provided reasonable
assurance that the systems of risk management and internal
control were broadly effective.
Section 172(1)
The Section 172(1) statement can be found in the
Strategic Report on page 55.
2024 Corporate Governance Code
The Company established
a Corporate Governance Steering Committee as a management
group to address the changes to the Code. Further information
can be found on pages 59 and 72.
Key statements
Key statements and Application of the UK Corporate Governance Code
Saga plc
Annual Report and Accounts 2025
57
Strategic Report
Financial statements
Additional information
Governance
CORPORATE GOVERNANCE STATEMENT
Chairman’s introduction to governance
Dear shareholder,
2024/25 has been a busy year for our Board and we made a number
of very significant decisions that led to the Group being able to lay the
foundations for future growth and provide support for our strategy to
move towards a more capital-light model, reduce debt and generate
long-term sustainable value for our stakeholders.
We agreed a 20-year partnership with wholly owned UK subsidiaries
of Ageas SA/NV (
Ageas
) for our motor and home insurance operations,
alongside the sale of our Underwriting company, Acromas Insurance
Company Limited (
AICL
). The new partnership brings together the
strength of the Saga brand, our marketing skills and customer base
with Ageas’s extensive and growing UK insurance business.
The partnership with Ageas will enable us to offer best-in-class
insurance services to our customers and, once the new arrangements
have been bedded in, provide us an excellent opportunity to increase
the number of motor and home insurance customers we serve and,
at the same time, to completely re-engineer the way we run our
motor and home insurance operations.
There was a significant amount of Board discussion regarding the
best way to reduce debt and increase liquidity ahead of the maturity
of our £250.0m 2026 bond and the loan facility that I had previously
provided. Various options were explored and expert independent
financial and legal advice was sought to aid our decision making.
The resultant corporate refinancing significantly enhances the
Group’s liquidity position, increases covenant headroom and provides
funding certainty as we execute our strategic growth plans.
During the year, the Group repaid its £150.0m 2024 senior unsecured
corporate bond at maturity and completed a successful refinancing
of the Group’s corporate debt in full. We did this by securing new
facilities to enhance the Group’s liquidity position. As a result, following
the year end, we repaid both the £250.0m 2026 bond and the £75.0m
drawn position of the £85.0m facility that I had provided. This facility
and the Group’s existing Revolving Credit Facility were cancelled.
Find out more in Board activities on pages 62-65
Changes to Board and Committee
structure/composition
There was no change to Board composition during the year,
however, the Nomination Committee continued to assess the skills,
diversity and capacity required at both the Board and individual
Committee levels.
It undertook a review of the proposal to re-appoint Julie Hopes and
Gareth Hoskin as Non-Executive Directors when they were proposed
for re-appointment after serving their second three-year terms.
The Board approved the recommendations to re-appoint them.
Following the year end, it was announced that Steve Kingshott would
be standing down from his role as the Chief Executive Officer of
Insurance, from 12 February 2025, and that he would take on the
role of specialist adviser for the delivery and implementation of the
20-year partnership with Ageas and remain an Executive Director.
Peter Bazalgette, Senior Independent Director, and Steve Kingshott,
both resigned from the Board with effect from 9 April 2025. These
changes to the Board follow the successful Insurance agreement with
Ageas and reflect the Group’s new simplified business model.
I would like to thank them both for all their hard work over the
past years and the significant contributions they have each made.
Their expertise in their respective fields of media and insurance have
proven invaluable as we have reshaped Saga. We wish them well in
their future endeavours.
The Board approved the Nomination Committee’s recommendation
that Gareth Hoskin be appointed as Senior Independent Director,
Chair of the Nomination Committee and a member of the
Remuneration Committee and that Julie Hopes be appointed
as a member of the Nomination Committee.
Find out more in our Nomination Committee Report on
pages 69-70
GOVERNANCE
REPORT
Sir Roger De Haan
Non-Executive Chairman
Saga plc
Annual Report and Accounts 2025
58
Risk management
Our risk management framework, financial reporting processes and
internal controls were overseen by our Audit and Risk Committees,
with matters escalated to the Board whenever necessary.
The Audit Committee was focused on supporting the Group to deliver
its strategic priorities, including entering into the partnership with
Ageas and the sale of AICL. This Committee played a key role in
considering our options for refinancing and maintaining the financial
flexibility of the Group.
The Risk Committee continued to provide independent challenge and
oversight to assess the main risks facing the business and the design
and effectiveness of critical controls, together with monitoring risk
maturity. The Board recognised that effective risk management
protects our assets, reputation and brand.
During the year, the Audit and the Risk Committees received updates
from a Corporate Governance Reforms Steering Committee, a
management group that we established to address the changes
resulting from the revised UK Corporate Governance Code, which will
apply to the Company from the financial year ending 31 January 2026.
Find out more in:
Audit Committee Report on pages 71-74
Risk Committee Report on pages 75-76
People and remuneration
The Nomination Committee’s primary focus was on succession
planning and talent development, while keeping in mind the Group’s
Diversity, Equity, Inclusion and Belonging (
DEI&B
) targets. This helped
us ensure the Group continued to have the key skills and abilities we
required to achieve our strategic goals.
The Remuneration Committee continued to be as focussed on our
colleagues as we were on our customers, in order to ensure that our
approach to rewarding them at all levels was aligned with our business
strategy, which placed customer service and colleague engagement
at its core. Julie Hopes, our Remuneration Committee Chair, regularly
attended our People Committee meetings during the year and her
role as People Champion ensured that colleagues had a voice in
our boardroom.
Shareholder approval will be sought for a revised Remuneration
Policy this year. The Remuneration Committee plays an important
role in aligning executive incentives with our business strategy, while
ensuring that the remuneration structure remains both motivational
and retentive.
Find out more in:
How the Board monitors culture on page 62
Directors’ Remuneration Report on pages 77-79
Environmental, Social and Governance (
ESG
)
In 2023, we launched Saga’s ESG strategy which focussed on
championing positive ageing, acted on climate change and biodiversity
and strengthened our exceptional culture. During the financial year,
we continued to make progress, which we measured against our
key performance indicators and targets.
The highlights, during the year, included the calculation of our Scope 3
emissions footprint and the collection of colleague diversity data,
which enabled us to consider setting informed targets around DEI&B.
Since the year end, we announced our charity partnership with Kent
Wildlife Trust .
ESG remains a priority for our business and we believe it is essential
to the future success of our brand. We hope our ongoing efforts will
continue to drive positive change and we will continue to prioritise the
environmental performance of our Cruise fleet, including establishing
a pathway to achieving net zero emissions by 2050.
Find out more in:
Environmental, Social and Governance on pages 39-46
2025 ESG Report
Board and Committee evaluation
This year, the Board effectiveness and performance review was
carried out with the help of all Directors completing a survey that
evaluated the Board’s focus on strategy, how well the Directors
worked together, the quality of the financial and business information
they received and how well the Board Committees interacted with
the Board. The Group Company Secretary, with my support,
prepared a report which was then discussed by the Board.
The review concluded that our governance framework had worked
well and in an agile way during the year. Its use of subcommittees was
effective in analysing the detail relating to significant projects. Board
committees were found to be operating effectively, with matters
reported, and escalated, to the Board as necessary.
Find out more about Board composition, succession and
evaluation on page 68
Our 2025 Annual General Meeting (
AGM
)
This year, our AGM will be held on 24 June 2025, at the offices of
Numis Securities Limited, 45 Gresham Street, London EC2V 7BF.
Full details will be set out in the Notice of AGM in due course.
The Board and I enjoy meeting with and hearing from shareholders
at our AGM and are looking forward to seeing shareholders there.
Sir Roger De Haan
Non-Executive Chairman
15 April 2025
Saga plc
Annual Report and Accounts 2025
59
Strategic Report
Financial statements
Additional information
Governance
CORPORATE GOVERNANCE STATEMENT
Board of Directors
The Board composition brings a wealth of expertise and leadership with a diverse range of backgrounds
spanning key sectors relevant to the Company. With a commitment to governance, sustainability, and growth,
their collective balance of experience will ensure long-term value creation. Each Board members’ biography
demonstrates the insight and contribution they bring to the Board.
Roger De Haan
Non-Executive Chairman
Appointed
5 October 2020
Key strengths and experience
Experienced business leader and
board director with extensive
experience in travel and financial
services industries.
Significant history with Saga,
having worked in the business for
40 years, including over 20 years
as Chairman and Chief Executive.
Instrumental in transforming
Saga, from a specialist tour
operator to one that offered
its own cruises, and expanding
the business to cover publishing,
insurance and financial services,
creating the Saga brand.
Knighted in the 2014 New Year
Honours List for services to
education and to charity in Kent
and overseas.
Other roles
Director of Folkestone Harbour
companies; and Chair of
Friends of Folkestone Academy
(appointed January 2004)
and the two charities: Creative
Folkestone (appointed January
2003) and The Roger De Haan
Charitable Trust (appointed
September 1978).
Mike Hazell
Group Chief Executive Officer
Appointed
9 October 2023 (as Group Chief Financial Officer).
Group Chief Executive Officer from 28 November 2023
Key strengths and experience
Over 25 years of multi-sector
experience in a variety of
executive roles.
Substantial experience of
strategy development and
implementation at pace.
Deep understanding of
corporate turnarounds
and financing.
Significant experience working
within diversified groups.
Previous senior roles include:
Interim Chief Financial Officer
at The Co-op Group; Group
Chief Financial Officer and,
ultimately, Chief Executive
Officer of Debenhams; and
various management roles
at BSkyB, Fonterra and Pfizer.
IE
N
OB
Mark Watkins
Group Chief Financial Officer
Appointed
28 November 2023
Key strengths and experience
Fellow of the Institute of
Chartered Accountants
in England and Wales.
Extensive knowledge of Saga,
with over eight years of
experience within the business,
including time as Chief
Corporate Development Officer,
Finance Director, and
Director of Investor Relations
and Corporate Finance.
Experience in delivering
corporate strategy,
investor communications
and internal/external analysis
and reporting.
Considerable strategic,
investor and operational
finance experience across
multiple sectors.
Previous senior roles include:
Chief Financial Officer Europe and
Central Asia at Intertek; Finance
Director of the Processing,
Recovery and Disposal Division
at Secure Energy Services; and
Group Financial Controller at
Bovis Homes.
Other roles
Director of Creative Folkestone
(appointed September 2024).
Steve Kingshott
1
Executive Director
Appointed
3 January 2023 (resigned 9 April 2025)
Key strengths and experience
Highly experienced insurance
executive with over 30 years
of experience in the UK
insurance market.
Previous senior roles include:
Chief Executive Officer of
Tesco Bank’s Insurance business;
and Chief Insurance Officer for
Tesco Bank.
OB
OB
Peter Bazalgette
2
Senior Independent Director
Appointed
1 September 2022 (resigned 9 April 2025)
Key strengths and experience
Wealth of experience from
the media and wider
creative industries.
Multi-industry knowledge
in broadcasting, television,
advertising, digital media
and venture capital.
Previous roles include:
Chairman of ITV plc; Chairman
of Endemol UK; Chair of the
Arts Council for England;
Non-Executive Director of
YouGov; and Non-Executive
Director of Channel Four.
Other roles
Chair of LoveCrafts Group Limited
(appointed April 2018).
Anand Aithal
Independent Non-Executive Director
Appointed
1 September 2022
Key strengths and experience
Extensive non-executive
experience in fintech, insurance
broking, asset management
and accountancy.
Entrepreneurial perspective,
having co-founded his own data
analytics business.
Previous roles include: Managing
Director at Goldman Sachs and
Lead Non-Executive Board
Member of the Cabinet Office.
Other roles
3
Non-Executive Director of
Persimmon plc (appointed January
2025); Non-Executive Director
of Nationwide Building Society
(appointed September 2024);
Trustee of the Institute
for Government (appointed
September 2024); Non-Executive
Director and member of Audit
and Risk Committee of Polar
Capital Holdings plc (appointed
January 2022); and Non-Executive
Appointee to Council Board
of Association of Chartered
Certified Accountants
(appointed December 2019).
N
R
IE
A
N
IE
1
Steve Kingshott resigned from the Board with effect from 9 April 2025
2
Peter Bazalgette resigned from the Board with effect from 9 April 2025
3
The Board approved Anand Aithal’s new roles at Persimmon plc, Nationwide Building Society and the Institute for Government, concluding that these were appropriate and
that he had sufficient time to undertake the roles
Saga plc
Annual Report and Accounts 2025
60
Gemma Godfrey
Independent Non-Executive Director,
Environmental, Social and Governance Champion
and Chair of Saga Personal Finance Limited
Appointed
1 September 2022
Key strengths and experience
Founder of two successful
digital businesses.
Specialist in digital
transformation, innovation
and de-risking the delivery
of new services.
Previous roles include:
Boardroom adviser on the
Apprentice USA; Non-Executive
Director of VivoPower
International plc; Non-Executive
Director of Forester Life Limited;
and Non-Executive Director of
Eight Capital Partners plc.
Other roles
4
Chair and Non-Executive Director
of Scottish Widows Schroder
Wealth (ACD) Limited
(appointed August 2024);
Non-Executive Director and
member of Nomination and
Remuneration Committee of
Kingswood Holdings Limited
(appointed October 2022);
Non-Executive Director and Chair
of the Management Liaison Forum
of Oberon Investments Group plc
(appointed September 2021);
and business and money expert
on ITV and Sky News.
Gareth Hoskin
7
Independent Non-Executive Director,
Speak Up Champion and Chair of Acromas
Insurance Company Limited
Appointed
11 March 2019
Key strengths and experience
Over 21 years of experience in
insurance, in a variety of roles.
Chartered Accountant, with
recent and relevant financial
experience and competence
in accounting (Institute of
Chartered Accountants in
England and Wales).
Previous roles include: main
Board Director and Chief
Executive Officer International,
and finance, retail marketing
and HR roles in Legal & General;
accountant at PwC; Vice Chair
and Senior Independent Director
at Leeds Building Society; and
Trustee, Non-Executive Director
and Chair of the Audit and Risk
Committee at Diabetes UK.
Other roles
8
Senior Independent Non-Executive
Director and member of the
Group Audit, Group Risk,
Group Remuneration, People, and
Group Nomination and Governance
Committees of OSB Group plc
(appointed March 2025).
Julie Hopes
5
Independent Non-Executive Director,
People Champion and Chair of Saga Services Limited
Appointed
1 October 2018
Key strengths and experience
Associate with the Chartered
Institute of Bankers.
Wealth of insurance experience,
coupled with over 31 years in
a variety of roles, specialising
in general insurance and
predominantly in personal lines.
Highly customer-focussed,
with a breadth of functional,
membership and affinity
experience, alongside a track
record of driving growth.
Previous roles include:
Chair of Police Mutual and
its Remuneration Committee;
Non-Executive Director and
Chair of the Risk Committee
of Co-operative Insurance;
a variety of roles at RSA and
Tesco Bank; and Chief Executive
Officer of The Conservation
Volunteers, a UK community
volunteering charity.
Other roles
6
Non-Executive Director and
member of the Audit and
Nomination Committees
(appointed October 2024)
and Remuneration Committee
Chair (appointed December 2024)
of Secure Trust Bank plc; and
Deputy Chair and Senior
Independent Director of
West Bromwich Building Society
(appointed April 2016).
Key
Committee Chair
A
Audit Committee
OB
Operating Board
IE
Innovation and Enterprise
Committee
N
Nomination Committee
R
Remuneration Committee
RI
Risk Committee
N
IE
RI
R
A
RI
R
A
IE
RI
N
Board experience
Insurance
Travel
Personal finance
Board experience and corporate governance
Strategy and innovation
Consumer-facing businesses
Brand management
Stakeholder management and culture
Finance and audit
Digital and media
Risk management
Board composition
Non-Executive Chairman
Executive Directors
Non-Executive Directors
Under 1 year
–
1 to 3 years
6
3 to 6 years
1
Over 6 years
2
Board tenure
Under 50
2
50–59
4
60–69
2
70 and over
1
Board age
4
The Board approved Gemma Godfrey’s new role at Scottish Widows Schroder Wealth (ACD) Limited, concluding that it was appropriate and that she had sufficient time
to undertake the role
5
Julie Hopes became a member of the Nomination Committee with effect from 9 April 2025
6
The Board approved Julie Hopes’ new role at Secure Trust bank plc, concluding that it was appropriate and that she had sufficient time to undertake the role
7
Gareth Hoskin was appointed Senior Independent Director and became Chair of the Nomination Committee and a member of the Remuneration Committee with effect
from 9 April 2025
8
The Board approved Gareth Hoskin’s new role at OSB Group plc, concluding that it was appropriate and that he had sufficient time to undertake the role
Saga plc
Annual Report and Accounts 2025
61
Strategic Report
Financial statements
Additional information
Governance
CORPORATE GOVERNANCE STATEMENT
Board activities
FOCUSSED ON POSITIONING
SAGA FOR GROWTH
This year was focussed on delivering the right strategic options to create the foundation
for the Group’s long-term success. Board meeting agendas were carefully structured and
included an update by the Chair of each Committee, including any matters for escalation,
and a report from each Operating Board member, updating on progress against each
business’ strategy and our Group initiatives.
During the year, the Board held seven scheduled meetings and five
ad hoc meetings. The additional meetings were necessary due to
the need to regularly discuss the strategic options and direction
of the Group.
The examples of principal decisions taken by the Board during the
year demonstrate how the Board recognises the importance of
considering the needs of, and impact on, all stakeholder groups.
How culture is embedded
Culture is embedded throughout the Company by creating an
inclusive and diverse business using data and targets to drive action
and meaningful change, empowering our colleagues to have a voice
and build connection through colleague surveys and networks and
by developing our external partnerships and employer brand.
Culture framework
The Board regularly reviews a range of information to actively monitor culture. The table below shows the key sources of data the Board tracks,
with a view to take action where adjustments or remedial action are needed. During the year, the Board was satisfied that the culture was aligned
with the Company’s purpose, values and strategy.
Cultural identifier
Cultural priorities
Promoting
integrity and
openness
Valuing
DEI&B
Being
responsive to
the views of
stakeholders
Culture aligned
to purpose,
values and
strategy
Colleague surveys
People Champion Non-Executive Director
attendance at People Committee
Speak Up reports
Progress on diversity, equity, inclusion
and belonging (
DEI&B
)
Environmental targets
Health and safety performance
Internal audit reports and findings
How the Board monitors culture
As always, there was a need to ensure that the consequences of
decisions would promote the long-term success of the Company,
as well as maintain Saga’s reputation for high standards of
business conduct.
Find out more in:
Engaging with stakeholders on pages 22-23
Section 172(1) statement on page 55
Financial
wellbeing
Health and
wellbeing
Family
support
Community
Inclusion
Personal
development
“2024/25 has been a busy year for our Board
and we made a number of very significant
decisions that led to the Group being able
to lay the foundations for future growth and
provide support for our strategy to move
towards a more capital-light model, reduce
debt and generate long-term sustainable
value for our stakeholders.”
Sir Roger De Haan
Non-Executive Chairman
Saga plc
Annual Report and Accounts 2025
62
1
Since the year end, the strategic pillars evolved, reflecting the strategic progress made over the past 12 months and our focus on driving long-term sustainable growth.
The strategic pillars that applied during the 2024/25 financial year were set out in the 2024 Annual Report and Accounts. These were: maximising our core businesses;
reducing debt through capital-light growth; and growing our customer base and deepening our customer relationships
Reached an agreement with Ageas for a 20-year partnership for motor and home insurance.
Agreed the sale of our Insurance Underwriting business, AICL, subject to regulatory approval and certain conditions being met.
Key Board decision
How the Board reached
its decision and considered
matters set out in
Section 172(1) (
S172(1)
)
of the Companies Act 2006
(the
Act
)
Significant time spent discussing the future of the Insurance business within the Group.
Considered how to drive long-term sustainable growth, while continuing to reduce the level of debt.
Focussed discussion on how to provide best-in-class insurance services to our customers.
Expert independent advice, guidance and analysis sought from world-leading financial advisory and asset
management firm.
Evaluated the strategic fit of the partnership arrangement and sale of AICL with the alignment to our
growth plan and strategic pillars.
Established a working group of Executive and Non-Executive Directors to oversee the successful delivery
of the partnership arrangement and sale agreement, ensuring that all stakeholders were considered
throughout discussions and negotiations.
Stakeholder management
The Board discussed how to continue to deliver exceptional experiences to our
customers
,
while also
creating value for its
shareholders
.
The impact on
colleagues
and
customers
was considered when discussing options, particularly when the
decision was made to sell AICL, and the potential impact that could have.
Regulators
were kept up to date throughout negotiations and updated on how Saga would still continue
to deliver good outcomes for our
customers
.
The
Pension Trustees
were consulted to ensure a fair and transparent outcome for those in the pension
scheme.
Challenges faced
Challenging trading conditions in Insurance Broking as a result of greater market competition. Actions
were taken to slow the decline in policy sales by investing in price, but the effectiveness of this action was
hindered by inflationary pressures. These significant challenges highlighted the importance of reaching an
agreement for the partnership and sale to ensure the viability and value of the Insurance Broking business
to the Group, and ultimately all stakeholders, in future years.
Regulatory considerations associated with a partnership arrangement and successful completion of the
sale of AICL.
Retention of colleagues and suppliers throughout the transition of the motor and home business and
completion of sale.
Complex negotiations around how Saga’s data and brand would be protected, while achieving a good
outcome for both Saga and Ageas.
Outcome and impact
of the decision
The Board concluded that the partnership arrangement with Ageas, and the sale of AICL, aligned with the
Group’s strategy and growth plan and that it was ultimately in the best interests of all stakeholders.
The partnership arrangement is expected to drive growth in our motor and home insurance business
through differentiated products, while ensuring continued good customer outcomes, in line with regulatory
expectations.
Both the partnership arrangement and sale are consistent with the Group strategy to move towards
a capital-light business model to support further growth, crystallise value, reduce debt and enhance the
long-term value for shareholders.
Reduced operating expenses and cost base expected, following completion of the transition and sale
of AICL.
Key to our strategic pillars
1
1
Maximising the
growth of our
existing businesses
4
Reducing debt,
while simplifying
our operations
2
Driving incremental growth
through new business lines
and products
3
Growing our customer
base and deepening
those relationships
Considered how to deliver our growth plan by
reducing our debt, while simplifying our operations
1
3
4
Connection to strategic pillars
Saga plc
Annual Report and Accounts 2025
63
Strategic Report
Financial statements
Additional information
Governance
CORPORATE GOVERNANCE STATEMENT
Key Board decision
Board activities continued
How the Board reached its
decision and considered
matters set out in S172(1)
of the Act
Considered how to drive long-term sustainable growth through our existing businesses.
CEOs of each business unit attended Board meetings to discuss current trading, strategy, opportunities
and risks, with business unit update reports reviewed at every meeting.
Discussions held on how to enhance products offered in the Travel
2
businesses in a capital-light way,
while still providing exceptional products and service to our customers, noting the strong customer
demand and transactional net promoter score (
tNPS
).
Stakeholder management
The Board discussed how to continue to deliver exceptional products and service to its
customers
,
while also creating value for its
shareholders
.
The opportunities to develop further
supplier and partnership
relationships, which are key to delivery
of the strategy, including strengthening the products and services Saga offers, were considered.
Challenges faced
Certain factors, such as those geopolitical in nature, requiring us to make certain amendments to travel
itineraries or destinations.
The impact of climate change, such as increasingly severe rain, drought, heat and storm events, causing
disruption in the supply chain, resulting in a reduced customer experience and increased business costs.
In addition, incidents of severe weather can result in disruption to Travel
2
itineraries and the availability
of supplies.
Cost of living pressures experienced in the UK creating the potential for reduced levels of discretionary
spending from our customer group.
Outcome and impact
of the decision
The Board approved the addition of Spirit of the Moselle to the existing River Cruise fleet in July 2025,
following strong customer demand and an increase in tNPS.
Exceptional growth and customer demand experienced, resulting in record levels of occupancy on the
two Ocean Cruise ships.
Leadership consolidated, with the Holidays
2
business now being managed by the Cruise team to ensure
alignment of the customer experience between the businesses, deliver efficiencies and position both
for further growth.
Increased demand experienced for the Saga Money digital newsletter and webinars promoting
financial wellbeing.
Launched the Saga Magazine in selected high street stores throughout the UK.
Options to enhance product offerings and customer experiences in Travel
2
, including an addition to the River Cruise fleet.
Building awareness of our newer Saga Money products and driving growth in customer acquisitions.
Expanding the Saga Magazine customer reach.
Connection to strategic pillars
2
Following the consolidation of leadership across our Cruise and Travel businesses, Travel will now be referred to as ‘Holidays’, with the existing Cruise and Travel umbrella
becoming ‘Travel’
3
Since the year end, the strategic pillars evolved, reflecting the strategic progress made over the past 12 months and our focus on driving long-term sustainable growth.
The strategic pillars that applied during the 2024/25 financial year were set out in the 2024 Annual Report and Accounts. These were: maximising our core businesses;
reducing debt through capital-light growth; and growing our customer base and deepening our customer relationships
1
2
3
Key to our strategic pillars
3
1
Maximising the
growth of our
existing businesses
4
Reducing debt,
while simplifying
our operations
2
Driving incremental growth
through new business lines
and products
3
Growing our customer
base and deepening
those relationships
Considered how to support our existing businesses
in their strategic and customer growth
Saga plc
Annual Report and Accounts 2025
64
Key Board decision
Connection to strategic pillars
1
4
How the Board reached its
decision and considered
matters set out in S172(1)
of the Act
Significant discussion regarding how to reduce debt and increase liquidity ahead of the maturity of our
£250.0m bond and repayment of the loan facility provided by Roger De Haan.
Explored different options for refinancing and the risk and opportunities associated with each.
Expert independent financial and legal advice sought to aid the Board’s decision on refinancing options.
Sale of our Insurance Underwriting business, AICL, and partnership arrangement with Ageas discussed
and agreed, in line with the Group’s aim to reduce debt and simplify our operations.
Management of debt was considered and discussed at every Board meeting as part of the budget and
five-year plan approval process.
Going concern and viability statements considered and discussed in detail.
Stakeholder management
The impact on all stakeholders was considered, including
colleagues
,
customers
,
communities
,
partners
and suppliers
,
shareholders
and
investors
. The
Pension Trustees
were also consulted and kept informed.
Transparent communication with
colleagues
, particularly those who may be impacted by the sale of AICL
or partnership arrangement with Ageas. Their needs are being considered at each step, including through
any future arrangements with Ageas.
Regulators
kept informed of the corporate refinancing, partnership arrangement with Ageas and sale
of AICL and were updated on how Saga would still continue to deliver good outcomes and exceptional
products and service for
customers
.
Challenges faced
Balancing the level of investment required to scale operations with maximising cash generation and
accelerating debt reduction.
Multiple stakeholders to manage, across complex negotiations with multiple workstreams, while continuing
to deliver business as usual.
Refinancing of corporate debt was subject to certain customary conditions.
Commercial property market outlook creating challenges in respect of property sales.
Outcome and impact
of the decision
Going concern and viability statements made.
Significant progress made in reducing our debt.
Repayment of £150.0m senior unsecured bond in May 2024, through a combination of Available Cash
4
and a £75.0m drawdown of the facility provided by Roger De Haan.
Concluded discussions with our Revolving Credit Facility (
RCF
) lenders, agreeing an extension to the
maturity date from 31 May 2025 to 31 March 2026.
Amendment to the RCF leverage covenant test, which was previously calculated excluding Ocean Cruise,
but moved to a Group basis.
Board approved the refinancing of the Group’s corporate debt in full, significantly enhancing the Group’s
liquidity position, increasing covenant headroom and providing funding certainty as we execute our
strategic growth plans.
Following the year end, the new £335.0m term loan was used to repay the £250.0m bond, maturing in
July 2026, alongside the £75.0m drawings under the loan facility provided by Roger De Haan. In addition,
the facility provided by Roger De Haan and the Group’s existing RCF were cancelled.
Management of debt, including the
repayment of our corporate bonds and
loan facility provided by Roger De Haan,
and the corporate refinancing
4
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
Saga plc
Annual Report and Accounts 2025
65
Strategic Report
Financial statements
Additional information
Governance
CORPORATE GOVERNANCE STATEMENT
Board leadership and Company purpose
At 31 January 2025, the Board comprised nine Directors with a broad set of complementary skills, industry expertise and each
bringing a different perspective.
On 28 January 2025, the Board reviewed and approved a document detailing the division of responsibilities and roles of the Chairman,
Group CEO, Senior Independent Director, all Committee Chairs and the Non-Executive Directors nominated ESG Champion, Speak Up
Champion and People Champion. This is available on our corporate website (www.corporate.saga.co.uk/about-us/governance).
Board roles
Member
Role
Max. possible
meetings
Attendance
Roger De Haan
Non-Executive Chairman (leadership, Board governance, setting
the agenda and facilitating open Board discussions, performance
and shareholder engagement).
12
12
Mike Hazell
Group CEO (Group performance and developing strategy for
Board approval).
12
12
Mark Watkins
Group CFO (Group financial performance, including creation of the
budget and five-year plans for recommendation to the Board).
12
12
Steve Kingshott
1
Executive Director (advising on the delivery and implementation
of the 20-year partnership for the motor and home Insurance
Broking business).
12
12
Independent Non-Executive Directors
Role
Max. possible
meetings
Attendance
Peter Bazalgette
1
(Senior Independent Director)
Participate in, assess, challenge and monitor Executive
Directors’ delivery of the strategy (within risk and governance
structures); financial controls and integrity of financial
statements; and Board diversity. Evaluate and appraise the
performance of the Non-Executive Chairman, Executive
Directors and senior management.
12
12
Anand Aithal
12
11
Gemma Godfrey
(ESG Champion)
12
12
Julie Hopes
(People Champion)
12
12
Gareth Hoskin
1
(Speak Up Champion)
12
11
Our Board
A document summarising the matters which are reserved for the
Board was last considered on 28 January 2025. These include
the following:
Strategy and management
Setting the Group’s purpose, values, strategy and standards
and ensuring these align with our culture.
Approving the strategic direction, budgets, forecasts and
objectives, as well as their successful implementation.
Overseeing our operations, including policies relating to
regulatory, financial and operational matters.
Any decision which may have a material impact on the Group.
For example, new business activity, significant expansion,
partnerships or diversification/cessation of existing businesses.
Structure and capital
Approving changes relating to our capital, corporate,
management or control structures; and borrowings and
guarantees, other than in the normal course of business.
Financial items, risk management and internal controls
Approving the interim and preliminary results and annual report
and accounts, alongside material capital or operating expenditure
outside predetermined tolerances or beyond agreed delegated
authorities.
Ensuring maintenance of a sound system of internal controls,
including risk appetite and policies such as the ESG Policy.
Contracts and business transactions
Approving capital projects which are strategically material, are
not in the usual course of business or are outside of normal
financial limits in place.
Conducting post-investment reviews which were not considered
in detail by the Audit or Risk Committees or where the Board
decides a full review is required.
Joint ventures, material arrangements with customers or
suppliers and major investments.
Communication and engagement with stakeholders
Considering the balance of interests between stakeholders,
including shareholders, customers, colleagues and the
communities in which we operate.
Ensuring that independent channels are available for colleagues
to engage and raise any matters of concern.
See pages 22-23 for details of the Board’s role in stakeholder
engagement, which supports Directors’ duties under Section 172(1)
of the Companies Act 2006.
Shareholder engagement
The Board seeks feedback from our shareholders on the Company’s
performance against strategy and actively monitors their views.
Full details of how we engage with our shareholders can be found in
the Strategic Report on page 23. In addition, an Investor Relations
report is tabled at each Board meeting.
We recognise that we have a significant number of retail shareholders,
many of whom are also our customers. We engage with this group
through arranging presentations via the Investor Meet Company
platform, which provides an opportunity for our Group CEO and
Group CFO to answer any questions they may have. Shareholders also
had the opportunity to meet the Directors at the 2024 Annual General
Meeting (
AGM
), held at the offices of Numis Securities Limited.
AGM
The AGM will be held on 24 June 2025 at 11.00am at the offices of
Numis Securities Limited, 45 Gresham Street, London EC2V 7BF.
Full details, and an explanation of business to be considered at the
meeting, will be provided in the Notice of AGM. A copy will be available
on Saga’s corporate website in due course (www.corporate.saga.co.uk).
1
Peter Bazalgette and Steve Kingshott both resigned from the Board with effect from 9 April 2025. These changes to the Board follow the successful Insurance agreement
with Ageas and reflect the Group’s new simplified business model. Gareth Hoskin has assumed the position of Senior Independent Director
Saga plc
Annual Report and Accounts 2025
66
Division of responsibilities
Our governance framework
An annual review of the governance framework was undertaken by the Company to ensure it continued to allow business units to operate
autonomously within a Group framework. The Data Management Committee continues to consider and support our data strategy.
The Audit Committee Chair serves as the Speak Up Champion. The Chair of the Remuneration Committee is the nominated People Champion
and regularly attends the People Committee. A Non-Executive Director is appointed as the ESG Champion and regularly meets with the
ESG and Sustainability Manager, who attends Operating Board and Board meetings to discuss ESG strategy and targets. The ESG Steering
Committee meets regularly and reports to the Operating Board. For more information on the governance put in place to monitor ESG strategy,
see page 40.
Nomination Committee
Purpose:
To review and monitor the
leadership needs of the Board and senior
management and support the Company’s
continued ability to recruit and develop
the level and balance of skills, experience
and knowledge required to ensure its
long-term success.
Audit Committee
Purpose:
To work closely with the
Risk Committee to monitor the integrity
of the financial statements and establish,
maintain and review the effectiveness
of the systems of internal control, and to
monitor the effectiveness, performance
and objectivity of the internal and
external auditors.
Risk Committee
Purpose:
To assist the Board with
articulating and developing its risk
management strategy, establishing and
maintaining an effective risk management
framework and providing oversight of
risk management. It is responsible for and
confirms to the Board that the Group
carried out a robust assessment of the
principal risks facing the Group.
Find out more in our
Risk Committee Report
on pages 75-76
Find out more in our
Audit Committee Report
on pages 71-74
Find out more in our
Nomination Committee Report
on pages 69-70
Remuneration Committee
Purpose:
To determine the policy and
terms and conditions of employment;
remuneration/compensation and benefits
of senior executives, and to review
workforce remuneration and incentive
programmes to ensure alignment with
culture and strategy and determine
share-based arrangements.
People Committee
Purpose:
To support our continuous
listening strategy where all colleagues can
speak up and share the things that matter
to them, enabling our leadership to act
and respond to feedback. This gives the
employees a voice in the boardroom.
Find out more in our
Directors’ Remuneration Report
on pages
77-93
Data Management Committee
Purpose:
To ensure that Saga’s data is actively
managed, controlled and monitored in
accordance with the Group’s data governance
framework, and oversee the associated risks.
ESG Steering Committee
Purpose:
To support and monitor delivery of the
Group’s ESG strategy and targets and to drive
ESG accountability across the business units.
Operating Board
Purpose:
To support the Group CEO in the
performance of duties in relation to the
management and day-to-day running of the Group.
Duties:
Implement the Group’s strategy.
Act as guardians of the brand, customer and
data strategy.
Cultural leadership and people strategy.
ESG strategy and review/monitoring of
targets. Oversee ESG Steering Committee.
Review principal risks and uncertainties
across the Group.
Ensure effective implementation of Group risk
policy and internal controls framework in a
consistent manner across all business areas.
Monitor performance of business units
against targets, objectives and key
performance indicators set by the Board.
Review and discuss talent management and
succession planning throughout the Group.
Review and monitor culture, DEI&B and
colleague engagement metrics.
Manage risk and conduct, review Group risk
and internal audit and assurance plans, and
report potential, or actual, breaches of
regulation or policy to the Board.
Oversee Data Management Committee.
Board
Approve strategic direction and ensure its
successful implementation.
Leadership and management of the Group,
including setting the Group’s purpose, values
and standards and aligning these with culture.
Encourage innovation and consider the views,
interests and needs of key stakeholders,
including colleagues, customers,
communities and shareholders.
Ensure that independent channels are
available for colleagues to engage and raise
matters of concern. This includes discussing
an annual report presented by the
Non-Executive Director who acts as Speak
Up Champion.
Ensure oversight of compliance with
statutory and regulatory obligations.
Ensure a sound system of internal controls
and risk management is maintained.
Assess the potential impact of decisions.
Oversee ESG strategy in all business units
across the Group.
Innovation and Enterprise
Committee
Purpose:
To assist the Board in assessing
whether proposals to expand the range of
products and services offered are aligned
with the Company’s purpose and that the
recommended action plan is in the best
interests of the Group.
Saga plc
Annual Report and Accounts 2025
67
Strategic Report
Financial statements
Additional information
Governance
CORPORATE GOVERNANCE STATEMENT
Composition, succession and evaluation
CORPORATE GOVERNANCE STATEMENT
Evaluation of the Board, Committees and Directors
The Board effectiveness and performance review consisted of all Directors completing a survey, which included questions on strategic
focus over the year, emerging strategy, how well the Board worked together, the financial and business information it received and how
the Board Committees interacted with the Board. The Group Company Secretary, supported by the Non-Executive Chairman,
prepared a report which was then discussed by the Board.
Feedback was also requested on the effectiveness of the Board Committees and the performance of the Non-Executive Chairman.
The Senior Independent Director and the other Non-Executive Directors also appraised the Non-Executive Chairman’s performance
and the Non-Executive Directors had regular meetings with the Non-Executive Chairman at which their performance was discussed.
The members of the Board
The Board considers the composition and size of the Board to be
appropriate, taking into account the independence of character, skills
and integrity of, and different approach taken by, all the Directors.
Our Directors have a broad range of experience in a variety of markets
and sectors, particularly in the areas of insurance, financial services,
cruise and holidays, customer service, digital, brand management,
strategy and asset and risk management, all of which are invaluable
to Saga.
Our Non-Executive Directors met regularly during the year without
Executive Directors present and provided objective, rigorous and
constructive challenge to management.
The Senior Independent Director acts as a sounding board for the
Non-Executive Chairman.
Independent Non-Executive Directors and
Board composition
We continue to comply with the Code recommendation that at least
half of our Board, excluding the Chairman, are Non-Executive
Directors whom the Board considers to be independent.
For the year ended 31 January 2025, the Board considered Anand Aithal,
Peter Bazalgette
1
, Gemma Godfrey, Julie Hopes and Gareth Hoskin to
be independent Non-Executive Directors, free from any business or
other relationships that could materially interfere with the exercise of
their independent judgement or objective challenge of management.
Annual re-election
All Directors are required to stand for annual re-election at the
Company’s AGM. The Board’s view is that each of the Directors
standing for re-election should be re-appointed.
We believe that they have the skills required for the Board to discharge
its responsibilities, as outlined in each of their biographies set out on
pages 60-61.
The details of the specific reasons why each Director’s contribution
continues to be important to the Company’s long-term sustainable
success will be included in our Notice of AGM.
DEI&B
The Group has a DEI&B Policy and, during the year, forums were held
on topics relating to DEI&B, which provided valuable insight around
how colleagues felt relating to matters such as inclusivity, age,
ethnicity and gender. The Board recognises that it is important to
consider the need to have an inclusive approach for all colleagues.
For details of the gender split of our Board and Senior Management,
see page 46.
Find out more in:
Environmental, Social and Governance on page 46
Nomination Committee Report on pages 69-70
Action taken as a result
of the 2023/24 evaluation
Conclusions from 2024/25
evaluation and next steps
Areas of focus for 2025/26
The review concluded that the Board
had demonstrated resilience in challenging
circumstances, was focussed on the right
priorities and had the right skills needed
to steer the Group through the risks and
opportunities ahead.
Actions taken included:
Strategy –
Detailed discussions around
how best to deliver an optimal outcome
for the Group, resulting in a successful
Insurance partnership, sale of AICL and
corporate refinancing.
Brand and data –
Consideration of how
customers’ needs would be met and how
data and insight played a vital role in the
future of the business.
Culture, values and stakeholders –
These were carefully considered at each
stage of the extensive strategic review.
The governance framework was revised
to clarify and strengthen controls and
enhance the relationship between the
Group and its subsidiaries.
Risk management and ESG –
Top risks
and ESG targets were considered
in detail, through ‘deep dives’ at
Board meetings.
Strategic focus.
The governance
framework worked well during the year,
to support the strategic review of the Group
and significant project work. Appropriate
information was provided and sufficient time
was allowed for challenge and debate and
the effective use of subcommittees meant
that detailed analysis could take place in an
agile way, which, in turn, led to focussed
Board decisions.
Board performance.
Respondents felt that
the quality of reporting and papers presented
to the Board had significantly improved and
were now even more strategically focussed.
Financial and business information.
This was
a strong area, with Directors confirming that
the information discussed at Board meetings
was high quality, clear and concise and
pitched at the right level, with good use
of executive summaries.
Interaction with Board Committees.
The review confirmed that the Committees
of the Board had the time and expertise to
interrogate issues sufficiently and escalate
points to the Board as appropriate.
Focus on growth strategy.
Directors
agreed that all Board meetings will continue
to focus on the growth strategy and will
consider brand perception, competitor
analysis, the impact of artificial intelligence
and technological change and all
stakeholder’s needs, while retaining the
principle that customers’ needs will remain
at the heart of every discussion.
Board ways of working.
There will be even
more focus in leveraging Directors’ skillsets
and experience to support executive
management in their drive to grow their
businesses. Papers will become more
forward-looking, concentrating on
strategic and external factors, with clear
outcomes defined.
Reporting.
There will be an increased focus
on tracking delivery of the strategy, including
individual businesses reporting against their
growth strategy and monitoring progress
of the Insurance partnership with Ageas and
sale of AICL.
Governance framework.
The approach
of continuous review and improvement will
continue so that the framework needed to
support the growth strategy is refreshed.
Committee feedback to the Board will
remain an important way of ensuring that
the Board remains focussed on monitoring
the delivery of strategy, while ensuring that
risk management and internal controls
oversight remain at a high standard.
1
Peter Bazalgette resigned from the Board with effect from 9 April 2025
Saga plc
Annual Report and Accounts 2025
68
Nomination Committee Report
The primary focus for the Committee for the year was on
succession planning and talent development, while keeping
in mind the Group’s Diversity, Equity, Inclusion and Belonging
targets, to ensure the Group continued to have the key skills
and abilities to position and deliver long-term growth for Saga.”
Gareth Hoskin
Chair, Nomination Committee
What we did during the year
Time spent on matters
Board composition
Succession planning and
talent development
DEI&B
Board evaluation
c.25%
c.35%
c.35%
c.5%
The Committee’s responsibilities
Review the structure, size and composition of the Board
needed to ensure that the right balance of skills, experience
and knowledge are in place.
Consider how to develop a diverse pipeline in succession
planning and talent development of Executive Directors
and senior executives.
Evaluate the independence, experience, diversity and
knowledge of the Board.
Identify and nominate candidates to fill Board and
Committee vacancies.
Review Board performance evaluation results in relation
to Board composition.
The Committee’s Terms of Reference were reviewed
during the year (approved by the Board on 28 January 2025)
and are available on our corporate website
(www.corporate.saga.co.uk/about-us/governance).
Committee evaluation
An evaluation of the Committee’s effectiveness took place
during the year, as part of the Board effectiveness review
(for details see page 68).
The review indicated that the Committee had been well chaired
and focussed on the key issues and remained forward-looking
and pragmatic, while providing sufficient debate and support.
It was acknowledged that the Committee will play an important
role over the next year as the Group focusses on driving growth.
Members (majority are Independent Non-Executive Directors)
Member
since
Max. possible
meetings
Attendance
Gareth Hoskin
1
(Chair)
31 Dec 2023
3
Peter Bazalgette
1
(Former Chair)
30 Sep 2022
3
Anand Aithal
31 Dec 2023
3
Roger De Haan
5 Oct 2020
3
Gemma Godfrey
31 Dec 2023
3
Committee composition and attendance
Key actions in 2024/25
Considered talent development and succession planning
for executive roles.
Reviewed progress against set targets relating to diversity,
equity, inclusion and belonging (
DEI&B
).
Continued to assess Board composition to ensure that the
skills and experience of Directors support the delivery of
Group strategy.
Priorities for 2025/26
Careful consideration of the skills required for the future
to drive further growth.
Continued focus on succession planning and talent
development to support new ways of working as a result
of the Insurance partnership with wholly owned UK
subsidiaries of Ageas SA/NV (
Ageas
).
Monitoring how management is developing its current and
future leaders and driving greater diverse representation
at more senior levels.
1
Peter Bazalgette resigned from the Board with effect from 9 April 2025. With effect from the same date, Gareth Hoskin became Chair of the Nomination Committee and
Julie Hopes became a member
Saga plc
Annual Report and Accounts 2025
69
Strategic Report
Financial statements
Additional information
Governance
CORPORATE GOVERNANCE STATEMENT
Nomination Committee Report continued
Dear shareholder,
Following Peter Bazalgette’s resignation on 9 April 2025, I assumed
position of the Chair of the Nomination Committee (the
Committee
).
I would like to thank Peter for chairing the Committee so effectively and
for his support as he handed over responsibility to me.
As highlighted last year, the primary focus for the Committee for the
year was on succession planning and talent development, while
keeping in mind the Group’s DEI&B targets, to ensure the Group
continued to have the key skills and abilities to position and deliver
long-term growth for Saga.
The Committee considered the revised UK Corporate Governance
Code (the
Code
), which would apply to the Company from the financial
year ending 31 January 2026, and are confident that the Company’s
processes will be compliant with changes to the Code relating
to composition, succession and evaluation.
The Committee is mindful that, as a result of the significant strategic
progress made during the year, including agreement with Ageas for
a 20-year partnership and the sale of our Insurance Underwriting
business, alongside the successful refinancing of our corporate debt,
there will be a need for careful consideration of the skills required for
the future to drive further growth.
Board composition
There were no changes to Board composition during the year.
Nevertheless, the Committee continued to assess the skills, diversity
and capacity required at both the Board and individual Committee
levels. As reported in last year’s Committee report, the appointments
of Mike Hazell, as Group Chief Executive Officer (
CEO
), and Mark
Watkins, as Group Chief Financial Officer, ensured the Board
continued to have the required skills to maintain and deliver the
Group’s strategy to maximise the growth of our existing businesses;
drive incremental growth through new business lines and products;
grow our customer base while deepening those relationships; and
reducing debt, while simplifying our operations.
The Committee undertook a review of the proposal to re-appoint
Julie Hopes and me as Non-Executive Directors when we were
proposed for re-appointment after serving our second three-year
terms and the Board approved the recommendation to re-appoint us.
I did not participate in the discussion when my re-appointment was
being considered.
Following the year end, it was announced that Steve Kingshott was
standing down from his role as the CEO of Insurance with effect from
12 February 2025, and would assume the role of specialist adviser,
advising on the delivery and implementation of the 20-year
partnership with Ageas for our motor and home Insurance Broking
business, while remaining as an Executive Director for the Company.
Subsequently, both Steve Kingshott and Peter Bazalgette notified the
Board of their intention to step down with effect from 9 April 2025.
These changes to the Board follow the successful Insurance agreement
with Ageas and reflect the Group’s new simplified business model.
The Committee considered the impact of these changes on committee
composition and the Board approved the recommendation that I should
become Senior Independent Director, Chair of the Committee and a
member of the Remuneration Committee and that Julie Hopes should
become a member of the Committee. Neither Peter nor I participated
in the decision regarding my appointment as his successor.
The Committee is pleased to confirm that Committee memberships
remain compliant with the Code and the experience and skills of each
Non-Executive Director are well matched.
Over the coming year, the Committee will keep under review the
executive and non-executive leadership needs of the organisation,
with the aim of ensuring the continued ability of the Company to deliver
the Group strategy.
Succession planning and talent development
During the year, the Committee received an update from the CEO and
the Chief People Officer on how talent management was approached,
with a particular focus on the Operating Board members.
The Committee heard about the detailed performance and
development of each of the Operating Board and what steps were
taken to strengthen their potential and capability.
In addition, the Committee considered the approach to evaluating
performance, talent and succession and the progress made in
creating a diverse and high-quality pipeline.
The Committee is committed to monitoring how management is
developing its current and future leaders and driving greater diverse
representation at more senior levels.
Independence and election of Directors
After the year end, but prior to publication of this Annual Report and
Accounts, the Committee considered the profiles of the Directors,
each Director’s independence, contribution and time commitment
necessary to perform their duties and recommended to the Board
that all should be put forward for re-election at the 2025 Annual
General Meeting.
The Code requires that at least half of the Board, excluding the
Chairman, are considered to be independent Non-Executive
Directors. At 31 January 2025, five of the nine (56%) Board members
were independent Non-Executive Directors, with other members
being the Non-Executive Chairman and three Executive Directors.
DEI&B
The Committee considered the approach to evaluate performance,
talent and succession and the progress made in creating a diverse and
high-quality pipeline.
Committee members received an update on the Company’s DEI&B
strategy, including progress made to date on the Group’s focus on
embracing diversity and further developing an equitable culture,
which promotes inclusion.
The Group continues to lead the conversation on age, with it being
seen as a leader in this area as a result of partnerships with third
parties including the Centre for Ageing Better, the implementation
of policies such as Grandparents’ Leave and our ongoing approach
to hybrid working.
It is recognised that diversity is wider than gender and ethnicity and
encompasses many cultural differences.
The Company has a DEI&B Policy in place, with the aim of raising
awareness of fairness and equality in the workplace and outlining how
everyone is responsible for creating an inclusive environment that
respects the dignity and diversity of all people. This policy applies to
the Group, including the Board, and is linked to Company strategy.
All colleagues must report any breaches, whether actual or perceived,
to their line manager or to the People team. There is also the option to
report on an anonymous basis via the Company’s Speak Up process.
The Group maintained its position from the previous year against
the Board agreed data-driven targets as part of the Company’s
Environmental, Social and Governance strategy. For more
information, see page 46. It is recognised that further progress is
needed against the data-driven targets and the Company remains
committed to achieving them.
The Board has a 22%
2
gender balance of women, and one member
is from an ethnic minority background. The gender balance is 44% on
the Operating Board and senior layers of management below Board
level. Details of the gender balance of those in senior management can
be found on page 46. The Committee recognises that this does not
meet the targets set out in the UK Listing Rules on board diversity
and this is something the Board remains committed to improving in
the coming years. This will be a key focus when reviewing the executive
and non-executive leadership needs of the organisation.
Targets are disclosed on our corporate website (www.corporate.saga.
co.uk/about-us/environmental-social-and-governance). The intention
remains to increase female representation in the Senior Management
Team to 50%, and 40% on the Board, by 2027.
Board evaluation
The Board evaluation focussed on strategic direction over the year,
emerging strategy, how well the Board worked together, the financial
and business information it received and how the Board Committees
interacted with the Board.
All Directors, and the Group Company Secretary, were asked to
complete a questionnaire about the dynamics of the Board and how
well Board meetings supported discussion of the strategy and its
delivery. The evaluation report prepared by the Group Company
Secretary was discussed and this confirmed that the governance
framework worked well and in an agile way during the year, with
effective use of subcommittees to analyse the detail relating to
significant projects, which led to focussed Board discussions.
More details can be found on page 68.
Gareth Hoskin
Chair, Nomination Committee
2
As a result of Peter Bazalgette, Senior Independent Director, and Steve Kingshott, Executive Director, resigning from the Board with effect from 9 April 2025, the gender
balance of women at the date of signing this report was 29%
Saga plc
Annual Report and Accounts 2025
70
Audit Committee Report
The Committee supported the Board to
provide independent challenge and oversight
of the Group’s financial reporting and
internal controls.”
Gareth Hoskin
Chair, Audit Committee
What we did during the year
Time spent on matters
The Committee’s responsibilities
Consider the integrity of the financial statements.
Review the adequacy and effectiveness of the Company’s
internal financial controls and other internal control systems.
Monitor the effectiveness of the Company’s Internal Audit
and Assurance (
IAA
) and Finance functions and the
external auditor.
Review the IAA work plan.
Review the Group’s interim and preliminary financial
statements and accounting policies.
Review and approve key judgements and estimates used
as a basis for preparing the Group’s financial statements.
Approve the remuneration and terms of engagement,
and determine the independence of the external auditor.
Monitor the scope of the annual audit and the extent of
non-audit work undertaken by the external auditor.
Provide recommendations on the fair, balanced and
understandable assessment, going concern basis of
preparation and viability statements.
Ensure that whistleblowing (
Speak Up
) and anti-fraud
systems are in place and monitored.
The Committee’s Terms of Reference were reviewed during
the year (approved by the Board on 28 January 2025)
and are available on our corporate website
(www.corporate.saga.co.uk/about-us/governance).
Committee evaluation
An effectiveness evaluation of the Committee took place during
the year, as part of the Board effectiveness review (for details,
see page 68).
The review concluded that the Committee was well chaired
with an inclusive approach which allowed for healthy debate and
robust challenge. This meant that the Committee achieved its
purpose of providing effective and independent oversight over
financial reporting processes, internal controls and the
external auditor.
Members (all are independent Non-Executive Directors)
Member
since
Max. possible
meetings
Attendance
Gareth Hoskin (Chair)
4 Apr 2019
5
Anand Aithal
17 Nov 2022
5
Julie Hopes
31 Dec 2020
5
The Board is satisfied that Gareth Hoskin has recent and relevant financial experience and competency in accounting, reflected by
his professional qualification as a chartered accountant and relevant experience throughout his career. The Board is also satisfied
that the Committee members possess an appropriate level of independence and offer a depth of financial and commercial
experience across various industries, including the sectors in which the Company operates. The Board of Directors’ biographies
on pages 60-61 contain details of Committee members’ skills and experience.
Committee composition and attendance
Key actions in 2024/25
Oversight of the refinancing the Group’s corporate debt.
Oversight and review of the sale of our Insurance
Underwriting business, and the impacts of entering into
a partnership arrangement with wholly owned UK
subsidiaries of Ageas SA/NV (
Ageas
) on areas of key
accounting judgement.
Review of the Group’s financial control systems.
Review developments within the audit, corporate governance,
reporting and regulatory landscapes that were of relevance
to audit committees, and prioritising assurance work in
readiness for the Corporate Governance Reform (
CGR
).
Priorities for 2025/26
Integration of financial control systems to support and
enhance the control framework.
Continued review and monitoring of the CGR to enhance
and align control environment.
Supporting Ageas partnership arrangements and alignment
of Group controls.
Financial statements
(including key judgements
and estimates)
Internal financial
controls
Internal audit
External audit
c.40%
c.10%
c.20%
c.25%
Speak Up
c.5%
Saga plc
Annual Report and Accounts 2025
71
Strategic Report
Financial statements
Additional information
Governance
CORPORATE GOVERNANCE STATEMENT
Dear shareholder,
The Audit Committee (the
Committee
) supported the Board to
provide independent challenge and oversight of the Group’s financial
reporting and internal controls. The Committee was focussed on
supporting the Group to deliver its strategic priorities, including
entering into a partnership with Ageas for motor and home insurance,
alongside the sale of our Insurance Underwriting business, Acromas
Insurance Company Limited (
AICL
).
Sharp focus was maintained on debt reduction and, in May 2024,
our £150.0m senior unsecured bond was repaid through a
combination of Available Cash
1
resources and a drawdown of £75.0m
on the loan facility provided by Roger De Haan.
Discussions with our existing Revolving Credit Facility lenders were
concluded to amend the facility to extend the maturity date from
31 May 2025 to 31 March 2026, to provide the Group with greater
financial flexibility, and the Group subsequently secured new credit
facilities to successfully refinance our corporate debt in full and
enhance the liquidity position to target long-term sustainable growth.
The Group’s £250.0m 2026 bond was listed on the Irish Stock
Exchange (Euronext Dublin). As a result of the Group securing the
new credit facilities in January 2025, following the year end, this bond
and the £75.0m drawn portion of the £85.0m loan facility provided
by Roger De Haan were repaid.
Our report is structured to present an overview of how we fulfilled
our role during the period, including oversight of the IAA function
and management of the relationship with the external auditor,
KPMG LLP (
KPMG
). We continued to work closely with the Risk
Committee, and more detail on how the risk to our business strategy
was assessed is set out in the Risk Committee Report on pages 75-76.
Reporting
Preliminary and interim results were reviewed and challenged,
together with the application of key accounting policies and areas of
significant judgement and how they were achieved. KPMG provided
reports throughout the year, concentrating on areas identified as
having significant audit risk.
CGR
During the year, the Audit and Risk Committees received updates
from a CGR Steering Committee, which was established as a
management group to address the changes to the UK Corporate
Governance Code in respect of the risks and controls that would
impact the Company and oversee the key workstreams of various
project teams to deliver the new CGR requirements.
The Committee received regular updates and oversight on the phased
implementation of a new cloud-based general ledger system to
replace the Company’s existing system. The project aims to
standardise processes and simplify and improve the controls
environment, replacing existing legacy finance systems.
Significant issues
The Committee exercises its judgement in determining the
accounting matters that are of particular importance to the financial
statements. Any such matters are subject to discussions between
senior management, the Group Chief Financial Officer and KPMG
as part of the audit process.
Liquidity, going concern and viability
The Committee performed a detailed review of the Group’s projected
cash flow, borrowing capacity and the covenants within its borrowing
facilities, based on papers prepared by management. Throughout the
year, the Committee discussed management’s ongoing measures to
reduce central operating costs, while also considering options to
reduce Net Debt
1
and explore alternative liquidity options.
Find out more in:
Note 2.1 of the financial statements on page 111
Viability Statement on page 53
Independent Auditor’s Report to the Members of Saga plc on
pages 98-105
Valuation of insurance contract liabilities
Following the adoption of International Financial Reporting Standard
(
IFRS
) 17 ‘Insurance Contracts’, the valuation of insurance contract
liabilities continued to be based on significant estimates and the
application of an appropriate discount rate to liabilities incurred for
claims. The Committee reviewed and challenged the key judgements
relating to the estimate of the core actuarial best estimate liability,
which is based on historical loss data. It also reviewed the adjustment
to the actuarial best estimate in respect of events not in data and the
distribution of ultimate claim costs around the best estimate,
including, and specifically, ultimate claim costs at the 85% confidence
level which drives the IFRS 17 risk adjustment.
Find out more in:
Note 28 of the financial statements on pages 159-162
Independent Auditor’s Report to the Members of Saga plc
on pages 98-105
Valuation of goodwill
The Committee reviewed the impairment assessments of the
Insurance Broking goodwill balance at 31 July 2024 and 31 January
2025 and considered the assumptions made by management in
relation to the calculation of the discount and terminal growth rates.
The Committee considered the robustness of the underlying cash
flow forecasts in determining the impairment of £138.3m recognised
in July 2024, and in reaching the conclusion that no further
impairment was required at 31 January 2025.
Find out more in:
Note 16 of the financial statements on pages 139-140
Independent Auditor’s Report to the Members of Saga plc
on pages 98-105
Valuation of the parent company’s investment in subsidiaries
The recoverability of the carrying value of the investment in
subsidiaries held on the balance sheet of the Company was evaluated
by the Committee. Cash flow forecasts, discount rates, valuation
methodology and stresses were all considered as part of
management’s analysis used in the calculation to determine that
a release of impairments recorded in previous years of £492.0m
would be recognised at 31 January 2025.
Find out more in:
Note 2 of the Company financial statements on page 181
Independent Auditor’s Report to the Members of Saga plc
on pages 98-105
Valuation of Ocean Cruise ships
The Committee reviewed indicators of impairment for the Group’s
Ocean Cruise ships at 31 July 2024 and 31 January 2025.
Management reviews concluded that there were no new indicators
of impairment at either date. Analysis considered key elements of
the trading outlook, change in the useful economic lives and the
residual values of the assets due to any changes in climate change,
the discount rate and technological obsolescence.
Find out more in Note 17 of the financial statements on
pages 140-141
1
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
Audit Committee Report continued
Saga plc
Annual Report and Accounts 2025
72
Disposal group held for sale
The Committee reviewed the judgement made by management in
determining that the criteria for classification of the AICL disposal
group as held for sale and as a discontinued operation had been met
at 31 January 2025.
The Committee considered the carrying value of the net assets of the
AICL disposal group at 31 January 2025, compared with the expected
fair value of disposal proceeds less costs to sale. An impairment of
£6.9m was identified as a result. Since there are no non-current
assets within the scope of IFRS 5, against which the impairment
identified by management can be allocated, the impairment loss
will be recognised at the time of disposal.
Find out more in Note 38 of the financial statements
on pages 171-175
Carrying value of other material assets
Other items of the Group’s property, including plant and equipment,
held for sale properties, River Cruise ships and software intangibles
were reviewed by the Committee for indicators of impairment.
Analysis considered key elements of the trading outlook, change in
the useful economic lives and the residual values of the assets due
to changes in the business model and technological obsolescence.
Impairments of £28.1m were recognised in the year in respect of
software assets, reflecting changes to the future business model for
our motor and home insurance products, following announcement
of the Ageas partnership.
The Committee considered whether any buildings recognised as held
for sale at the balance sheet date still met the IFRS 5 ‘Non-current
Assets Held for Sale and Discontinued Operations’ criteria. Our
Enbrook Park office was reclassified to property, plant and equipment,
following a review of the strategy for this property and the planned
re-opening of the office as a colleague hub in 2025. The Committee
also challenged the basis of any updated valuations for those
properties remaining classified as held for sale.
Find out more in Notes 15, 17, 18 and 38 of the financial
statements on pages 138, 140-142 and 171-175
Defined benefit pension scheme
The Group continued to make payments of £5.8m (2024: £5.8m)
to the defined benefit pension scheme as part of the deficit recovery
plan agreed under the latest triennial valuation of the scheme at
31 January 2023. The 31 January 2023 triennial valuation was
completed during the year and revised contribution amounts were
agreed as part of the deficit recovery plan for the defined benefit
pension scheme.
The Committee reviewed the assumptions made by the Group’s
pension scheme advisers in calculating the valuation of the scheme
in accordance with International Accounting Standard 19 ‘Employee
Benefits’ at 31 July 2024 and 31 January 2025.
Find out more in Note 27 of the financial statements
on pages 155-158
Restructuring provision
The Committee reviewed the judgements and estimates made by
management in recognising a provision of £16.5m at 31 January 2025
in relation to direct costs associated with the restructuring
programme for the Group’s Insurance Broking operations.
Find out more in Note 31 of the financial statements
on page 166
Internal control observations of the external auditor
As part of the audit, the Committee considered internal control
observations identified by KPMG, and management attended
Committee meetings to provide context and assurance regarding
appropriate actions.
Accounting policies
The Committee received reports from management in relation to
significant accounting policies and was satisfied that suitable key
accounting policies had been adopted, and judgements were
appropriate and provided a true and fair view of the Company’s
financial performance and position.
Fair, balanced and understandable
A key governance requirement is for the Board to ensure that the
Annual Report and Accounts and financial statements, taken as a
whole, is fair, balanced and understandable, and provides the
information necessary for shareholders to assess the Group’s
position, performance, business model and strategy. The Committee
advised the Board that it supported the statement made on page 57.
This was following consideration of whether:
the report was clear and presented a balanced view of successes,
challenges, opportunities and risks;
key messages were prominent and key performance indicators
(
KPIs
) were disclosed at an appropriate level;
the segmental information provided in Note 3 of the financial
statements was consistent with, and reconciled to Alternative
Performance Measures and other information disclosed in the
Strategic Report; and
Alternative Performance Measures were reconciled with the
closest IFRS measure in the financial statements, and the
definitions provided were explained.
Going concern and viability
The going concern basis of preparation disclosure note is set out on
page 111, and the Viability Statement, and the methodology for
assessing the Group’s ongoing viability, is set out on page 53.
The current position of the Group, the principal risks and
uncertainties (as reviewed and refreshed by the Risk Committee
and detailed on pages 49-52) and the methodology used to assess
the ongoing viability over the five-year period were reviewed by the
Committee. A base case and severe but plausible scenario were used
to perform the going concern assessment and the Committee
reviewed the key assumptions in each scenario modelled.
Audit and control
Internal controls
The Committee reviewed the outcome of the audits of key financial
controls. The Group Financial Controller provided an update on
accounting issues and the key aspects of financial controls at each
meeting. The Committee received updates on regulatory
developments and the progress made with the Group’s preparatory
material controls work in readiness for the new CGR requirements.
The Committee also received regular updates from management on
the progress of plans to replace the Group’s core general ledger
accounting system. The impact and acceptable level of risk for this
project was also considered by the Risk Committee.
Find out more in our Risk Committee Report on pages 75-76
Financial crime and Speak Up reporting
Policies covering financial crime (including anti-bribery, anti-corruption,
anti-fraud, anti-money laundering and treasury sanctions, and asset
freezing) were reviewed internally during the year and the Committee
noted that a further review was underway to incorporate the scope
of the Economic Crime and Corporate Transparency Act 2023 as part
of the CGR preparatory work. Speak Up Policy and processes were
reviewed against best practice to ensure continued integrity and
effectiveness, and to encourage colleague engagement. Following
an independent review by management, this year we introduced a
third-party independent reporting route to further enhance the
existing processes.
The Speak Up Policy was recommended for Board approval by the
Committee, which was granted in April 2024. It is my responsibility
to ensure the integrity, independence and effectiveness of the
Company’s Speak Up Policy and procedures. The Committee
reviewed all reported cases and concluded that these had been
handled in accordance with the policy or, where applicable, exceptions
noted accordingly.
Saga plc
Annual Report and Accounts 2025
73
Strategic Report
Financial statements
Additional information
Governance
CORPORATE GOVERNANCE STATEMENT
IAA
The IAA work plan was approved and internal audits conducted
throughout the year were considered. The audit plan was refreshed
on a quarterly basis to maintain alignment with strategic objectives,
and progress was appropriately reported by the IAA Director with
amendments to the audit plan being considered and approved by
the Committee. The Committee was satisfied that the IAA function,
when combined with the use of external resource for specialised
audits, was appropriately resourced. The IAA Director attended
Committee meetings and provided regular reports on the progress
of the IAA plan. Three private meetings were also held with the
IAA Director throughout the year.
The Committee monitored whether the IAA function was able to
exercise independent judgement from management throughout the
year and was satisfied that this was the case.
The Committee was updated that the Chartered Institute of Internal
Auditors (
CIIA
) had released revised Global Internal Audit Standards
that were designed to support the continued evolution of the
profession and help organisations address today’s complex risk
landscape. An assessment against the new standard was carried out
and processes and controls updated accordingly.
A quality assurance and improvement programme, as required by
the CIIA, was considered. The Committee concluded that the Internal
Audit function complied with the CIIA’s definition of internal auditing,
the core principles of the Professional Practice of Internal Auditing
and the Code of Ethics.
The Committee, in cooperation with the Risk Committee,
monitored the work of the Risk, Compliance and IAA functions to
ensure that their activities complemented each other appropriately.
The KPIs reviewed included the timeliness of issuing reports and
completing issues assurance. We approved the Internal Audit
Charter and mandate, which is available on our corporate website
(www.corporate.saga.co.uk/about-us/governance).
Work conducted over the year was risk-based and covered both
financial and non-financial controls. A selection is shown below:
Key financial controls (plc and Saga Travel Group Limited).
Pricing (AICL).
Consumer Duty (Saga Services Limited (
SSL
) and Saga Personal
Finance Limited (
SPF
)).
Design and operational effectiveness assessment of the internal
risk and control environment.
Where improvements were identified, an action plan was agreed with
management and appropriately tracked.
Internal Audit also presented their annual year-end review of the
effectiveness of the risk management and controls framework.
They found it reasonable for the Committee to conclude that, while
areas for improvement were identified, the internal risk and control
environment is broadly effective.
Find out more in:
Risk management on pages 47-48
Risk Committee Report on pages 75-76
Subsidiary audit committees
The Non-Executive Directors of the Company chair the SSL, SPF and
AICL audit, risk and compliance committees; and the Non-Executive
Director of Saga Cruises Limited who chairs the Risk and Assurance
Committee, ensures that there is an adequate level of oversight and
that matters are escalated to the Committee as appropriate.
External audit
KPMG was appointed as the Company’s external auditor for the
financial year ended 31 January 2018 (following a competitive tender
process in 2016/17) and has been re-appointed annually since then.
Timothy Butchart has been the audit partner from the start of the
2022/23 audit. In accordance with the FRC’s audit committees and
external audit: minimum standard, and the Company’s Independent
Auditor Policy, the Company proposes to complete a competitive
re-tender process in 2026 in respect of the 2027/28 audit.
Audit planning
KPMG presented an audit plan for the financial year, together with an
outline of its risk assessments, materiality thresholds and planned
approach. The key aspects of the plan are set out in the Independent
Auditor’s Report to the Members of Saga plc on pages 98-105.
The Committee considered the audit scope, materiality and coverage,
areas of audit focus and KPMG’s planned response to identified
significant audit risks, taking size, complexity and susceptibility to
fraud and error into account. The Committee also considered, and
approved, KPMG’s engagement terms and fee proposal for 2024/25.
Auditor independence and non-audit fees
During the year, the Committee met once with the external auditor
without members of management being present. The Committee
continually monitored and challenged the independence and
objectivity of KPMG and independence was confirmed by the auditor
throughout the year in letters addressed to the Committee.
In accordance with the Revised Ethical Standard issued by the FRC in
2024, the Committee has a robust Auditor Independence Policy on
non-audit fees and employment of former employees of the external
auditor. The policy contains a list of non-audit services, which the
Committee is satisfied can be carried out by the external auditor
without affecting its independence as external auditor. There are clear
approval levels where the Committee Chair, or the whole Committee,
is required to authorise assignments. The Auditor Independence
Policy was reviewed on 30 September 2024. The audit fees payable
to KPMG in respect of the year ended 31 January 2025 were £2.2m
(2024: £2.2m) and non-audit service fees incurred were £0.5m
(2024: £0.3m). This equates to a non-audit to audit fee ratio of 0.2
(2024: 0.1). A summary of fees paid to the external auditor is set out
in Note 5 to the consolidated financial statements on page 131.
Audit quality and effectiveness of external auditor
The following were considered when assessing the effectiveness
of KPMG:
Our perception of KPMG’s understanding and insight into the
Group’s business model.
How key areas of judgement were approached by KPMG, the
extent of challenge and the quality of reporting.
The content of, and management’s responsiveness to, KPMG’s
management letter.
Feedback from management, following completion of an evaluation
survey on the audit process (including audit scope, audit
communication, independence and objectivity).
The evaluation concluded that the external auditor had run the audit
process well, retained a high level of independence and had thoroughly,
and fairly, challenged the key accounting judgements and estimates.
The conclusion was that the audit was judged to be good quality.
The Committee is satisfied that the audit continues to be effective
and provides independent and objective challenge to management.
A recommendation was made to the Board for the re-appointment
of KPMG as the Company’s auditor at the forthcoming Annual
General Meeting.
Gareth Hoskin
Chair, Audit Committee
Audit Committee Report continued
Saga plc
Annual Report and Accounts 2025
74
Risk Committee Report
The Committee continued to provide independent challenge
and oversight to assess the top risks facing the business,
the design and effectiveness of critical controls, together
with monitoring risk maturity and supporting the business
in responding to the challenges it faced.”
Julie Hopes
Chair, Risk Committee
What we did during the year
Time spent on matters
The Committee’s responsibilities
Review and advise the Board on the Group’s overall risk
appetite, tolerance, strategy and risk assessment processes.
Oversee and advise the Board on current risk exposure and
future risk strategy.
Monitor the effectiveness of the Group’s risk management
and internal control systems and conduct risk management
procedures.
Monitor principal risks and uncertainties (
PRUs
).
Consider the Group’s capability to identify, and manage,
new and emerging risk.
Provide qualitative and quantitative advice to the
Remuneration Committee on risk weightings.
Review material breaches of risk limits and adequacy
of action.
The Committee’s Terms of Reference were reviewed
during the year (approved by the Board on 28 January 2025)
and are available on our corporate website
(www.corporate.saga.co.uk/about-us/governance).
Committee evaluation
An evaluation of the Committee’s effectiveness took place
during the year, as part of the Board effectiveness review
(for details, see page 68).
The review indicated that there was the right balance of
maintaining strategic oversight, while understanding the detail
associated with the principal risks to the business. It was felt that
the key issues facing the Group were robustly discussed and
that the meetings were chaired effectively, with an appropriate
level of challenge. It was acknowledged that the Committee
will become more forward-looking as risk maturity continues
to improve.
Members (all are independent Non-Executive Directors)
Member
since
Max. possible
meetings
Attendance
Julie Hopes (Chair)
4 Apr 2019
5
Gemma Godfrey
17 Nov 2022
5
Gareth Hoskin
31 Dec 2020
5
Committee composition and attendance
Key actions in 2024/25
Oversight of PRUs focussing on the liquidity/debt refinancing,
cyber, Environmental, Social and Governance (
ESG
) and
data risks.
Reviewed updates on Information Security and projects
to improve business critical Information Technology (
IT
)
systems, with focus on replacement of the general ledger
accounting system.
Priorities for 2025/26
Establishing how the Committee can support the Board
in forming a common view of the key risks to the business,
agree appropriate risk appetites and support Executive
Directors and management accordingly.
Continued review and monitoring of Corporate Governance
Reform (
CGR
) that is relevant to the Committee ahead
of implementation.
The general ledger accounting system change, as the
project moves towards completion.
Management and
reporting
Risk strategy, policy
and appetites
Compliance
Data risk control
c.40%
c.15%
c.15%
c.30%
Saga plc
Annual Report and Accounts 2025
75
Strategic Report
Financial statements
Additional information
Governance
CORPORATE GOVERNANCE STATEMENT
Dear shareholder,
During the year, the Risk Committee (the
Committee
) continued to
provide independent challenge and oversight to assess the top risks
facing the business, the design and effectiveness of critical controls,
together with monitoring risk maturity and supporting the business
in responding to the challenges it faced. Effective risk management
protects our assets, reputation and brand and supports delivery of
our strategy.
We remained focussed on oversight of the continual enhancement of
the Group’s cyber and security controls, in line with the ever-changing
external threat environment, and significant progress was made to
bring the cyber PRU back within appetite. Work to improve the
Group’s liquidity was ongoing throughout the year, concluding with
an extension of the maturity dates on our existing Revolving Credit
Facility, and a new facility provided by certain funds, entities (or
affiliates or subsidiaries of such funds or entities) and/or accounts
managed, advised or controlled by HPS Investment Partners, LLC
or its subsidiaries (
HPS Funds
) to refinance our corporate debt in full,
mitigating our liquidity PRU exposure.
Management and reporting
The Committee considered the rationale behind the selection of
the Group’s PRUs. The PRUs were reviewed at each meeting and
refreshed regularly during the year, ensuring that new and emerging
risks and opportunities were captured and remained at the forefront
of the Group’s strategic planning.
The Committee considered the impact of the sale of Acromas
Insurance Company Limited, the partnership with Ageas SA/NV
and the refinancing agreed with HPS Funds. This formed part of the
strategic mitigating action towards the liquidity risk/debt refinancing
and the capability and capacity PRUs identified.
Find out more in principal risks and uncertainties on
pages 49-52
The Committee received updates throughout the year from the
CGR Steering Committee, which was established during the year as
a management group to address changes to the UK Corporate Code
(the
Code
).
Risk management, compliance and internal controls
In collaboration with the Audit Committee, the effectiveness of the
Group risk management framework and internal control systems
was discussed and all material financial, operational and compliance
controls were considered. The Committee concluded that the internal
risk and control environment was broadly effective, with appropriate
controls to mitigate key risks. The Group will continue to take action
to enhance the customer experience, strengthen risk management
processes and embed management actions and risk maturity across
its businesses.
We recommended to the Board that the appropriate statements
could be made, confirming that a robust assessment of emerging and
principal risks facing the Group, and a review of the effectiveness of
the risk management process, had been carried out (see pages 47-48).
Risk strategy, policy and appetite
Changes and additions to the PRUs were reviewed and challenged,
in line with the agreed strategy and business model, and the results
of this review are shown in the Strategic Report on pages 49-52.
These formed the basis of the scenario testing used to produce the
Viability Statement (see page 53).
Our risk management processes are described on pages 47-48.
These are designed to manage, rather than eliminate, the risk of
failure to achieve business objectives and can only provide reasonable,
and not absolute, assurance against material misstatement or loss.
Find out more in risk management on pages 47-48
We reviewed the Group risk appetites and framework during the year.
We continue to benchmark progress in risk maturity against the
principles set by industry best practice.
The Risk Policy was considered and it was determined that no material
changes were required. The Risk Policy continued to facilitate clear
direction and remained effective in helping the Company address
risk appetite.
Liquidity risk/debt refinancing
The Committee reviewed how management addressed the risk
associated with its funding, including those associated with repaying
or refinancing this funding at maturity. The Committee supported
management proposals to progress its refinancing options, which
were successfully completed.
Cyber risk
The Chief Information Officer was responsible for mitigating the risk
associated with the increased threat from cyber attacks. The
Committee was informed that the Company had taken mitigating
actions, including an ongoing vulnerability management programme,
that contained industry benchmarking and external penetration
testing, a broad range of systems and tools to actively detect and
respond to cyber threats, and a strategy to further reduce the
Company’s footprint of potential system targets.
Capability and capacity
The Committee monitored the capability and capacity risk arising
from the significant strategic objectives that the Company was
committed to delivering and the substantial resource required to do
this. The Committee supported management’s plan to mitigate the
risk, which included retention of key colleagues and a review and
optimisation of the Company’s operating model, ensuring it supported
the delivery.
General ledger accounting system change
The replacement of the general ledger system aims to standardise
processes, simplify and improve the control environment through
replacing existing legacy finance systems. The Committee continued
to discuss the risks associated with the proposed replacement of the
general ledger accounting system and it remains a challenge due to
pressures from competing strategic priorities within the Company.
The Committee continued to have oversight of the project risk,
receiving regular updates from management and the business unit
risk and audit committees. To reduce the impact to other strategic
priorities and risk, the Committee supported an extension to the
project delivery plan.
ESG
The Committee was aware that the Company was actively delivering
against the ESG strategy, with robust governance controls for
ESG implemented.
Julie Hopes
Chair, Risk Committee
Risk Committee Report continued
Saga plc
Annual Report and Accounts 2025
76
The Committee’s aim is to ensure that our
approach to rewarding colleagues at all
levels is aligned to our business strategy,
which places customer service and
colleague engagement at its core.”
Julie Hopes
Chair, Remuneration Committee
What we did during the year
Time spent on matters
The Committee’s responsibilities
Set and monitor the Remuneration Policy (the
Policy
) for
senior executives, considering the relevant legal and
regulatory requirements and all relevant factors to ensure
alignment with delivery of value over the long term.
Determine and monitor remuneration packages for
Executive Directors, the Chairman and senior management.
Review workforce remuneration and incentive programmes
to encourage desirable culture, behaviour and responsible
risk taking.
Determine all aspects of share-based incentive
arrangements.
Review and administer colleague share schemes.
Set key performance indicators (
KPIs
) for the Annual Bonus
Plan and long-term incentives.
Prepare a Directors’ Remuneration Report annually.
The Remuneration Committee’s Terms of Reference were
reviewed during the year (approved by the Board on
28 January 2025) and are available on our corporate website
(www.corporate.saga.co.uk/about-us/governance).
Committee evaluation
An evaluation of the Committee’s effectiveness took place
during the year, as part of the Board effectiveness review
(for details, see page 68).
The review indicated that the Committee was well run, with
discussion focussed on the right topics and the impact of
decisions on all stakeholders was considered throughout,
leading to fair outcomes. The proposed options for the Policy
were scrutinised to ensure that the Policy had the right balance
of performance and retention. Respondents felt that there was
robust discussion around performance targets, measures and
benchmarking and that the Committee was kept informed of
the views of the wider workforce via the People Committee.
Members (all are independent Non-Executive Directors)
Member
since
Max. possible
meetings
Attendance
Julie Hopes (Chair)
4 Apr 2019
5
Peter Bazalgette
1
17 Nov 2022
5
Gemma Godfrey
17 Nov 2022
5
Committee composition and attendance
Key actions in 2024/25
Approved salary increases as part of the annual salary
review, and levels of bonus awards.
Approved targets for our annual bonus scheme.
Made grants under the Restricted Share Plan (
RSP
) and
recommended a Free Share award for all colleagues.
Reviewed the Policy and began engaging with shareholders.
Priorities for 2025/26
Complete Policy review, ensuring alignment with the
Company’s strategic direction.
Continue to set and monitor remuneration, ensuring this
evolves and supports our strategy.
Continue to ensure that Executive Director and senior
management remuneration is aligned with the wider
workforce.
The Policy
Regulatory
developments
Senior management
remuneration
Share schemes
c.35%
c.10%
c.25%
c.15%
Colleague
compensation and
benefits structure
c.15%
Annual Statement
DIRECTORS’ REMUNERATION REPORT
1
Peter Bazalgette resigned from the Board with effect from 9 April 2025. Gareth Hoskin became a member of the Committee with effect from the same date
Saga plc
Annual Report and Accounts 2025
77
Strategic Report
Financial statements
Additional information
Governance
DIRECTORS’ REMUNERATION REPORT
Annual Statement continued
Dear shareholder,
I am pleased to present to you the Directors’ Remuneration Report
for the year ended 31 January 2025 which has been approved by
both the Remuneration Committee (the
Committee
) and the Board.
Business context
This year posed challenges to the business, given continued market
and economic uncertainty alongside changes in the Government.
Despite this, Saga delivered a strong underlying financial performance,
reflecting growth in both revenue and Underlying Profit Before Tax
1
,
driven by the exceptional performance of our Cruise and Holidays
businesses. Net Debt
1
continued to reduce year on year.
This demonstrates the progress that has been made under our new
Executive Leadership Team.
Ocean and River Cruise continue to go from strength to strength,
increasing occupancy and securing strong forward bookings going
into 2025/26. We expect to continue the growth of our River Cruise
business through the introduction of our new ship, Spirit of the
Moselle, joining our fleet in July 2025. Growth also extends into our
Holidays business, with higher booked revenue than the prior year,
alongside an increase in the number of passengers.
Turning to our Insurance businesses, Saga is currently undertaking
a series of strategic shifts, including the sale of our Insurance
Underwriting business, Acromas Insurance Company Limited (
AICL
),
and the transfer of our motor and home Insurance Broking operations
to wholly owned UK subsidiaries of Ageas SA/NV (
Ageas
). The
execution of these, and other strategic priorities, will remain the focus
in the near term. A number of colleagues in these business areas will
also transfer upon successful completion of these transitions.
In the financial year, we successfully refinanced our corporate debt
in full. As planned in May 2024 the Group repaid the £150.0m senior
unsecured bond drawing down £75.0m of the £85.0m loan facility
provided by Roger De Haan.
In summary, our Leadership Team made significant progress in the
early stages of implementing our growth plans, despite continuing to
operate in a challenging and complex environment. I am pleased to
report the progress made, and we remain focussed on expanding our
customer base and advancing the business going forward.
Company performance for the 2024/25 financial year
The implementation of our strategy (as outlined on pages 8-13) was
measured against the KPIs set out below:
Total Underlying Profit Before Tax
1
increased £9.6m to £47.8m.
Net Debt
1
, at 31 January 2025, was £590.5m, £46.7m lower than
31 January 2024.
Customer consent capture of 37% across the Group, higher than
the target set of 30%. This is a revised approach to capturing
marketing consent and, as such, there are no historical
comparisons available.
Customer transactional net promoter score of 59, flat when
compared with the prior year.
Colleague engagement increased across Saga, with our most
recent survey scoring 7.9 out of 10, an improvement of 1.3 from
January 2024.
Changes to the Board
There were no changes to the Board during the year.
Peter Bazalgette, Senior Independent Director, and Steve Kingshott,
Executive Director, both resigned from the Board with effect from
9 April 2025. These changes to the Board follow the successful
Insurance agreement with Ageas and reflect the Group’s new simplified
business model. Full details of leaving arrangements will be disclosed
in next year’s Directors’ Remuneration Report.
Remuneration outcomes in FY24/25
Salary increases for 2024/25
During 2024/25, Executive Directors did not receive an increase in
salary. The average increase awarded to the broader colleague group
was 4.0%.
2024/25 bonus
The assessment of annual performance for the Executive Directors is
70% based on business performance against a scorecard of financial
targets, with the remaining 30% based on their achievement of
personal objectives, which are central to delivery of the strategy and
operating model. The specific targets set are shown on pages 83-85,
together with the degree of achievement of each.
The Committee’s assessment of performance against the financial
targets resulted in a final outcome of 57.4% out of the maximum 70%
for the Group Chief Executive Officer (
CEO
) and Group Chief Financial
Officer (
CFO
), and 45.9% out of the maximum 70% for the Executive
Director (previously CEO of Insurance). The Committee considered
this outcome, in light of overall business performance and the
stakeholder experience during the year. The Committee determined
that the outcome was a fair reflection of both the financial performance
and the strategic progress made during the year. The Committee
noted a number of key achievements including securing the Ageas
partnership, improved profitability of the Holidays business and
delivering results ahead of expectations.
The Committee reviewed each Executive Director’s individual
performance during the year against a number of bespoke objectives,
and determined that the outcomes for Mike Hazell, Mark Watkins
and Steve Kingshott, would be 27.5%, 27.5% and 27.7% out of the
maximum 30.0% respectively. Further details of each Executive
Director’s individual contribution to the business can be found on
pages 84-85.
Page 83 sets out the calculation for the 2024/25 bonus, which paid out
at 84.9%, 84.9% and 73.6% of maximum for the Group CEO, CFO and
Executive Director (previously CEO of Insurance) respectively.
Mike Hazell will receive a bonus of £764,295, Mark Watkins will
receive a bonus of £398,070 and Steve Kingshott will receive a bonus
of £379,143.
In line with our approved Policy, all bonus awards are paid one-third
in deferred shares and two-thirds in cash.
2021 RSP vesting
RSP awards were made in 2021 to the former Group CEO and CFO
at 100% of salary and 85% of salary respectively.
On vesting, the Committee carried out an assessment of the RSP
to determine whether the underpin test had been met and whether
the awards would result in a windfall gain on vesting. The Committee
concluded that the terms of the underpin had been met and that
there were no windfall gains over the vesting period. However, when
considering overall business performance over the three-year vesting
period, the Committee deemed it appropriate to exercise its discretion
to apply a 10% reduction to the award at the point of vesting.
The 2021 RSP, therefore, vested at 90% of the maximum.
Remuneration changes for 2025/26
Policy review
Our Policy is due for approval at the 2025 Annual General Meeting
(
AGM
) and, over the course of the year, the Committee undertook a
comprehensive review of the existing Policy. The Committee engaged
with shareholders and feedback from this process will be taken into
account in determining our Policy for shareholder approval.
To provide shareholders with full disclosure of the Policy, which will be
voted on at the 2025 AGM, full details of the proposal will be included
in the 2025 AGM Notice of Meeting.
1
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
Saga plc
Annual Report and Accounts 2025
78
Salary increases for 2025/26
The Group CEO received a salary increase of 2.5%, in line with the
wider workforce rate. His salary for 2025/26 will be £615,000.
The Group CFO was internally promoted into the role at a salary
of £375,000, which was around 17% lower than his predecessor.
Since his promotion to the Board, the Group CFO performed well,
successfully delivering on a number of strategic objectives, including
managing the short-term liquidity needs of the Group during 2024.
The Group CFO also supported the broader refinancing of the 2026
bond, which will help to address the near-term debt maturities as well
as providing the Group with additional liquidity, if required. In light of
the achievements, the Committee determined that a 10% increase
in salary was appropriate, taking his salary to £412,500.
The Executive Director (previously CEO of Insurance) received a
salary increase of 2.5%, in line with the wider workforce rate. His salary
for 2025/26
2
will be £422,300.
Where time was allocated during the year – matters
discussed, decisions made, and actions taken
Approved Executive Director and Operating Board salary
increases as part of the annual salary review for 2025/26.
Approved the business and personal metrics for the 2024/25
annual bonus. Details of the personal objectives for the Executive
Directors can be found on pages 84-85.
Determined the level of bonus awards for 2024/25.
Made grants under the RSP for the Operating Board and Senior
Leadership Team.
Recommended that the Board approve the award of Free Shares
to all eligible colleagues in June 2024.
Reviewed and approved the scheme rules of the RSP and
Deferred Bonus Plan.
Reviewed progress against the actions to reduce our gender pay
gap and discussed the Company’s wider diversity, equity, inclusion
and belonging strategy.
Noted the voting results on our Directors’ Remuneration Report
at the 2024 AGM and continued our constructive dialogue with
shareholders.
Discussed how the Committee would review wider workforce pay
and ensure alignment of incentives throughout the Company with
its culture and strategy.
Reviewed the Policy and began preparations to consult on the
changes with shareholders.
Wider workforce considerations
In making decisions on executive pay, the Committee considers wider
workforce remuneration and conditions, as outlined on pages 88-89.
We continue to be as focussed on our colleagues as we are on our
customers. The Committee’s aim is to ensure that our approach to
rewarding colleagues at all levels is aligned to our business strategy,
which places customer service and colleague engagement at its core.
We continue to engage with colleagues on executive reward matters
through our People Committee, which I attend regularly. Further details
of our People Committee can be found in our 2025 Environmental,
Social and Governance Report.
As part of our commitment to fairness, this report contains details
of the pay and conditions of our wider workforce, the cascade of
incentives throughout our business, and our Group CEO to colleague
pay ratio. Details of Saga’s gender pay report can be found on our
website (www.saga.co.uk/gender-pay-review).
Shareholder consultation and looking ahead
The Committee continues to uphold an open and constructive
dialogue with shareholders. As with the prior year, we consulted with
major shareholders on the decisions made in respect of the financial
year. As a result, we received a voting outcome of 87.62% in support of
the 2024 Directors’ Remuneration Report. We will continue to engage
with shareholders and seek to incorporate feedback within our future
remuneration decisions.
Looking ahead to 2025/26, the Committee is undertaking a
consultation with shareholders in the lead up to the 2025 AGM, ahead
of a binding vote on the proposed Policy. As part of this, I am engaging
with our largest shareholders to listen to their views and address any
questions or concerns. Feedback from this process will be taken into
account in determining our Policy for shareholder approval at the
2025 AGM. As noted above, full details of the proposals will be
included in the 2025 AGM Notice of Meeting.
Conclusion
I hope you find the information contained in this report helpful,
thoughtful and clear.
I am always happy to hear from our shareholders, and you can contact
me at any time at remco.chair@saga.co.uk if you have any questions
or comments on this report.
Julie Hopes
Chair, Remuneration Committee
2
Steve Kingshott resigned from the Board with effect from 9 April 2025
Saga plc
Annual Report and Accounts 2025
79
Strategic Report
Financial statements
Additional information
Governance
DIRECTORS’ REMUNERATION REPORT
Remuneration at a glance
No awards vested during the year for any current Executive Directors, however, the 2021 RSP vested on 9 April 2024 at 90% of maximum
for the former Group CEO and CFO. The Remuneration Committee reviewed the performance of the award and made an adjustment to the
final vesting level to take into account the experience and expectation of our shareholders and the value of their shareholdings over the life
of this award.
Director
Face value
of award
(% of salary)
Shares
awarded
Value of
award at
grant (£)
End of
vesting
period
Pro-rated
for stepping
down
Proportion
of award
vesting as
percentage
of maximum
Number of
shares
vesting
Value of
award
vesting (£)
Euan Sutherland
Former Group CEO
100%
184,258
710,500
8 April 2024
168,903
8
90%
152,012
179,070
8
James Quin
Former Group CFO
85%
94,787
365,500
8 April 2024
94,787
90%
85,308
100,493
1
Total spend on pay, including Executive Directors
2
Executive Directors did not receive any increase in salary in February 2024. The average increase awarded to the broader colleague group was 4.0%
3
All colleagues received a 2.5% increase in base pay in February 2022, with colleagues below senior leadership receiving a further increase of 5.0% in December 2022,
which was brought forward from February 2023, to support colleagues with the rising cost of living
4
Mike Hazell became a Director on 9 October 2023 in the role of Group CFO and was appointed as the Group CEO on 28 November 2023
5
Mark Watkins became a Director on 28 November 2023
6
As per the Remuneration Policy (the
Policy
), a third of Executive Directors’ bonus is deferred in shares, which vest after three years
7
RSP awards vest after three years
8
The RSP original award to the former Group CEO was pro-rated under the scheme rules, given his leave date was prior to the date of the award vesting
Remuneration in the Group
2024/25 Total single figure remuneration (£)
RSP awards vesting in 2024
Total spend
on pay
1
£119.4m
2023/24 – £161.6m
2022/23 – £132.0m
2021/22 – £118.3m
Group CEO pay ratio
to the median colleague
50:1
2023/24 – 63:1
2022/23 – 56:1
2021/22 – 76:1
General increase
for all colleagues
4.0%
2
2023/24 – Nil
3
2022/23 – 7.5%
3
2021/22 – 1.5%
Mike Hazell
Group Chief Executive Officer (
CEO
)
Mark Watkins
Group Chief Financial Officer (
CFO
)
Steve Kingshott
Executive Director (previously CEO of Insurance)
Key
Salary
Benefits and pension
Bonus
6
Restricted Share Plan (
RSP
)
7
2024/25
2023/24
4
1,894,030
760,426
49,735
600,000
764,295
480,000
15,113
180,308
197,805
367,200
2024/25
2023/24
5
1,064,305
124,837
36,235
375,000
398,070
255,000
6,142
62,500
56,195
n/a
2024/25
2023/24
1,076,439
882,448
38,096
412,000
379,143
247,200
37,845
412,000
185,403
247,200
Saga plc
Annual Report and Accounts 2025
80
For 2024/25, the Executive Director (previously CEO of Insurance) had a maximum bonus opportunity of 125% of salary. The overall bonus
outcome is set out in the table below. Further details are set out on pages 83-85 in the Annual Report on Remuneration.
Performance condition
Weighting
Threshold
(20% payout)
Target
(50% payout)
Maximum
(100% payout)
Outcome achieved
(% of maximum bonus)
Total Underlying Profit Before Tax
12
27.5%
21.5%
Total Insurance Underlying Profit Before Tax
12
27.5%
9.9%
Net Debt
12
15.0%
14.5%
Personal objectives
30.0%
27.7%
Total
100.0%
73.6%
The table sets out the shareholdings of the Executive Directors at 31 January 2025. Further detail is set out on page 86.
Director
Shareholding
requirement
(% of salary)
Shares owned
outright
(% of salary)
9,10
Shares subject to continued
employment holding periods
(% of salary)
10,11
Mike Hazell
Group CEO
250%
–
76%
Mark Watkins
Group CFO
200%
–
43%
Steve Kingshott
Executive Director (previously CEO of Insurance)
200%
–
102%
For 2024/25, the Group CEO and Group CFO had a maximum bonus opportunity of 150% of salary and 125% of salary respectively.
The overall bonus outcome is set out in the table below. No discretion was applied to the formulaic outcome. Further details are set out
on pages 83-85.
Performance condition
Weighting
Threshold
(20% payout)
Target
(50% payout)
Maximum
(100% payout)
Outcome achieved
(% of maximum bonus)
Total Underlying Profit Before Tax
12
55.0%
42.9%
Net Debt
12
15.0%
14.5%
Personal objectives
30.0%
Group CEO: 27.5%
Group CFO: 27.5%
Total
100.0%
Group CEO: 84.9%
Group CFO: 84.9%
9
Represents actual shares owned at 31 January 2025
10
Based on the mid-market quotation share price of 124.0p at 31 January 2025 and the year-end salaries of the Executive Directors
11
Represents unvested RSP awards and annual bonus deferred share awards
12
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
2024/25 Annual bonus outcome for the Group CEO and Group CFO
2024/25 Annual bonus outcome for the Executive Director (previously CEO of Insurance)
Shareholding of the Executive Directors
Saga plc
Annual Report and Accounts 2025
81
Strategic Report
Financial statements
Additional information
Governance
DIRECTORS’ REMUNERATION REPORT
2024/25 Actual performance and remuneration outcomes
Single total figure of remuneration for Executive Directors for the 2024/25 financial year (audited)
The table below sets out the single total figure of remuneration and breakdown for each Director in respect of the 2024/25 financial year.
Comparative figures for the 2023/24 financial year are also provided. Figures provided have been calculated in accordance with Schedule 8
of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, as amended in 2013.
Period
Salary
£
Taxable
benefits
£
Pension
£
Other
£
Total
fixed
£
Bonus
1
£
Restricted
Share Plan
(
RSP
)
2
£
Total
variable
£
Single
figure
£
Mike Hazell
3
2024/25 600,000
13,735
36,000
–
649,735
764,295
480,000
1,244,295
1,894,030
(Group CEO)
2023/24
180,308
4,267
10,846
–
195,421
197,805
367,200
565,005
760,426
Mark Watkins
4
2024/25
375,000
13,735
22,500
–
411,235
398,070
255,000
653,070
1,064,305
(Group CFO)
2023/24
62,500
2,285
3,857
–
68,642
56,195
n/a
56,195
124,837
Steve Kingshott
2024/25
412,000
13,376
24,720
–
450,096
379,143
247,200
626,343
1,076,439
(Executive Director
(previously CEO of Insurance))
2023/24
412,000
13,125
24,720
–
449,845
185,403
247,200
432,603
882,448
Roger De Haan
2024/25
Nil
–
–
–
Nil
–
–
Nil
Nil
(Non-Executive Chairman)
2023/24
Nil
–
–
–
Nil
–
–
Nil
Nil
Julie Hopes
5
2024/25
151,000
–
–
–
151,000
–
–
–
151,000
(Non-Executive Director,
Remuneration Committee
Chair, Risk Committee Chair,
Chair of Saga Services Limited)
2023/24
141,834
–
–
–
141,834
–
–
–
141,834
Gareth Hoskin
2024/25
141,000
–
–
–
141,000
–
–
–
141,000
(Non-Executive Director,
Audit Committee Chair,
Chair of Acromas Insurance
Company Limited (
AICL
))
2023/24
141,000
–
–
–
141,000
–
–
–
141,000
Gemma Godfrey
2024/25
131,000
–
–
–
131,000
–
–
–
131,000
(Non-Executive Director,
Chair of Saga Personal
Finance (
SPF
) Limited)
2023/24
131,000
–
–
–
131,000
–
–
–
131,000
Peter Bazalgette
2024/25
115,500
–
–
–
115,500
–
–
–
115,500
(Senior Independent
Non-Executive Director,
Nomination Committee Chair)
2023/24
115,500
–
–
–
115,500
–
–
–
115,500
Anand Aithal
2024/25
75,500
–
–
–
75,500
–
–
–
75,500
(Non-Executive Director,
Innovation and Enterprise
Committee Chair)
2023/24
75,500
–
–
–
75,500
–
–
–
75,500
Annual Report on Remuneration
1
A third of the bonus award is deferred into shares vesting after three years
2
The face value on grant of the RSP awards is shown in the table above as there are no performance conditions other than underpins tested on vesting. The RSP award vests
after three years
3
Mike Hazell became a Director on 9 October 2023 in the role of Group CFO and was appointed as the Group CEO on 28 November 2023
4
Mark Watkins became a Director on 28 November 2023
5
Julie Hopes became the Chair of the Remuneration Committee on 31 December 2023
Saga plc
Annual Report and Accounts 2025
82
How we performed in 2024/25
Bonus (audited in conjunction with details on pages 132-133)
The details of the performance conditions and outcomes against the targets for the annual bonus in respect of the 2024/25 financial year are
shown in the table below. No discretion was applied to the formulaic outcome. For 2024/25, the Group CEO had a maximum bonus opportunity
of 150% of salary and the Group CFO and Executive Director had a maximum bonus opportunity of 125% of salary.
Saga plc bonus scorecard
Performance condition
Weighting
(based on
100% max)
Threshold
performance
required
(£m)
50% Target
performance
required
(£m)
Maximum
performance
required
(£m)
Actual
performance
(£m)
Annual bonus
for threshold
and maximum
performance
(% of max)
Actual annual bonus achieved
(% of maximum bonus)
Mike Hazell
Mark Watkins
Total Underlying Profit
Before Tax
6
55.0%
33.3
40.8
53.3
47.8
20%
42.9%
42.9%
100%
Net Debt
6
15.0%
638.5
619.8
588.5
590.5
20%
14.5%
14.5%
100%
Personal objectives
30.0%
0%
27.5%
27.5%
100%
Total
100.0%
84.9%
84.9%
Total calculated (£)
£764,295
£398,070
Total payable (£)
£764,295
£398,070
Insurance bonus scorecard
Performance condition
Weighting
(based on
100% max)
Threshold
performance
required
(£m)
50% Target
performance
required
(£m)
Maximum
performance
required
(£m)
Actual
performance
(£m)
Annual bonus
value for
threshold and
maximum
performance
(% of max)
Actual annual bonus achieved
(% of maximum bonus)
Steve Kingshott
Total Underlying Profit
Before Tax
6
27.5%
33.3
40.8
53.3
47.8
20%
21.5%
100%
Total Insurance Underlying
27.5%
23.1
26.9
33.1
25.1
20%
9.9%
Profit Before Tax
6
100%
Net Debt
6
15.0%
638.5
619.8
588.5
590.5
20%
14.5%
100%
Personal objectives
30.0%
0%
27.7%
100%
Total
100.0%
73.6%
Total calculated (£)
£379,143
Total payable (£)
£379,143
6
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
Saga plc
Annual Report and Accounts 2025
83
Strategic Report
Financial statements
Additional information
Governance
DIRECTORS’ REMUNERATION REPORT
Annual Report on Remuneration continued
Individual performance assessment
The Remuneration Committee (the
Committee
) assessed Executive Directors on their individual performance in the year, against a set of
universal strategic objectives, which account for 30% of their maximum bonus. Details of these universal strategic objectives for each of the
individuals are noted below:
Objective
Weighting
(based on
100% max)
20%
threshold
performance
required
50% target
performance
required
Maximum
performance
required
Actual
performance
Actual annual bonus achieved
(% of maximum bonus)
Mike
Hazell
Mark
Watkins
Steve
Kingshott
Culture and colleagues
Objective
Maintain high levels of colleague engagement,
measured by the engagement score from the
colleague survey.
Outcome
5.0%
Saga plc
6.6
7.0
7.4
7.9
5.0%
5.0%
–
Increased colleague engagement across Saga;
93% participation in our most recent survey,
scoring 7.9 out of 10, an improvement of 0.3
from June 2024 and 1.3 from January 2024.
Insurance
6.6
7.0
7.4
7.7
–
–
5.0%
Customer base
Objective
Grow our customer base and deepen
customer relationships, measured
by customer consent capture and
cross-sell opportunities.
Outcome – Customer consent
2.5%
Saga plc
30%
37%
2.5%
2.5%
–
To grow our customer base and deepen
the relationships with our customers,
we changed our approach to capturing
marketing consent last year. Previously,
we could only market products for a specific
business area, however, we now ask for
broader consent, allowing us to promote
a wider range of products from across the
Group to a larger number of customers.
Achieved 37% opt-in across the Group,
compared with the target of 30%.
Insurance
30%
42%
–
–
2.5%
Outcome – Cross-sell
2.5%
Saga plc
2.5%
2.5%
–
Action taken to create cross-sell
opportunities in future years, including the
launch of mySaga functionality, adding
product tiles to each product page and the
introduction of a Saga directory in all printed
magazines and key brochures.
Insurance
–
–
2.5%
Customer satisfaction
Objective
Increase the strength of the Saga brand, using
the Saga Voice of the Customer to improve
customer experience, measured by customer
transactional net promoter score (
tNPS
).
Outcome – tNPS
2.5%
Saga plc
59
60
61
59
0.5%
0.5%
–
Group customer tNPS was flat when
compared to last year, reflecting higher
scores across Cruise resulting in threshold
achievement at a Group level.
Insurance
59
60
61
61
–
–
2.5%
Outcome – Retention rates
2.5%
Saga plc
Average of outcomes from all business units
2.0%
2.0%
–
Retention rates exceeded target thresholds
across all areas of the business.
Insurance
77%
79%
81%
78%
–
–
0.7%
Environmental, Social and
Governance (
ESG
)
Objective
Achieve the ESG targets set by the Board.
Outcome
5.0%
Saga plc
5.0%
5.0%
–
1.
95% of colleagues completed and passed
set criteria for training on the basics of
ageing, compared with the target of 90%.
Insurance
–
–
5.0%
2. Scope 3 greenhouse gas emissions
footprint calculated and published.
3. Partnership with charities for ocean and
biodiversity projects.
4. Colleague diversity survey launched in
May 2024, with a 44% participation rate.
Personal growth objective
Outcome
10.0%
10.0%
10.0%
9.5%
Details of the individual objectives under
personal growth projects, and their
assessment are noted overleaf.
Overall
30.0%
27.5%
27.5%
27.7%
Saga plc
Annual Report and Accounts 2025
84
Individual performance assessment continued
Details of the individuals’ achievements are set out in the tables below.
Personal growth project overview
Committee assessment and basis of achievement for 2024/25
Mike Hazell – Maximum: 10.0% of overall bonus. Achievement: 10.0% of overall bonus
Delivery of a sustainable business model for
growth in the future
Defined the strategic narrative for the Group and delivered a sustainable business model for
growth going forward:
Undertook a comprehensive review of the strategic options available to Saga.
Positively engaged with the business in delivering these options, with a strong
recommendation, resulting in a clear agreement across the Board on the
forward-looking actions.
Successful execution of agreed actions (partnership with, and agreement to sell Acromas
Insurance Company Limited (
AICL
) to, wholly owned UK subsidiaries of Ageas SA/NV (
Ageas
))
to deliver Saga’s future business plan and, subsequently, secured the refinancing of the
2026 debt maturities.
Personal growth project overview
Committee assessment and basis of achievement for 2024/25
Mark Watkins – Maximum: 10.0% of overall bonus. Achievement: 10.0% of overall bonus
Support the Group’s strategic objectives,
including securing the financial health of the
Group
Supported key stakeholders in delivering the Group’s strategic objectives, including:
Successful delivery of internal projects, which enhanced the short-term financial position
of the business, despite a challenging backdrop.
Managed the short-term liquidity needs of the Group, with the support of our
existing banks.
Managed the long-term refinancing of the 2026 bond and facility provided by Roger De Haan,
addressing near-term debt maturities and securing an opportunity for additional liquidity,
if needed.
Personal growth project overview
Committee assessment and basis of achievement for 2024/25
Steve Kingshott – Maximum: 10.0% of overall bonus. Achievement: 9.5% of overall bonus
Support the Group’s strategic objectives
Supported key stakeholders in delivering the Group’s strategic objectives, including:
Delivered the Ageas partnership deal for motor and home insurance, alongside the
agreement to sell AICL.
Successful migration of travel and private medical insurance customers from our existing
system to Guidewire, including the successful transfer from the AXA to Bupa partnership.
Improved Insurance Underwriting profitability and customer satisfaction, and led the team
through a complex and successful negotiation with Ageas.
RSP Scheme interests vesting during the financial year
No awards vested during the year for any current Executive Directors, however, the 2021 RSP vested on 9 April 2024 at 90% of maximum for
the former Group CEO and CFO. Further information can be found in the Payments for loss of office/Payments to past directors (audited)
section on page 87.
RSP Scheme interests awarded during the financial year (audited)
On 8 July 2024, the RSP award was granted to the Group CEO, Group CFO and Executive Director (previously CEO of Insurance). Details of the
awards are set out below.
Director
Award type
Basis of award
Date of grant
Date of
vesting
Number of
shares
granted
Face value per
share
7
Total face
value of award
(£)
Mike Hazell
Group CEO
Nil-cost options
80% of salary
8 July 2024
8 July 2027
430,879
111.4
480,000
Mark Watkins
Group CFO
Nil-cost options
68% of salary
8 July 2024
8 July 2027
228,904
111.4
255,000
Steve Kingshott
Executive Director
(previously CEO of Insurance)
Nil-cost options
60% of salary
8 July 2024
8 July 2027
221,903
111.4
247,200
Deferred Bonus Plan
On 28 May 2024, the deferred element of the executive annual bonus award was granted to the Group CEO, Group CFO and Executive Director
(previously CEO of Insurance). Details of the award are set out below.
Director
Award type
Number of
shares
granted
Face value per
share
7
Total face
value of award
End of
deferral period
Mike Hazell
Group CEO
Deferred shares
50,332
131.0
65,935
28 May 2027
Mark Watkins
Group CFO
Deferred shares
14,298
131.0
18,731
28 May 2027
Steve Kingshott
Executive Director (previously CEO of Insurance)
Deferred shares
47,176
131.0
61,801
28 May 2027
7
Represents the mid-market quotation (
MMQ
) share price on the day prior to grant
Saga plc
Annual Report and Accounts 2025
85
Strategic Report
Financial statements
Additional information
Governance
DIRECTORS’ REMUNERATION REPORT
Annual Report on Remuneration continued
Directors’ share interests (audited)
Executive Directors are required to build up their shareholdings over a reasonable amount of time, which would normally be five years, and then
subsequently hold a shareholding equivalent to a percentage of base salary. The following table sets out the equity interests held by the Executive
and Non-Executive Directors (including those of their connected persons). If there are any changes to equity interests between the end of the
reporting year and the Notice of Annual General Meeting (the
Notice
) (if the Notice is sent more than a month after the year end), we will include
an updated position in our Notice.
Unvested nil-cost options held
Director
Shareholding
requirement
(% salary)
8
Current
shareholding
(% salary)
Shares
counting
towards
shareholder
requirements
9
Beneficially
owned
Long-term
Incentive
Plan (
LTIP
)
nil-cost
options
subject to
performance
conditions
RSP
nil-cost
options not
subject to
continued
service
Deferred
bonus
nil-cost
options
subject to
continued
service
Other
awards
Vested but
unexercised
nil-cost
options held
Unvested
Share
Incentive
Plan (
SIP
)
shares not
subject to
performance
conditions
Shareholding
requirement
met?
Executive Directors
Mike Hazell
250%
76%
366,631
–
10
–
640,947
50,332
–
–
253
No
Mark Watkins
200%
43%
129,593
443
–
228,904
14,298
–
–
480
No
Steve Kingshott
200%
102%
340,417
–
–
500,620
140,771
–
–
480
No
Non-Executive Directors
11
Roger De Haan
12
–
–
–
37,217,720
13
–
–
–
–
–
–
n/a
Julie Hopes
–
–
–
4,419
–
–
–
–
–
–
n/a
Gareth Hoskin
–
–
–
19,018
–
–
–
–
–
–
n/a
Gemma Godfrey
–
–
–
12,438
–
–
–
–
–
–
n/a
Peter Bazalgette
–
–
–
212,249
–
–
–
–
–
–
n/a
Anand Aithal
–
–
–
24,500
–
–
–
–
–
–
n/a
Taxable benefits
The taxable benefits for Executive Directors are in line with our wider workforce policies. Mike Hazell, Mark Watkins and Steve Kingshott
received private medical insurance and a company car during the year.
Pension entitlements
Pension contributions for all Executive Directors are aligned with those of the majority of colleagues (6% of salary). Colleagues can, however,
opt to increase their contribution to a maximum of 10%, which the Company will match. This does not apply to Executive Directors. No Executive
Director receives an entitlement under a defined benefit plan.
8
Shareholding requirements are those that were in existence throughout the course of the year and at 31 January 2025
9
The number of shares counting towards the shareholding requirement is calculated by summing beneficially owned shares with unvested nil-cost options which are not
subject to performance conditions, on a net of tax basis as well as any vested but unexercised options on a net of tax basis. The MMQ share price of 124.0p at 31 January 2025
was used for the purpose of calculating the current shareholding (i.e. value of beneficially owned shares and value of/gain on interests over shares) as a percentage of salary
10
Since the year end, Mike Hazell purchased 78,125 shares, which will be fully disclosed in the 2026 Directors’ Remuneration Report
11
Values are not calculated for Non-Executive Directors as they are not subject to shareholding requirements
12
The connected persons of Roger De Haan include Allison De Haan, who holds 20,750 shares
13
Since the year end, Roger De Haan purchased 1,479,385 shares, which will be fully disclosed in the 2026 Directors’ Remuneration Report
Saga plc
Annual Report and Accounts 2025
86
Payments for loss of office/payments to past directors (audited)
As previously disclosed in the 2024 Annual Report and Accounts, both Euan Sutherland and James Quin stepped down from the Board
of Directors from their roles as the Group CEO and Group CFO in 2023. The full details of the remuneration arrangements for both were
fully disclosed in the 2024 Annual Report and Accounts. The remuneration elements received for the period ending 31 January 2025 are
outlined below.
Euan Sutherland
As disclosed last year, Euan received salary, benefits and his pension allowance in line with the Policy until cessation of employment on
31 January 2024. The final total figure was £808,567 and was entirely in respect of the 2023/24 financial year. No further payments were
made in respect of the 2024/25 financial year.
From the Termination Date, Euan commenced receipt of monthly payments in lieu of notice comprising salary, pension and benefits for the
remainder of his notice period, which commenced on 27 November 2023. The level of salary from 1 May 2024 was reduced to reflect the
salary for his new executive role. £249,025 was paid in relation to the 2024/25 financial year.
The RSP award granted on 9 April 2021 vested on 9 April 2024 at 90% of maximum, following review by the Committee, where the
Committee exercised its discretion to reduce the final vesting level to account for the experience and expectation of our shareholders and
the value of their shareholdings over the life of this award. The table below sets out the number of shares that vested.
James Quin
As disclosed last year, James received salary, benefits and his pension allowance in line with the Policy until cessation of employment on
30 April 2024. The total figure of £497,697 disclosed last year was entirely in respect of the 2023/24 financial year and further payments
worth £121,290 were made in respect of the 2024/25 financial year.
From the Termination Date, James commenced receipt of monthly payments in lieu of notice comprising salary, pension and benefits for
the remainder of his notice period, which commenced on 27 September 2023. £321,894 was paid in relation to the 2024/25 financial year.
A pro rata bonus for 2024/25, based on the satisfaction of performance measures, was awarded and will be satisfied two-thirds cash and
one-third in deferred shares pursuant to the Deferred Bonus Plan, in line with the Policy, as determined by the Committee. The level of
bonus for 2024/25 was £118,703, 83.7% of the maximum.
The RSP award granted on 9 April 2021 vested on 9 April 2024 at 90% of maximum, following review by the Committee, where the
Committee exercised its discretion to reduce the final vesting level to account for the experience and expectation of our shareholders and
the value of their shareholdings over the life of this award. The table below sets out the number of shares that vested.
Vesting of 2021 RSP awards
Director
Face value of
award
(% of salary)
Shares
awarded
Value of
award at
grant
(£)
End of
vesting
period
Pro-rated
for step
down
Proportion
vesting as
percentage
of maximum
Number of
shares
vesting
Value of
award
vesting (£)
Euan Sutherland
Former Group CEO
100%
184,258
710,500
8 April 2024
168,903
14
90%
152,012
179,070
James Quin
Former Group CFO
85%
94,787
365,500
8 April 2024
94,787
90%
85,308
100,493
14
The RSP original award to the former Group CEO was pro-rated under the scheme rules, given his leave date was prior to the date of the award vesting
Saga plc
Annual Report and Accounts 2025
87
Strategic Report
Financial statements
Additional information
Governance
DIRECTORS’ REMUNERATION REPORT
Annual Report on Remuneration continued
Fees retained for external non-executive directorships
Executive Directors may hold positions in other companies as non-executive directors and retain the fees. Mike Hazell does not hold any external
directorships. Steve Kingshott did not hold any external directorships prior to departure from the Board. Mark Watkins was appointed as a
Director for Creative Folkestone on 23 September 2024 but does not receive a fee.
Governance of remuneration
Wider workforce
For the Committee to review the wider workforce pay, policies and incentives, reports are regularly considered at Committee meetings, setting
out key details of remuneration throughout the Company. Alongside its review of the wider workforce remuneration, the Committee considers
the approach applied to the Executive Directors and senior management. In particular, the Committee is focussed on ensuring that the
approach to the remuneration of the Executive Directors and senior management is consistent with that applied to the wider workforce.
The table summarises some of the key workforce reward elements that are regularly discussed by the Committee:
Bonus
Bonus schemes contain both financial and personal measures. A financial scorecard is used for all colleagues at
Saga linked to their business unit, including Executive Directors. Malus and clawback are in place for the colleagues
in our Senior Leadership Team (
SLT
).
Other incentive
schemes
Incentive arrangements that are paid more frequently are also operated in our contact centres. These incentive
schemes are reviewed regularly to ensure best practice and market alignment. The method of calculation and
frequency of payment varies, depending on business area and product.
Base pay
The Operating Board and SLT received no pay award in February 2024, with the average increase awarded to the
broader colleague group being 4.0%.
National living wage
Saga continues to be committed to paying above the national living wage for UK colleagues and, in 2024, became
an accredited Real Living Wage employer.
RSP
RSP awards are granted across senior leadership at Saga. Eligible colleagues received an RSP grant in 2024,
ranging from 20% to 50% of salary.
SIP
We continue to promote our SIP, so that all colleagues can invest in the Company’s success. The plan enables
colleagues to purchase shares through payroll.
Pension
Saga operates a single defined contribution Master Trust arrangement with Aviva. At 31 January 2025, there were
2,126 colleagues in this scheme.
The Committee Chair engages regularly with the People Committee, gaining regular feedback and outlining executive remuneration. Feedback
from this engagement is then shared with the Committee. Find out more in our 2025 ESG Report.
Competitive pay and cascades of incentives
Organisational level
Number of
colleagues
15
Range of
bonus
(% of salary)
Maximum
proportion of
bonus payable
in cash
Minimum
proportion
of bonus
deferrable
in shares
Range of
RSP award
(% of salary)
SIP
Group CEO
1
150%
67%
33%
80%
Yes
Group CFO
1
125%
67%
33%
68%
Yes
Executive Director
(previously CEO of Insurance)
1
125%
67%
33%
60%
Yes
Operating Board
6
100%
67%
33%
40%
Yes
SLT
37
40-80%
100%
–
16
20-40%
Yes
Senior Management Team
160
10-40%
100%
–
n/a
Yes
Other bonused colleagues
1,483
2.5-7.5%
100%
–
n/a
Yes
Other non-bonused colleagues
1,809
n/a
n/a
n/a
n/a
Yes
15
Colleagues at 31 January 2025
16
Colleagues in the SLT within Insurance also receive one-third of their bonus deferred for two years
Saga plc
Annual Report and Accounts 2025
88
Pay comparisons
Group CEO ratio
Our Group CEO to average colleague pay ratio for 2024/25 was 50:1. To give context to this ratio, we included a chart below which tracks the
CEO to average colleague pay ratio since 2014/15 alongside Saga’s total shareholder return (
TSR
) performance over a 10-year period. We also
show this against the performance of the FTSE Small Cap (
SMC
) during the same time span.
Jan-15
TSR rebased to 100 on Initial Public Offering (
IPO
)
Jan-16
Jan-17
258:1
116:1
78:1
40:1
48:1
41:1
76:1
76:1
56:1
63:1
50:1
Jan-18
Jan-19
Jan-20
Jan-21
Jan-22
Jan-23
Jan-24
Jan-25
200
250
300
Saga TSR
150
100
50
0
FTSE SMC
CEO pay ratio
The chart shows the value of £100 invested in the Company’s shares compared to the FTSE SMC index. The graph shows the TSR generated
by the movement in share value and the reinvestment over the same period of dividend income. This graph is calculated in accordance with the
Financial Conduct Authority UK Listing Rules.
In summary, there is significant volatility in Group CEO pay, and we believe that this is caused by the factors set out below.
Our Group CEO’s pay is made up of a higher proportion of incentive pay than that of our colleagues, in line with the expectations of our
shareholders and accepted market practice for senior executive roles. This introduces a higher degree of variability in pay each year,
which in turn affects the ratio.
The value of long-term incentives, which measure performance over three years, is disclosed in the year they vest, which increases the
Group CEO’s pay in that year, again impacting the ratio.
We recognise that the ratio is driven by the different structure of pay for our Group CEO versus that of our colleagues, as well as the
make-up of our workforce. This ratio varies between businesses in the same sector. What is important from our perspective is that this
ratio is influenced only by the differences in structure, and not by divergence in fixed pay between the Group CEO and wider workforce.
Where the structure of remuneration is similar, as for the Operating Board and the Group CEO, the ratio is much more stable over time.
Saga plc
Annual Report and Accounts 2025
89
Strategic Report
Financial statements
Additional information
Governance
DIRECTORS’ REMUNERATION REPORT
Annual Report on Remuneration continued
Colleague and CEO ratios
The table below sets out the total remuneration received by the Group CEO using the methodology applied to the single total figure
of remuneration.
Group Chief
Executive Officer
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22
2022/23
2023/24
2024/25
Total single figure (£)
Lance
Batchelor
1,600,287
2,490,617
1,025,146
17
1,191,743
946,353
–
–
–
–
–
Euan
Sutherland
–
–
–
–
116,535
2,118,471
2,401,273
18
1,753,093
1,835,610
19
–
Mike Hazell
–
–
–
–
–
–
–
–
223,363
19
1,894,030
Annual bonus
payment level
achieved
(percentage
of maximum
opportunity)
Lance
Batchelor
78.6%
67.5%
–
35.1%
18.2%
-
–
–
–
–
Euan
Sutherland
–
–
–
–
66.8%
83.1%
85.4%
35.3%
61.4%
–
Mike Hazell
–
–
–
–
–
–
–
–
71.9%
84.9%
LTIP vesting level
achieved
(percentage of
maximum
opportunity)
20
Lance
Batchelor
n/a
21
65.6%
26.0%
–
–
–
–
–
–
–
Euan
Sutherland
–
–
–
–
–
n/a
21
10.0%
n/a
21
90.0%
90.0%
22
Mike Hazell
–
–
–
–
–
–
–
–
n/a
n/a
Ratio of Group CEO
single total
remuneration figure
to all colleagues
23,24
Option
used
Option B
23
Option B
23
Option B
23
Option B
23
Option B
23
Option B
23
Option B
23
Option B
23
25
th
percentile
n/a
n/a
8:1
59:1
46:1
97:1
104:1
66:1
71:1
67:1
Median
78:1
116:1
40:1
25
48.1
26
41:1
27
76:1
28
76:1
29
56:1
30
63:1
31
50:1
32
75
th
percentile
n/a
n/a
33:1
36.1
29:1
55:1
55:1
42:1
41:1
36:1
Ratio of single
total remuneration
figure shown to
Operating Board
2:1
4:1
3:1
3:1
2:1
4:1
3:1
3:1
3:1
3.1
The colleague pay figures used to calculate the ratio are as follows:
25
th
percentile
Median
75
th
percentile
2024/25
Salary
£24,747
£31,304
£45,000
Total pay
£28,132
£37,621
£53,220
17
For 2017/18, the final value of the 2015 LTIP award at vesting date is shown and is restated from the 2017/18 Annual Report and Accounts. The share price at the vesting
date of 30 June 2018 was 125.6p
18
The final value of the 2019 LTIP award had not been confirmed at the time the 2022 Annual Report and Accounts was published and, therefore, was not included in the
2021/22 single figure. The final vesting of the 2019 LTIP was confirmed as 10% of maximum and, therefore, the 2021/22 single figure was restated
19
Mike Hazell was appointed as the Group CEO on 28 November 2023. Euan Sutherland’s payments reflect the period until he stepped down as Group CEO on 28 November 2023
20
As disclosed in the 2021 Annual Report and Accounts, in 2020, the LTIP was replaced with an RSP and, therefore, 2023/24 was the first year the RSP vested
21
No LTIP awards were eligible to vest for the Group CEO in post during 2015/16, 2020/21 and 2022/23
22
As noted in the Annual Statement, the 2021 RSP award vesting in April 2024 vested at 90% of maximum, including a discretionary 10% reduction applied by the Committee
23
For the colleague ratio, Saga chose to use Option B, identifying colleagues using our gender pay gap data. This was the preferred option due to the availability of data for our
many UK-based, overseas and part-time colleagues for whom single total figure data is difficult to calculate. Figures have been completed for 2017/18 to 2024/25, using the
April gender pay gap data for that year. To mitigate any anomalies, 11 individuals were identified at each percentile point from the gender pay gap data and the median of pay
in the years 2017/18 to 2024/25 for these colleagues was calculated in line with the single total figure methodology
24
The median ratios shown for 2015/16 and 2016/17 were recalculated to allow a comparison with the 2017/18 to 2024/25 figures, which were calculated in line with the
methodology prescribed by the regulations
25
The fall in ratio in 2017/18 was due to the forfeiture of bonus by the Group CEO and the relatively low payout on the LTIP. This reflects the fact that shareholders want
executives to have a higher proportion of pay at risk and this is reflected in the volatility in the chart. The percentage change in Group CEO remuneration set out in the
table on page 94 shows that year on year, when the volatility of payouts from equity-based awards is excluded, the changes in remuneration for the Group CEO and average
colleagues are broadly in line. This demonstrates that the underlying compensation ratio is not increasing year on year
26
The increase in ratio for 2018/19 was due to the Group CEO receiving a bonus in 2018/19. This increase remained low due to a relatively low bonus and LTIP payout
27
The fall in ratio for 2019/20 was due to the rebalancing of base pay and commission in our contact centres
28
The increase in ratio in 2020/21 was due to the relatively high bonus payout in 2020/21 and RSP award granted to the Group CEO in 2020/21
29
No change in ratio in 2021/22 due to the similar payout in bonus
30
The fall in ratio in 2022/23 was due to the lower bonus payout
31
The increase in ratio in 2023/24 was due to the relatively high bonus payout
32
The decrease in ratio in 2024/25 was due to a lower CEO total single figure in comparison to previous years and the result of aligning base pay to the Real Living Wage
Saga plc
Annual Report and Accounts 2025
90
Annual percentage change in remuneration of Directors and other colleagues
The following table sets out the change in the remuneration paid to each Director from 2019/20 to 2024/25, compared with the average
percentage change for other colleagues.
The percentage change for each Director’s remuneration in the table below is based on the figures in the single total figure table on page 82.
Average colleague pay is calculated using the following elements:
Annual salary: base salary and standard monthly allowances.
Taxable benefits: car allowance and private medical insurance premiums.
Annual bonus: company bonus, management bonus, commission and incentive payments.
% increase/(decrease) in
remuneration in 2020/21
compared with previous year
(2019/20)
% increase/(decrease) in
remuneration in 2021/22
compared with previous year
(2020/21)
% increase/(decrease) in
remuneration in 2022/23
compared with previous year
(2021/22)
% increase/(decrease) in
remuneration in 2023/24
compared with previous year
(2022/23)
% increase/(decrease) in
remuneration in 2024/25
compared with previous year
(2023/24)
Salary/
fees
Taxable
benefits
Annual
bonus
Salary/
fees
Taxable
benefits
Annual
bonus
Salary/
fees
Taxable
benefits
Annual
bonus
Salary/
fees
Taxable
benefits
Annual
bonus
Salary/
fees
Taxable
benefits
Annual
bonus
Mike Hazell
33
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
3.9%
2.3%
28.8%
Mark Watkins
34
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
–
2.3%
18.1%
Steve Kingshott
35
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
3.0%
0.3%
10.9%
–
1.9%
104.5%
Roger De Haan
36
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Julie Hopes
41.7%
37
n/a
n/a
(1.0%)
37
n/a
n/a
(0.8%)
37
n/a
n/a
(19.0%)
37
n/a
n/a
6.5%
37
n/a
n/a
Gareth Hoskin
9.3%
38
n/a
n/a
2.9%
38
n/a
n/a
–
n/a
n/a
2.7%
n/a
n/a
–
n/a
n/a
Gemma Godfrey
39
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
24.2%
40
n/a
n/a
–
n/a
n/a
Peter Bazalgette
39
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
10.9%
41
n/a
n/a
–
n/a
n/a
Anand Aithal
39
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
8.4%
42
n/a
n/a
–
n/a
n/a
Average per colleague
3.2%
43
2.7%
67.8%
4.1%
43
6.6%
5.4%
13.3%
43
3.6%
(49.9%)
4.6%
43
2.5%
58.2%
6.3%
43
5.8%
47.1%
Relative importance of the spend on pay
The table below sets out the relative importance of spend on pay in the 2024/25 and 2023/24 financial years, compared with other
disbursements. All figures provided are taken from the relevant Company accounts.
Disbursements from
profit in 2024/25
financial year
£m
Disbursements from
profit in 2023/24
financial year
£m
Percentage change
Profit distributed by way of dividend
–
–
–
Total tax contributions
44
22.0
24.1
(8.7%)
Overall spend on pay, including Executive Directors
119.4
161.6
(26.1%)
33
No comparison for Mike Hazell prior to 2024/25 due to him becoming a Director on 9 October 2023. The increase in salary in 2024/25 was due to moving from CFO to CEO
on 28 November 2023
34
No comparison for Mark Watkins prior to 2024/25 due to him becoming a Director on 28 November 2023
35
No comparison for Steve Kingshott prior to 2023/24 due to him becoming a Director on 3 January 2023
36
Roger De Haan has waived his fee since becoming Chairman in 2020
37
The increase in fees for Julie Hopes in 2020/21 was due to her becoming Chair of the SPF Board on 1 February 2020 and assuming the position of Risk Committee Chair
on 31 December 2020. The decrease in fees in 2021/22 was due to the reduction in the fee for the Chair of SPF role on 1 January 2021 following a review of the role.
The decrease in fees in 2022/23 and 2023/24 is due to her stepping down from the role as Chair of SPF on 10 January 2023. She also assumed the position of
Remuneration Chair on 31 December 2023
38
The increase in fees for Gareth Hoskin in 2020/21 and 2021/22 was due to him becoming Chair of the Audit Committee on 22 June 2020
39
No comparison for Gemma Godfrey, Peter Bazalgette and Anand Aithal prior to 2022/23 due to them joining in September 2022
40
The increase in fees for Gemma Godfrey in 2023/24 was due to her becoming Chair of SPF on 10 January 2023
41
The increase in fees for Peter Bazalgette in 2023/24 was due to him becoming Senior Independent Director and Chair of the Nomination Committee on 30 September 2022
42
The increase in fees for Anand Aithal in 2023/24 was due to him becoming Chair of the Innovation and Enterprise Committee on 1 November 2022
43
The average salary per colleague increased in 2020/21 and 2021/22 due to a combination of the annual salary increase, Company restructuring, which altered our colleague
base, and the impacts of the COVID-19 pandemic. The increase in salary 2022/23 was due to a combination of two pay increases for the wider workforce and further
investment in base pay. The increase in salary in 2023/24 was a result of Company restructuring, which altered our colleague base, and an uplift in the entry salary within
our contact centres. The increase in salary in 2024/25 is a result of the annual pay review and alignment to the Real Living Wage
44
Total tax contributions include corporation tax, national insurance contributions, Value Added Tax and air passenger duty
Saga plc
Annual Report and Accounts 2025
91
Strategic Report
Financial statements
Additional information
Governance
DIRECTORS’ REMUNERATION REPORT
Annual Report on Remuneration continued
The Policy and its implementation
The current Policy was approved by shareholders at the AGM held on 5 July 2022 and is available on our corporate website
(www.corporate.saga.co.uk/about-us/governance).
Our Policy is due for approval at the 2025 AGM and, over the course of the year, the Committee undertook a comprehensive review of the
existing Policy. In light of recent changes to the business, the Committee determined that more time is needed to ensure that the new Policy
is fit for purpose and aligned to the Company’s strategic direction. The Committee engaged with shareholders, and feedback from this process
will be taken into account in determining our Policy for shareholder approval.
To provide shareholders with full disclosure of the Policy and its implementation for the 2025/26 financial year, which will be voted on at the
2025 AGM, full details of the proposals will be included in the notes of the 2025 AGM Notice of Meeting.
Note that the current Policy aligns with the Code, in particular, on the following points.
Key remuneration element of the Code
Alignment with the Policy
Five-year period between the date of grant and realisation for
equity incentives
Long-term incentives continue to meet the requirement through the
implementation of a two-year vesting period.
Phased release of equity awards
The RSP meets this requirement, as awards are made in an annual
cycle. The Saga Transformation Plan has a phased release in years
five, six and seven.
Discretion to override formulaic outcomes
Included in the terms and conditions of the Annual Bonus Plan and
long-term incentive plans.
Post-cessation shareholding requirement
The full in-employment requirement for two years following cessation
of employment.
Pension alignment
The pension contribution for all Executive Directors is aligned with
the majority of colleagues at 6%. Colleagues can, however, opt to
increase their contribution to a maximum of 10%, which the Company
will match. This does not apply to Executive Directors.
Extended malus and clawback
Malus and clawback provisions align with the Financial Reporting
Council’s Board Effectiveness Guidance.
Advisers to the Committee
Following a selection process carried out by the Board prior to the IPO of the Company, the Committee engaged the services of
PricewaterhouseCoopers (
PwC
) as independent remuneration advisers.
During the financial year, PwC advised the Committee on all aspects of the Policy for Executive Directors and members of the Operating Board.
PwC is a member of the Remuneration Consultants Group and the voluntary code of conduct of that body is designed to ensure that objective
and independent advice is given to remuneration committees. Other PwC teams provide certain non-audit services to the Company in the areas
of tax and consulting. The Committee is satisfied that no conflicts of interest exist in the provision of these services and that the advice provided is
independent and objective. Fees of £132,324 (2023/24: £99,173) were provided to PwC during the year in respect of remuneration advice received.
The Committee receives support from the Chief People Officer and Group Company Secretary.
Shareholder voting
The current Policy was approved by shareholders at the AGM held on 5 July 2022. Outlined below are the voting outcomes for this, and in
respect of approving the Directors’ Remuneration Report at the AGM on 25 June 2024.
Resolution
AGM date
Votes for
% of
votes cast
Votes
against
% of
votes cast
Votes cast
45
% of issued
share capital
voted
Votes
withheld
To approve the Directors’
Remuneration Report
25 June 2024
63,402,629
87.62%
8,956,857
12.38%
72,446,413
50.53%
86,927
To approve the Directors’
Remuneration Policy
5 July 2022
58,132,761
79.74%
14,770,366
20.26%
72,982,813
52.01%
79,686
45
Votes cast figures include votes withheld as well as votes for and against
Saga plc
Annual Report and Accounts 2025
92
Service contracts and letters of appointment
The Committee’s policy for setting notice periods is that normally they will be a maximum of 12 months. The Committee may, in exceptional
circumstances arising on recruitment, allow a longer period, which would in any event reduce to 12 months following the first year of employment.
The Non-Executive Directors of the Company do not have service contracts and are appointed by letters of appointment. Each independent
Non-Executive Director’s term of office runs for a three-year period.
The Company follows the UK Corporate Governance Code 2024 (the
Code
) recommendation that all Directors be subject to annual
re-appointment by shareholders.
Executive Director
Notice periods
Name
Date appointed
Nature of contract
From Company
From Director
Compensation provisions
for early termination
Mike Hazell
9 October 2023
Rolling
12 months
12 months
None
Mark Watkins
28 November 2023
Rolling
12 months
12 months
None
Steve Kingshott
46
3 January 2023
Rolling
n/a
n/a
None
Non-Executive Director
Name
Original appointment
Appointment
of current term
Arrangement
Notice period/unexpired
term at AGM
Julie Hopes
1 October 2018
1 October 2024
Letter of appointment
3 months/27 months
Gareth Hoskin
11 March 2019
11 March 2025
Letter of appointment
3 months/32 months
Gemma Godfrey
1 September 2022
1 September 2022
Letter of appointment
3 months/2 months
Peter Bazalgette
46
1 September 2022
1 September 2022
Letter of appointment
n/a
Anand Aithal
1 September 2022
1 September 2022
Letter of appointment
3 months/2 months
The Board allows Executive Directors to accept appropriate outside non-executive director appointments provided the aggregate commitment
is compatible with their duties as Executive Directors. The Executive Directors concerned may retain fees paid for these services, which will be
subject to approval by the Board.
Julie Hopes
Chair, Remuneration Committee
15 April 2025
This report has been prepared in accordance with Schedule 8 of The Large and Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008 as amended in 2013, 2018 and 2019, the Provisions of the current Code and the UK Listing Rules.
46
Peter Bazalgette and Steve Kingshott both resigned from the Board with effect from 9 April 2025. These changes to the Board follow the successful Insurance agreement
with Ageas and reflect the Group’s new simplified business model
Saga plc
Annual Report and Accounts 2025
93
Strategic Report
Financial statements
Additional information
Governance
Management Report
The Directors’ Report, together with the Strategic Report set out on pages 1-55, form the Management Report for the purposes of Disclosure
Guidance and Transparency Rule (
DTR
) 4.1.5 R (the
Management Report
).
Statutory information contained elsewhere in the Annual Report
Information required to be part of this Directors’ Report can be found elsewhere in the Annual Report and Accounts as indicated in the table
below and is incorporated into this report by reference.
Information
Location in Annual Report and Accounts
Likely future developments in the business of the Company or its subsidiaries
Pages 1-55
Environmental, Social and Governance, including Task Force on Climate-Related Financial Disclosures
Pages 39-46
Greenhouse gas emissions
Pages 45-46
Suppliers, customers and others in a business relationship engagement
Pages 22-23
Colleagues (employment of disabled persons, workforce engagement and policies)
Pages 46 and 54
Corporate Governance Statement
Pages 56-76
Directors’ details (including changes made during the year)
Pages 58, 60-61 and 68-70
Related-party transactions
Not applicable
Diversity
Pages 46, 68 and 70
Board and executive diversity targets
Pages 46, 68 and 70
Share capital
Note 33 on page 167
Employee share schemes (including long-term incentive schemes)
Note 36 on pages 168-170
Financial instruments: information on the Group’s financial instruments and risk management
objectives and policies, including our policy for hedging
Notes 2, 3, 7, 8, 19 and 20
on pages 111-130, 132 and 142-152
Statements of responsibilities
Page 97
Additional information
Pages 183-190
Disclosure table pursuant to UK Listing Rule (
UKLR
) 6.6.1
The following table provides references to where the information required by UKLR 6.6.1 is disclosed:
UKLR
UKLR requirement
Disclosure
6.6.1(1)
Interest capitalised by the Group and any related tax relief
Note 17 on pages 140-141
6.6.1(2)
Unaudited financial information (UKLR 6.2.23 R)
Group Chief Financial Officer’s Review, pages 24-38
6.6.1(3)
Long-term incentive schemes (UKLR 9.3.3 R)
Directors’ Remuneration Report, pages 77-93
6.6.1(4)
Directors’ waivers of emoluments
Directors’ Remuneration Report, pages 77-93
6.6.1(5)
Directors’ waivers of future emoluments
Directors’ Remuneration Report, pages 77-93
6.6.1(6)
Non-pre-emptive issues of equity for cash
Directors’ Report on page 96
6.6.1(7)
Non-pre-emptive issues of equity for cash by any unlisted major
subsidiary undertaking
Not applicable
6.6.1(8)
Parent company participation in a placing by a listed subsidiary
Not applicable
6.6.1(9)
Contract of significance in which a Director is, or was,
materially interested
Directors’ Report on page 95 and Note 2.1 on page 111
6.6.1(10)
Contract of significance between the Company
(or one of its subsidiaries) and a controlling shareholder
Not applicable
6.6.1(11)
Waiver of dividends by a shareholder
Directors’ Report on page 96
(under paragraph ‘Rights attaching to shares’)
6.6.1(12)
Waiver of future dividends by a shareholder
Directors’ Report on page 96
(under paragraph ‘Rights attaching to shares’)
6.6.1(13)
Board statement in respect of relationship agreement with a
controlling shareholder
Not applicable. See Directors’ Report on page 95
(under ‘Relationship agreement with Director shareholder’)
Directors’ Report
Results and dividends
The Group made a loss after taxation of £164.9m for the financial year
ended 31 January 2025. The Board did not pay an interim dividend.
The Board of Directors is not in a position to recommend the payment
of a final dividend for the 2024/25 financial year.
The Directors intend to resume dividend payments in the future, once
further progress has been made with deleveraging and when current
limitations, particularly in relation to the Ocean Cruise ship debt,
have been removed.
Any decision to declare and pay dividends is made at the discretion
of the Directors and depends on, among other things, applicable law,
regulation, restrictions, the Group’s financial position, regulatory
capital requirements, working capital requirements, finance costs,
general economic conditions and other factors the Directors deem
significant from time to time.
Political donations
No political donations were made during the year.
Saga plc
Annual Report and Accounts 2025
94
Directors’ interests
A list of the Directors, their interests in the long-term performance
share plan, contracts and ordinary share capital of the Company are
given in the Directors’ Remuneration Report on pages 77-93.
Agreements with Director shareholder
The Board confirms that, in accordance with UKLR 6.2.3, there are
no controlling shareholders in the Company. However, the Company
entered into a relationship agreement with Roger De Haan on
10 September 2020 (the
Relationship Agreement
) as Roger De Haan
directly holds 38,676,335
1
shares of 15p each
1
(constituting 26.98% of
issued share capital at 31 January 2025). This is considered a contract
of significance in accordance with UKLR 6.6.1(9). The Relationship
Agreement regulates the relationship between the Company and
Roger De Haan and contains undertakings that transactions and
arrangements will be conducted on an arm’s-length basis and on
normal commercial terms. It also provides that dilutions caused by
new issuances of shares shall be disregarded when determining
investor rights under its terms.
The Group entered into an unsecured loan facility with Roger De Haan
on 3 April 2023 and an amendment was agreed on 26 September
2023. This was provided on an arm’s-length basis and on normal
commercial terms. On 8 February 2024, Roger De Haan and the
Company agreed to amend the terms of the facility to remove the
prohibition on lease and hire purchase agreements. On 22 September
2024, a further amendment was agreed between the Company and
Roger De Haan to amend the terms of the facility to remove reference
to the prepayment and cancellation of the facility upon receipt of
certain proceeds. On 15 April 2024, a further extension to the
maturity date of the facility was agreed, to 30 April 2026.
On 27 February 2025, the £75.0m drawn amount under the loan
facility was repaid, and the facility was cancelled, following the
successful refinancing of the Group’s corporate debt.
Rules on appointment and replacement of Directors
A Director may be appointed by ordinary resolution of the
shareholders in a general meeting following nomination by the
Board or a member (or members) entitled to vote at such a meeting.
In addition, the Directors may appoint a Director to fill a vacancy,
or as an additional Director, provided that the individual retires at
the next Annual General Meeting (
AGM
). A Director may be removed
by the Company in certain circumstances set out in the Company’s
Articles of Association or by an ordinary resolution of the Company.
The Relationship Agreement between the Company and Roger De Haan
provides for the nomination for appointment (and removal or
re-nomination) to the Board of one Non-Executive Director for
as long as he holds at least the higher of:
10% or more of the issued ordinary share capital of the
Company; and
the percentage of the issued ordinary share capital of the Company,
represented by 60% of the investor’s holding of ordinary shares
immediately following the capital raise, which took place in
October 2020.
All Directors will seek re-election at the AGM in accordance with the
Company’s Articles of Association and the recommendations of the
UK Corporate Governance Code 2024.
Directors’ indemnities
At the date of this report, indemnities are in force, under which the
Company has agreed to indemnify the Directors, to the extent
permitted by law and the Company’s Articles of Association, in
respect of all losses arising out of, or in connection with, the execution
of their powers, duties and responsibilities, as Directors of the
Company or any of its subsidiaries.
No amount was paid under any of these indemnities during the year.
Directors’ and officers’ liability insurance is in place at the date of this
report, at an amount which the Board considers adequate. This is
subject to annual review.
Change of control – significant agreements
There are some arrangements, which give rights to third parties to
terminate agreements upon a change of control of the Company,
including following a takeover; for example, commercial contracts and
insurance distribution agreements. Details of such arrangements are
captured as part of the contractual governance process.
The Group’s corporate debt, at 31 January 2025, was unsecured and
in place for general purposes. It consisted of a £250.0m five-year
public listed bond at 5.50%, due to mature in July 2026. The Group
also had two liquidity facilities, being a £50.0m Revolving Credit
Facility (
RCF
), expiring in May 2025, and an £85.0m loan facility with
Roger De Haan, expiring in April 2026. At the same date, the Group
had drawn £75.0m of the facility with Roger De Haan.
Following the year end, the Company transitioned to the new capital
structure, consisting of a £335.0m term loan facility, a £100.0m
delayed-draw term loan facility, which can be used to fund Ocean
Cruise ship debt amortisation or growth investment, and a new
£50.0m RCF.
Export Credit Agency-backed funding is in place over 12 years to
finance 80% of the cost of the Group’s two Ocean Cruise ships at a
fixed interest rate. The first of these facilities was drawn on completion
of the build of Spirit of Discovery and secured by way of a charge over
the asset. The second facility was drawn on completion of the build of
Spirit of Adventure and also secured by way of a charge over the asset.
The Company provided a guarantee for this ship debt.
In the event of a change of control, the facilities would either require
repayment or renegotiation. If the ship financing was terminated,
significant break fees may be incurred. Further details on banking
facilities are shown in Note 30 to the consolidated financial
statements on pages 163-165.
The rules of the Company’s colleague share plans generally provide for
the accelerated vesting and/or release of share awards in the event of
a change of control of the Company.
The Company does not have any agreements with colleagues,
including Directors, which would pay compensation in the event of a
change of control.
Conflict of interest
Each Director is obliged to disclose any potential, or actual, conflict of
interest in accordance with the Company’s Conflict of Interest Policy.
The policy is subject to review and declarations are made on an annual
basis. Directors are also required to update any changes to declarations
as they occur. Internal controls are in place to ensure that any
related-party transactions are conducted on an arm’s-length basis.
Share capital and interests in voting rights
The Company’s share capital, including movements during the year,
is set out on page 167. At the date of this report, the Company’s issued
share capital comprised a single class of share capital which is divided
into ordinary shares of 15p each. At 31 January 2025, 143,361,741
ordinary shares of 15p each had been issued, fully paid up and quoted
on the London Stock Exchange (
LSE
).
In accordance with DTR 5.1, the Company must disclose where it has
been notified of the interests in the Company’s total voting rights.
The obligation to notify sits with the shareholder, and the Company
must report on the notifications received, between the end of the
reporting year and a date not more than one month prior to the date
of the notice of AGM. If the date of signing of the Annual Report and
Accounts is prior to this, we will include an updated position in our
AGM Notice (
Notice
).
Since the date of disclosure to the Company, the interest of any
person may have increased or decreased. There is no requirement
to notify the Company of any increase or decrease unless the holding
passes a notifiable threshold in accordance with DTR 5.1.
1
This shareholding represents shares directly held by Roger De Haan. His shareholding, including that of his connected persons, is set out on page 86 of the Directors’
Remuneration Report
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2025
95
Strategic Report
Governance
Rights attaching to shares
The Company has a single class of ordinary shares in issue. The rights
attached to the shares are governed by applicable law and the
Company’s Articles of Association, which are available on our
corporate website (www.corporate.saga.co.uk/about-us/governance).
Ordinary shareholders have the right to receive notice, attend and
vote at general meetings; and to receive a copy of the Company’s
annual report and accounts and a dividend when approved and paid.
On a show of hands, each shareholder present in person, or by proxy
(or an authorised representative of a corporate shareholder), shall
have one vote. In the event of a poll, one vote is attached to each share
held. No shareholder owns shares with special rights as to control.
The Notice will state the deadlines for exercising voting rights and for
appointing a proxy or proxies.
The Saga Employee Benefit Trust (the
Trust
) is an Employee Benefit
Trust which holds property (the
Trust Fund
) including inter-alia
money, and ordinary shares in the Company, in trust in favour,
or for the benefit, of colleagues of the Saga Group.
The Trustee of the Trust has the power to exercise the rights and
powers incidental, and to act in relation to the Trust Fund in such
manner as the Trustee, in its absolute discretion, thinks fit. The
Trustee has waived its rights to dividends on ordinary shares held by
the Trust. Details of employee share schemes are set out in Note 36
to the consolidated financial statements.
Restrictions on the transfer of shares
The Company is not aware of any agreement that would result in a
restriction on the transfer of shares or voting rights.
Articles of Association
Any amendment to the Company’s Articles of Association may only
be made by passing a special resolution of the shareholders of the
Company. The Company last approved its Articles of Association
by special resolution at the AGM held on 14 June 2021.
Research and development
The Group does not undertake any material activities in the field
of research and development.
Branches outside the UK
The Company does not have any branches outside the UK.
Post-balance sheet events
Since the year end, the Group closed the new credit facilities
detailed in Note 30 and drew down the £335.0m term loan facility
on 27 February 2025, utilising the proceeds to repay, and cancel in
full, the £250.0m senior unsecured notes maturing in July 2026,
and the £75.0m drawn under the £85.0m loan facility provided
by Roger De Haan. In addition, the existing undrawn £50.0m RCF
was cancelled.
Auditor
KPMG LLP confirmed its willingness to continue in office as auditor
of the Company, and resolutions for its re-appointment, and for the
Audit Committee to determine its remuneration, will be proposed
at the forthcoming AGM.
Annual General Meeting
The AGM will be held on 24 June 2025 at 11.00am at the offices of
Numis Securities Limited, 45 Gresham Street, London EC2V 7BF.
The Notice will be available on our corporate website
(www.corporate.saga.co.uk) in due course.
By order of the Board
Victoria Haynes
Group Company Secretary
15 April 2025
Saga plc (Company no. 08804263)
Information regarding other interests in voting rights provided to
the Company, pursuant to the Financial Conduct Authority DTRs,
is published on the Company’s corporate website and via a
Regulatory Information Service.
During the year, the following notifications were received:
Name
Ordinary shares
of 15p each
Percentage of
capital as
disclosed to
the Company
Nature of
holding
Eldose Babu
2
11,500,001
8.02
Direct
At 15 April 2025, the Company had been notified of the following
interests in the Company’s total voting rights:
Name
Ordinary shares
of 15p each
Percentage of
capital as
disclosed to
the Company
Nature of
holding
Roger De Haan
38,676,335
26.98
Indirect
Authority to allot/purchase own shares
A shareholders’ resolution was passed at the AGM on 25 June 2024,
authorising the Company to make market purchases within the
meaning of Section 693(4) of the Companies Act 2006 (the
Act
)
(up to £2,150,426.11, representing 10% of the aggregate nominal
issued share capital of the Company). This is subject to a minimum
price of 15p and a maximum price of the higher of 105% of the average
mid-market quotations for five business days prior to purchase or the
price of the last individual trade and highest current individual bid as
derived from the LSE trading system.
The Company did not exercise this authority during the year, and it will
expire at the forthcoming AGM. A special resolution to authorise the
Company to make market purchases representing 10% of current
nominal share capital will be proposed at the 2025 AGM.
The Directors of the Company were also granted authority at the
2024 AGM to allot relevant securities up to a nominal amount of
£7,160,918.96. This authority was not exercised during the year.
This authority will apply until the conclusion of the 2025 AGM, at which
shareholders will be asked to grant the Directors authority (for the
purposes of Section 551 of the Act) to allot relevant securities:
up to an aggregate nominal amount of 33.3% of the Company’s
issued ordinary share capital; and
comprising equity securities (as defined in the Act) up to an
aggregate nominal amount of 66.6% of the Company’s issued
ordinary share capital (after deducting from such limit any relevant
securities issued under (i) in connection with a rights issue).
These amounts will apply until the conclusion of the 2026 AGM, or,
if earlier, 31 July 2026.
Special resolutions will also be proposed to give the Directors
authority to make non-pre-emptive issues wholly for cash in
connection with rights issues and otherwise up to an aggregate
nominal amount of 10% of the Company’s issued ordinary share
capital, and to make non-pre-emptive issues wholly for cash in
connection with acquisitions or specified capital investments up to
an aggregate amount of 10% of the Company’s issued ordinary share
capital. This is consistent with the Pre-Emption Group’s published
Statement of Principles.
2
This disclosure relating to Eldose Babu reflects the disclosure announced on 5 June 2024, with previous disclosures announced in the prior financial year
Directors’ Report continued
Saga plc
Annual Report and Accounts 2025
96
Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and
Accounts, and the Group and parent company financial statements,
in accordance with applicable laws and regulations.
Company law requires the Directors to prepare Group and parent
company financial statements for each financial year. Under that law,
they are required to prepare the Group financial statements in
accordance with UK-adopted international accounting standards
and in conformity with the requirements of the Companies Act 2006
(the
Act
), and have elected to prepare the parent company financial
statements in accordance with UK accounting standards, including
Financial Reporting Standard 101 ‘Reduced Disclosure Framework’.
Under company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Group, and parent company, and of their
profit or loss for that period (see Governance statements on page 54).
In preparing each of the Group and parent company financial
statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable, relevant,
reliable and prudent;
for the Group financial statements, state whether they have
been prepared in accordance with UK-adopted international
accounting standards;
for the parent company financial statements, state whether
applicable UK accounting standards have been followed, subject to
any material departures having been disclosed and explained in the
parent company financial statements;
assess the Group and parent company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern; and
use the going concern basis of accounting, unless they either
intend to liquidate the Group or the parent company, or to cease
operations or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent company’s
transactions and disclose with reasonable accuracy at any time, the
financial position of the parent company and enable them to ensure
that its financial statements comply with the Act. They are also
responsible for such internal controls as they determine necessary
to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error, and have
general responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the Group and to prevent and detect
fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Statement that comply with that law and those regulations.
Disclosure of information to the auditor
Having made the requisite enquiries, so far as each of the Directors
is aware, there is no relevant audit information (as defined by
Section 418(3) of the Act) of which the Company’s auditor is unaware,
and the Directors have taken all the steps they ought to have taken
to make themselves aware of any relevant audit information and to
ensure that the Company’s auditor is aware of that information.
Maintenance of website and single
electronic reporting
The Directors are responsible for the maintenance and integrity of
the corporate and financial information included on the Company’s
website. Legislation in the UK, governing the preparation and
dissemination of financial statements, may differ from legislation
in other jurisdictions.
The financial statements will form part of the annual financial report
prepared using the single electronic reporting format under the
Transparency Directive European Single Electronic Format (
ESEF
)
Regulation. The auditor’s report on these financial statements
provides no assurance over the ESEF format.
Directors’ responsibility statement
Each of the Directors who were in office at the date of this report,
whose names and responsibilities are listed on pages 60-61, confirm
that, to the best of their knowledge:
the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss of the
Company and the undertakings included in the consolidation taken
as a whole; and
the Management Report, as defined in the Directors’ Report,
includes a fair review of the development and performance of the
business and the position of the issuer, and the undertakings
included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face.
The Directors consider the Annual Report and Accounts, taken as
a whole, to be fair, balanced and understandable and provide the
information necessary for shareholders to assess the Group’s
position and performance, business model and strategy.
By order of the Board
Victoria Haynes
Group Company Secretary
15 April 2025
Saga plc (Company no. 08804263)
Statements of responsibilities
Financial statements
Additional information
Saga plc
Annual Report and Accounts 2025
97
Strategic Report
Governance
1 Our opinion is unmodified
We have audited the financial statements of Saga plc (“the Company”)
for the year ended 31 January 2025 which comprise the Consolidated
income statement, Consolidated statement of comprehensive income,
Consolidated statement of financial position, Consolidated statement
of changes in equity, Consolidated statement of cash flows, the
Company Balance sheet, Company Statement of changes in equity,
and the related notes, including the accounting policies in note 2.3
to the financial statements and note 1.1 to the Company financial
statements other than the disclosures labelled as unaudited in
note 35.
In our opinion:
The financial statements give a true and fair view of the state of the
Group’s and of the parent company’s affairs as at 31 January 2025
and of the Group’s loss for the year then ended.
The Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards.
The parent company financial statements have been properly
prepared in accordance with UK accounting standards, including
FRS 101
Reduced Disclosure Framework
.
The financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
are described below. We believe that the audit evidence we have
obtained is a sufficient and appropriate basis for our opinion. Our audit
opinion is consistent with our report to the Audit Committee.
We were first appointed as auditor by the shareholders on
22 June 2017. The period of total uninterrupted engagement is for
the eight financial years ended 31 January 2025. We have fulfilled
our ethical responsibilities under, and we remain independent of the
Group in accordance with, UK ethical requirements including the
Financial Reporting Council (FRC) Ethical Standard as applied to listed
public interest entities. No non-audit services prohibited by that
standard were provided.
Overview
Materiality:
Group
financial statements
as a whole
£6.2m (2024: £5.6m)
1.05% of 2025 revenue
(2024: 0.76% of revenue)
Coverage
97% (2024: 97%) of total revenues
Key audit matter
vs 2024
Recurring risks
Recoverability of goodwill
Valuation of the liability and
reinsurance for incurred claims
Recoverability of the parent company’s
investment in subsidiaries
2 Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and
include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had
the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.
We summarise below the key audit matters (unchanged from 2024 other than the exclusion of a key audit matter relating to going concern),
in decreasing order of audit significance, in arriving at our audit opinion above, together with our key audit procedures to address those matters
and our findings from those procedures in order that the Company’s members, as a body, may better understand the process by which we
arrived at our audit opinion. These matters were addressed, and our results are based on procedures undertaken, in the context of, and solely
for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are incidental to that
opinion, and we do not provide a separate opinion on these matters.
Area
The risk
Our response
Recoverability
of goodwill
Goodwill:
£206.4 million,
(2024: £344.7 million)
Impairment of
goodwill:
£138.3 million
(2024: £104.9million)
Refer to pages 71-74
(Audit Committee
Report) note 2.3h on
page 123 (accounting
policies) and note 14
on pages 137-140
(financial disclosures)
in the annual report
and accounts.
Forecast-based valuation:
Insurance Broking goodwill in the Group is
significant and at risk of recoverability if forecast
business performance were to fall significantly
short of business plans on account of compressed
margins resulting from high claims costs inflation.
The estimated recoverable amount of goodwill
in relation to the Insurance Broking business is
subjective due to the inherent uncertainty involved
in forecasting and discounting future cash flows
and judgement is required to assess whether the
directors’ overall estimate, taking into account the
below assumptions, falls within an acceptable range.
The assessment of the recoverability of goodwill
involves a high degree of subjectivity around
assumptions due to the supporting calculations
of Value in Use (‘VIU‘) being reliant on expectations
of future performance as well as the delivery risk
attached to expected forecast cash flows based
on an affinity partnership agreed with a third party
insurer. Inputs into the VIU calculations, such as
future cash flows pre-tax discount rate and terminal
growth rates are at risk of error on account of
subjectivity, complexity and uncertainty arising
from their estimation.
We performed the tests below rather than seeking to rely on
any of the Group’s controls because the estimation uncertainty
involved in the nature of the balance is such that we would
expect to obtain audit evidence primarily through the detailed
procedures described.
Our procedures included:
Historical comparisons:
We assessed the reasonableness of cash flow projections
against historical performance and the terms of the
affinity partnership.
Our sector experience:
We evaluated and challenged the assumptions used in cash
flow forecasts using our sector knowledge and experience.
Benchmarking assumptions:
We compared the Group’s assumptions to externally derived
data in relation to key inputs such as pre-tax discount rate
with the support of our valuation specialists and terminal
growth rates.
Saga plc
Annual Report and Accounts 2025
98
Independent Auditor’s Report to the Members of Saga plc
Independent Auditor’s Report to the Members of Saga plc
Area
The risk
Our response
The risk in relation to these assets is impacted by
uncertainty in the economic outlook and therefore
there is a risk of impairment to Insurance Broking
goodwill; and particularly if the Group fails to meet
its forecasts for 2025/26 and beyond which
incorporate cash flows based on an affinity
partnership deal onward from Q4 2025.
The effect of these matters is that, as part of our risk
assessment, we determined that the valuation of
goodwill has a high degree of estimation uncertainty,
with a potential range of reasonable outcomes
greater than our materiality for the financial
statements as a whole, and possibly many times
that amount.
Comparing valuations:
We compared the recoverable amount of the Insurance
business Cash Generating Unit (‘CGU’) by reference to the
VIU relative to the carrying value and evaluated the outcome
against comparator industry multiples.
Assessing transparency:
We assessed whether the Group disclosures about the
sensitivity of the outcome of the impairment assessment to
changes in key assumptions reflect the risks inherent in the
valuation of goodwill.
Our findings:
We found the Group’s estimated recoverable
amount of goodwill and the related impairment charge to
be balanced (2024 finding: balanced), with proportionate
(2024 finding: proportionate) disclosure of the related
assumptions and sensitivities.
Valuation of the
liability and
reinsurance for
incurred claims
Liability for
incurred claims:
£235.9 million
(2024: £286.4 million)
Amounts recoverable
on incurred claims
(Estimate of present
value of future cash
flows): £88.9 million
(2024: £141.3 million)
Refer to pages 71-74
(Audit Committee
Report) note 2.3r
on pages 123-126
(accounting policies)
and note 28 on
pages 159-162
(financial disclosures).
Subjective valuation:
The liability for incurred claims represents a
significant liability for the Group and comprises the
discounted unbiased probability weighted estimate
of the cash flows and a risk adjustment. There is a
significant risk around the valuation of the liability
and amounts recoverable for incurred claims driven
by the risk of inappropriate estimation in respect
of the future cash flows.
Valuation of incurred but not reported (‘IBNR’)
claims is the most subjective component of the
liability for incurred claims and reinsurance contract
asset, requiring a number of assumptions to be
made with high estimation uncertainty. This is
heightened due to the need for adjustments to
the historical claims pattern to reflect uncertainty
driven by the inflationary environment and
judgmental allowance for the effect of events
not in the historic claims data.
There is greater inherent uncertainty in valuation
of those claims which emerge slowly over time, or
where there is greater potential exposure to large
losses due to the effect of uncertain or unknown
incurred events.
This judgement is applied to a number of key
assumptions and methodologies being the choice
of development patterns, and the application of
method used to value Periodical Payment Orders
(‘PPOs’). Similar estimates are required in
establishing the reinsurers’ share of incurred claims,
in particular share of IBNR claims.
The effect of these matters is that, as part of our
risk assessment, we determined that the valuation
of the liability and amounts recoverable for incurred
claims has a high degree of estimation uncertainty,
with a potential range of reasonable outcomes
greater than our materiality for the financial
statements as a whole, and possibly many times
that amount. The financial statements (note 20)
disclose the sensitivity estimated by the Group.
We tested the design and implementation of key controls
over the actuarial reserving process. Due to the nature of this
balance, we would expect to obtain audit evidence primarily
through detailed substantive procedures as outlined below.
We have involved our actuarial specialists to perform the
following procedures:
Independent re-projection of undiscounted cash flows:
Using the Group’s own data, we carried out independent
re-projections to form our own view of the estimate of the
cash flows for IBNR both on a gross and net of reinsurance
basis for non-PPOs on an undiscounted basis and on a
discounted basis for PPOs. We have included an inflation
loading based on our independent assessment and have
challenged the Group’s own assumption with respect to
this loading.
Historical comparisons:
We compared prior year actual versus expected claims
experience by class of business and accident year.
Assessing transparency:
We considered the adequacy of the Group’s disclosures
in respect of the sensitivity of the valuation of liability
and amounts recoverable for incurred claims and key
assumptions applied to key areas of judgement and
estimation uncertainty.
Our findings:
We found that the resulting estimate of the
amount recognised for liability and amounts recoverable for
incurred claims to be mildly cautious (2024 finding: mildly
optimistic). We found the disclosures of the sensitivities to
changes in key assumptions and estimate as inputs to the
valuation to be proportionate (2024: proportionate).
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Financial statements
Additional information
Governance
Area
The risk
Our response
Recoverability
of the parent
company’s
investment in
subsidiaries
Company’s
investment in
subsidiaries:
£659.3 million
(2024: £167.3 million)
Refer to pages 71-74
(Audit Committee
Report), note 1.1b on
page 179 (accounting
policies) and note 2
on page 181 (financial
disclosures).
Forecast-based valuation:
The parent company has a single direct subsidiary
but indirectly owns all entities within the Group.
The carrying amount of the parent company’s
investment in subsidiaries is significant and has
been impaired in prior years. The carrying amount
is at risk of further impairment or reversal of
previously booked impairments if forecast business
performance for the Group’s business units, due to
volatility in margins in the Insurance Broking unit in
particular, were to fall short or deliver significantly
ahead of expected business performance.
The estimated recoverable amount of the parent
company’s investment in subsidiaries is subjective
due to the inherent uncertainty involved in
forecasting and discounting future cash flows and
judgement is required to assess whether the
directors’ overall estimate, taking into account the
below assumptions, falls within an acceptable range.
The assessment of the recoverability of this asset
involves a high degree of subjectivity around
assumptions due to the supporting calculations
of VIU being reliant on expectations of future
performance. Multiple inputs into the VIU
calculations, such as future cash flows, pre-tax
discount rate and terminal growth rates are at risk
of error in order to demonstrate that the value of
the asset is not impaired.
The risk in relation to these assets is impacted by
uncertainty in the economic outlook and therefore
there is risk of impairments to investments in
subsidiaries at the parent company level if the
Group delivers results that are materially different
from the plan in 2025/26, and years thereafter.
The effect of these matters is that, as part of our
risk assessment, we determined that the valuation
of the parent company’s investment in subsidiaries
has a high degree of estimation uncertainty, with
a potential range of reasonable outcomes greater
than our materiality for the financial statements
as a whole, and possibly many times that amount.
We performed the tests below rather than seeking to rely on
any of the Group’s controls because the estimation uncertainty
involved in the nature of the balance is such that we would
expect to obtain audit evidence primarily through the detailed
procedures described.
Our procedures included:
Historical comparisons:
We assessed the reasonableness of cash flow projections
against historical performance.
Our sector experience:
We evaluated and challenged the assumptions used in cash
flow forecasts using our sector knowledge and experience.
Benchmarking assumptions:
We compared the parent company’s assumptions to
externally derived data in relation to key inputs such as
pre-tax discount rates with the support of our valuation
specialists and terminal growth rates.
Comparing valuations:
For the parent company’s investment in subsidiaries, we
compared the sum of the VIUs or fair value less costs to sell
for all of the Group’s CGUs to the carrying value, market
capitalisation and implied multiples of the Group’s businesses;
and evaluated reasons for any significant differences.
Sensitivity analysis:
We assessed the sensitivity of the headroom over the parent
company’s investment in subsidiaries and concluded on the
appropriateness of the recoverable amount of the parent
company’s investment in subsidiaries. This was performed
considering reasonable possible changes in key assumptions
underlying the business plans, including pre-tax discount rate
and terminal growth rates.
Assessing transparency:
Assessing the adequacy of the parent company’s disclosures
in respect of the investment in subsidiaries.
Our findings:
We found the Group’s estimated recoverable
amount of the parent company’s investment in subsidiaries and
the related reversal of impairment to be balanced (2024 finding:
balanced), with proportionate (2024 finding: proportionate)
disclosure of the related assumptions and sensitivities.
During February 2025, the Group was able to repay £250.0m of senior unsecured notes and a £75.0m loan provided by Sir Roger De Haan, the
Group’s chair. This was possible following a refinancing of the Group’s corporate debt arrangements which has resulted in the majority maturing
in 2031, which is well beyond the end of the Group’s going concern period. We have therefore determined that going concern is no longer one of
the most significant risks in our current year audit and, therefore, it is not separately identified in our Key Audit Matters section of the report this
year. Further details on going concern are provided in Section 4 of this report.
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Independent Auditor’s Report to the Members of Saga plc continued
3 Our application of materiality and an
overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at
£6.2m (2024: £5.6m), determined with reference to a benchmark
of total revenue, of which it represents 1.05% (2024: 0.76%
determined with reference to a benchmark of total revenue which
included revenue from operations classified as discontinued in 2024
of £176.5m as disclosed in note 38).
Total Revenue
£6.2m
Whole financial statements materiality
(2024: £5.6m)
£0.3m
Misstatements reported to the
Audit Committee (2024: £0.3m)
£588.3m
(2024: £741.1m)
Group Materiality
£6.2m
(2024: £5.6m)
Total Revenue
Group Materiality
Whole financial statements
performance materiality
£4.0m
(2024: £3.6m)
Range of materiality at 5 components
(2024: 5 components) £1.7m-£2.9m
(2024: £2.2m-£4.2m)
Materiality for the parent Company financial statements as a whole
was set at £4.4m (2024: £4.4m), determined with reference to a
benchmark of net assets of which it represents 0.1% (2024: 1.6%).
In line with our audit methodology, our procedures on individual
account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an acceptable
level the risk that individually immaterial misstatements in individual
account balances add up to a material amount across the financial
statements as a whole.
Performance materiality was set at 65% (2024: 65%) and 75%
(2024: 75%) of materiality for the financial statements as a whole
for the Group and the parent company respectively. This equates
to £4.0m (2024: £3.6m) and £3.3m (2024: £3.3m) for the Group
and the parent company respectively. We applied this percentage
in our determination of performance materiality based on impact of
the number of control deficiencies identified during the prior period.
We agreed to report to the Audit Committee any corrected or
uncorrected identified misstatements exceeding £0.3m
(2024: £0.3m), in addition to other identified misstatements that
warranted reporting on qualitative grounds.
Overview of the scope of our audit
This year, we applied the revised group auditing standard in our audit
of the consolidated financial statements. The revised standard changes
how an auditor approaches the identification of components, and how
the audit procedures are planned and executed across components.
In particular, the definition of a component has changed, shifting the
focus from how the entity prepares financial information to how we,
as the group auditor, plan to perform audit procedures to address
group risks of material misstatement (“RMMs”). Similarly, the group
auditor has an increased role in designing the audit procedures as well
as making decisions on where these procedures are performed
(centrally and/or at component level) and how these procedures are
executed and supervised. As a result, we assess scoping and coverage
in a different way and comparisons to prior period coverage figures
are not meaningful. In this report we provide an indication of scope
coverage on the new basis.
We performed risk assessment procedures to determine which
of the Group’s components are likely to include risks of material
misstatement to the Group financial statements and which
procedures to perform at these components to address those risks.
In total, we identified 13 components, having considered our evaluation
of the Group’s operational structure, the existence of common
information systems, the existence of common risk profile across
entities and our ability to perform audit procedures centrally.
Of those, we identified 4 quantitatively significant components which
contained the largest percentages of either total revenue or total
assets of the Group, for which we performed audit procedures.
Additionally, having considered qualitative and quantitative factors,
we selected 1 component with accounts and/or disclosures
contributing to the specific risks of material misstatement of the
Group financial statements.
The below summarises where we performed audit procedures:
Component type
Number of
components where
audit procedures
were performed
Range of
materiality applied
Quantitatively
significant
components
4
£2.9m - £1.8m
Other components
where we performed
procedures
1
£1.7m
Total
5
We involved component auditors in performing the audit work on
3 components. We set the component materialities having regard to
the mix of size and risk profile of the Group across the components.
We also performed the audit of the Parent Company.
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Financial statements
Additional information
Governance
Our audit procedures covered 97% of Group revenue. We performed
audit procedures in relation to components that accounted for 96%
of Group total assets.
For the remaining components for which we performed no audit
procedures, no component represented more than 2% of Group
total revenue including discontinued operations or Group total assets
including assets held for sale. We performed analysis at an aggregated
Group level to re-examine our assessment that there is not a reasonable
possibility of a material misstatement in these components.
With the assistance of our IT auditors we obtained an understanding of
the main IT systems relevant to our Group audit. The Group’s control
environment is undergoing improvement, including the upgrade of the
general ledger. As such, our planned audit approach was to rely only on
relevant General IT Controls at the Group level but not for the audits
of the components.
Following our testing, including performing additional risk assessment
procedures in response to deficiencies identified, we were able to rely
on general IT controls and automated controls at the Group level in
determining the work to be performed over certain consolidation
processes. As we did not rely on controls over the component IT
systems, we performed additional testing over the completeness and
accuracy of information extracted from the systems used in our audit.
We also concluded that substantive audit procedures in most areas of
our audit, such as revenue-to-cash matching, would produce relevant
audit evidence in a more efficient way and therefore our audit was
largely substantive.
We identified control deficiencies in relation to manual journal
entries and therefore we were not able to rely on controls in this
area. Following incremental risk assessment, we determined that
no significant changes were required to our planned approach
to journal testing.
Overall, considering the developing nature of the control
environment and the most efficient and effective approach for
gaining the appropriate audit evidence, we concluded that a largely
substantive audit approach was appropriate for the audit of the
year ended 31 January 2025 for significant risk areas and the key
transactional processes.
4 Going concern
The directors have prepared the financial statements on the going
concern basis as they do not intend to liquidate the Group or the
Company or to cease their operations, and as they have concluded
that the Group’s and the Company’s financial position means that
this is realistic. They have also concluded that there are no material
uncertainties that could have cast significant doubt over their ability
to continue as a going concern for at least 12 months from the date
of approval of the financial statements (“the going concern period”).
We used our knowledge of the Group, its industry, and the general
economic environment to identify the inherent risks to its business
model and analysed how those risks might affect the Group’s and
Company’s financial resources or ability to continue operations over
the going concern period. The risks that we considered most likely
to adversely affect the Group’s and Company’s available financial
resources and metrics relevant to debt covenants over this
period were:
The agreement for the sale of the Insurance Underwriting
business and the affinity partnership for Insurance Broking
business be cancelled or delayed.
The inability to achieve load factors for Ocean Cruise,
lower demand for River Cruise and slower growth in the
Holidays business.
The anticipated benefits of the affinity partnership deal for the
Insurance Broking business may not be fully realized due to
unforeseen business risks, regulatory changes, or the timing and
extent to which management can achieve the cost savings.
Further unexpected downturn in performance of the Insurance
Broking business due to worsening competitive market pressures.
We also considered less predictable but realistic second order
impacts, such as adverse changes in UK Government policy and the
economic environment, which could result in a rapid reduction of
available financial resources.
We considered whether these risks could plausibly affect the liquidity
or covenant compliance in the going concern period by comparing
severe, but plausible downside scenarios that could arise from these
risks individually and collectively against the level of available financial
resources and covenants indicated by the Group’s financial forecasts.
Our conclusions based on this work:
We consider that the directors’ use of the going concern basis
of accounting in the preparation of the financial statements
is appropriate.
We have not identified, and concur with the directors’ assessment
that there is not a material uncertainty related to events or
conditions that, individually or collectively, may cast significant
doubt on the Group’s or Company’s ability to continue as a going
concern for the going concern period.
We have nothing material to add or draw attention to in relation to
the directors’ statement in note 2.1 to the financial statements on
the use of the going concern basis of accounting with no material
uncertainties that may cast significant doubt over the Group and
Company’s use of that basis for the going concern period, and we
found the going concern disclosure in note 2.1 to be acceptable.
The related statement under the UK Listing Rules set out on
page 57 is materially consistent with the financial statements
and our audit knowledge.
However, as we cannot predict all future events or conditions and as
subsequent events may result in outcomes that are inconsistent with
judgements that were reasonable at the time they were made, the
above conclusions are not a guarantee that the Group or the
Company will continue in operation.
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Independent Auditor’s Report to the Members of Saga plc continued
5 Fraud and breaches of laws and
regulations – ability to detect
Identifying and responding to risks of material
misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”)
we assessed events or conditions that could indicate an incentive or
pressure to commit fraud or provide an opportunity to commit fraud.
Our risk assessment procedures included:
Enquiring of directors, the audit committee and the Internal Audit
and Assurance Director, and inspection of key policies and papers
provided to those charged with governance as to the Group’s
high-level policies and procedures to prevent and detect fraud,
including the Group’s channel for “whistleblowing” and the process
for engaging local management to identify fraud risks specific to
their business units, as well as whether they have knowledge of any
actual, suspected, or alleged fraud.
Reading Board, Audit and Risk Committee minutes and in the case
of Audit Committee meetings for the Group, attendance of the
external audit partner at these meetings.
Considering remuneration incentive schemes and performance
targets for directors and senior management.
Using analytical procedures to identify any usual or unexpected
relationships.
Reading broker reports and other public information to identify
third-party expectations and concerns.
We communicated identified fraud risks throughout the audit team
and remained alert to any indications of fraud throughout the audit.
This included communication from the group to component audit
teams of relevant fraud risks identified at the Group level and request
to component audit teams to report to the Group audit team any
instances of fraud that could give rise to a material misstatement
at Group.
As required by auditing standards and taking into account possible
pressures to meet profit targets, we perform procedures to address
the risk of management override of controls, in particular the risk that
Group and component management may be in a position to make
inappropriate accounting entries. On this audit we do not believe there
is a fraud risk related to revenue recognition because revenue is not
complex in nature and there is no significant management judgement
or estimation involved in recording the revenue transactions.
We also identified fraud risks related to an inappropriate valuation of
the liability and amounts recoverable for incurred claims, in response
to possible pressures to meet profit targets.
In determining the audit procedures to address the identified fraud
risks, we took into account the results of our evaluation and testing of
the operating effectiveness of the Group-wide fraud risk management
controls. Further detail in respect of the procedures performed over
the valuation of the liability and amounts recoverable for incurred
claims, including how we have used specialists to assist in our challenge
of management is set out in the key audit matter disclosures in
section 2 of this report.
To address the pervasive risk as it relates to management override,
we also performed procedures including:
Identifying journal entries to test for all in scope components,
based on risk criteria and comparing the identified entries to
supporting documentation. These included those posted by senior
management, those including specific words based on our risk
criteria, those journals which were unbalanced, those posted to
unusual accounts, those posted at the end of the period and/or
post-closing entries with little or no description and unusual
journal entries posted to either cash, revenue or borrowings
Assessing significant accounting estimates including the valuation
of liability and amounts recoverable for incurred claims for bias.
Identifying and responding to risks of material
misstatement due to non-compliance with laws
and regulations
We identified areas of laws and regulations that could reasonably
be expected to have a material effect on the financial statements
from our general commercial and sector experience, and through
discussion with the directors and other management (as required
by auditing standards), and from inspection of the Group’s regulatory
and legal correspondence and discussed with the directors and other
members of management the policies and procedures regarding
compliance with laws and regulations.
As the Group is regulated, our assessment of risks involved gaining
an understanding of the control environment including the entities’
procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our
team and remained alert to any indications of non-compliance
throughout the audit. This included communication from the group to
audit teams of quantitatively significant components and component
requiring special audit consideration of relevant laws and regulations
identified at the Group level, and a request to auditors of quantitatively
significant components and component requiring special audit
consideration to report to the group team any instances of
non-compliance with laws and regulations that could give rise to a
material misstatement at Group.
The potential effect of these laws and regulations on the financial
statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect
the financial statements including financial reporting legislation
(including related companies’ legislation), distributable profits
legislation, taxation legislation and pension legislation and we assessed
the extent of compliance with these laws and regulations as part of our
procedures on the related financial statement items.
Secondly, the Group is subject to many other laws and regulations
where the consequences of non-compliance could have a material
effect on amounts or disclosures in the financial statements, for
instance through the imposition of fines or litigation or the loss of the
Group’s license to operate. We identified the following areas as those
most likely to have such an effect: regulatory capital, regulatory
compliance and liquidity and certain aspects of company legislation
recognising the financial and regulated nature of the Group’s activities
and its legal form, with the Insurance businesses regulated primarily
by the Financial Conduct Authority and the Gibraltar Financial
Services Commission and the Cruise and the Holidays businesses
regulated by the Civil Aviation Authority. The Cruise and Holidays
businesses are also members of the Association of British Travel
Agents, the International Air Transport Association and the
Federation of Tour Operators. These are well-recognised UK trade
bodies with codes of conduct to which members are required
to adhere.
Auditing standards limit the required audit procedures to identify
non-compliance with these laws and regulations to enquiry of the
directors and other management and inspection of regulatory and
legal correspondence, if any. Therefore, if a breach of operational
regulations is not disclosed to us or is evident from relevant
correspondence, an audit will not detect that breach.
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Strategic Report
Financial statements
Additional information
Governance
Context of the ability of the audit to detect fraud
or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable
risk that we may not have detected some material misstatements
in the financial statements, even though we have properly planned
and performed our audit in accordance with auditing standards.
For example, the further removed non-compliance with laws and
regulations is from the events and transactions reflected in the
financial statements, the less likely the inherently limited procedures
required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of
non-detection of fraud, as these may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal
controls. Our audit procedures are designed to detect material
misstatement. We are not responsible for preventing non-compliance
or fraud and cannot be expected to detect non-compliance with all
laws and regulations.
6 We have nothing to report on the other
information in the annual report
The directors are responsible for the other information presented in
the annual report together with the financial statements. Our opinion
on the financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except as explicitly
stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether, based on our financial statements audit work, the
information therein is materially misstated or inconsistent with the
financial statements or our audit knowledge. Based solely on that work
we have not identified material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
We have not identified material misstatements in the strategic
report and the directors’ report.
In our opinion the information given in those reports for the
financial year is consistent with the financial statements.
In our opinion those reports have been prepared in accordance
with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ remuneration report to be
audited has been properly prepared in accordance with the
Companies Act 2006.
Disclosures of emerging and principal risks and
longer-term viability
We are required to perform procedures to identify whether there is a
material inconsistency between the directors’ disclosures in respect
of emerging and principal risks and the viability statement, and the
financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw
attention to in relation to:
The directors’ confirmation within the viability statement on
page 53 that they have carried out a robust assessment of the
emerging and principal risks facing the Group, including those that
would threaten its business model, future performance, solvency
and liquidity.
The Principal Risks and Uncertainties disclosures describing these
risks and how emerging risks are identified, and explaining how
they are being managed and mitigated.
The directors’ explanation in the viability statement of how they
have assessed the prospects of the Group, over what period
they have done so and why they considered that period to be
appropriate, and their statement as to whether they have a
reasonable expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over the period of
their assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
We are also required to review the viability statement, set out on
page 57 under the UK Listing Rules. Based on the above procedures,
we have concluded that the above disclosures are materially
consistent with the financial statements and our audit knowledge.
Our work is limited to assessing these matters in the context of only
the knowledge acquired during our financial statements audit. As we
cannot predict all future events or conditions and as subsequent
events may result in outcomes that are inconsistent with judgements
that were reasonable at the time they were made, the absence of
anything to report on these statements is not a guarantee as to the
Group’s and Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a
material inconsistency between the directors’ corporate governance
disclosures and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the
following is materially consistent with the financial statements and
our audit knowledge:
The directors’ statement that they consider that the annual report
and financial statements taken as a whole is fair, balanced and
understandable, and provides the information necessary for
shareholders to assess the Group’s position and performance,
business model and strategy.
The section of the annual report describing the work of the
Audit Committee, including the significant issues that the Audit
Committee considered in relation to the financial statements,
and how these issues were addressed.
The section of the annual report that describes the review of the
effectiveness of the Group’s risk management and internal
control systems.
We are required to review the part of the Corporate Governance
Statement relating to the Group’s compliance with the provisions of
the UK Corporate Governance Code specified by the UK Listing Rules
for our review. We have nothing to report in these respects.
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Independent Auditor’s Report to the Members of Saga plc continued
7 We have nothing to report on the other
matters on which we are required to report
by exception
Under the Companies Act 2006, we are required to report to you if,
in our opinion:
Adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been
received from branches not visited by us.
The parent company financial statements and the part of the
Directors’ remuneration report to be audited are not in
agreement with the accounting records and returns.
Certain disclosures of directors’ remuneration specified by law
are not made.
We have not received all the information and explanations we
require for our audit.
We have nothing to report in these respects.
8 Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 97,
the directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair view;
such internal control as they determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error; assessing the Group’s
and parent company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern; and using
the going concern basis of accounting unless they either intend to
liquidate the Group or the parent company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue our opinion in an auditor’s
report. Reasonable assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the
financial statements.
A fuller description of our responsibilities is provided on the FRC’s
website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in an
annual financial report prepared under Disclosure Guidance and
Transparency Rule 4.1.17R and 4.1.18R. This auditor’s report provides
no assurance over whether the annual financial report has been
prepared in accordance with those requirements.
9 The purpose of our audit work and to
whom we owe our responsibilities
This report is made solely to the Company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members, as a body, for
our audit work, for this report, or for the opinions we have formed.
Timothy Butchart (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square, London, E14 5GL
15 April 2025
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Strategic Report
Financial statements
Additional information
Governance
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated income statement
for the year ended 31 January 2025
Notes
2025
£m
2024
(re-presented
1
)
£m
Continuing operations
Revenue
3
Cost of sales
3
(308.8 )
(302.0 )
Gross profit
Other income
4
Administrative and selling expenses
5
(231.8 )
(238.7 )
Increase in credit loss allowance
(1.8 )
(1.1 )
Impairment of non-financial assets
6
(162.8 )
(113.3 )
Gain on lease modification
18
Net profit/(loss) on disposal of property, plant and equipment and software
15, 17, 18
(0.5 )
Investment income
7
Finance costs
8
(50.5 )
(44.4 )
Loss before tax from continuing operations
(160.2 )
(123.8 )
Tax (charge)/credit
10
(18.5 )
Loss from continuing operations
(178.7 )
(108.0 )
Profit/(loss) from discontinued operations, net of tax
2
38a
(5.0 )
Total loss for the year
(164.9 )
(113.0 )
Attributable to:
Equity holders of the parent
(164.9 )
(113.0 )
Loss per share:
Basic
12
(117.4 p)
(80.8 p)
Diluted
12
(117.4 p)
(80.8 p)
Loss per share from continuing operations:
Basic
12
(127.2 p)
(77.2 p)
Diluted
12
(127.2 p)
(77.2 p)
The Notes on pages 111-176 form an integral part of these consolidated financial statements.
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106
1
The comparative information for the year to 31 January 2024 has been re-presented from that previously published due to the Group’s decision to divest itself of the
underwriting and claims handling sections of its Insurance business and, therefore, they have been reclassified as discontinued operations (see Note 38a))
2
The results of discontinued operations, comprising the post-tax profit, are shown as a single amount on the face of the income statement. An analysis of this amount is
presented in Note 38a)
Consolidated statement of comprehensive income
for the year ended 31 January 2025
Notes
2025
£m
2024
£m
Loss for the year
(164.9 )
(113.0 )
Other comprehensive income
Other comprehensive income that may be reclassified to the income statement in
subsequent years from continuing operations
Net gains/(losses) on hedging instruments during the year
19
(1.3 )
Recycling of previous (gains)/losses to the income statement on matured hedges
19
(3.3 )
Total net gains/(losses) on cash flow hedges
(0.3 )
Associated tax effect
(0.3 )
Total other comprehensive income with recycling to the income statement from
continuing operations
Other comprehensive income that will not be reclassified to the income statement
in subsequent years from continuing operations
Remeasurement gains/(losses) on defined benefit plan
27
(41.1 )
Associated tax effect
(12.0 )
Total other comprehensive losses without recycling to the income statement from
continuing operations
(7.4 )
(30.8 )
Total other comprehensive losses from continuing operations
(5.0 )
(30.5 )
Total comprehensive losses for the year
(169.9 )
(143.5 )
Attributable to:
Equity holders of the parent
(169.9 )
(143.5 )
Arising from:
Continuing operations
(183.7 )
(138.5 )
Discontinued operations
(5.0 )
(169.9 )
(143.5 )
The Notes on pages 111-176 form an integral part of these consolidated financial statements.
Saga plc
Annual Report and Accounts 2025
107
Strategic Report
Additional information
Governance
Financial statements
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of financial position
at 31 January 2025
Notes
2025
£m
2024
£m
Assets
Goodwill
14
Intangible assets
15
Property, plant and equipment
17
Right-of-use assets
18
Financial assets
19
Current tax assets
Deferred tax assets
10
Reinsurance contract assets
28
Inventories
22
Trade and other receivables
23
Trust and escrow accounts
24
Cash and short-term deposits
25
Assets held for sale
38
Total assets
Liabilities
Retirement benefit scheme liability
27
Insurance contract liabilities
28
Provisions
31
Financial liabilities
19
Deferred tax liabilities
10
Contract liabilities
29
Trade and other payables
26
Liabilities directly associated with assets held for sale
38a
Total liabilities
Equity
Issued capital
33
Share premium
Own shares held reserve
(1.4 )
(1.2 )
Retained deficit
(620.2 )
(452.5 )
Share-based payment reserve
Hedging reserve
(0.5 )
(2.9 )
Total equity
Total equity and liabilities
The Notes on pages 111-176 form an integral part of these consolidated financial statements.
Mike Hazell
Mark Watkins
Group Chief Executive Officer
Saga plc
Annual Report and Accounts 2025
108
Consolidated statement of changes in equity
for the year ended 31 January 2025
Attributable to the equity holders of the parent
Issued
capital
£m
Share
premium
£m
Own shares
held
reserve
£m
Retained
(deficit)/
earnings
£m
Share-
based
payment
reserve
£m
Hedging
reserve
£m
Total
£m
At 1 February 2024
(1.2 )
(452.5 )
(2.9 )
Loss for the year from continuing operations
(178.7 )
(178.7 )
Profit for the year from discontinued operations
Loss for the year
(164.9 )
(164.9 )
Other comprehensive (losses)/gains excluding
recycling from continuing operations
(7.4 )
(2.2 )
Recycling of previous gains to the income statement
from continuing operations
(2.8 )
(2.8 )
Total comprehensive (losses)/income
(172.3 )
(169.9 )
Issue of share capital (Note 33)
(0.2 )
Share-based payment charge (Note 36)
Transfer upon vesting of share options
(4.7 )
(0.1 )
At 31 January 2025
(1.4 )
(620.2 )
(0.5 )
At 1 February 2023
(309.7 )
(3.2 )
Loss for the year from continuing operations
(108.0 )
(108.0 )
Loss for the year from discontinued operations
(5.0 )
(5.0 )
Loss for the year
(113.0 )
(113.0 )
Other comprehensive losses excluding recycling from
continuing operations
(30.8 )
(0.8 )
(31.6 )
Recycling of previous losses to the income statement
from continuing operations
Total comprehensive (losses)/income
(143.8 )
(143.5 )
Issue of share capital (Note 33)
Share-based payment charge (Note 36)
Own shares transferred
(1.2 )
(0.8 )
(2.0 )
Transfer upon vesting of share options
(1.8 )
At 31 January 2024
(1.2 )
(452.5 )
(2.9 )
The Notes on pages 111-176 form an integral part of these consolidated financial statements.
Saga plc
Annual Report and Accounts 2025
109
Strategic Report
Additional information
Governance
Financial statements
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of cash flows
for the year ended 31 January 2025
Notes
2025
£m
2024
£m
Loss before tax from continuing operations
(160.2 )
(123.8 )
Profit/(loss) before tax from discontinued operations
38a
(5.2 )
Loss before tax
(141.1 )
(129.0 )
Depreciation, impairment and profit or loss on disposal, of property, plant and equipment,
and right-of-use assets
Amortisation and impairment of intangible assets and goodwill, and loss on disposal of software
Impairment of assets held for sale
38b
Gain on lease modification
18
(0.2 )
Share-based payment transactions
Net finance expense from insurance contracts
28
Net finance income from reinsurance contracts
28
(7.3 )
(1.9 )
Finance costs
8
Interest income from investments
(17.3 )
(15.4 )
Decrease/(increase) in trust and escrow accounts
(1.7 )
Movements in other assets and liabilities
(1.2 )
Investment income interest received
Interest paid
(41.7 )
(38.2 )
Income tax received
Net cash flows from operating activities
Investing activities
Proceeds from sale of property, plant and equipment, intangible assets and right-of-use assets
Purchase of, and payments for, the construction of property, plant and equipment and intangible assets
(20.1 )
(26.7 )
Disposal of financial assets
Purchase of financial assets
(11.5 )
(11.7 )
Disposal of subsidiary, net of cash in business disposed of
13
Net cash flows from investing activities
Financing activities
Payment of principal portion of lease liabilities
32
(7.3 )
(11.6 )
Proceeds from new borrowings
32
Repayment of borrowings
32
(232.2 )
(62.2 )
Net cash flows used in financing activities
(144.5 )
(73.8 )
Net (decrease)/increase in cash and cash equivalents
(16.5 )
Cash and cash equivalents at the start of the year
Cash and cash equivalents at the end of the year
25
Included in the above are cash flows from discontinued operations. An analysis of these can be found in Note 38a).
The Notes on pages 111-176 form an integral part of these consolidated financial statements.
Saga plc
Annual Report and Accounts 2025
110
Saga plc
Annual Report and Accounts 2025
111
Notes to the consolidated financial statements
Strategic Report
Governance
Financial statements
Additional information
Company
) is a public limited company incorporated
and domiciled in the United Kingdom
UK
) under the Companies Act
2006 (registration number 08804263). The Company is registered
in England and Wales and its registered office is 3 Pancras Square,
base, which include package and cruise holidays, general insurance
products, personal finance products and a range of media content
prepared in accordance with UK-adopted international
The consolidated financial statements have been prepared on a going
concern basis and on a historical cost basis, except as otherwise
stated. The Group reviewed the appropriateness of the going concern
basis in preparing the financial statements, details of which are
included below. Based on those assumptions, the Directors concluded
that it remains appropriate to adopt the going concern basis in
preparing the financial statements.
British pounds sterling (
GBP
), which is also the parent company’s
functional currency, and all values are rounded to the nearest hundred
thousand (£m), except when otherwise indicated. Each company in
the Group determines its own functional currency and items included
in the financial statements of each entity are measured using that
The preparation of financial statements in compliance with
UK-adopted international accounting standards requires the use
of certain critical accounting estimates. It also requires management
to exercise judgement in applying the Group’s accounting policies.
The areas where significant judgements and estimates have been
made in preparing the financial statements, and their effect, are
disclosed in Note 2.6.
The material accounting policies adopted, which have been applied
consistently, unless otherwise stated, are set out in Note 2.3.
The Directors performed an assessment of going concern to
determine the adequacy of the Group’s financial resources over the
period from the date of signing these financial statements to
30 April 2026.
This assessment is centred on a base case overlaid with risk-adjusted
financial projections which incorporate scenario analysis and stress
tests on expected business performance.
On 30 January 2025, the Group announced that it had agreed new
credit facilities, comprising a £335.0m term loan facility, a £100.0m
delayed-draw term loan (
DDTL
) facility and a £50.0m Revolving
Credit Facility (
RCF
). The term loan facility and DDTL facility both
mature on 29 January 2031 and the RCF matures on 29 July 2030.
Subsequent to the year end, on 27 February 2025, the Group drew
down the £335.0m term loan facility and utilised the proceeds to
repay the £250.0m senior unsecured notes maturing in July 2026,
and the £75.0m drawn under the £85.0m loan facility provided by
Roger De Haan. This refinancing substantially reduced the Group’s
exposure to debt maturities in the near term and secured access
to additional sources of liquidity to provide the Group with financial
flexibility over the coming years.
The Group’s base case modelling assumes continued strong
performance in Cruise on the back of continued high load factors
and growth in per diems. Our Holidays business is also expected to
achieve further growth in profits. The Insurance division reflects the
expected disposal of the Group’s Underwriting business later this
year, together with a plan for the Broking business that sees it
leveraging strategic partnerships to meet the needs of the over-50s,
while migrating to a new operating model for motor and home that
will facilitate a return to longer-term growth.
The Group’s severe but plausible stressed scenario incorporates a
reduction in load factors of 1-2% for Cruise and a reduction in touring
customer volumes of c.2,500 per annum in the Holidays business.
Downside risks modelled for Insurance include the impact of a possible
delay in the timing of the expected sale of the Underwriting business.
drawdowns against its new £50.0m RCF, but no drawdown against the
£100.0m DDTL facility, the Group expects to make all Ocean Cruise
debt principal repayments as they fall due over the period to April
2026 and to retain sufficient levels of Available Cash
3
to service its
liquidity requirements across the assessment period. In addition, it
expects to meet the financial covenants relating to its secured Cruise
debt and to remain below the 8.8x Leverage Ratio
3
covenant attached
to its new £50.0m RCF. It also expects to remain below the 8.0x
Leverage Ratio
3
covenant attached to the new £335.0m term loan
and to the £100.0m DDTL facility, enabling it to draw down on this
currently undrawn facility to support the repayment of Ocean Cruise
debt repayments should the need arise.
Noting that it is not possible to accurately predict all possible future
risks to the Group’s trading, based on this analysis and the scenarios
modelled, the Directors concluded that the Group will have sufficient
funds to continue to meet its liabilities as they fall due at least until
April 2026. They have, therefore, deemed it appropriate to prepare
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its
subsidiaries
) made up to 31 January each year. Control is achieved
when the Group is exposed, or has rights, to variable returns from its
involvement with an investee entity and has the ability to affect those
returns through its power over the investee entity.
The existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether the
Group controls another entity.
Subsidiary companies are consolidated using the acquisition method.
The results of subsidiaries acquired, or disposed of, during the year
are included in the consolidated income statement from the effective
date of acquisition (control) or up to the effective date of disposal
(control ceases), as appropriate. Where a subsidiary which constituted
a separate major line of business is disposed of, it is disclosed as a
discontinued operation.
In preparing these consolidated financial statements, any intra-group
receivables, payables, income and expenses arising from intra-group
trading are eliminated. Where accounting policies used in individual
financial statements of a subsidiary company differ from Group
policies, adjustments are made to bring these policies in line with
Group policies.
A change in the ownership interest of a subsidiary, without a loss of
control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the
related assets (including goodwill), liabilities, non-controlling interest
and other components of equity while any resultant gain or loss is
recognised in profit or loss. Any investment retained is recognised
Saga plc
Annual Report and Accounts 2025
112
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
Revenue represents amounts receivable from the sale or supply
of goods and services provided to customers in the ordinary course
of business and is recognised to the extent that it is probable that the
future economic benefits will flow to the Group and the revenue
can be reliably measured, regardless of when payment is received.
The policies for the recognition of the Group’s various revenue
streams by segment are as follows:
i) Travel
Revenue from Cruise, in respect of Ocean Cruise holidays, is
recognised in line with the performance obligations, being the cruise
itself, flights and/or rail journeys (where applicable), travel insurance
and transfers. The standalone selling price of each performance
obligation is estimated as the cost to provide each obligation plus a
profit margin appropriate to the nature of each service. The price
charged to each customer is then apportioned to each performance
obligation based on the relative estimated standalone selling prices,
in line with the requirements of International Financial Reporting
Standard (
IFRS
) 15 ‘Revenue from Contracts with Customers’.
The portion of revenue allocated to the cruise itself is recognised on
a per diem basis over the duration of the cruise, in line with when the
performance obligation is satisfied. The portion of revenue allocated
to flights, and flight upgrades (where applicable), and transfers is
recognised on the date that each trip is fulfilled.
Revenue from travel insurance (which is underwritten by a third party)
for cruising holidays is recognised at the cover start date of the policy,
which is usually at the point the customer makes a booking.
Revenue from Cruise, relating to chartered river cruise ships, is also
recognised in line with the performance obligations that are included
in a package holiday, namely the provision of flights, accommodation,
transfers and travel insurance. Revenue is recognised as and when
each performance obligation is satisfied, which is deemed to be when
each service to the customer takes place.
For Holidays, revenue in relation to flights and flight upgrades is
recognised on the date of each flight; revenue in relation to
accommodation is recognised over the duration of the holiday;
revenue in relation to transfers is recognised on the date that the
transfers occur before and after each holiday; and revenue in respect
of travel insurance (which is underwritten by a third-party
underwriter) is recognised on the cover start date of the insurance.
This is consistent with the approach adopted by the Cruise business.
An element of revenue which represents the non-refundable deposit
received at the time of booking is recognised in the income statement
immediately in line with the prevailing rate of cancellations.
Revenue from sales in resort, or on board a cruise ship operated by the
Group, for example for optional excursions, is recognised as it is earned.
Revenue from Travel received in advance of when each performance
obligation is satisfied is included as deferred revenue within contract
liabilities in the statement of financial position.
ii) Insurance
The amounts received from customers for insurance policies comprise
three main elements: the premium charged to the customer in
respect of the insurance cover (
gross premium
); insurance premium
tax (
IPT
); and an arrangement fee, where applicable (only applied to
policies that are brokered via a panel). The gross premium itself
comprises two elements: the premium charged by the underwriter
of each policy (
net premium
), which may be provided by the Group’s
in-house underwriter or by a third-party underwriter, plus any
adjustment to the net premium that is applied by the Group’s broker
during the broking service (
street pricing adjustment
).
The Group may also charge additional amounts, where the customer
pays in instalments, for mid-term cancellations or for adjustments
made to policies mid-term.
IPT is excluded from all revenue recognised by the Group.
Our Insurance Broking business also offers a three-year fixed-price
feature, bundled within the Saga Plus product offering for motor
and home insurance. This product is a distinct and separate service
offered by the broker, as a promise to match or beat the premium
for the next two renewal dates for the same level of protection and
provided that the customer’s circumstances do not change.
(a) For 12-month insurance policies with no option to fix the premium
at renewal (
annual policies
)
For insurance policies underwritten by the Group:
the gross insurance premium and any amounts received as a result
of the policyholder opting to pay in instalments are recognised as
insurance revenue on a straight-line, time-apportioned basis over
the coverage period;
any such amounts received in advance of coverage being provided
to the policyholder are deferred within insurance contract
liabilities in the statement of financial position;
mid-term adjustments to premiums are recognised on a
straight-line, time-apportioned basis over the remaining coverage
period of the policy; and
reductions in premiums arising from mid-term cancellations are
recognised on the effective date of the cancellation.
The above treatment is in line with the requirements of IFRS 17
‘Insurance Contracts’ (see also Note 2.3r)).
For insurance policies not underwritten by the Group:
the portion of the gross premium that is retained by the Group,
otherwise referred to as the street pricing adjustment, is allocated
to performance obligations and recognised as those performance
obligations are satisfied. The most material amount is allocated to
the performance obligation relating to the brokerage service,
which is recognised on the inception date of the insurance
contract; and
the portion of the gross premium charged by the third-party
underwriter, otherwise referred to as the net premium, is not
recognised as revenue in the income statement.
The above treatment is in line with the requirements of IFRS 15.
For all insurance policies:
the arrangement fee that is charged in respect of the broking
service is recognised within revenue from Insurance Broking
services on the date that each policy is arranged; and
any fee income charged for a mid-term cancellation or adjustment
is recognised on the date the adjustment is made, being the point
that the mid-term service is fulfilled. Where these amounts arise
from insurance contracts underwritten by the Group, they are
presented within Insurance revenue, otherwise they are presented
within revenue from Insurance Broking services.
(b) For 12-month insurance policies where customers have the option
to fix the premium over three years (
three-year fixed-price products
)
The policyholder’s option to fix the annual premium at the first and
second renewal points is accounted for under IFRS 15 as a promise to
the customer.
Where the related insurance policy is not underwritten by the Group,
this promise is accounted for as a separate performance obligation to
the brokerage service.
Where the related insurance policy is underwritten by the Group, this
promise is a distinct service that is accounted for separately from the
host insurance contract because:
the cash flows and risks of the price promise service are not highly
interrelated with those of the insurance contract; and
the Group does not provide a significant service in integrating the
price promise with the insurance underwriting service.
Therefore, the accounting treatment of the Group’s obligation to fix
the premium does not depend on whether the related insurance policy
is underwritten by the Group.
For all three-year fixed-price products, the Group allocates a portion
of the gross premiums received at inception and at the first renewal
point to the price promise service. The amount allocated to this
service is an estimate of its standalone selling price, being an actuarial
estimate of the cost of transferring the obligation to a third-party plus
an appropriate profit margin.
Saga plc
Annual Report and Accounts 2025
113
Strategic Report
Governance
Financial statements
Additional information
Amounts allocated to the price promise service are initially deferred
within contract liabilities in the statement of financial position and
subsequently recognised as revenue since the option to fix is exercised
by the customer (and the Group’s performance obligation is satisfied).
If a customer cancels a policy subject to the three-year fixed-price
promise mid-term, or chooses not to renew in the second or third
years, any remaining deferred revenue is recognised within revenue
at the point the cover ends, being the point that the Group is released
from the obligation to fix the price at renewal.
The Group previously entered into contracts to limit its exposure to
potential losses arising as a result of underwriting net rate inflation in
respect of its three-year fixed-price offering. The Group continues to
recognise amounts arising from those contracts. Those contracts are
classified as insurance contracts held.
(c) Other sources of revenue relating to insurance policies
Profit commissions due to the Group, from acting as an insurance
intermediary on behalf of third-party underwriters, are recognised
and valued in accordance with the contractual terms to which they are
subject, when it is highly probable that a significant reversal of revenue
will not occur.
Where claims arise on insurance policies that are not the fault of the
insured, the Group may earn revenue from:
referrals to credit hire companies (in relation to policies
underwritten by the Group or by third parties); and
referrals to credit repair companies (in relation to policies
underwritten by third parties only).
This revenue is recognised at the point of referral.
iii) Other Businesses and Central Costs
(a) Saga Money
Revenue from personal finance products is recognised when the
customer contracts with the provider of the relevant personal finance
product where the revenue comprises a one-off payment by the
provider of the product.
Where the personal finance product is one that delivers a recurring
income stream, the present value of the future expected revenue to
be received is recognised when the customer contracts with the
provider of the relevant personal finance product, and it is highly
probable that a significant reversal of revenue recognised will not occur.
For the Saga savings product, commissions are earned over the
duration of the contract in line with the contractual amount due to
the Group.
For Saga equity release products, commissions are earned initially
and over the lifetime of the product. Additionally, further commissions,
where applicable, are earned at each subsequent stage of the
drawdown if any more of the advance is taken by the customer. Initial
commission relating to new business is recognised as revenue at the
point the performance obligation with the Group’s contracted
business partners is satisfied, and the customer has taken out the
product. Where applicable, and the probability of further drawdowns
is high, trail commission is recognised as the discounted future cash
flows expected to be received over the estimated life of the product
and likewise for further commissions on additional drawdowns
undertaken by the customer.
For Saga legal services, mortgage and investing products, broking
commissions are earned initially, and over the duration of the contract,
in line with the contractual amount due to the Group.
(b) Saga Publishing
Magazine subscription revenue is recognised on a straight-line basis
over the period of the subscription. Revenue generated from
advertising within the magazine is recognised when the magazine
is provided to the customer.
The element of subscriptions and advertising revenue relating to the
period after the reporting date is recognised as deferred revenue
within contract liabilities in the statement of financial position.
(c) Printing and mailing
Revenue from printing and mailing services is recognised in line with
Acquisition costs arising from the selling or renewing of insurance
policies underwritten by the Group (
insurance acquisition cash flows
)
are expensed when they are incurred within insurance service
expenses in the income statement. See also Note 2.3r)viii).
For insurance policies not underwritten by the Group, fees charged
by price-comparison websites are recognised as a contract cost
asset within trade and other receivables and amortised in line with
the pattern of revenue recognition for the related insurance policies.
This takes into account revenue expected to be generated from
future renewals. Other incremental costs of obtaining insurance
policies not underwritten by the Group, such as payment processing
costs, would be incurred again if the insurance contract renews.
Therefore, the pattern of revenue recognition relating to these
incremental costs is one year. As permitted by IFRS 15, such costs are
ii) Claims costs
Claims costs incurred in respect of insurance policies underwritten
by the Group are included within insurance service expenses in the
income statement. These costs include estimates in respect of losses
reported as having occurred during the period, an estimate for the
cost of claims incurred during the period but not reported at the
reporting date, and any adjustments to claims outstanding from
previous periods. See Note 2.3r)vi)(b) for further details.
The portion of claims costs recoverable from reinsurance contracts
is recognised within net income from reinsurance contracts in the
income statement. These recoveries are recognised in the same
period in which the claims costs are recognised. See Note 2.3r)vii)
for further details.
Finance costs comprise interest paid and payable, and commitment
fee, calculated using the effective interest rate (
EIR
) method, and it is
recognised in the income statement as it accrues. Accrued interest
is included within the carrying value of the interest-bearing financial
liability in the statement of financial position. Finance costs also include
debt issue costs that were initially recognised in the statement of
financial position and amortised over the life of the debt, debt issue
costs in respect of renegotiating existing, or negotiating new, facilities
that are immediately recognised in the income statement and net
All other expenses are recognised in the income statement as they
Saga plc
Annual Report and Accounts 2025
114
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
2.3 Summary of material accounting
policies continued
Investment income in the form of interest is recognised in the income
statement as it accrues and is calculated using the EIR method.
Interest income is earned by the Group on assets held at fair value
through profit or loss (
FVTPL
) and amortised cost. Fees and
commissions which are an integral part of the effective yield of the
financial asset or liability are recognised as an adjustment to the EIR
ii) Dividend income
Income in the form of dividends is recognised when the right to receive
payment is established. For listed securities, this is the date that the
security is listed as ex-dividend.
Realised and unrealised gains and losses on financial investments are
recorded as investment income in the income statement and
represent net fair value gains and losses arising from changes in fair
iv) Other income
The Group recognises other items in profit or loss as other income,
when the amounts become receivable and its right to receive
i) Current income tax
Income tax assets and liabilities for the current period are measured
at the amount expected to be recovered from, or paid to, taxation
authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted at the reporting
date. Current income tax assets and liabilities also include
adjustments in respect of tax expected to be payable, or recoverable,
in respect of previous periods. Current income tax relating to items
recognised in other comprehensive income (
OCI
) and directly in
equity is recognised in OCI or equity and not in the income statement.
Deferred tax is provided on temporary differences between the tax
bases of assets and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that
it is probable that taxable profit will be available, against which the
deductible temporary differences and the carry forward of unused
tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all, or part of, the
deferred tax asset to be utilised. Unrecognised deferred tax assets
are reassessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profits will allow
the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that
are expected to apply in the year when the asset is realised or the
liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date. Deferred tax
is charged, or credited, in the income statement, except when it
relates to items charged or credited in OCI or equity, in which case
the deferred tax is recognised in OCI or equity as appropriate.
Deferred tax assets and deferred tax liabilities are offset if a legally
enforceable right exists to set-off current tax assets against current
tax liabilities and the deferred taxes relate to the same taxable entity
Transactions in foreign currencies are initially recorded by the Group
at their respective functional currency spot rate at the date that the
transaction first qualifies for recognition. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the functional
Intangible assets acquired are measured on initial recognition at
cost and, subsequent to initial recognition, are carried at cost less
any accumulated amortisation and accumulated impairment losses.
The cost of intangible assets acquired in a business combination
is their fair value at the date of acquisition. Internally generated
intangibles, excluding internally developed software, are not
capitalised and the related expenditure is reflected in the income
statement in the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed finitely. Computer
software costs recognised as assets are amortised over their
estimated useful economic lives, which vary from asset to asset within
a range of 3-13 years.
Intangible assets are amortised over their useful economic life on a
basis appropriate to the consumption of the asset and are assessed
for impairment whenever there is an indication that the intangible
asset may be impaired. The amortisation period and the amortisation
method for an intangible asset with a finite useful life are reviewed at
least at the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and are treated as
changes in accounting estimates. The amortisation expense on
intangible assets with finite lives is recognised in the income statement
in the expense category that is consistent with the function of the
intangible assets.
Gains or losses arising from derecognition of an intangible asset are
measured as the difference between the net disposal proceeds and
the carrying amount of the asset and are recognised in the income
Business combinations are accounted for using the acquisition
method. The cost of an acquisition is measured as the aggregate of
the consideration transferred, measured at acquisition date at fair
value, and the amount of any non-controlling interests in the acquiree.
the non-controlling interests in the acquiree at fair value or at the
When the Group acquires a business, it assesses the financial and
non-financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual
terms, economic circumstances and pertinent conditions at the
acquisition date.
Any contingent consideration to be transferred by the Group
will be recognised at fair value at the acquisition date. Contingent
consideration classified as an asset or liability that is a financial
instrument within the scope of IFRS 9 ‘Financial Instruments’ is
measured at fair value, with the changes in fair value recognised
in the income statement.
Any excess of the cost of acquisition over the fair values of the
identifiable assets and liabilities is recognised as goodwill. If the cost
of acquisition is less than the fair values of the identifiable assets and
liabilities of the acquired business, the difference is recognised directly
in the income statement in the year of acquisition.
Acquisition-related costs are expensed as incurred and included in
administrative expenses.
After initial recognition, goodwill is measured at cost less any
accumulated impairment losses. Goodwill is allocated to cash
generating units (
CGUs
) at the point of acquisition and is reviewed
at least annually for impairment.
The useful life of goodwill is assessed as indefinite. Goodwill is not
amortised, but is tested for impairment at least annually, at the
CGU level. Where the carrying value of the asset exceeds the
recoverable amount, an impairment loss is recognised in the income
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Goodwill is not subject to amortisation and is tested annually for
impairment, or more frequently if events or changes in circumstances
indicate that it might be impaired. If such an indication exists, the
recoverable amount is estimated and compared with the carrying
amount. If the recoverable amount is less than the carrying amount,
the asset is considered impaired and is written down to its recoverable
amount and the impairment loss is recognised immediately in the
income statement.
Other assets are tested for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be
recoverable. If there is any indication that an asset may be impaired,
a recoverable amount is estimated for the individual asset. If it is not
possible to estimate the recoverable amount of the individual asset,
the recoverable amount is determined according to the CGU to which
the asset belongs.
For impairment testing, assets are grouped together into the smallest
group of assets that generate cash inflows from continuing use that
are largely independent of the cash inflows of other assets or CGUs.
Goodwill arising from a business combination is allocated to the CGUs,
or groups of CGUs, that are expected to benefit from the synergies of
the combination.
The recoverable amount is calculated as the higher of fair value less
costs to sell, and value-in-use. In assessing value-in-use, where
appropriate, estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific
to the asset. In determining fair value less costs of disposal, recent
market transactions are taken into account. If no such transactions
can be identified, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, quoted share
prices for publicly traded companies or other available fair value
indicators. The Group bases its value-in-use calculations on detailed
budgets, plans and long-term growth assumptions, which are
prepared separately for each of the Group’s CGUs to which individual
Property, plant and equipment is stated at cost, net of accumulated
depreciation and impairment losses. Where an item of property, plant
and equipment comprises major components having different useful
lives, they are accounted for separately.
position date are classified separately. These assets are transferred
to other asset categories when they become available for their
basis to write off the depreciable amount of property, plant and
equipment over their estimated useful lives. The depreciable amount
is the cost of an asset less its residual value. Land and assets in the
are as follows:
Buildings, properties and related fixtures:
Buildings | 50 years |
Fixtures and fittings | 3-20 years |
Ocean Cruise ships | 30 years |
Computers | 3-6 years |
Plant, vehicles and other equipment | 3-10 years |
Costs relating to Ocean Cruise ship mandatory dry-dockings are
capitalised and depreciated over the period up to the next dry-docking,
where appropriate. The International Convention for the Safety of Life
at Sea regulations stipulate that ships have to be dry-docked twice
in an interval of five years, with the interval between consecutive
dry-dockings being not less than two years and not more than three
years. All other repairs and maintenance costs are recognised in the
An item of property, plant and equipment is derecognised upon
disposal, or when no future economic benefits are expected from its
use or disposal. Any gain or loss arising on derecognition of an asset
(calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in the income statement
when the asset is derecognised.
Estimated residual values and useful lives are reviewed annually.
In relation to the annual review of estimated residual values and
useful lives of Ocean Cruise ships, potential environmental regulatory
changes are also considered. The shipping industry has made a
commitment to reduce CO
2
emissions by 40% by 2030 (from a
2008 baseline), and the UK Government has made commitments
to reach net zero emissions by 2050. The Energy Efficiency Existing
Ship Index (
EEXI
) and Carbon Intensity Indicator (
CII
) regulations
were introduced internationally in 2023 to enable the industry to
meet the 2030 target, and the Group’s Ocean Cruise ships meet the
requirements of these regulations. The end of their useful economic
lives of 30 years will have been reached by 2049 in the case of Spirit
discontinued operations
The Group classifies non-current assets as held for sale if their
carrying amount will be recovered principally through a sale
transaction rather than through continuing use. To be classified as
held for sale, an asset must be available for immediate sale in its
present condition, subject only to terms that are usual and customary
for the sale of such assets, and the sale must be highly probable. A sale
is considered to be highly probable when management is committed
to a plan to sell an asset, an active programme to locate a buyer and
complete the plan has been initiated, at a price that is reasonable
in relation to its current fair value, and there is an expectation that the
sale will be completed within one year from the date of classification.
Non-current assets classified as held for sale are carried on the
Group’s statement of financial position at the lower of their carrying
amount and fair value less costs to sell. In accordance with IFRS 5
‘Non-current Assets Held for Sale and Discontinued Operations’, an
impairment loss on a disposal group is allocated to non-current assets
within the scope of the standard, limited to the carrying value of those
assets. If there are no non-current assets within the scope of IFRS 5
for which an impairment loss can be allocated against, the impairment
loss will be recognised at the time of disposal.
Property, plant and equipment and intangible assets, once classified
as held for sale, are not depreciated or amortised.
The Group classifies a component of the Group as a discontinued
operation when it has either been disposed of, or is classified as held
for sale, and:
represents a separate major line of business or geographical area
of operations;
is part of a single coordinated plan to dispose of a separate major
line of business or geographical area of operations; or
is a subsidiary acquired exclusively with a view to resale.
Discontinued operations are excluded from the results of continuing
operations and are presented as a single amount of profit or loss after
tax from discontinued operations in the income statement. The assets
and liabilities relating to discontinued operations are excluded from
those of continuing operations and are presented as single amounts
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Notes to the consolidated financial statements continued
2.3 Summary of material accounting policies continued
On initial recognition, a financial asset is classified as either amortised cost, fair value through other comprehensive income (
FVOCI
) or FVTPL.
The classification of financial assets is based on the business model in which a financial asset is managed, and its contractual cash flow
characteristics. Derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead,
the hybrid financial instrument, as a whole, is assessed for classification. The Group does not hold any financial assets classified as FVOCI.
Initial recognition | Subsequent measurement | |
Amortised | A financial asset is classified as amortised cost (initially | These assets are subsequently measured at amortised cost |
cost | measured at fair value plus any directly attributable | using the EIR method. The amortised cost is reduced by any |
transaction costs) if it meets both of the following | impairment losses (see (ii) below). Interest income, foreign | |
conditions and is not elected to be designated as FVTPL: | exchange gains and losses and impairments are recognised | |
| It is held within a business model whose objective | in profit or loss as they are incurred. Any gain or loss on | |
is to hold assets to collect contractual cash flows. | derecognition is recognised in profit or loss immediately. | |
Its contractual terms give rise, on specified dates, | ||
to cash flows that are solely payments of principal | ||
and interest on the principal amount outstanding. | ||
The Group classifies trade receivables and other | ||
receivables as held at amortised cost. | ||
FVTPL | All financial assets not classified as amortised cost | These assets are subsequently measured at fair value. |
(or FVOCI), as described above, are classified as FVTPL | Net gains and losses, including any interest or dividend | |
and held at fair value. This includes all derivative | income (separately disclosed), are recognised in profit | |
financial assets. | or loss, unless such instruments are designated in a hedging | |
On initial recognition, the Group may irrevocably elect | relationship (see (vi) overleaf). | |
to designate a financial asset, which otherwise meets the | ||
requirements to be measured at amortised cost or FVOCI, | ||
as FVTPL if doing so eliminates, or significantly reduces, | ||
an accounting mismatch that would otherwise arise. | ||
This election is made on an individual instrument basis. | ||
This election has been made for the Group’s debt securities. | ||
The Group classifies loan funds, money market funds held | ||
within the Insurance business and foreign exchange forward | ||
contracts not designated in a hedging relationship, as FVTPL. |
(a) Derecognition
A financial asset is derecognised when the rights to receive cash flows
from the asset have expired or when the Group has transferred
substantially all the risks and rewards relating to the asset to a
The expected credit loss (
ECL
) impairment model applies to financial
assets measured at amortised cost.
The Group measures loss allowances at an amount equal to 12-month
ECLs, except for the following, which are measured as lifetime ECLs:
Debt securities that are determined to have high credit risk at the
reporting date.
Other debt securities and bank balances for which credit risk has
increased significantly since initial recognition.
Trade receivables and contract assets that result from
transactions within the scope of IFRS 15.
When determining whether the credit risk of a financial asset has
increased significantly since initial recognition, and when estimating
ECLs, the Group considers reasonable and supportable information
that is relevant and available without undue cost or effort. This includes
both quantitative and qualitative information and analysis, based on
the Group’s historical experience and informed credit assessment,
including forward-looking information.
The Group considers a debt security to have low credit risk when its
credit risk rating is equivalent to the definition of investment grade.
The Group considers this to be BBB- or higher as per credit rating scales.
(a) Measurement of ECLs
ECLs are measured as a probability-weighted estimate of credit
losses. Credit losses are measured as the probability of default in
conjunction with the present value of the Group’s exposure. Loss
allowances for ECLs on financial assets measured at amortised cost
are deducted from the gross carrying amount of the assets, with a
(a) Initial recognition and measurement
All financial liabilities are classified as financial liabilities at amortised
cost on initial recognition except for derivatives, which are classified
at FVTPL, the gains or losses for which are recognised through OCI
if the instrument is designated as a hedging instrument in an effective
cash flow hedge.
recognised initially at fair value and, in the case of loans and
borrowings, net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables, loans
and borrowings, derivative financial instruments and lease liabilities.
(b) Subsequent measurement
After initial recognition, interest-bearing loans, borrowings and other
payables are subsequently measured at amortised cost using the
EIR method. Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in finance
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(c) Derecognition
A financial liability is derecognised when the obligation under the
liability is discharged, cancelled or expires.
When an existing financial liability is replaced by another from the
same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such exchange or
modification is treated as a derecognition of the original liability and
the recognition of a new liability. The difference in the respective
Derivatives are measured at fair value, both initially and subsequently
to initial recognition. All changes in fair value of non-designated
derivatives are recognised in the income statement immediately.
Changes in fair value of derivatives designated as cash flow hedges are
initially recognised in OCI until such a point that they are recycled to
profit or loss in the same period as the hedged item is recognised in
profit or loss, or immediately if the hedged item is no longer expected
to occur.
Derivatives are presented as assets when the fair values are positive,
and as liabilities when the fair values are negative. A derivative is
presented as a non-current asset or a non-current liability if the
remaining maturity of the instrument is more than 12 months and
The Group measures all financial instruments at fair value at each
reporting date, other than those instruments measured at
amortised cost.
Fair value is the price that would be required to sell an asset or to
transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement
is based on the assumption that the transaction to sell the asset
or transfer the liability takes place either in the principal market
accessible by the Group for the asset or liability or, in the absence
of a principal market, in the most advantageous market accessible
by the Group for the asset or liability.
The fair values are quoted market bid prices where there is an active
market, or based on valuation techniques when there is no active
market or the instruments are unlisted. Valuation techniques include
the use of recent arm’s-length market transactions, discounted cash
flow analysis and other commonly used valuation techniques.
For assets and liabilities that are recognised in the financial
statements on a recurring basis, the Group determines whether
transfers have occurred between levels in the hierarchy by
The Group designates certain derivative financial instruments as cash
flow hedges of certain forecast transactions. These transactions are
highly probable to occur and present an exposure to variations in cash
flows that could ultimately affect amounts determined in profit or loss.
The Group has elected to adopt the general hedge accounting model
in IFRS 9. This requires the Group to ensure that hedge accounting
relationships are aligned with its risk management objectives and
strategy and to apply a qualitative and forward-looking approach to
assessing hedge effectiveness.
The Group uses forward foreign exchange and commodity swap
contracts to hedge the variability in cash flows arising from changes
in foreign currency rates and oil prices respectively. For foreign
exchange contracts, the Group designates the fair value change of
the full forward price as the hedging instrument in cash flow hedging
relationships. For commodity hedging, the Group designates the
fair value change of the benchmark oil price. The effective portion of
changes in fair value of hedging instruments is accumulated in a cash
flow hedge reserve as a separate component of equity. Any ineffective
portion of the fair value gain or loss is recognised immediately within
the income statement.
When a hedging instrument no longer meets the criteria for hedge
accounting, through maturity, sale, or other termination, hedge
accounting is discontinued prospectively. If the hedged forecast
transaction is still expected to occur, the associated cumulative gain
or loss remains in the hedging reserve and is recognised in accordance
with the above policy when the hedged forecast transaction occurs.
If the hedged forecast transaction is no longer expected to occur,
the cumulative unrealised gain or loss is recognised in the income
The Group leases various River Cruise ships, buildings, equipment and
vehicles. The contract length of the lease varies considerably and may
include extension or termination options as described below.
At the inception of a contract, the Group assesses whether a contract
is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period
of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Group
assesses whether: the contract involves the use of an identified asset;
the Group has the right to obtain substantially all of the economic
benefits from use of the asset throughout the period of use; and the
Group has the right to direct the use of the asset.
Leases are initially recognised as a right-of-use asset and a
corresponding lease liability at the date at which the leased asset is
available for use by the Group. The lease liability is initially measured
at the present value of the lease payments that are not paid at the
commencement date. Where it is reasonably certain that an extension
option will be triggered in a contract, lease payments to be made in
respect of the option will be included in the measurement of the
lease liability.
The lease payments are discounted using the interest rate implicit in
the lease. If that rate cannot be readily determined, which is generally
the case for leases in the Group, the Group’s incremental borrowing
rate is used. This is the rate that the Group would have to pay to
borrow the funds necessary to obtain an asset of similar value to the
right-of-use asset, in a similar economic environment, with similar
terms, security and conditions.
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Notes to the consolidated financial statements continued
2.3 Summary of material accounting policies
continued
l) Leases continued
Lease payments are allocated between principal and finance cost.
The finance cost is charged to the income statement over the lease
period using the EIR method and the lease liability is measured at
amortised cost using the EIR method.
Right-of-use assets are initially measured at cost, comprising the
present value of future lease payments plus any initial direct costs and
restoration costs. Right-of-use assets are depreciated over the lease
term on a straight-line basis, except for the Group’s River Cruise ships.
The unit of production method is used to depreciate River Cruise ships
to accurately reflect the usage of the asset, which is seasonal.
Payments associated with short-term leases of equipment and all
leases of low-value assets are expensed in profit or loss as incurred, in
line with the exemption allowed under paragraph 6 of IFRS 16 ‘Leases’.
Short-term leases are leases with a lease term of 12 months or less
without a purchase option. Low-value assets comprise IT equipment
and small items of office furniture.
Extension and termination options are included in a number of
property and River Cruise ship leases across the Group. These are
used to maximise operational flexibility in terms of managing the
assets used in the Group’s operations. The majority of extension and
termination options held are exercisable only by the Group and not
by the respective lessor.
The Group remeasures the lease liability, and makes a corresponding
adjustment to the related right-of-use asset, whenever:
the lease term has changed or there is a significant event or change
in circumstances resulting in a change in the assessment of
exercise of a purchase option, in which case the lease liability is
remeasured by discounting the revised lease payments using a
revised discount rate; or
a lease contract is modified and the lease modification is not
accounted for as a separate lease, in which case the lease liability
is remeasured based on the lease term of the modified lease by
discounting the revised lease payments using a revised discount
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalised as part
of the cost of the respective asset. All other borrowing costs are
expensed in the period in which they occur.
Borrowing costs consist of interest and fees that an entity incurs in
Cash and short-term deposits in the statement of financial position
comprise cash at bank and in hand, short-term deposits with a
maturity of three months or less from their inception date and money
market funds held outside of the Insurance Underwriting business.
cash equivalents consist of cash and short-term deposits as defined
above, and short-term highly liquid investments (including money
market funds held within the Insurance Underwriting business) with
original maturities of three months or less that are subject to an
Prior to 28 March 2023, 100% of customer monies were paid into
trust until the Group had fulfilled its obligations and the customer had
returned from their holiday. The trust was administered and controlled
by an independent trustee, PT Trustees Limited. On this date, the
Group moved from a trust arrangement to an escrow arrangement.
This meant that, from 28 March 2023, 70% of customer monies
received in advance in relation to Air Travel Organisers’ Licensing (
ATOL
)
licensable bookings are held in escrow accounts until after the
customer has travelled, when the Group has fulfilled all its
performance obligations with customers. From 1 October 2024,
in respect of the Holidays business, the Group moved from an escrow
arrangement to simply holding cash within the business, in respect of
the 70% element of customer monies.
The escrow arrangement is governed by a deed between the Group,
the Civil Aviation Authority Air Travel Trustees and an independent
Trustee, PT Trustees Limited, which determines the inflows and
outflows from the accounts. The Group utilises the remaining 30% of
customer advance receipts in its Holidays and River Cruise businesses
Trade and other receivables are initially recognised at fair value and
subsequently measured at amortised cost. Loss allowances are
Inventories are stated at the lower of cost and net realisable value.
Costs include all costs incurred in bringing each product to its present
location and condition. Net realisable value is based on estimated
selling price less any further costs expected to be incurred prior
reinsurance contracts
i) Classification
The Group issues insurance contracts, under which it accepts
significant insurance risk from policyholders, and also enters into
reinsurance contracts, under which it transfers significant insurance
risk related to underlying insurance contracts. ‘Reinsurance contracts’
refers to reinsurance contracts held by the Group. The Group does
not issue any reinsurance contracts.
Insurance and reinsurance contracts can also expose the Group to
financial risk.
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ii) Separating components from insurance and reinsurance contracts
When the Group underwrites an insurance contract, a number of
separate contracts may be entered into at the same time. These
contracts may involve more than one legal entity within the Group.
As the set of contracts is designed to achieve an overall commercial
effect for the Group, for accounting purposes the following steps
are taken:
The total cash flows arising from all contracts are initially
considered as a whole (together the
host insurance contract
).
The Group then identifies any service components that are
‘distinct’ and, therefore, require separation for accounting
purposes. A service is distinct if the policyholder can benefit
from it, either on its own or with other resources that are readily
available to the policyholder. The following distinct service
components were identified:
–
The brokerage of the core insurance contract (where it has
first been subject to the competitive pricing panel that the
Group operates).
–
The brokerage of any add-on cover underwritten by a
third party.
–
The promise to fix the premium for three years (where this
option is taken by the policyholder).
These distinct service components are accounted for as separate
customer contracts under IFRS 15.
The total cash inflows from the combined set of contracts are
then allocated, for accounting purposes, between:
–
any distinct service components; and
–
the insurance component of the host insurance contract.
This allocation is performed based on the standalone selling price
of each component.
Cash outflows that relate directly to each component are
attributed to that component, with any remaining cash outflows
attributed on a systematic and rational basis, reflecting the cash
outflows the Group would expect to arise if that component were
a separate contract.
iii) Aggregation of insurance and reinsurance contracts
The Group applies the requirements of IFRS 17 at the level of groups
of insurance contracts issued. Groups of insurance contracts are
determined by identifying portfolios of insurance contracts, which
comprise contracts that are subject to similar risks and managed
together, and dividing each portfolio into annual cohorts (i.e. by year
of issue) and each annual cohort into three groups based on the
expected profitability of each contract at initial recognition:
Any contracts that are onerous at initial recognition.
Any contracts that, at initial recognition have no significant risk
of becoming onerous.
Any other contracts.
Groups of reinsurance contracts are established such that each
group comprises a single contract.
iv) Recognition of insurance and reinsurance contracts
The Group recognises insurance contracts issued from the earliest of:
the beginning of the coverage period;
when the first payment from a policyholder becomes due or,
if there is no due date, when the first payment is received; and
when facts and circumstances indicate that the contract is
onerous. This could be as early as the date on which the contract
is first entered into.
When a contract is recognised, it is added to an existing group of
contracts or, if the contract does not qualify for inclusion in an existing
group, it forms a new group to which future contracts are added.
Groups of contracts are established on initial recognition and their
composition is not revised once all contracts have been added to
the group.
The Group recognises groups of reinsurance contracts as follows:
Groups of reinsurance contracts that provide proportionate
coverage (primarily quota share arrangements) are recognised
when any underlying insurance contract is initially recognised.
All other groups of reinsurance contracts (primarily excess of loss
arrangements) are recognised from the earlier of:
–
the beginning of the coverage period of the group of reinsurance
contracts; or
–
the date on which an onerous group of underlying contracts is
recognised (provided that the related reinsurance contract was
entered into on, or before, that date).
v) Contract boundaries
The measurement of groups of insurance contracts issued, and
reinsurance contracts, reflects all future cash flows arising from
insurance coverage within the boundary of each contract
(the
contract boundary
).
Cash flows are within the contract boundary if they arise from
substantive rights and obligations that exist during the reporting
period in which the Group can compel the policyholder to pay
premiums or has a substantive obligation to provide services.
vi) Measurement – insurance contracts
The Group measures all groups of insurance contracts issued
in accordance with IFRS 17’s simplified premium allocation
approach (
PAA
). They are eligible for the PAA as the coverage
period of each contract in each group is one year or less.
The following sections set out the Group’s approach to measuring
groups of insurance contracts under the PAA.
(a) Measurement at initial recognition
On initial recognition, the liability for remaining coverage of groups
of insurance contracts issued is measured as:
any premiums received at, or before, initial recognition; plus
for groups of contracts that are onerous (expected to be
loss-making) at initial recognition, a loss component measured as
the excess of the fulfilment cash flows over the carrying amount of
the liability for remaining coverage, excluding the loss component.
A corresponding loss is recognised in profit or loss. At initial
recognition, the loss component is only recognised and measured
in respect of policies that individually meet the recognition criteria
at that date.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
2.3 Summary of material accounting policies
continued
r) Insurance contracts underwritten by the Group and
reinsurance contracts continued
vi) Measurement – insurance contracts continued
(b) Subsequent measurement
At the end of each reporting period, each group of contracts is
measured as the sum of the liability for remaining coverage and the
liability for incurred claims.
Liability for remaining coverage
At the end of each reporting period, the carrying amount of the liability
for remaining coverage (excluding the loss component) of each group
of contracts is equal to:
the opening carrying amount of the liability for remaining coverage;
plus premiums received in the period;
less the amount recognised as insurance revenue for coverage
provided in the period. Insurance revenue is the amount of total
expected premium receipts (excluding premium taxes) allocated
to each period of coverage on the basis of the passage of time
(i.e. a straight-line basis). This is appropriate as, for the insurance
contracts that the Group issues, the expected pattern of release
of risk during the coverage period does not differ significantly from
the passage of time.
The liability for remaining coverage (excluding the loss component)
is not adjusted for the time value of money.
For groups of contracts that were onerous at initial recognition:
the loss component of the liability for remaining coverage is
increased in respect of any individual policies added to the group;
the loss component is reversed as coverage is provided, reducing
the liability for remaining coverage; a corresponding credit to
profit or loss means that the onerous loss is not recognised a
second time when a liability for incurred claims is established as
coverage is provided; and
the expected profitability of remaining coverage is reassessed
at each reporting date, with any changes since initial recognition
reflected in the valuation of the remaining loss component of the
liability for remaining coverage, with a corresponding entry in
profit or loss.
For other groups of contracts, at each reporting date the Group
considers whether the remaining coverage has become onerous.
If so, a loss component of the liability for remaining coverage is
established with a corresponding loss recognised in profit or loss.
Liability for incurred claims
As coverage is provided, the Group establishes a liability for incurred
claims. The liability is estimated based on the fulfilment cash flows
relating to incurred claims, including both claims that have been
notified (i.e. outstanding claims) and claims incurred but not
reported (
IBNR
). These fulfilment cash flows:
include an estimate of claims handling costs and settlement
amounts, and the expected value of salvage and other recoveries;
incorporate, in an unbiased way, all reasonable and supportable
information available without undue cost or effort about the
amount, timing and uncertainty of those future cash flows;
reflect current estimates from the Group’s perspective;
are adjusted to reflect the time value of money and effect of
financial risk (a discounting adjustment); the Group did not take
the PAA option to not discount claims expected to be paid within
one year of the loss event; and
include an explicit adjustment for non-financial risk (the
risk
adjustment
), which reflects the compensation required for
bearing uncertainty about the amount and timing of cash flows
that arise from non-financial risk.
vii) Measurement – reinsurance contracts
The Group also measures all groups of reinsurance contracts in
accordance with the PAA. Groups of excess of loss reinsurance
contracts are eligible for the PAA as each contract has a coverage
period of one year or less. Groups of other reinsurance contracts
(primarily the motor quota share arrangement) are eligible for the
PAA as, at initial recognition, the Group expects that the resulting
measurement of the asset for remaining coverage would not differ
materially to that under the IFRS 17 general measurement model.
Groups of reinsurance contracts are measured on the same basis as
the underlying insurance contracts, adapted as appropriate to reflect
the different features of reinsurance contracts, including:
where the Group recognises a loss on initial recognition of an
onerous group of underlying insurance contracts, or when further
onerous insurance contracts are added to a group, the Group
establishes a loss-recovery component of the asset for remaining
coverage for groups of reinsurance contracts depicting any
recovery of losses. The loss-recovery component is calculated
by multiplying the loss recognised on the underlying insurance
contracts and the percentage of claims on the underlying
insurance contracts the Group expects to recover from the
group of reinsurance contracts;
reinsurance cash flows that are contingent on claims experience
are treated as part of the claims expected to be reimbursed;
this applies to profit commission clauses within the Group’s motor
quota share reinsurance contracts; and
the Group assesses the risk that the counterparties to its
reinsurance contracts are not able to fulfil their obligations
(non-performance risk, or default risk), including by considering
available data on the financial strength of the reinsurers. An
allowance is included in the relevant estimate of the present value
of future cash flows to reflect this risk.
viii) Measurement – insurance acquisition cash flows
The Group identifies insurance acquisition cash flows, being the
costs of selling, underwriting and starting insurance contracts.
The costs are primarily commissions paid to intermediaries,
including price-comparison websites, and an allocation of other
operating expenses.
The Group has taken the IFRS 17 option to expense insurance
acquisition cash flows immediately where the coverage period of
the related contract is one year or less. As all the Group’s insurance
contracts have a coverage period of one year or less, all insurance
acquisition cash flows are expensed when they are incurred.
ix) Modification and derecognition
An insurance contract is derecognised when:
it is extinguished (i.e. when the obligation expires or is discharged
or cancelled); or
there is a modification of the contract that is treated as a
derecognition and recognition of a new contract. This is the case
where the modified terms, if applied at inception, would have
resulted in:
–
a change in the measurement model or the applicable standard
for measuring a component of the contract;
–
a substantially different contract boundary; or
–
the contract being included in a different group of contracts.
When a modification is not treated as a derecognition, the Group
recognises amounts paid, or received, for the modification as an
adjustment to the relevant liability for remaining coverage relating
to the existing contract.
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x) Presentation
As noted in Note 38a), during the year to 31 January 2025 the Group
decided to divest itself of the underwriting and claims handling
sections of its Insurance business and, therefore, they have been
reclassified as discontinued operations. The primary statements
referred to below can be found within Note 38a) (where relevant).
The Group disaggregates the total amount recognised in the
statement of profit or loss into an insurance service result, comprising
insurance revenue and insurance service expenses, and insurance
finance income or expenses.
(a) Separate presentation of portfolios in an asset or liability position
In the statement of financial position, where applicable, the Group
separately presents the carrying amount of portfolios of insurance
contracts issued that are assets, portfolios of insurance contracts
issued that are liabilities, portfolios of reinsurance contracts that are
assets and portfolios of reinsurance contracts that are liabilities.
(b) Changes in the risk adjustment
The Group disaggregates the change in risk adjustment for
non-financial risk between a financial and non-financial portion,
included within insurance finance expenses and the insurance service
result respectively.
(c) Reinsurance
On the face of the income statement, income or expenses from
reinsurance contracts (other than insurance finance income or
expenses) are presented as a single amount, separately from the
income or expenses from insurance contracts issued.
(d) Insurance finance income or expense
Insurance finance income or expenses comprise the change in the
carrying amount of the group of insurance contracts arising from:
the effect of the time value of money and changes in the time value
of money; and
the effect of financial risk and changes in financial risk.
This largely represents:
the unwind of the discounting of the liability for incurred claims;
the impact of changes in the discount rate used in the
measurement of the liability for incurred claims; and
the impact of changes in the care worker inflation assumption
used in the measurement of claims settled as periodical payment
orders (
PPOs
).
Reinsurance finance income, or expense, is the change in the carrying
value of amounts relating to reinsurance contracts arising for the
same reasons.
The Group does not disaggregate insurance finance income or
expenses between profit or loss and OCI as permitted by the standard.
xi) Transition
In adopting IFRS 17, the Group applied a full retrospective approach
to transition. Under the full retrospective approach to transition,
at 1 February 2022, the Group:
identified, recognised and measured each group of insurance and
reinsurance contracts as if IFRS 17 had always been applied;
derecognised previously reported balances that would not have
existed if IFRS 17 had always been applied (e.g. insurance
receivables and payables that, under IFRS 17, are included in the
measurement of the insurance contracts); and
recognised any resulting net difference in equity.
However, the Group applied a transition exemption to not disclose
previously unpublished information about claims development that
occurred earlier than five years before the end of the annual reporting
The Group provides benefits to employees (including Executive
Directors) in the form of share-based payment transactions, whereby
employees render services as consideration for equity instruments
(
equity-settled transactions
). The cost of equity-settled
transactions is measured by reference to the fair value on the grant
date and is recognised as an expense over the relevant vesting period,
ending on the date on which the employee becomes fully entitled to
the award.
Fair values of share-based payment transactions are calculated using
market price valuation modelling techniques. In valuing equity-settled
transactions, assessment is made of any vesting conditions to
categorise these into market performance conditions, non-market
performance conditions and service conditions.
Where the equity-settled transactions have market performance
conditions (that is, performance which is directly or indirectly linked
to the share price), the fair value of the award is assessed at the time
of grant and is not changed, regardless of the actual level of vesting
achieved, except where the employee ceases to be employed prior
to the vesting date.
For service conditions and non-market performance conditions,
the fair value of the award is assessed at the time of grant and is
reassessed at each reporting date to reflect updated expectations
for the level of vesting. No expense is recognised for awards that
ultimately do not vest.
At each reporting date prior to vesting, the cumulative expense is
calculated, representing the extent to which the vesting period has
expired and, in the case of non-market conditions, the best estimate
of the number of equity instruments that will ultimately vest or, in the
case of instruments subject to market conditions, the fair value on
grant adjusted only for leavers. The movement in the cumulative
expense since the previous reporting date is recognised in the income
statement, with the corresponding increase being recognised in the
share-based payments reserve.
Upon vesting of an equity instrument, the cumulative cost in the
share-based payments reserve is reclassified to retained earnings
in equity.
The dilutive effect of outstanding options is reflected as additional
During the year, the Group operated a defined benefit pension plan
that required contributions to be made to separately administered
funds. The cost of providing benefits under the defined benefit plan
was determined separately using the projected unit credit valuation
method. The defined plan was closed to future accrual on 31 October
2021. From 1 November 2021, members moved from active to
deferred status.
Actuarial gains and losses arising in the year were credited/charged to
OCI and comprise the effects of changes in actuarial assumptions and
experience adjustments due to differences between the previous
actuarial assumptions and what has actually occurred. In particular,
the difference between the interest income and the actual return on
plan assets is recognised in OCI.
Other movements in the net surplus or deficit, which include the
current service cost, any past service cost and the effect of any
curtailment or settlements, are recognised in the income statement.
Past service costs are recognised in the income statement on the
earlier of the date of plan curtailment and the date that the Group
recognises restructuring-related costs. The Group no longer incurs
any service costs or curtailment costs relating to the defined benefit
pension plan as the scheme is closed to future accrual. Interest cost,
calculated on the same basis as interest income recognised in profit
or loss on plan assets, is also charged to the income statement.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
2.3 Summary of material accounting policies
continued
t) Retirement benefit schemes continued
The defined benefit schemes are funded, with assets of the schemes
held separately from those of the Group, in separate Trustee
administered funds. Scheme assets are measured using market
values, and scheme liabilities are measured using the projected unit
actuarial method and are discounted at the current rate of return on
a high-quality corporate bond of equivalent term and currency to the
liability. Full actuarial valuations are obtained, at least triennially, and
are updated at each reporting date. The resulting defined benefit
asset or liability is presented separately on the face of the statement
of financial position. The value of a pension benefit asset is restricted
to the amount that may be recovered, either through reduced
contributions, or agreed refunds from the scheme.
For defined contribution schemes, the amounts charged to the
Provisions are recognised when the Group has a present obligation
(legal or constructive) as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be required
to settle the obligation, and a reliable estimate can be made of the
amount of the obligation. The expense relating to any provision is
presented in the income statement net of any reimbursement.
If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects the risks specific
to the liability. Where discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
A provision is recognised for onerous contracts in which the unavoidable
costs of meeting the obligations under the contract exceed the
economic benefits expected to be received under it. The unavoidable
costs reflect the least net cost of exiting the contract, which is the lower
of the cost of fulfilling it and any compensation or penalties arising from
failure to fulfil it. The costs of fulfilling a contract comprise both the
A provision for restructuring is recognised when the Group has
developed a detailed restructuring plan of the business, or part of the
business concerned, and the restructuring either has commenced
or has been announced publicly. Future operating losses are not
provided for.
Trade and other payables are initially recognised at fair value and
subsequently measured at amortised cost. They represent liabilities
to pay for goods or services that have been received or supplied in the
normal course of business, invoiced by the supplier before the year
The Group has ordinary shares that are classified as equity.
Incremental external costs that are directly attributable to the issue
x) Own shares
Own shares represent the shares of the Company that are held by an
Employee Benefit Trust (
EBT
). Own shares are recorded at cost and
deducted from equity. The Directors consider that, under the terms
of the contractual arrangements in place, Saga has control over the
EBT. The results and net assets of the EBT have, therefore, been
yet effective
The following is a list of standards, and amendments to standards,
that were in issue but not effective, or adopted, at 31 January 2025.
a) Lack of exchangeability (amendments to International
Accounting Standard (
IAS
) 21 ‘The Effects of Changes in Foreign
Exchange Rates’)
The amendments contain guidance to specify when a currency is
exchangeable and how to determine the exchange rate when it is not.
The amendments were effective for annual reporting periods beginning
on, or after, 1 January 2025. The amendments are not expected to have
a material impact on the Group’s financial statements. The amendments
are not currently endorsed by the UK Endorsement Board.
b) IFRS 18 ‘Presentation and Disclosures in Financial Statements’
IFRS 18 includes requirements for all entities applying IFRS for the
presentation and disclosure of information in financial statements.
IFRS 18 will replace IAS 1 ‘Presentation of Financial Statements’.
IFRS 18 introduces three defined categories for income and expenses:
operating, investing and financing. This is to improve the structure
of the income statement, and requires all companies to provide new
defined subtotals, including operating profit. The standard is effective
for annual reporting periods beginning on, or after, 1 January 2027.
The impact of this standard on the Group’s financial statements is
still being assessed. The standard is not currently endorsed by the
UK Endorsement Board.
c) Amendments to IFRS 9 and IFRS 7 regarding the classification
and measurement of financial instruments
The amendments address matters identified during the
post-implementation review of the classification and measurement
requirements of IFRS 9 ‘Financial Instruments’. The standard is
effective for annual reporting periods beginning on, or after,
1 January 2026. The amendments are not expected to have a material
impact on the Group’s financial statements. The standard is not
currently endorsed by the UK Endorsement Board.
d) Annual improvements to IFRS – Volume 11
The amendments include clarifications, simplifications, corrections
and changes aimed at improving the consistency of several IFRS.
The amendments are effective for annual periods beginning on or after
1 January 2026, with earlier application permitted. The amendments
are not expected to have a material impact on the Group’s financial
statements. The standard is not currently endorsed by the UK
and amendments
The following is a list of standards, and amendments to standards,
that became effective, or were adopted, for the first time during the
year ended 31 January 2025.
a) Classification of liabilities as current or non-current
(amendments to IAS 1 ‘Presentation of Financial Statements’)
The amendments aim to promote consistency in applying the
requirements by helping companies determine whether, in the
statement of financial position, debt and other liabilities with
an uncertain settlement date should be classified as current
(due, or potentially due, to be settled within one year) or non-current.
The amendments were effective for annual periods beginning on,
or after, 1 January 2024. The amendments had no effect on the
Group’s financial statements.
b) Definition of lease liability in a sale and leaseback
(amendment to IFRS 16)
The amendment clarifies how a seller-lessee subsequently measures
sale and leaseback transactions that satisfy the requirements in
IFRS 15 to be accounted for as a sale. The amendment was effective
for annual reporting periods beginning on, or after, 1 January 2024.
The amendments had no effect on the Group’s financial statements.
c) Supplier finance arrangements (amendments to IAS 7
‘Statement of Cash Flows’ and IFRS 7)
The amendments add disclosure requirements, and ‘signposts’
within existing disclosure requirements, that ask entities to provide
qualitative and quantitative information about supplier finance
arrangements. The amendments were effective for annual reporting
periods beginning on, or after, 1 January 2024. The amendments had
no effect on the Group’s financial statements.
d) Non-current liabilities with covenants (amendments to IAS 1)
The amendments clarify how conditions with which an entity must
comply within 12 months after the reporting period affect the
classification of a liability. The amendments were effective for
annual reporting periods beginning on, or after, 1 January 2024.
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Additional information
The preparation of financial statements requires the Group to select accounting policies and make estimates and assumptions that affect items
reported in the primary consolidated financial statements and Notes to the consolidated financial statements.
The major areas of judgement used as part of accounting policy application are summarised below:
Significant judgements
Acc. policy | Items involving judgement | Critical accounting judgement |
2.3a) | Revenue recognition | Management exercised judgement in identifying separate performance obligations arising |
– identification of | from insurance policies brokered by the Group, namely: | |
performance obligations | where the insurance contract is also underwritten by the Group, the judgement that the | |
| arising from insurance | arrangement of the insurance policy is a service (performance obligation) that is distinct from | |
| policies brokered by | the insurance underwriting service. The revenue allocated to the arrangement performance | |
| the Group | obligation is recognised earlier than the revenue that is allocated to the insurance underwriting | |
service; and | ||
the judgement that the option to fix the customer’s premium at renewal for insurance policies | ||
bundled with the three-year fixed-price promise is a separate performance obligation to the | ||
arrangement of the related insurance policy. This results in the deferral of a portion of revenue | ||
from policy years one and two to policy years two and three. | ||
Please refer to Note 2.3a) for further information on the Group’s performance obligations relating | ||
to revenue recognition. | ||
2.3r) | Classification of the | This judgement is made by applying the principles of IFRS 17. |
Group’s risk transfer | The Group’s excess of loss and funds-withheld quota share reinsurance arrangements, relating to | |
| arrangements as | its motor underwriting line of business, are deemed to transfer significant insurance risk to the | |
reinsurance contracts | reinsurers. They are, therefore, classified as reinsurance contracts under IFRS 17. | |
2.3j) | Disposal groups and | To be classified as held for sale, an asset must be available for immediate sale in its present |
discontinued operations | condition, subject only to terms that are usual and customary for the sale of such assets, and the | |
sale must be highly probable. A sale is considered to be highly probable when management is | ||
committed to a plan to sell an asset, an active programme to locate a buyer and complete the plan | ||
has been initiated, at a price that is reasonable in relation to its current fair value, and there is an | ||
expectation that the sale will be completed within one year from the date of classification. | ||
On 16 December 2024, subsidiaries of the Group entered into a share purchase agreement with | ||
Ageas (UK) Limited under which the Group agreed to sell to Ageas UK, and Ageas UK agreed to | ||
purchase, the entire issued share capital of AICL. At 31 January 2025, management exercised | ||
judgement in determining that the criteria for classification of the AICL disposal group as held for | ||
sale and as a discontinued operation had been met. | ||
2.3h) | Impairment testing of | Goodwill |
goodwill and other major | The Group determines whether goodwill needs to be impaired at least annually, and twice-yearly | |
classes of assets | if indicators of impairment exist at the interim reporting date of 31 July. | |
New pricing rules set by the Financial Conduct Authority ( FCA ) came into effect on 1 January 2022, | ||
following the conclusion of the General Insurance Pricing Practices ( GIPP ) market study. As a | ||
result, and against the background of a highly competitive motor insurance market, the Group | ||
saw a fall in policy volumes in the period to 31 July 2023 and year to 31 January 2024. In the years | ||
to 31 January 2024 and 31 January 2025, high net rate inflation from our underwriting panel | ||
continued to have an adverse impact on the expected future profitability of the Insurance business. | ||
Management judged these trading impacts to constitute indicators of impairment and, therefore, | ||
conducted full impairment reviews of the Insurance Broking CGU at 31 July 2023, 31 January 2024, | ||
31 July 2024 and 31 January 2025. As a result of these reviews, management considered it | ||
necessary to impair the goodwill allocated to the Insurance Broking CGU by £68.1m at 31 July 2023, | ||
£36.8m at 31 January 2024, £138.3m at 31 July 2024 and £nil at 31 January 2025. | ||
Property, plant and equipment | ||
In the years ended 31 January 2024 and 31 January 2025, management exercised its judgement in | ||
considering it unnecessary to conduct an impairment review of the Group’s two Ocean Cruise ships | ||
since no indicators of impairment were identified. | ||
In the years ended 31 January 2024 and 31 January 2025, management exercised its judgement in | ||
relation to the impairment of plant and equipment assets and performed an impairment review of | ||
the recoverable amount of plant and equipment assets used by the Group. As a result of this review, | ||
management deemed it necessary to impair plant and equipment assets by £0.1m (2024: £0.1m) | ||
in the Central Costs division. Please refer to Note 17a) for further detail. | ||
Right-of-use assets | ||
In the years to 31 January 2024 and 31 January 2025, management exercised its judgement in | ||
considering it unnecessary to conduct an impairment review of right-of-use River Cruise ship | ||
assets, since no indicators of impairment were identified. | ||
In the year ended 31 January 2024, management exercised its judgement in relation to the | ||
impairment of right-of-use assets used by the Group’s Publishing business following a restructuring | ||
exercise. As a result of this review, management deemed it necessary to impair long leasehold land | ||
and building assets by £0.1m in that business. Please refer to Note 18a) for further detail. |
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
2.6 Significant accounting judgements, estimates and assumptions continued
Significant judgements continued
Acc. policy | Items involving judgement | Critical accounting judgement |
2.3h) | Impairment testing of | Property assets held for sale |
continued | goodwill and other major | In the years to 31 January 2024 and 31 January 2025, in light of the Group obtaining updated |
classes of assets | freehold property market valuation reports, management exercised judgement in relation to the | |
continued | impairment of property assets held for sale. As a consequence of the remeasurement of the | |
properties to the lower of fair value less cost to sell and the carrying value, management concluded | ||
that a net impairment charge of £0.4m (2024: £10.4m) should be recognised accordingly. | ||
Please refer to Note 38b) for further detail. | ||
Intangible assets | ||
In the year ended 31 January 2024, following the cessation of development work and the decision | ||
to exit some of the Group’s smaller, loss-making activities, management exercised its judgement | ||
in relation to the impairment of software assets and performed an impairment review of the | ||
recoverable amount of software assets used by the Insurance Broking and Central Costs divisions. | ||
As a result of this review, management deemed it necessary to impair software assets by £1.2m and | ||
£1.9m in the Insurance Broking business and Central Costs division respectively. Please refer to | ||
Note 16b) for further detail. | ||
In the year ended 31 January 2025, following the Group’s decision to divest itself of the underwriting | ||
and claims handling sections of its Insurance business (Note 38a)), management exercised its | ||
judgement in relation to the impairment of software assets and performed an impairment review | ||
of the recoverable amount of software assets used by the Insurance Broking division. As a result | ||
of this review, management deemed it necessary to impair software assets by £21.3m in the | ||
Insurance Broking continuing operations business and by £4.0m in relation to the intangible fixed | ||
assets held by the disposal group (Note 38a)). The latter impairment charge related to the software | ||
assets of the claims handling section of the Insurance business, which were impaired in full. Please | ||
refer to Note 16b) for further detail. | ||
In addition, management assessed the recoverable amount of software assets at 31 January 2025 | ||
and concluded that an impairment of £2.8m was required in the Group’s Central Costs division. | ||
2.3r) | Insurance contract | Eligibility of reinsurance contracts for the PAA |
liabilities (and related | Some of the Group’s groups of reinsurance contracts have a coverage period of more than | |
reinsurance contract | 12 months, including the motor quota share arrangement, which has a three-year coverage period. | |
assets) | Management applied judgement in concluding that these groups are eligible for the PAA on | |
the basis that, at initial recognition, it expects that the measurement of the asset for remaining | ||
coverage under the PAA would not differ materially to that under the IFRS 17 general | ||
measurement model. | ||
Liability for incurred claims | ||
This judgement relates to the estimation of future claims costs in relation to areas of uncertainty. | ||
It is relevant to both components of the IFRS 17 liability for incurred claims: | ||
The estimate of the present value of future cash flows. | ||
The risk adjustment. | ||
The approach to determining the risk adjustment within the liability for incurred claims is a key area | ||
of judgement. Under IFRS 17, the risk adjustment reflects the compensation required for bearing | ||
uncertainty about the amount and timing of the cash flows that arise from non-financial risk. | ||
The Group determines the risk adjustment at the level of each IFRS 17 portfolio of insurance | ||
contracts, the most material of which is the motor portfolio, using a confidence level technique | ||
(also referred to as a Value at Risk ( VaR ) approach). Following this approach, the total liability for | ||
incurred claims (net of reinsurance) is set at the 85% confidence level (ultimate basis), with the net | ||
risk adjustment being the difference between this total net liability for incurred claims and the net | ||
estimate of the present value of future cash flows. The gross risk adjustment is derived in a similar | ||
way, with the reinsurance risk adjustment being the difference between the gross and net risk | ||
adjustments. This approach, and in particular, the use of the 85% confidence level, results in a risk | ||
adjustment that meets the IFRS 17 requirements as a key judgement. | ||
As the risk adjustment is determined at the level of each IFRS 17 portfolio, the confidence level | ||
referred to above does not reflect diversification of risk across these portfolios. | ||
A further key area of judgement relates to the discount rate that is applied to the estimate of | ||
future cash flows. Under IFRS 17, the discount rate used should reflect the liquidity characteristics | ||
of the insurance liabilities. Assessing the liquidity characteristics of the liabilities requires | ||
significant judgement. Management concluded that cash flows relating to the liability for incurred | ||
claims are illiquid and, therefore, the discount rate should include an illiquidity premium above the | ||
risk-free rate. | ||
2.3u) | Restructuring provision | Management exercised judgement in identifying which costs should be included in the |
measurement of the restructuring provision. In addition, judgement is required of the best | ||
estimate of those costs. |
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Additional information
All estimates are based on management’s knowledge of current facts and circumstances, assumptions based on that knowledge and predictions
of future events and actions. Actual results may, therefore, differ from those estimates.
The table below sets out those items the Group considers to have a significant risk of resulting in a material adjustment to the carrying amounts
of assets and liabilities, together with the relevant accounting policy.
Acc. policy | Items involving estimation | Sources of estimation uncertainty |
2.3a)i) | Revenue recognition – | The standalone selling price of the option to fix within the Group’s three-year fixed-price feature |
three-year fixed-price | offered by our Insurance Broking division was estimated using the expected cost plus a margin | |
product | approach, as set out in paragraph 79 (b) of IFRS 15. | |
An allowance was also made for the likelihood that the option will be exercised by factoring in the | ||
expected rate of renewal at the first and second renewal dates. The amount of revenue deferred | ||
upon initial recognition is, therefore, reduced to the extent that it is estimated that customers will | ||
not exercise the option because they either decide not to renew or they make a claim that releases | ||
the Group from its obligation to fix the customer price. | ||
2.3f) and | Useful economic lives and | The useful economic lives and residual values of software assets classified as intangible assets |
2.3i) | residual values of software | (Note 15) and Ocean Cruise ship assets classified as property, plant and equipment (Note 17) are |
intangible assets and | assessed upon the capitalisation of each asset and, at each reporting date, are based upon the | |
Ocean Cruise ships | expected consumption of future economic benefits of the asset. Estimated residual values and | |
useful lives are reviewed annually. Changes in the expected useful life or the expected pattern of | ||
consumption of future economic benefits embodied in the asset are considered to modify the | ||
amortisation or depreciation period or method, as appropriate, and are treated as changes in | ||
accounting estimates. In relation to the annual review of estimated residual values and useful lives | ||
of Ocean Cruise ships, potential environmental regulatory changes are also considered. | ||
2.3h) | Goodwill impairment | The Group determines whether goodwill needs to be impaired on an annual basis, or more |
testing | frequently as required. This requires an estimation of the value-in-use of the CGUs to which | |
goodwill is allocated. The value-in-use calculation requires the Group to estimate the future cash | ||
flows expected to arise from the CGUs, discounted at a suitably risk-adjusted rate to calculate | ||
present value. | ||
The impact of changes to pricing rules set by the FCA following the completion of the GIPP market | ||
study, particularly the highly competitive motor insurance market and the adverse impact on profit | ||
before tax for the current and prior year, increased the estimation uncertainty in the Insurance | ||
Broking CGU. The outcome of the impairment reviews conducted concluded that impairment | ||
charges of £68.1m, £36.8m, £138.3m and £nil be recognised against the Group’s Insurance Broking | ||
CGU at 31 July 2023, 31 January 2024, 31 July 2024 and 31 January 2025 respectively. | ||
Sensitivity analysis was undertaken to determine the effect of changing the discount rate, the | ||
terminal value and future cash flows on the present value calculation, as shown in Note 16a). | ||
2.3r) | Valuation of insurance | Estimates of future cash flows to fulfil liabilities for incurred claims |
contract liabilities (and | For insurance contracts, estimates have to be made for the expected cost of claims known but | |
related reinsurance | not yet settled (case reserves) and for the expected cost of IBNR claims, at the reporting date. | |
contract assets) | It can take a significant period of time before the ultimate claims cost can be established with | |
certainty. | ||
The ultimate cost of incurred claims is estimated by using a range of standard actuarial claims | ||
projection techniques, such as the Chain-Ladder and Bornhuetter-Ferguson methods. The main | ||
assumption underlying these techniques is that past claims development experience can be used | ||
to project future claims development and hence ultimate claims costs. As such, these methods | ||
extrapolate the development of paid and incurred losses, average costs per claim and claim | ||
volumes based on the observed development of earlier years. Historical claims development is | ||
primarily analysed by accident year, geographical area, significant business line and peril. Additional | ||
qualitative judgement is used to assess the extent to which past trends may not apply in the future | ||
(e.g. to reflect one-off occurrences, changes in external or market factors such as public attitudes | ||
to claiming, economic conditions, levels of claims inflation, judicial decisions and legislation, as well as | ||
internal factors such as portfolio mix, policy features and claims handling procedures) in order to | ||
arrive at the best estimate of the ultimate cost of claims. | ||
The estimate of future cash flows arising from PPO liabilities requires an assumption for carer | ||
wage inflation. This assumption is currently set at 1.5% above the discount rate applied to liabilities | ||
for incurred claims (see below). This assumption will continue to be assessed at future | ||
measurement dates. |
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
2.6 Significant accounting judgements, estimates and assumptions continued
Significant estimates continued
Acc. policy | Items involving estimation | Sources of estimation uncertainty |
2.3r) | Valuation of insurance | Discount rate applied to liabilities for incurred claims |
continued | contract liabilities (and | All the Group’s liabilities for incurred claims (and related reinsurance assets) are discounted. |
related reinsurance | ||
contract assets) | The determination of the discount rate applied to liabilities for incurred claims is an estimate. | |
continued | This discount rate reflects the current risk-free interest rate in the currency of the insurance | |
liabilities, being GBP, plus an illiquidity premium. Such a discount rate is not observable and, | ||
therefore, must be estimated. The discount rate is estimated by removing from the yield curve of | ||
a portfolio of GBP-denominated corporate bonds an estimate of the components of that yield that | ||
relate to expected and unexpected credit losses. The portfolio of corporate bonds used reflects | ||
the debt securities that the Group holds to support its insurance liabilities. | ||
Following this approach, the GBP discount rate curves that were applied to liabilities for incurred | ||
claims were as follows: |
1 year | 3 years | 5 years | 10 years | 20 years | 30 years | |
31 January 2025 | 4.5% | 4.4% | 4.5% | 4.9% | 5.5% | 5.6% |
31 January 2024 | 4.9% | 4.4% | 4.1% | 4.3% | 4.9% | 4.9% |
The sensitivity of this assumption is shown in Note 20a)iii). | ||
Risk adjustment | ||
The confidence level technique used by the Group to determine the risk adjustment requires | ||
estimation of the probability distribution of the present value of future cash flows arising from | ||
liabilities for incurred claims, including estimates of possible favourable and unfavourable outcomes. | ||
These probability distributions are estimated both gross and net of reinsurance. | ||
2.3t) | Valuation of pension | The cost of defined benefit pension plans, and the present value of the pension obligation, are |
benefit obligation | determined using actuarial valuations. Actuarial valuations involve making assumptions about | |
discount rates, expected rates of return on assets, future salary increases, mortality rates and | ||
future pension increases. Due to the complexity of the valuation, the underlying assumptions and | ||
its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. | ||
All assumptions are reviewed at each reporting date. | ||
All significant assumptions and estimates involved in arriving at the valuation of the pension scheme | ||
obligation are set out in Note 27. | ||
2.3u) | Valuation of restructuring | The Group recognises a restructuring provision when a detailed plan identifies the business, or part of |
provision | the business concerned, together with the location and number of employees affected. This requires | |
detailed estimation of the associated costs, the timeline of the restructuring programme and the | ||
employees affected. |
For management purposes, the Group is organised into business units based on their products and services. The Group has three reportable
operating segments as follows:
Travel:
comprises the operation and delivery of Ocean and River Cruise holidays (
Cruise
), as well as package tour and other holiday
products (
Holidays
). The Group owns and operates two Ocean Cruise ships. All other holiday and River Cruise products are packaged
together with third-party supplied accommodation, flights and other transport arrangements.
Insurance:
comprises the provision of general insurance products. Revenue is derived primarily from insurance premiums and broking
revenues. The segment is further analysed into three product sub-segments:
–
Motor broking
–
Home broking
–
Other broking
The results of the Group’s underwriting and claims handling businesses have been classified as discontinued operations following the
announcement of the agreed sale of the Group’s Insurance Underwriting business and are no longer shown in the tables overleaf (see Note 38a)
for further details).
Other Businesses and Central Costs:
comprises the Group’s other businesses and its central cost base. The other businesses primarily
include Saga Money (the personal finance product offering), Saga Publishing, and the Group’s mailing and printing business,
CustomerKNECT.
Segment performance is evaluated using the Group’s key performance measure of Underlying Profit Before Tax
4
. Items not included within a
specific segment relate to transactions that do not form part of the ongoing segment performance or are managed at a Group level.
All revenue is generated solely in the UK.
Transfer prices between operating segments are set on an arm’s-length basis, in a manner similar to transactions with third parties. Segment
income, expenses and results include transfers between business segments that are then eliminated on consolidation.
4
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
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Additional information
Other | ||||||||
| Insurance | Businesses | |||||||
Motor | Home | Other | and Central | |||||
Travel | broking | broking | broking | Total | Costs | Adjustments | Total | |
2025 | £m | £m | £m | £m | £m | £m | £m | £m |
Continuing operations | ||||||||
Revenue | 453.9 | 45.9 | 31.8 | 36.7 | 114.4 | 24.6 | (4.6) | 588.3 |
Cost of sales | (300.0) | – | – | – | – | (8.8) | – | (308.8) |
Gross profit/(loss) | 153.9 | 45.9 | 31.8 | 36.7 | 114.4 | 15.8 | (4.6) | 279.5 |
Administrative and selling expenses | (75.3) | (60.7) | (31.0) | (28.1) | (119.8) | (43.1) | 4.6 | (233.6) |
Impairment of assets | – | (21.3) | – | – | (21.3) | (3.2) | (138.3) | (162.8) |
Gain on lease modification | – | – | – | – | – | 0.2 | – | 0.2 |
Net profit on disposal of property, | 0.9 | – | – | – | – | – | – | 0.9 |
plant and equipment | ||||||||
Investment income | 1.5 | 0.9 | – | – | 0.9 | 3.7 | – | 6.1 |
Finance costs | (20.2) | – | – | – | – | (30.3) | – | (50.5) |
Profit/(loss) before tax | 60.8 | (35.2) | 0.8 | 8.6 | (25.8) | (56.9) | (138.3) | (160.2) |
Reconciliation to Underlying | ||||||||
Profit/(Loss) Before Tax 5 | ||||||||
Profit/(loss) before tax | 60.8 | (35.2) | 0.8 | 8.6 | (25.8) | (56.9) | (138.3) | (160.2) |
Net fair value loss on derivative | 0.3 | – | – | – | – | – | – | 0.3 |
financial instruments | ||||||||
Impairment of Insurance | – | – | – | – | – | – | 138.3 | 138.3 |
Broking goodwill | ||||||||
Impairment of assets | – | 21.3 | – | – | 21.3 | 3.2 | – | 24.5 |
Amortisation of fees and costs | – | – | – | – | – | 3.5 | – | 3.5 |
on Roger De Haan loan facility | ||||||||
Restructuring costs | 0.9 | 18.2 | – | – | 18.2 | 9.3 | – | 28.4 |
Foreign exchange movement | (0.6) | – | – | – | – | – | – | (0.6) |
on lease liabilities | ||||||||
Onerous contract provision | – | (3.1) | 1.3 | – | (1.8) | – | – | (1.8) |
Profit share on cessation of private | – | – | – | 2.6 | 2.6 | – | – | 2.6 |
medical insurance ( PMI ) contract | ||||||||
Ocean Cruise customer | 1.7 | – | – | – | – | – | – | 1.7 |
compensation and dry dock costs | ||||||||
IFRS 16 adjustment on River | 0.5 | – | – | – | – | – | – | 0.5 |
Cruise vessels | ||||||||
Underlying Profit/(Loss) | 63.6 | 1.2 | 2.1 | 11.2 | 14.5 | (40.9) | – | 37.2 |
Before Tax 5 | ||||||||
5
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
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128
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
3 Segmental information continued
Other | ||||||||
Insurance | Businesses | |||||||
Motor | Home | Other | and Central | |||||
Travel | broking | broking | broking | Total | Costs | Adjustments | Total | |
2024 (re-presented 6 ) | £m | £m | £m | £m | £m | £m | £m | £m |
Continuing operations | ||||||||
Revenue | 410.0 | 33.6 | 55.4 | 45.6 | 134.6 | 25.1 | (5.1) | 564.6 |
Cost of sales | (292.5) | (0.5) | – | – | (0.5) | (9.0) | – | (302.0) |
Gross profit/(loss) | 117.5 | 33.1 | 55.4 | 45.6 | 134.1 | 16.1 | (5.1) | 262.6 |
Other income | 5.0 | – | – | – | – | – | – | 5.0 |
Administrative and selling expenses | (67.7) | (50.3) | (35.7) | (20.6) | (106.6) | (70.3) | 4.8 | (239.8) |
Impairment of assets | – | – | – | – | – | (8.4) | (104.9) | (113.3) |
Net loss on disposal of property, | – | (0.1) | – | – | (0.1) | (0.4) | – | (0.5) |
plant and equipment and software | ||||||||
Investment income | 0.8 | 0.4 | – | – | 0.4 | 5.4 | – | 6.6 |
Finance costs | (20.8) | (0.1) | – | – | (0.1) | (23.5) | – | (44.4) |
Profit/(loss) before tax | 34.8 | (17.0) | 19.7 | 25.0 | 27.7 | (81.1) | (105.2) | (123.8) |
Reconciliation to Underlying | ||||||||
Profit/(Loss) Before Tax 7 | ||||||||
Profit/(loss) before tax | 34.8 | (17.0) | 19.7 | 25.0 | 27.7 | (81.1) | (105.2) | (123.8) |
Net fair value loss on derivative | 1.4 | – | – | – | – | – | – | 1.4 |
financial instruments | ||||||||
Impairment of Insurance | – | – | – | – | – | – | 104.9 | 104.9 |
Broking goodwill | ||||||||
Impairment/loss on disposal | – | – | – | – | – | 8.8 | – | 8.8 |
of assets | ||||||||
Amortisation of fees and costs | – | – | – | – | – | 0.4 | – | 0.4 |
on Roger De Haan loan facility | ||||||||
Restructuring costs | 3.4 | 3.7 | – | – | 3.7 | 31.7 | – | 38.8 |
Disposal costs relating to the | – | – | – | – | – | – | 0.3 | 0.3 |
Big Window | ||||||||
Foreign exchange movement | (0.6) | – | – | – | – | – | – | (0.6) |
on lease liabilities | ||||||||
Onerous contract provision | – | 3.1 | – | – | 3.1 | – | – | 3.1 |
Ocean Cruise discretionary ticket | 1.0 | – | – | – | – | – | – | 1.0 |
refunds and associated costs | ||||||||
Underlying Profit/(Loss) | 40.0 | (10.2) | 19.7 | 25.0 | 34.5 | (40.2) | – | 34.3 |
Before Tax 7 | ||||||||
Analysis of total assets less liabilities by segment:
2025 | 2024 | |
£m | £m | |
Travel | 129.1 | 89.3 |
Insurance | 9.8 | 37.0 |
Other Businesses and Central Costs | 38.1 | 152.6 |
Adjustments | (119.3) | (55.4) |
57.7 | 223.5 |
Discontinued operations assets and liabilities held for sale (Note 38a)) are included within the Insurance segment total assets less liabilities
figure above.
6
The comparative information for the year to 31 January 2024 has been re-presented from that previously published due to the Group’s decision to divest itself of the
underwriting and claims handling sections of its Insurance business and, therefore, they have been reclassified as discontinued operations (see Note 38a))
7
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
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Financial statements
Additional information
Total assets less liabilities detailed as adjustments relates to the following unallocated items:
2025 | 2024 | |
£m | £m | |
Goodwill (Note 14) | 206.4 | 344.7 |
Bonds and the loan facility with Roger De Haan | (325.7) | (400.1) |
(119.3) | (55.4) |
The following table provides a disaggregation of the Group’s revenue by major product line, analysed by its core operating segments.
| 2025 | ||||
Other | ||||
Businesses | ||||
and Central | ||||
Travel | Insurance | Costs | Total | |
Major product lines | £m | £m | £m | £m |
Continuing operations | ||||
Ocean Cruise | 236.7 | 236.7 | ||
River Cruise and Holidays | 217.2 | 217.2 | ||
Motor broking | 45.9 | 45.9 | ||
Home broking | 31.8 | 31.8 | ||
Other broking | 36.7 | 36.7 | ||
Money | 5.6 | 5.6 | ||
Publishing and CustomerKNECT | 13.9 | 13.9 | ||
Other | 0.5 | 0.5 | ||
453.9 | 114.4 | 20.0 | 588.3 | |
2024 (re-presented 8 ) | ||||
Other | ||||
Businesses | ||||
and Central | ||||
Travel | Insurance | Costs | Total | |
Major product lines | £m | £m | £m | £m |
Continuing operations | ||||
Ocean Cruise | 210.0 | 210.0 | ||
River Cruise and Holidays | 200.0 | 200.0 | ||
Motor broking | 33.6 | 33.6 | ||
Home broking | 55.4 | 55.4 | ||
Other broking | 45.6 | 45.6 | ||
Money | 6.4 | 6.4 | ||
Publishing and CustomerKNECT | 12.5 | 12.5 | ||
Other | 1.1 | 1.1 | ||
410.0 | 134.6 | 20.0 | 564.6 | |
8
)).
8
The comparative information for the year to 31 January 2024 has been re-presented from that previously published due to the Group’s decision to divest itself of the
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130
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
3 Segmental information continued
b) Contract balances
The following table provides information about contract assets and contract liabilities from contracts with customers as accounted for under
IFRS 15 (the amounts stated here are not insurance acquisition cash flow assets accounted for under IFRS 17):
2025 | 2024 | |
£m | £m | |
Contract cost assets (Note 23) | 4.9 | 3.6 |
Contract liabilities (Note 29) | 176.8 | 159.8 |
The contract cost assets relate to commissions paid to price-comparison websites to acquire new business policies not underwritten by
the Group.
Management expects that incremental commission fees paid to price-comparison websites, as a result of obtaining insurance contracts,
are recoverable. The Group has, therefore, capitalised them as contract assets amounting to £2.0m for the year ended 31 January 2025
(2024: £2.8m). These fees are amortised over the period of the expected renewal cycle. In the year to 31 January 2025, the amount of
amortisation was £2.3m (2024: £1.7m) and there was no impairment loss in relation to the costs capitalised.
Applying the practical expedient in paragraph 94 of IFRS 15, the Group recognises the incremental costs of obtaining contracts as an expense
when incurred if the amortisation period of the assets that the Group otherwise would have recognised is one year or less.
The contract liabilities relate to the deferral of revenue for performance obligations not satisfied, at 31 January, and comprise the advance
consideration received from customers for holidays or cruises booked, but not travelled; and insurance premiums street pricing adjustments
received in advance of the cover start date (where the policy is not underwritten by the Group). There was no revenue recognised in the current
reporting year that related to performance obligations that were satisfied in a prior year.
Significant changes in the contract cost assets and the contract liabilities during the year are as follows:
2025 | 2024 | |||
Contract | Contract | Contract | Contract | |
cost assets | liabilities | cost assets | liabilities | |
£m | £m | £m | £m | |
Balance at 1 February | 3.6 | 159.8 | 2.5 | 126.5 |
Released to the income statement in the period | (2.3) | (395.4) | (1.7) | (376.1) |
Additional contract balances incurred during the year | 2.0 | 435.4 | 2.8 | 444.9 |
Amounts refunded to customers | – | (23.5) | – | (35.4) |
Amounts reclassified to assets/liabilities held for sale | 1.6 | 0.5 | – | – |
Disposed of with subsidiary undertaking (Note 13b)) | – | – | – | (0.1) |
Balance at 31 January | 4.9 | 176.8 | 3.6 | 159.8 |
c) Transaction price allocated to the remaining performance obligations
The transaction price allocated to three-year fixed-price insurance policy renewal options, where the remaining performance obligations are not
expected to be satisfied within the next 12 months, is £1.2m (2024: £2.0m). This is expected to be recognised as revenue in the subsequent one
to three years.
The transaction price allocated to customer contracts within the Travel segment, where the remaining performance obligations are not
expected to be satisfied within the next 12 months, is £3.8m (2024: £1.7m). This is expected to be recognised as revenue in the subsequent one
to two years.
The Group applies the practical expedient in paragraph 121 of IFRS 15 and does not disclose information about remaining performance
2025 | 2024 | |
£m | £m | |
Continuing operations | ||
Compensation | – | 5.0 |
– | 5.0 |
In the prior year, an amount of £5.0m was received by the Group from an insurance company as compensation for refunds paid to customers
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Additional information
2025 | 2024 | |
(re-presented 9 ) | ||
£m | £m | |
Continuing operations | ||
Staff costs (excluding restructuring costs) | 86.5 | 95.1 |
Marketing and fulfilment costs | 46.8 | 44.6 |
Short-term lease rentals | 0.1 | 0.2 |
Auditors’ remuneration | 2.1 | 2.1 |
Other administrative costs | 66.6 | 67.3 |
Depreciation – property, plant and equipment (Note 17) | 0.7 | 1.0 |
Depreciation – right-of-use assets (Note 18) | 2.2 | 2.0 |
Amortisation of intangible assets (Note 15) | 8.7 | 7.5 |
Restructuring costs | 18.1 | 18.9 |
231.8 | 238.7 |
Administrative and selling expenses relate to non-Insurance Underwriting businesses.
2025 | 2024 | |
(re-presented 9 ) | ||
£m | £m | |
Audit of the parent company and consolidated financial statements | 0.8 | 1.0 |
Audit of subsidiary financial statements | 1.0 | 0.8 |
Audit-related assurance services | 0.3 | 0.3 |
Auditors’ remuneration relating to continuing operations | 2.1 | 2.1 |
Auditors’ remuneration relating to discontinued operations (Note 38a)) | 0.6 | 0.4 |
Total auditors’ remuneration | 2.7 | 2.5 |
a) Impairments during the year ended 31 January 2025
During the year ended 31 January 2025, the Group impaired the carrying value of the goodwill balance allocated to the Insurance Broking CGU
by £138.3m (Note 14).
The Group impaired software in its Insurance and Central Costs divisions by £25.3m and £2.8m respectively, totalling £28.1m (Note 15).
Of the impairment in Insurance, £4.0m related to the claims handling section of the Insurance business to be divested of (Note 38a)) and,
therefore, it has been reclassified as discontinued operations within the income statement.
Furthermore, the Group concluded that an impairment charge of £0.1m (Note 17) to plant and equipment assets was required in the Group’s
Central Costs division.
In light of the Group obtaining updated freehold property market valuation reports, management also impaired assets held for sale by £0.4m
(Note 38b)). Within this total, £0.1m related to the underwriting section of the Insurance business to be divested of (Note 38a)) and, therefore,
it has been reclassified as discontinued operations within the income statement.
b) Impairments during the year ended 31 January 2024
During the year ended 31 January 2024, the Group impaired the carrying value of the goodwill balance allocated to the Insurance Broking CGU
by £104.9m (Note 14).
The Group impaired software in its Insurance Broking and Central Costs divisions by £1.2m and £1.9m respectively, totalling £3.1m (Note 15).
The £1.2m impairment in the Insurance Broking division related to the claims handling section of the Insurance business to be divested of
(Note 38a)) and, therefore, it has been reclassified as discontinued operations within the income statement.
Furthermore, the Group concluded that an impairment charge of £0.1m (Note 17) to plant and equipment assets was required in the Group’s
Central Costs division, and that an impairment charge of £0.1m (Note 18) to right-of-use assets was required in the Group’s Publishing division.
In light of the Group obtaining updated freehold property market valuation reports, management also impaired assets held for sale by £10.4m
(Note 38b)). Within this total, £4.2m related to the underwriting section of the Insurance business to be divested of (Note 38a)) and, therefore,
9
The comparative information for the year to 31 January 2024 has been re-presented from that previously published due to the Group’s decision to divest itself of the
underwriting and claims handling sections of its Insurance business and, therefore, they have been reclassified as discontinued operations (see Note 38a))
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132
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
2025 | 2024 | |
(re-presented 10 ) | ||
£m | £m | |
Continuing operations | ||
Interest income recognised using the EIR method on FVTPL financial assets | 6.0 | 6.2 |
Interest income earned on financial assets measured at amortised cost | 0.1 | 0.4 |
6.1 | 6.6 |
2025 | 2024 | |
£m | £m | |
Continuing operations | ||
Interest and charges on debt and borrowings using the EIR method | 42.2 | 40.2 |
Net fair value loss on derivative financial instruments | 0.3 | 1.4 |
Net finance costs on retirement benefit schemes | 2.3 | 0.5 |
Debt issue costs | 3.6 | 0.4 |
Net interest and finance charges payable on lease liabilities | 2.1 | 1.9 |
50.5 | 44.4 |
Amounts charged to the income statement for the year are as follows:
2025 | 2024 | |
(re-presented 10 ) | ||
£m | £m | |
Continuing operations | ||
Wages and salaries | 90.7 | 128.3 11 |
Social security costs | 8.6 | 11.9 |
Pension costs (Note 27) | 4.5 | 5.1 11 |
103.8 | 145.3 | |
Discontinued operations | ||
Wages and salaries | 13.6 | 14.2 11 |
Social security costs | 1.3 | 1.3 |
Pension costs (Note 27) | 0.7 | 0.8 11 |
15.6 | 16.3 | |
Total staff costs | 119.4 | 161.6 |
10
)) and £88.1m (2024: £114.0m (re-presented
10
))
charges of £4.2m (2024: £3.4m) and restructuring provision costs of £16.5m (2024: £nil). Further details can be found in Note 36 for
share-based payments and Note 31 for the restructuring provision.
Average monthly number of employees:
2025 | 2024 | |
(re-presented 10 ) | ||
number | number | |
Travel | 1,151 | 2,034 |
Insurance | 940 | 1,061 |
Other Businesses and Central Costs | 380 | 382 |
Continuing operations | 2,471 | 3,477 |
Employees attributable to discontinued operations | 391 | 407 |
Total employee numbers | 2,862 | 3,884 |
to the Ocean Cruise business. The impact of this on the total employee numbers reported above is that, after May 2024, crew members are
no longer employees of the Group. This has resulted in a significant decrease in the average monthly number of employees reported for the
Travel business in the current year.
The comparative information for the year to 31 January 2024 has been re-presented from that previously published due to the Group’s decision to divest itself of the
11
The combined total figure (continuing plus discontinued operations) for pensions costs previously reported was £11.6m, this should have been £5.7m lower because it
incorrectly included employee contributions. Similarly, the combined total figure for wages and salaries of £136.8m should have been £5.7m higher. The comparatives for
the year ended 31 January 2024 have been restated accordingly
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Financial statements
Additional information
Directors’ remuneration
The information required by the Companies Act 2006 and the UK Listing Rules of the FCA is contained on pages 77-96 in the Directors’
Remuneration Report.
Compensation of key management personnel of the Group
Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities
of the Group and comprise the Directors of the Company and the Operating Board.
The amounts recognised as an expense during the financial year in respect of key management personnel are as follows:
2025 | 2024 | |
£m | £m | |
Short-term benefits | 6.2 | 7.1 |
Termination costs | – | 1.9 |
Post-employment benefits | 0.1 | 0.1 |
Share-based payments | 1.2 | 1.1 |
7.5 | 10.2 |
The major components of the income tax charge/(credit) are:
2025 | 2024 | |
(re-presented 12 ) | ||
£m | £m | |
Continuing operations | ||
Consolidated income statement | ||
Current income tax | ||
Current income tax credit | (0.5) | (1.8) |
Adjustments in respect of previous years | 0.9 | (3.6) |
0.4 | (5.4) | |
Deferred tax | ||
Relating to origination and reversal of temporary differences | 19.0 | (9.5) |
Adjustments in respect of previous years | (0.9) | (0.9) |
18.1 | (10.4) | |
Tax charge/(credit) in the income statement relating to continuing operations | 18.5 | (15.8) |
Reconciliation of tax (charge)/credit to loss before tax, multiplied by the UK corporation tax rate:
2025 | 2024 | |
(re-presented 12 ) | ||
£m | £m | |
Continuing operations | ||
Loss before tax from continuing operations | (160.2) | (123.8) |
Tax at rate of 25.0% (2024: 24.0%) | (40.1) | (29.7) |
Adjustments in respect of previous years | – | (4.5) |
Expenses not deductible for tax purposes: | ||
Effect of Ocean Cruise business being in tonnage tax regime | (11.8) | (8.2) |
Impairment of goodwill | 34.6 | 25.2 |
Rate change adjustment on temporary differences | – | (0.4) |
Corporation tax losses not recognised | 27.9 | – |
Other deferred tax assets and liabilities not recognised | 6.5 | – |
Other non-deductible expenses/non-taxed income | 1.4 | 1.8 |
Tax charge/(credit) in the income statement relating to continuing operations | 18.5 | (15.8) |
The Group’s tax charge relating to continuing operations for the year was £18.5m (2024: £15.8m credit (re-presented
12
)) representing
a tax effective rate of negative 84.5% before the impairment of goodwill (2024: 83.6% (re-presented
12
)). In both the current and prior years, the
difference between the Group’s tax effective rate and the standard rate of corporation tax was mainly due to the Group’s Ocean Cruise business
being in the tonnage tax regime. In addition, in the current year, it is also due to £111.6m of corporation tax losses carried forward at 31 January 2025
not being considered recoverable and, therefore, no deferred tax asset was recognised for these losses.
12
The comparative information for the year to 31 January 2024 has been re-presented from that previously published due to the Group’s decision to divest itself of the
underwriting and claims handling sections of its Insurance business and, therefore, they have been reclassified as discontinued operations (see Note 38a))
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
10 Tax continued
Adjustments in respect of previous years include an adjustment for the over-provision of tax in prior years of £nil (2024: £4.5m credit).
The £4.5m credit for the prior year includes £3.2m of repayments from HM Revenue & Customs in respect of the years ended 31 January 2019
and 31 January 2020.
Consolidated statement | Consolidated income statement | |||
of financial position | (continuing operations) | |||
2025 | 2024 | 2025 | 2024 | |
(re-presented 13 ) | ||||
£m | £m | £m | £m | |
Excess of depreciation over capital allowances | – | 4.1 | 5.9 | (0.7) |
Retirement benefit scheme liabilities | – | 12.0 | – | 1.3 |
Short-term temporary differences: | ||||
– Designated hedges recognised through OCI | – | 0.3 | – | – |
– Share-based payment reserve | – | 2.3 | 2.3 | (0.3) |
– General bad debt provision | – | 1.0 | 1.0 | (0.4) |
– Capitalised borrowing costs | – | (2.5) | (2.5) | (0.1) |
– IFRS 16 transition adjustments | – | 1.8 | 1.8 | (0.6) |
– IFRS 17 adjustments | – | 4.9 | – | – |
– Losses carried forward | – | 9.7 | 9.7 | (9.7) |
– Other | – | 1.2 | (0.1) | 0.1 |
Deferred tax charge/(credit) | 18.1 | (10.4) | ||
Net deferred tax assets | – | 34.8 | ||
2025 | 2024 | |
£m | £m | |
Deferred tax assets | – | 49.4 |
Deferred tax liabilities | – | (14.6) |
Net deferred tax assets | – | 34.8 |
Reconciliation of net deferred tax assets:
2025 | 2024 | |
(re-presented 13 ) | ||
£m | £m | |
At 1 February | 34.8 | 11.5 |
Tax (charge)/credit recognised in the income statement from continuing operations | (18.1) | 10.4 |
Tax (charge)/credit recognised in OCI from continuing operations | (12.3) | 10.9 |
Deferred tax (charge)/credit attributable to discontinued operations | (4.8) | 2.0 |
Amounts transferred to assets held for sale (Note 38a)) | 0.4 | – |
At 31 January | – | 34.8 |
The closing deferred tax balances at the statement of financial position date have been reflected at 25%. Net deferred tax assets are expected
to be normally settled in more than 12 months.
The Group has tax losses which arose in the UK of £111.6m (2024: £46.8m) that are available indefinitely for offsetting against future taxable profits
of the continuing operations of the Group. Deferred tax assets have not been recognised in respect of these losses as management have assessed
there are less likely than not to be sufficient future taxable profits to utilise these tax losses. The tax losses have arisen due to the Group’s Ocean
Cruise business being in the tonnage tax regime and thus excluded from corporate tax, meaning that taxable profits in the Group’s non-Ocean Cruise
businesses would be required to recognise deferred tax assets, and there are no other tax planning opportunities or other evidence of recoverability
in the near future. In addition, all other net timing differences were considered not to be recoverable, therefore no deferred tax assets have been
recognised in respect of the continuing business as at 31 January 2025, for the same reason that deferred tax assets were not recognised on tax
losses. If the Group were able to recognise all unrecognised deferred tax assets then profit for the year would be £34.4m higher and movements
through OCI would be £10.8m higher.
The Board of Directors does not recommend the payment of a final dividend for the 2024/25 financial year (2024: nil pence per share). For the
current and prior year, no interim or final dividends were declared, or paid, during the year.
The distributable reserves of Saga plc are £67.5m at 31 January 2025, which are equal to the retained earnings reserve. If necessary, its
subsidiary companies hold significant reserves from which a dividend could be paid. Subsidiary distributable reserves are available immediately,
with the exception of companies within the River Cruise, Holidays and Insurance Underwriting businesses, which require regulatory approval
before any dividends can be declared and paid. Under the terms of the ship debt facilities, dividends remain restricted until the ship debt
principal repayments that were deferred as part of the ship debt repayment holiday are fully repaid (Note 30). In addition, under the terms
The comparative information for the year to 31 January 2024 has been re-presented from that previously published due to the Group’s decision to divest itself of the
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Additional information
Basic loss per share is calculated by dividing the loss after tax for the year attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the period. Diluted loss per share is calculated by also including the weighted average
number of ordinary shares that would be issued on conversion of all potentially dilutive options.
There were no other transactions involving ordinary shares, or potential ordinary shares, between the reporting date and the date of
authorisation of these financial statements.
The calculation of basic and diluted loss per share is as follows:
2025 | 2024 | |
£m | £m | |
Loss attributable to ordinary equity holders | (164.9) | (113.0) |
Loss from continuing operations | (178.7) | (108.0) |
Weighted average number of ordinary shares | ’m | ’m |
Ordinary shares at 1 February | 139.8 | 139.5 |
Deferred Bonus Plan ( DBP ) share options exercised | 0.2 | 0.1 |
Restricted Share Plan ( RSP ) share options exercised | 0.5 | 0.2 |
Ordinary shares at 31 January | 140.5 | 139.8 |
Weighted average number of ordinary shares for basic loss per share and diluted loss per share | 140.5 | 139.8 |
Basic loss per share | (117.4p) | (80.8p) |
Basic loss per share from continuing operations | (127.2p) | (77.2p) |
Diluted loss per share | (117.4p) | (80.8p) |
Diluted loss per share from continuing operations | (127.2p) | (77.2p) |
The table below reconciles between basic loss per share and Underlying Basic Earnings Per Share
14
:
2025 | 2024 | |
Basic loss per share | (117.4p) | (80.8p) |
Adjusted for: | ||
Net fair value loss on derivative financial instruments | 0.3p | 0.8p |
Impairment of assets | 25.6p | 6.8p |
Impairment of Insurance Broking goodwill | 98.4p | 75.0p |
Disposal costs relating to the Big Window (Note 13b)) | – | 0.2p |
Onerous contract provision | (12.3p) | 6.9p |
Profit share on cessation of PMI contract | 2.2p | – |
Amortisation of fees and costs on the Roger De Haan loan facility | 3.0p | 0.2p |
Foreign exchange movement on lease liabilities | (0.5p) | (0.4p) |
Fair value gains on debt securities | (4.3p) | (2.0p) |
Changes in underwriting discount rates on non-PPO liabilities | (0.5p) | (0.6p) |
Restructuring costs | 26.9p | 23.3p |
Ocean Cruise customer compensation and dry dock costs | 1.4p | – |
Ocean Cruise discretionary ticket refunds and associated costs | – | 0.6p |
IFRS 16 lease accounting adjustment on River Cruise vessels | 0.4p | – |
Underlying Basic Earnings Per Share 14 | 23.2p | 30.0p |
14
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136
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
b) Disposals during the year ended 31 January 2024
During the year ended 31 January 2024, as a result of the decision to exit some of its smaller loss-making activities, the Group made the
decision to dispose of The Big Window Consulting Limited (the
Big Window
), a specialist research and insight business focussing on ageing.
On 31 December 2023, the Group sold the Big Window back to its founder and Chief Executive Officer, for a nominal sum of £1. The disposal
did not meet the requirements of IFRS 5 to be classified as a discontinued operation.
Details of the sale of the Big Window are as follows:
2024 | |
£m | |
Cash consideration received | – |
Cash and short-term deposits disposed of as part of the transaction | – |
Carrying value of net liabilities disposed | – |
Loss on disposal before tax | – |
Tax expense on gain | – |
Loss on disposal after tax | – |
The carrying amounts of assets and liabilities at the date of disposal were:
At date of | |
disposal | |
£m | |
Assets | |
Trade and other receivables | 0.1 |
Total assets | 0.1 |
Liabilities | |
Contract liabilities | 0.1 |
Total liabilities | 0.1 |
Net liabilities disposed | – |
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Goodwill | |
£m | |
Cost | |
At 1 February 2023 | 1,471.9 |
Disposal of a subsidiary (Note 13b)) | (0.5) |
Adjustment relating to the disposal of a subsidiary in a prior year | (13.0) |
At 31 January 2024 and 31 January 2025 | 1,458.4 |
Impairment | |
At 1 February 2023 | 1,022.3 |
Charge for the year (Note 16a)) | 104.9 |
Disposal of a subsidiary (Note 13b)) | (0.5) |
Adjustment relating to the disposal of a subsidiary in a prior year | (13.0) |
At 31 January 2024 | 1,113.7 |
Charge for the year (Note 16a)) | 138.3 |
At 31 January 2025 | 1,252.0 |
Net book value | |
At 31 January 2025 | 206.4 |
At 31 January 2024 | 344.7 |
Goodwill deductible for tax purposes amounts to £nil (2024: £nil).
The adjustment relating to the disposal of a subsidiary in a prior year relates to Destinology Limited, in the year ended 31 January 2021. At the
date of disposal of the company, the net book value of the goodwill asset relating to it was £nil, being the original cost of £13.0m, less a historic
impairment of £13.0m. The impact of this disposal on the Group’s cumulative cost and impairment balances carried forward, at 31 January 2021,
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
Software | |
£m | |
Cost | |
At 1 February 2023 | 115.0 |
Additions and internally developed software | 21.7 |
Disposals | (18.6) |
At 31 January 2024 | 118.1 |
Additions and internally developed software | 12.1 |
Reclassification to assets held for sale (Note 38a)) | (12.8) |
At 31 January 2025 | 117.4 |
Amortisation and impairment | |
At 1 February 2023 | 63.7 |
Amortisation | 8.9 |
Impairment of assets (Note 16b)) | 3.1 |
Disposals | (18.3) |
At 31 January 2024 | 57.4 |
Amortisation | 10.4 |
Impairment of assets (Note 16b)) | 28.1 |
Reclassification to assets held for sale (Note 38a)) | (12.8) |
At 31 January 2025 | 83.1 |
Net book value | |
At 31 January 2025 | 34.3 |
At 31 January 2024 | 60.7 |
The net book value of software at 31 January 2025 included internally generated software of £3.4m (2024: £26.4m) relating to Guidewire
(the Group’s Insurance Broking, policy administration and billing platform), including additions in the year of £10.6m (2024: £3.5m). The Guidewire
platform has an expected useful economic life of 13 years, with six years of phase one expenditure remaining at 31 January 2025. During the prior
year, the useful economic life of the Guidewire platform was extended from 10 years to 13 years, ending on 30 April 2031, to align with all product
elements that are being moved across to the platform. Implementation, and the commencement of amortisation of the Guidewire platform,
is on a phased basis, based on product re-platforming, and began in the year ended 31 January 2019. Following the Group’s decision to divest
itself of the underwriting and claims handling sections of its Insurance business (Note 38a)), management performed an impairment review of
software assets used by the Insurance Broking division. The outcome of the impairment review concluded that an impairment charge of £21.3m
be recognised against the Group’s software assets at 31 January 2025, in relation to the Guidewire platform.
The net book value of software at 31 January 2025 also included internally generated software of £1.4m (2024: £1.7m) relating to Tigerbay
(the Group’s travel booking reservation system) including additions in the year of £nil (2024: £nil). The Tigerbay platform has an expected useful
economic life of 10 years, with four years of phase one expenditure remaining at 31 January 2025. Implementation, and the commencement of
amortisation of the Tigerbay platform, is on a phased basis, based on product re-platforming, and began in the year ended 31 January 2020.
2025 | 2024 | |
(re-presented 15 ) | ||
£m | £m | |
Cost of sales | 0.1 | 0.1 |
Administrative and selling expenses (Note 5) | 8.7 | 7.5 |
Continuing operations | 8.8 | 7.6 |
Discontinued operations (Note 38a)) | 1.6 | 1.3 |
10.4 | 8.9 |
The comparative information for the year to 31 January 2024 has been re-presented from that previously published due to the Group’s decision to divest itself of the
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a) Goodwill
Goodwill acquired through business combinations has been allocated to CGUs for the purpose of impairment testing. The carrying value of
goodwill by CGU is as follows:
2025 | 2024 | |
£m | £m | |
Insurance Broking | 206.4 | 344.7 |
206.4 | 344.7 |
The Group tests all goodwill balances for impairment at least annually and half-yearly if indicators of impairment exist at the interim reporting
date of 31 July. The impairment test compares the recoverable amount of the CGU to the carrying value of its net assets, including the value
of the allocated goodwill.
On 1 January 2022, new pricing rules arising from the implementation of recommendations included in the FCA’s GIPP market study came
into effect. As a result, and against the background of a highly competitive motor insurance market, the Group saw a fall in policy volumes in
the period to 31 July 2023 and year to 31 January 2024. In the years to 31 January 2024 and 31 January 2025, high net rate inflation from our
underwriting panel continued to have an adverse impact on the expected future profitability of the Insurance business. In December 2024, the
Group also announced it had entered into a binding agreement with wholly owned subsidiaries in the UK of Ageas SA/NV (
Ageas
), to establish
a 20-year partnership for motor and home insurance (the
Affinity Partnership
), which is expected to impact future cash flows of the business.
Management considered these trading impacts to constitute indicators of impairment and, therefore, conducted full impairment reviews of
the Insurance Broking CGU at 31 July 2023, 31 January 2024, 31 July 2024 and 31 January 2025. At 31 July 2024, the Group determined that
the recoverable amount of the goodwill was below the carrying value, and so the Directors took the decision to impair the goodwill by £138.3m,
based on a probability-weighted assessment of the base and stressed forecast cash flows modelled.
At the assessment conducted as at 31 January 2025, forecast cash flows consistent with the latest five-year plan and further stress tests, were
modelled. After applying a probability weighting to the base and stressed forecast cash flows modelled, management concluded that no further
impairment of goodwill was required as at 31 January 2025, leaving the total impairment charge for the year at £138.3m.
The recoverable amount of the Insurance Broking CGU was determined based on a value-in-use calculation using nominal cash flow projections
from the Group’s latest five-year financial forecasts to 2029/30, which were derived using past experience of the Group’s trading, combined
with the anticipated impact of changes in macroeconomic and regulatory factors and the expected impact of the transition to the Affinity
Partnership. A terminal value was calculated using the Gordon Growth Model based on the fifth year of those projections and a terminal growth
rate calculated using an assumption of 2.0% (July 2023: 2.0%; January 2024: 2.0%; July 2024: 2.0%) as the expected long-term target rate of
inflation for the UK economy. The cash flows were then discounted to present value using a suitably risk-adjusted nominal discount rate based
on a market-participant view of the cost of capital and debt relevant to the insurance industry.
At 31 January 2025, the pre-tax discount rate used for the Insurance Broking CGU was 13.3% (July 2023: 13.8%; January 2024: 13.0%;
July 2024: 14.7%). The Group’s five-year financial forecasts incorporate the modelled impact of the new pricing rules and the estimated impact
that this is likely to have on future new business pricing and retention rates. As per IAS 36.44, incremental cash flows directly attributable to
growth initiatives not yet enacted at the statement of financial position date were then removed for the purpose of the value-in-use calculation.
The Group also considered the impact of downside stresses, both in terms of adverse impacts to the cash flow projections and to the discount
rate. For the cash flow stress test, the Group modelled the impact of a more prudent outlook on the current competitive challenges seen in
the insurance broking market, in combination with a more cautious terminal growth rate based on a more conservative assumption of 1.5%
(July 2023: 1.5%; January 2024: 1.5%; July 2024: 1.5%), as the outlook for growth in the UK economy. For the discount rate stress test, the Group
applied risk premia of +0.4ppts at 31 January 2025 (July 2023: +0.7ppts; January 2024: +0.2ppts; July 2024: +0.5ppts).
The headroom/(deficit) of the Insurance Broking CGU against the carrying value of goodwill at the time of the review of £206.4m at
31 January 2025 (after recognising an impairment charge of £138.3m at 31 July 2024), £344.7m at 31 July 2024 (after recognising cumulative
impairment charges in the year of £104.9m at 31 January 2024), and £381.5m at 31 January 2024 (after recognising an impairment charge of
£68.1m at 31 July 2023), was as follows:
| Headroom/(deficit) £m | |||||||||
| Base scenario | Cash flow stress test scenario | Discount rate stress test scenario | |||||||
31 January | 31 July | 31 January | 31 January | 31 July | 31 January | 31 January | 31 July | 31 January | |
2025 | 2024 | 2024 | 2025 | 2024 | 2024 | 2025 | 2024 | 2024 | |
Insurance Broking | 33.4 | (72.0) | (17.8) | (19.2) | (204.5) | (55.7) | 25.9 | (81.8) | (25.0) |
The (deficit)/headroom calculated is sensitive to the discount rate and terminal growth rate assumed, and to changes in the projected cash flows
of the CGU. Increased inflationary pressures on claims, the evolving market response to the regulatory changes introduced in early 2022 and,
in particular, the extent to which market prices move against Saga in a period of heightened global economic uncertainty, combine to increase
the range of possible cash flow outcomes in management’s modelling. A quantitative sensitivity analysis for each of these at 31 January 2025,
and its impact on the base scenario headroom against the carrying value of goodwill at the time of the review of £206.4m, is as follows:
Pre-tax discount rate | Terminal growth rate | Cash flow (annual) | ||||
+1.0ppt | -1.0ppt | +1.0ppt | -1.0ppt | +10% | -10% | |
£m | £m | £m | £m | £m | £m | |
Insurance Broking | (19.0) | 22.8 | 20.8 | (16.7) | 18.1 | (18.1) |
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
16 Impairment of intangible assets continued
b) Other intangible assets
Separately identifiable intangible assets are valued, and their appropriate useful lives established, at the time of acquisition. The carrying values
of these assets, and their remaining useful lives, are reviewed annually for indicators of impairment.
Following the Group’s decision to divest itself of the underwriting and claims handling sections of its Insurance business (Note 38a)), management
has concluded that this constitutes an indicator of impairment and has duly conducted an impairment review of the Group’s other intangible
fixed assets.
The outcome of this impairment review concluded that an impairment charge of £4.0m should be recognised against the intangible fixed assets
held by the disposal group at 31 January 2025 (Note 38a)). The impairment charge relates to the software assets of the claims handling section
of the Insurance business, which were impaired in full.
As a result of the announcement above, and subsequent impairment review, management concluded that an impairment charge of £21.3m
should be recognised against the internally generated software assets relating to Guidewire (the Group’s Insurance Broking, policy
administration and billing platform (Note 15)). The Guidewire software assets do not form part of the intangible fixed assets held by the
disposal group.
In addition, management assessed the recoverable amount of software assets at 31 January 2025 and concluded that an impairment of £2.8m
was required in the Group’s Central Costs division.
In the prior year, management assessed the recoverable amount of software assets at 31 January 2024 and concluded that impairments of
Long | |||||
Freehold | leasehold | ||||
land and | land and | Ocean | Plant and | ||
buildings | buildings | Cruise ships | equipment | Total | |
£m | £m | £m | £m | £m | |
Cost | |||||
At 1 February 2023 | 0.4 | 5.2 | 656.4 | 34.6 | 696.6 |
Additions | – | – | 0.7 | 1.4 | 2.1 |
Disposals | – | (0.4) | – | (13.1) | (13.5) |
Reclassification from assets held for sale (Note 38b)) | – | 4.1 | – | – | 4.1 |
At 31 January 2024 | 0.4 | 8.9 | 657.1 | 22.9 | 689.3 |
Additions | – | – | 5.8 | 1.1 | 6.9 |
Disposals | – | – | (0.2) | (0.2) | (0.4) |
Reclassification from assets held for sale (Note 38b)) | 6.0 | – | – | – | 6.0 |
At 31 January 2025 | 6.4 | 8.9 | 662.7 | 23.8 | 701.8 |
Depreciation and impairment | |||||
At 1 February 2023 | 0.4 | 5.2 | 49.4 | 30.6 | 85.6 |
Provided during the year | – | 0.1 | 21.0 | 1.7 | 22.8 |
Impairment of assets | – | – | – | 0.1 | 0.1 |
Disposals | – | (0.4) | – | (12.9) | (13.3) |
Reclassification from assets held for sale (Note 38b)) | – | 0.7 | – | – | 0.7 |
At 31 January 2024 | 0.4 | 5.6 | 70.4 | 19.5 | 95.9 |
Provided during the year | – | 0.1 | 21.7 | 1.4 | 23.2 |
Impairment of assets | – | – | – | 0.1 | 0.1 |
Disposals | – | – | – | (0.2) | (0.2) |
At 31 January 2025 | 0.4 | 5.7 | 92.1 | 20.8 | 119.0 |
Net book value | |||||
At 31 January 2025 | 6.0 | 3.2 | 570.6 | 3.0 | 582.8 |
At 31 January 2024 | – | 3.3 | 586.7 | 3.4 | 593.4 |
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2025 | 2024 | |
(re-presented 16 ) | ||
£m | £m | |
Cost of sales | 22.4 | 21.7 |
Administrative and selling expenses (Note 5) | 0.7 | 1.0 |
Continuing operations | 23.1 | 22.7 |
Discontinued operations (Note 38a)) | 0.1 | 0.1 |
23.2 | 22.8 |
During the year, the Group disposed of assets with a net book value of £0.2m (2024: £0.2m). The profit arising on disposal was £0.9m
(2024: £0.2m loss).
since it was no longer being actively marketed for disposal (Note 38b)). The carrying value of this property at 31 January 2024 was £6.0m.
In the prior year, the Group declassified one of the properties classified as held for sale at 31 January 2023, to property, plant and equipment,
a) Impairment review of property, plant and equipment
Management assessed the recoverable amount of plant and equipment assets at 31 January 2025 and concluded that an impairment charge
of £0.1m was required in the Group’s Central Costs division.
In the prior year, management assessed the recoverable amount of plant and equipment assets at 31 January 2024 and concluded that an
Long | ||||
leasehold | ||||
land and | River | Plant and | ||
buildings | Cruise ships | equipment | Total | |
£m | £m | £m | £m | |
Cost | ||||
At 1 February 2023 | 2.1 | 32.5 | 8.6 | 43.2 |
Additions | 1.9 | 1.5 | 2.5 | 5.9 |
Disposals | – | (11.5) | – | (11.5) |
At 31 January 2024 | 4.0 | 22.5 | 11.1 | 37.6 |
Additions | – | 7.3 | 0.7 | 8.0 |
Disposals | – | (1.6) | (2.1) | (3.7) |
Effect of modification of lease terms | (0.3) | – | – | (0.3) |
At 31 January 2025 | 3.7 | 28.2 | 9.7 | 41.6 |
Depreciation and impairment | ||||
At 1 February 2023 | 0.5 | 7.6 | 4.4 | 12.5 |
Provided during the year | 0.8 | 9.2 | 1.9 | 11.9 |
Impairment of assets | 0.1 | – | – | 0.1 |
Disposals | – | (11.5) | – | (11.5) |
At 31 January 2024 | 1.4 | 5.3 | 6.3 | 13.0 |
Provided during the year | 1.1 | 4.5 | 1.8 | 7.4 |
Disposals | – | (1.6) | (2.1) | (3.7) |
At 31 January 2025 | 2.5 | 8.2 | 6.0 | 16.7 |
Net book value | ||||
At 31 January 2025 | 1.2 | 20.0 | 3.7 | 24.9 |
At 31 January 2024 | 2.6 | 17.2 | 4.8 | 24.6 |
16
The comparative information for the year to 31 January 2024 has been re-presented from that previously published due to the Group’s decision to divest itself of the
underwriting and claims handling sections of its Insurance business and, therefore, they have been reclassified as discontinued operations (see Note 38a))
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142
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
18 Right-of-use assets continued
2025 | 2024 | |
£m | £m | |
Cost of sales | 5.2 | 9.9 |
Administrative and selling expenses (Note 5) | 2.2 | 2.0 |
7.4 | 11.9 |
During the year, the Group disposed of assets with a net book value of £nil (2024: £nil). The profit arising on disposal was £nil (2024: £nil).
The total cash outflow for leases amounted to £9.4m (2024: £13.6m).
In the year ended 31 January 2025, the modification of lease terms relating to long leasehold land and buildings resulted in a gain of £0.2m being
reported in the income statement in the year.
a) Impairment review of right-of-use assets
The Directors concluded that there were no indicators of impairment at 31 January 2025 and, accordingly, no impairment review was
deemed necessary.
In the year to 31 January 2024, management decided to restructure the Group’s Publishing business. As a result of this exercise, management
performed an impairment review of right-of-use assets used by the Publishing business. The outcome of this review concluded that an
impairment charge of £0.1m be recognised against the Group’s long leasehold land and buildings at 31 January 2024.
With the exception of the above, the Group did not consider it necessary to conduct an impairment review of right-of-use assets at
The Group’s principal financial liabilities comprise loans and borrowings, and trade and other payables. The main purpose of the loans and
borrowings financial liabilities is to finance the Group’s operations and to provide guarantees to support its operations. The Group’s principal
financial assets include debt securities and money market funds, both held within the Insurance business (Note 38a)), trade and other
receivables, and cash and short-term deposits. The Group also enters into derivative transactions such as foreign exchange forward contracts,
and fuel and gas oil swaps to manage its exposure to various risks.
2025 | 2024 | |
£m | £m | |
FVTPL | ||
Foreign exchange forward contracts | 0.2 | – |
Money market funds | 62.9 | 32.8 |
Debt securities | 178.7 | 219.1 |
241.8 | 251.9 | |
FVTPL designated in a hedging relationship | ||
Foreign exchange forward contracts | 0.9 | – |
Fuel oil swaps | – | 0.3 |
0.9 | 0.3 | |
Amortised cost | ||
Deposits with financial institutions | 11.5 | – |
11.5 | – | |
Amounts reclassified to assets held for sale (Note 38a)) | (241.6) | – |
Total financial assets | 12.6 | 252.2 |
Current | 12.4 | 74.1 |
Non-current | 0.2 | 178.1 |
12.6 | 252.2 |
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2025 | 2024 | |
£m | £m | |
Total financial assets (as above and presented on the face of the statement of financial position) | 12.6 | 252.2 |
Trade receivables (Note 23) | 99.7 | 81.4 |
Other receivables (Note 23) | 7.0 | 12.2 |
Cash and short-term deposits (Note 25) | 129.2 | 188.7 |
Total financial assets (including cash and short-term deposits, trade and other receivables) | 248.5 | 534.5 |
All financial assets that are measured at FVTPL are mandatorily measured at FVTPL, with the exception of debt securities which are designated
b) Financial liabilities
2025 | 2024 | |
£m | £m | |
FVTPL | ||
Foreign exchange forward contracts | 0.2 | 0.5 |
0.2 | 0.5 | |
FVTPL designated in a hedging relationship | ||
Foreign exchange forward contracts | 0.9 | 2.7 |
Fuel oil swaps | 0.5 | 0.8 |
1.4 | 3.5 | |
Amortised cost | ||
Bonds, Ocean Cruise ship loans and the loan facility provided by Roger De Haan (Note 30) | 662.2 | 796.2 |
Lease liabilities | 26.1 | 26.3 |
Bank overdrafts | 1.6 | 1.9 |
689.9 | 824.4 | |
Amounts reclassified to liabilities associated with assets held for sale (Note 38a)) | (1.4) | – |
Total financial liabilities | 690.1 | 828.4 |
Current | 71.3 | 238.2 |
Non-current | 618.8 | 590.2 |
690.1 | 828.4 |
2025 | 2024 | |
£m | £m | |
Total financial liabilities (as above and presented on the face of the statement of financial position) | 690.1 | 828.4 |
Trade payables (Note 26) | 145.5 | 139.3 |
Other payables (Note 26) | 9.0 | 9.0 |
Accruals (Note 26) | 43.9 | 40.6 |
Total financial liabilities (including trade and other payables, and accruals) | 888.5 | 1,017.3 |
Except for the Group’s bonds and Ocean Cruise ship loans, the fair values of financial liabilities held at amortised cost are not materially different
from their carrying amounts, since the interest payable on those liabilities is close to current market rates. The fair value of the Group’s bonds
(Note 30) at 31 January 2025 was £249.7m (2024: £356.3m). The fair value of the Group’s Ocean Cruise ship loans (Note 30) at 31 January 2025
was £325.6m (2024: £356.1m).
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Notes to the consolidated financial statements continued
19 Financial assets and financial liabilities continued
Financial instruments held at fair value are valued using quoted market prices or other valuation techniques.
Valuation techniques include net present value and discounted cash flow models, and comparison with similar instruments for which
market-observable prices exist. Assumptions and market-observable inputs used in valuation techniques include foreign currency exchange
rates and future oil prices.
The objective of using valuation techniques is to arrive at a fair value determination that reflects the price of the financial instrument at the
reporting date, which would have been determined by market participants acting at arm’s length.
Observable prices are those that have been seen either from counterparties or from market pricing sources, including Bloomberg. The use
of these depends upon the liquidity of the relevant market.
Financial instruments held at fair value have been categorised into a fair value measurement hierarchy as follows:
i) Level 1
These are valuation techniques that are based entirely on quoted market prices in an actively traded market and are the most reliable.
All money market funds and debt securities are categorised as Level 1, as the fair value is obtained directly from the quoted active market price.
ii) Level 2
These are valuation techniques for which all significant inputs are taken from observable market data. These include valuation models used to
calculate the present value of expected future cash flows and may be employed either when no active market exists or when there are quoted
prices available for similar instruments in active markets.
The models incorporate various inputs, including the credit quality of counterparties, interest rate curves and forward rate curves of the
underlying instrument.
All the derivative financial instruments are categorised as Level 2, as the fair values are obtained from the counterparty, brokers or valued using
observable inputs. Where material, credit valuation adjustment/debit valuation adjustment risk adjustments are factored into the fair values of
these instruments. At 31 January 2025, the marked-to-market values of derivative assets are net of a credit valuation adjustment attributable
to derivative counterparty default risk.
The fair values are periodically reviewed by the Group’s Treasury Committees.
iii) Level 3
These are valuation techniques for which any significant inputs are not based on observable market data.
The following tables provide the quantitative fair value hierarchy of the Group’s financial assets and financial liabilities that are held at fair value:
| At 31 January 2025 | At 31 January 2024 | |||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | |
Financial assets measured | ||||||||
at fair value | ||||||||
Foreign exchange forwards | – | 1.1 | – | 1.1 | – | – | – | – |
Fuel oil swaps | – | – | – | – | – | 0.3 | – | 0.3 |
Debt securities | 178.7 | – | – | 178.7 | 219.1 | – | – | 219.1 |
Money market funds | 62.9 | – | – | 62.9 | 32.8 | – | – | 32.8 |
Financial liabilities measured | ||||||||
at fair value | ||||||||
Foreign exchange forwards | – | 1.1 | – | 1.1 | – | 3.2 | – | 3.2 |
Fuel oil swaps | – | 0.5 | – | 0.5 | – | 0.8 | – | 0.8 |
Financial assets for which | ||||||||
fair values are disclosed | ||||||||
Deposits with financial institutions | – | 11.5 | – | 11.5 | – | – | – | – |
Financial liabilities for which | ||||||||
fair values are disclosed | ||||||||
Bonds, Ocean Cruise ship loans | 249.7 | 400.6 | – | 650.3 | 356.3 | 356.1 | – | 712.4 |
and the loan facility provided | ||||||||
by Roger De Haan | ||||||||
Lease liabilities | – | 26.1 | – | 26.1 | – | 26.3 | – | 26.3 |
Bank overdrafts | – | 1.6 | – | 1.6 | – | 1.9 | – | 1.9 |
There were no transfers between Level 1 and Level 2 during the year. In the prior year, following a review of the Group’s loans and borrowings,
bonds were transferred from Level 2 to Level 1 in the fair value hierarchy. There were no non-recurring fair value measurements of assets and
liabilities during the year (2024: none). The Group’s policy is to recognise transfers into, and out of, fair value hierarchy levels at the end of the
reporting period.
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The values of the debt securities and money market funds are based upon publicly available market prices.
Foreign exchange forwards are valued using current spot and forward rates discounted to present value. They are also adjusted for
counterparty credit risk using credit default swap curves. Fuel oil swaps are valued with reference to the valuations provided by third parties,
which use current Platts index rates, discounted to present value.
Bonds are valued at quoted market bid prices.
i) Forward currency risk
During the year ended 31 January 2025, the Group designated 258 foreign exchange forward currency contracts as hedges of highly probable
foreign currency cash expenses in future periods (2024: 126). These contracts are entered into to minimise the Group’s exposure to foreign
exchange risk and are designated as cash flow hedges.
Designated in the year | At 31 January 2025 | At 31 January 2024 | ||||
Foreign currency cash flow hedging instruments (nominal amounts) | Volume | £m | Volume | £m | Volume | £m |
Euro ( EUR ) | 62 | (0.7) | 63 | (0.7) | 46 | (1.2) |
US dollar ( USD ) | 64 | 0.8 | 64 | 0.8 | 65 | (1.3) |
Other currencies | 132 | (0.1) | 132 | (0.1) | 97 | (0.2) |
Total | 258 | – | 259 | – | 208 | (2.7) |
Hedging instruments for other currencies are in respect of Australian dollars, Canadian dollars, Swiss francs, Japanese yen, New Zealand
dollars, Norwegian krone, Thai baht, Chinese yuan, Danish krona and South African rand.
ii) Commodity price risk
The Group uses derivative financial instruments to mitigate the risk of adverse changes in the price of fuel. The Group enters into fixed price
contracts (swaps) in the management of its fuel price exposures. These contracts are expected to reduce the volatility attributable to price
fluctuations of fuel and are designated as cash flow hedges. Hedging the price volatility of forecast fuel purchases is in accordance with the risk
management strategy outlined by the Board of Directors. During the year ended 31 January 2025, the Group designated 20 fuel oil swaps as
hedges of highly probable fuel oil purchases in future periods (2024: 37).
Designated in the year | At 31 January 2025 | At 31 January 2024 | ||||
Commodity cash flow hedging instruments (nominal amounts) | Volume | £m | Volume | £m | Volume | £m |
Hedging instruments | 20 | (0.4) | 35 | (0.5) | 65 | (0.5) |
iii) Hedge maturity profile
The table below summarises the present value of the highly probable forecast cash flows that have been designated in a hedging relationship at
31 January 2025. These cash flows are expected to become determined in profit or loss in the same period in which the cash flows occur.
Total | ||||||
Other | currency | Fuel | ||||
EUR | USD | currencies | hedges | hedges | Total | |
Determination period | £m | £m | £m | £m | £m | £m |
1 February 2025 to 31 July 2025 | 24.5 | 16.2 | 3.9 | 44.6 | (0.1) | 44.5 |
1 August 2025 to 31 January 2026 | 21.8 | 20.4 | 2.7 | 44.9 | (0.4) | 44.5 |
1 February 2026 to 31 July 2026 | 1.9 | 6.2 | 0.3 | 8.4 | – | 8.4 |
1 August 2026 to 31 January 2027 | – | 0.2 | – | 0.2 | – | 0.2 |
Total | 48.2 | 43.0 | 6.9 | 98.1 | (0.5) | 97.6 |
During the year, the Group recognised net gains of £6.0m (2024: £1.3m losses) on cash flow hedging instruments through OCI into the hedging
reserve. The Group recognised £nil (2024: £nil) through the income statement in respect of the ineffective portion of hedges measured during
the year.
During the year, the Group de-designated four foreign currency forward contracts, with a transaction value of £6.4m, where forecast cash flows
are no longer expected to occur with a sufficiently high degree of certainty to meet the requirements of IFRS 9. The accumulated losses in
relation to these contracts of £0.1m were reclassified from the hedging reserve into profit or loss during the year. The Group did not
de-designate any fuel oil swaps during the year. During the year, the Group recognised a £3.3m gain (2024: £1.0m loss) through the income
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Notes to the consolidated financial statements continued
The Group is exposed to market risk, credit risk, liquidity risk, insurance risk and operational risk. The Group’s senior management oversees
these risks, supported by the Group Treasury function and Treasury Committees within the key areas of the Group that advise on financial risks
and the appropriate financial risk governance framework for the Group. These functions and Committees ensure that the Group’s financial risks
are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the
Group’s policies and risk objectives. All derivative activities are for risk management purposes and are carried out by the Group’s Treasury
function. It is the Group’s policy that no trading in derivatives for speculative purposes may be undertaken.
The Group manages concentration risk on its financial assets through a policy of diversification that is outlined in the Group Treasury Policy and
approved by the Board. The policy defines the exposure limit by asset class and to third-party institutions based on the credit ratings of the
individual counterparties, combined with the views of the Board. On a monthly basis, exposure to each asset class and counterparty is calculated
and reported, and compliance with the policy is monitored.
The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.
The Group’s exposure to insurance and operational risks, and the approach to managing these risks, is explained in more detail in Notes 20d)
and e).
Market risk is the risk that the fair value, or future cash flows, of a financial instrument, or the valuation of insurance and reinsurance contract
assets and liabilities fluctuate due to changes in market prices. The Group is exposed to the following market risk factors:
Foreign currency risk
Commodity price risk
Interest rate risk
The Group has policies and limits approved by the Board for managing market risk exposure. These set out the principles that the business
should adhere to for managing market risk and establishing the maximum limits that the Group is willing to accept considering strategy, risk
appetite and capital resources. The Group has the ability to monitor market risk exposure on a daily basis and has established limits for each
component of market risk.
The Group uses derivatives for hedging its exposure to foreign currency and fuel oil price risks. The market risk policy explicitly prohibits the
use of derivatives for speculative purposes. For risk exposures that the Group hedges, and for which the Group applies hedge accounting,
ineffectiveness may arise if the timing of the forecast transaction changes from what was originally estimated, or if there are changes in the
credit risk of the derivative counterparty. Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic
prospective effectiveness assessments, to ensure that an economic relationship exists between the hedged item and hedging instrument.
The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges
and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.
Foreign currency risk is the risk that the fair value, or future cash flows, of a financial asset or liability will fluctuate due to changes in foreign
exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities
(when revenue or expense is denominated in a different currency from the Group’s functional currency). The Group is not exposed to material
foreign currency risk through its Insurance Underwriting activities (Note 38a)).
The Group uses foreign exchange forward contracts to manage the majority of its transaction exposures. The foreign exchange forward
contracts, some of which are formally designated as hedging instruments, are entered into for periods consistent with the foreign currency
exposure of the underlying transactions, generally from one to 24 months. The foreign exchange forward contracts vary with the level of
expected foreign currency sales and purchases.
The following table demonstrates the sensitivity of the fair value of forward exchange contracts to a 5% change in USD and EUR exchange rates,
with all other variables held constant. The Group’s exposure to foreign currency changes for all other currencies is not material. The impact is
shown net of tax at the current rate.
Sensitivity of +/– 5% | |||
foreign exchange | |||
rate change in | Effect on equity | Effect on profit after tax | |
2025 | EUR | +/– £2.2m | +/– £0.3m |
USD | +/– £2.1m | +/– £0.5m | |
2024 | EUR | +/– £1.5m | +/– £0.2m |
USD | +/– £1.6m | +/– £0.2m |
To the extent that forward exchange contracts are held as part of effective hedging relationships, any change to the fair value of the instrument
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ii) Commodity price risk
The Group is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase of fuel and gas oil to
sail its Ocean Cruise ships and, therefore, require a continuous supply of fuel and gas oil. The volatility in the price of fuel and gas oil has led to the
decision to enter into commodity fuel and gas oil swap contracts. These contracts are expected to reduce the volatility attributable to price
fluctuations of fuel and gas oil. Managing the price volatility of forecast oil purchases is in accordance with the risk management strategy outlined
by the Board of Directors.
The Group manages the purchase price using forward commodity purchase contracts based on future forecast fuel oil requirements.
The following table shows the sensitivity of the fair value of fuel oil swaps to changes in the underlying fuel oil price (USD) with all other variables
held constant. The impact is shown net of tax at the current rate.
Sensitivity of +/– 5% | |||
rate change in | Effect on equity | Effect on profit after tax | |
2025 | USD – Fuel oil price | +/– £0.5m | – |
2024 | USD – Fuel oil price | +/– £0.8m | – |
iii) Interest rate risk
Interest rate risk is the risk that the fair value, or future cash flows, of a financial instrument or the valuation of insurance and reinsurance
contract assets and liabilities fluctuate because of changes in market interest rates.
Interest rate risk arises from various sources:
Investments in debt securities with a fixed interest rate, the market value and carrying value of which is affected by movements in market
interest rates.
Investments in debt securities with a floating interest rate, money market funds held within the Insurance Underwriting business and
short-term deposits. Movements in market interest rates change the amounts earned from these assets but do not materially affect their
market value or carrying value.
Borrowings with a floating interest rate (deferred repayments of ship loans). Movements in market interest rates change the future cash
flows that will arise from these borrowings, but do not materially affect their carrying value.
Insurance and reinsurance contract assets and liabilities. This interest rate risk primarily arises from the discounting of liabilities for
incurred claims and loss components of the liability for remaining coverage, and corresponding assets arising from reinsurance contracts.
The discount rates used are linked to market interest rates, such that changes in market interest rates will affect the valuation of insurance
and reinsurance contract assets and liabilities.
The Group’s loans and borrowings, at 31 January 2025, had a fixed interest rate (except the deferred repayments of the ship loans) and were
accounted for at amortised cost. As a result, changes in market interest rates do not affect their accounting measurement or the future cash
flows arising from them and, therefore, they are not considered further in this Note. However, the Group is exposed to a risk of interest rates
being higher if those borrowings are refinanced. More details on these borrowings are included in Note 30.
The Group’s interest rate exposure is summarised in the following table:
2025 | 2024 | |
£m | £m | |
Investments in debt securities with a fixed interest rate | 167.9 | 205.9 |
Investments in debt securities with a floating interest rate | 10.8 | 13.2 |
Money market funds and short-term deposits | 99.1 | 163.7 |
Borrowings with a floating interest rate (deferred repayments of ship loans) | (24.8) | (43.2) |
Insurance contract liabilities for incurred claims | (269.6) | (326.6) |
Reinsurance assets for incurred claims | 117.1 | 175.0 |
Insurance contract liabilities for remaining coverage (loss component) | (1.8) | (16.1) |
Reinsurance assets for remaining coverage (loss-recovery component) | – | 1.3 |
Debt securities, money market funds, insurance contract liabilities and reinsurance assets are held by the Group’s Insurance Underwriting
business (included within discontinued operations (Note 38a))).
The Group manages interest rate risk in various ways. The Group has a policy of holding the majority of investments to maturity by closely
matching asset and liability duration, and also ensures that the investment portfolio has a diversified range of investments such that there is a
combination of fixed and floating rate securities.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
20 Financial and insurance risk management objectives and policies continued
a) Market risk continued
iii) Interest rate risk continued
The following table shows the sensitivity of debt securities and insurance and reinsurance contract assets and liabilities to a 50bps parallel
increase or decrease in market interest rates at the end of the reporting period, being the change in market interest rates that was considered
reasonably possible at this date. This analysis assumes a corresponding change in the carer wage inflation assumption within the valuation of PPO
liabilities for incurred claims, as management expects these assumptions to move together in the long term. All other variables are assumed to
remain constant. This table does not show any impact on debt securities with a floating interest rate, money market funds or borrowings, as their
carrying values are not materially impacted by movements in market interest rates. The impacts are shown net of tax at the current rate.
2025 | 2024 | |||
Impact on profit after tax | Impact on profit after tax | |||
and on equity | and on equity | |||
50bps increase | 50bps decrease | 50bps increase | 50bps decrease | |
Discount rate change: | ||||
Insurance and reinsurance contracts: Net liabilities for incurred claims | £0.6m | (£0.6m) | £0.2m | (£0.2m) |
Insurance and reinsurance contracts: Net loss component | £0.2m | (£0.2m) | £0.3m | (£0.3m) |
Interest rate change (impact on debt securities) | (£0.6m) | £0.6m | (£1.8m) | £1.8m |
Net impact | £0.2m | (£0.2m) | (£1.3m) | £1.3m |
The following table shows the impact that a 50bps parallel increase or decrease in market interest rates would have had on profit after tax in
the period arising from floating rate debt securities, money market funds, short-term deposits and borrowings with a floating interest rate.
This analysis assumes that the Group’s relevant risk exposures throughout the period had been the same as they were at the end of the period.
2025 | 2024 | |||
Impact on profit after tax | Impact on profit after tax | |||
50bps increase | 50bps decrease | 50bps increase | 50bps decrease | |
Investments in debt securities with a floating interest rate | – | – | £0.1m | (£0.1m) |
Money market funds held within the Insurance business and | £0.4m | (£0.4m) | £0.6m | (£0.6m) |
short-term deposits | ||||
Borrowings with a floating interest rate (deferred repayments | (£0.1m) | £0.1m | (£0.2m) | £0.2m |
of ship loans) | ||||
Net impact | £0.3m | (£0.3m) | £0.5m | (£0.5m) |
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument, insurance contract, reinsurance contract
or customer contract, leading to a financial loss. The Group is primarily exposed to credit risk in relation to its financial and reinsurance assets,
outstanding derivatives, trade and other receivables, and cash and cash equivalents. The Group assesses its counterparty exposure in relation
to the investment of surplus cash, fuel oil and foreign currency contracts and undrawn credit facilities. The Group primarily uses published
credit ratings to assess counterparty strength and, therefore, define the credit limit for each counterparty in accordance with approved
treasury policies.
The credit risk in respect of trade and other receivables is generally limited, as payment from customers is primarily required before services
are provided. At 31 January 2025, the maximum exposure to credit risk for trade receivables by operating segment was as follows:
2025 | 2024 | |
£m | £m | |
Travel | 1.7 | 1.8 |
Insurance | 14.0 | 31.9 |
Other Businesses and Central Costs | 3.0 | 2.4 |
18.7 | 36.1 | |
Amounts relating to assets held for sale (Note 38a)) | (2.4) | – |
16.3 | 36.1 |
The variance between the quantum of the maximum exposure to credit risk for trade receivables (above) and total of trade receivables
presented in ‘Trade and other receivables’ (Note 23) primarily relates to debtors arising from insurance policies brokered by the Group but
underwritten by third-party insurers for which corresponding creditors exist in respect of the net premium to be passed on to the third-party
insurers. In the event of payment obligation default by a customer no longer on risk, the impairment of the debtor balance by the Group would
lead to a corresponding reduction in the related creditor with, or refund of net premium from, the third-party insurer. In the event of payment
obligation default by a customer remaining on risk, the impairment of the debtor balance by the Group would not lead to a corresponding
reduction in the related creditor with, or refund of net premium from, the third-party insurer, and the Group would bear the credit risk relating
to the debtor balance.
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The Group uses an allowance matrix to measure the ECLs of trade receivables from individual customers, which comprise a very large number of
small balances. The loss allowance required for these receivables is calculated in line with the simplified method for trade receivables per IFRS 9,
whereby lifetime ECLs are recognised irrelevant of the credit risk. The loss allowance is based on a combination of:
aged debtor analysis;
historical experience of write-offs for each receivable;
any specific indicators of credit deterioration observed; and
management judgement.
written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Group.
On that basis, the loss allowance at 31 January 2025 and 31 January 2024 was determined as follows for trade receivables:
31 January 2025 | Current | < 30 days | 30-60 days | 61-90 days | 91-120 days | > 120 days | Total |
Expected loss rate | 0.4% | 31.1% | 14.5% | 28.1% | 25.7% | 80.6% | |
Gross carrying amount – trade receivables (Note 23) | £98.5m | £1.4m | £0.4m | £0.1m | £0.2m | £0.6m | £101.2m |
Loss allowance (Note 23) | £0.4m | £0.4m | £0.1m | – | £0.1m | £0.5m | £1.5m |
31 January 2024 | Current | < 30 days | 30-60 days | 61-90 days | 91-120 days | > 120 days | Total |
Expected loss rate | 0.2% | 5.2% | 4.2% | 18.0% | 59.1% | 63.2% | |
Gross carrying amount – trade receivables (Note 23) | £78.9m | £2.2m | £0.5m | £0.2m | £0.1m | £0.4m | £82.3m |
Loss allowance (Note 23) | £0.4m | £0.1m | – | – | £0.1m | £0.3m | £0.9m |
The loss allowance for trade receivables, which relates wholly to continuing activities, reconciles to the opening allowances as follows:
2025 | 2024 | |
£m | £m | |
Opening loss allowance at 1 February | 0.9 | 1.1 |
Increase in loan loss allowance recognised in profit or loss during the year | 2.0 | 1.3 |
Receivables written off during the year as uncollectable | (1.2) | (1.3) |
Unused amount reversed | (0.2) | (0.2) |
Closing loss allowance at 31 January | 1.5 | 0.9 |
Credit risk in relation to deposits, debt securities and derivative counterparties is managed by the Group’s Treasury function in accordance
with the Group’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each
counterparty. Counterparty credit limits are reviewed on a regular basis and updated throughout the year, subject to approval by the Board.
The limits are set to minimise the concentration of risks and, therefore, mitigate financial loss through any potential counterparty failure.
In its Insurance Underwriting business (included within discontinued operations (Note 38a))), the Group is exposed to credit risk as follows:
Insurance contracts issued:
At 31 January 2025, the Group expected to receive £25.7m (31 January 2024: £43.8m) of premiums in the
future in relation to insurance contracts that had already been entered into, representing management’s view of the Group’s maximum
exposure to credit risk from insurance contracts issued. However, the majority of these receivables are due in advance of the related
insurance coverage, which the Group would not be liable for if the premiums are not paid. As a result, the credit risk associated with these
receivables is significantly mitigated and they were not recognised on the statement of financial position under the IFRS 17 PAA.
Reinsurance contracts:
The Group is exposed to the risk of default on its reinsurance arrangements when amounts recoverable under
those arrangements become due. Credit risk in respect of reinsurance arrangements is assessed from the time of entering into a
reinsurance contract. The Group’s reinsurance programme is only placed with reinsurers which meet the Group’s financial strength
criteria. At 31 January 2025, the Group had a concentration of counterparty risk arising from reinsurance contracts, driven by a material
recovery arising from the Group’s motor quota share reinsurance arrangement. The highest amount of reinsurance contract assets
recoverable from a single counterparty at 31 January 2025 was £21.0m (31 January 2024: £31.2m). At 31 January 2025, this reinsurer
had an AA credit rating (31 January 2024: AA).
The Group’s maximum exposure to credit risk for the components of the statement of financial position at 31 January 2025 and 31 January 2024
is the gross carrying amount, except for trade receivables and reinsurance contract assets. None of the financial assets measured at amortised
cost, other than trade receivables where a loss allowance has been determined as set out above, were impaired at the reporting date.
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Notes to the consolidated financial statements continued
20 Financial and insurance risk management objectives and policies continued
b) Credit risk continued
The Group’s financial assets and reinsurance assets are analysed by credit risk rating as follows:
Ratings analysis
31 January 2025 | ||||||
£m | AAA | AA | A | BBB | Unrated | Total |
Debt securities | 22.8 | 53.2 | 52.4 | 50.3 | – | 178.7 |
Money market funds held within Insurance Underwriting | 62.9 | – | – | – | – | 62.9 |
Deposits with financial institutions | – | 1.0 | 10.5 | – | – | 11.5 |
Derivative assets | – | 0.2 | 0.9 | – | – | 1.1 |
85.7 | 54.4 | 63.8 | 50.3 | – | 254.2 | |
Credit exposed component of reinsurance contract assets | – | 92.8 | 24.3 | – | – | 117.1 |
Total | 85.7 | 147.2 | 88.1 | 50.3 | – | 371.3 |
31 January 2024 | ||||||
£m | AAA | AA | A | BBB | Unrated | Total |
Debt securities | 23.9 | 59.2 | 70.4 | 65.6 | – | 219.1 |
Money market funds held within Insurance Underwriting | 32.8 | – | – | – | – | 32.8 |
Derivative assets | – | – | 0.3 | – | – | 0.3 |
56.7 | 59.2 | 70.7 | 65.6 | – | 252.2 | |
Credit exposed component of reinsurance contract assets | – | 134.1 | 42.2 | – | – | 176.3 |
Total | 56.7 | 193.3 | 112.9 | 65.6 | – | 428.5 |
Debt securities, money market funds and the credit exposed component of reinsurance contract assets are held by the Group’s Insurance
Liquidity risk is the risk that the Group, although solvent, either does not have available sufficient financial resources to enable it to meet its
obligations as they fall due, or can secure them only at excessive cost. The Group’s approach to managing liquidity risk is to evaluate current
and expected liquidity requirements to ensure that it maintains sufficient reserves of cash or availability on its RCF. The Group manages its
obligations to pay claims to policyholders as they fall due by matching the maturity of investments to the expected maturity of claims payments.
The table below analyses the maturity profile of the Group’s financial liabilities and insurance contract liabilities. The analysis of non-derivative
financial liabilities is based on the remaining period at the reporting date to the contractual maturity date. The analysis of insurance contract
liabilities includes only the component of this balance that relates to liabilities for incurred claims arising from portfolios of insurance contracts
that are in a liability position and is based on the estimates of the present value of the future cash flows expected to be paid out in the periods
presented (this excludes the risk adjustment).
31 January 2025 | On | Less than | 1 to 2 | 2 to 3 | 3 to 4 | 4 to 5 | Over 5 | |
£m | demand | 1 year | years | years | years | years | years | Total |
Bonds, Ocean Cruise ship loans and the loan | – | 55.7 | 379.2 | 46.4 | 43.8 | 43.8 | 100.9 | 669.8 |
facility provided by Roger De Haan | ||||||||
Interest on bonds, Ocean Cruise ship loans and | – | 31.6 | 18.9 | 6.6 | 5.2 | 3.9 | 4.3 | 70.5 |
the loan facility provided by Roger De Haan | ||||||||
Bank overdrafts | 1.6 | – | – | – | – | – | – | 1.6 |
Insurance contract liabilities | – | 69.1 | 43.1 | 25.3 | 14.6 | 7.5 | 76.3 | 235.9 |
Derivative liabilities | – | 1.6 | – | – | – | – | – | 1.6 |
Lease liabilities | – | 5.1 | 4.9 | 4.4 | 4.7 | 3.0 | 4.0 | 26.1 |
Interest on lease liabilities | – | 1.6 | 1.2 | 0.9 | 0.5 | 0.3 | 0.2 | 4.7 |
1.6 | 164.7 | 447.3 | 83.6 | 68.8 | 58.5 | 185.7 | 1,010.2 |
31 January 2024 | On | Less than | 1 to 2 | 2 to 3 | 3 to 4 | 4 to 5 | Over 5 | |
£m | demand | 1 year | years | years | years | years | years | Total |
Bonds and Ocean Cruise ship loans | – | 212.2 | 55.7 | 304.2 | 46.5 | 43.8 | 144.6 | 807.0 |
Interest on bonds and Ocean Cruise ship loans | – | 29.1 | 24.1 | 15.3 | 6.6 | 5.2 | 8.2 | 88.5 |
Bank overdrafts | 1.9 | – | – | – | – | – | – | 1.9 |
Insurance contract liabilities | – | 84.9 | 25.4 | 27.6 | 22.9 | 11.4 | 114.2 | 286.4 |
Derivative liabilities | – | 3.6 | 0.4 | – | – | – | – | 4.0 |
Lease liabilities | – | 5.4 | 4.1 | 3.8 | 2.9 | 3.0 | 7.1 | 26.3 |
Interest on lease liabilities | – | 1.5 | 0.9 | 0.8 | 0.6 | 0.4 | 0.5 | 4.7 |
1.9 | 336.7 | 110.6 | 351.7 | 79.5 | 63.8 | 274.6 | 1,218.8 |
Insurance contract liabilities are held by the Group’s Insurance Underwriting business (included within discontinued operations (Note 38a))).
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The table below sets out the remaining contractual maturities of the financial assets supporting the Group’s insurance contract liabilities
(included within discontinued operations (Note 38a)). It is presented on an undiscounted basis.
31 January 2025 | Less than | 1 to 2 | 2 to 3 | 3 to 4 | 4 to 5 | Over | No | |
£m | 1 year | years | years | years | years | 5 years | maturity | Total |
Debt securities | 77.2 | 50.9 | 35.4 | 9.0 | 7.4 | 13.3 | – | 193.2 |
Money market funds held within | – | – | – | – | – | – | 62.9 | 62.9 |
Insurance Underwriting | ||||||||
77.2 | 50.9 | 35.4 | 9.0 | 7.4 | 13.3 | 62.9 | 256.1 |
31 January 2024 | Less than | 1 to 2 | 2 to 3 | 3 to 4 | 4 to 5 | Over 5 | No | |
£m | 1 year | years | years | years | years | years | maturity | Total |
Debt securities | 47.9 | 76.8 | 53.5 | 34.8 | 9.1 | 21.4 | – | 243.5 |
Money market funds held within | – | – | – | – | – | – | 32.8 | 32.8 |
Insurance Underwriting | ||||||||
47.9 | 76.8 | 53.5 | 34.8 | 9.1 | 21.4 | 32.8 | 276.3 |
d) Insurance risk
Insurance risk applies to the Group’s Insurance Underwriting business (included within discontinued operations (Note 38a))).
Insurance risk arises from the inherent uncertainties as to the occurrence, cost and timing of insured events that could lead to significant
individual or aggregated claims in terms of quantity or value. This could be for a number of reasons, including weather-related events, large
individual claims, changes in claimant behaviour patterns such as increased levels of fraudulent activities, the use of PPOs, prospective or
retrospective legislative changes, unresponsive and inaccurate pricing or reserving methodologies, and the deterioration in the Group’s ability
to effectively and efficiently handle claims while delivering excellent customer service.
The Group manages insurance risk within its risk management framework as set by the Board. The key policies and processes mitigating these
risks have been implemented, which include underwriting partnership arrangements, reinsurance excess of loss contracts, pricing policies and
claims management, and administration policies.
i) Underwriting and pricing risk
The Group primarily underwrites motor insurance for private cars in the UK. The book consists of a large number of individual risks which are
widely spread geographically, which helps to minimise concentration risk. The Group has controls in place to restrict access to its products to
only those risks that it wishes to underwrite.
The Group has management information to allow it to monitor underwriting performance on a continuous basis and the ability to make pricing
and underwriting changes quickly. The Group undertakes detailed statistical analysis of underwriting experience for each rating factor, and
combination of rating factors, to enable it to adjust pricing for emerging trends.
ii) Reserving risk
Reserving risk is the risk that insufficient funds have been set aside to settle claims as they fall due. The Group undertakes regular internal
actuarial reviews and commissions external actuarial reviews at least once a year. These reviews estimate the future liabilities to consider the
adequacy of the provisions.
Claims which are subject to PPOs are a significant source of uncertainty within the Group’s liability for incurred claims. Cash flow projections
are undertaken for PPO claims to estimate the gross and net of reinsurance provisions required.
The Group purchases reinsurance to reduce the impact of individual large losses or accumulations from a single catastrophic event. During
2018, the Group entered into a funds-withheld quota share reinsurance contract that reinsures 80% of the Group’s motor claims risks limited
by a loss ratio cap of 130%, effective from 1 February 2019. Prior to this, the Group had a funds-withheld quota share reinsurance contract in
place that reinsured 75% of the Group’s motor claims risks limited by a loss ratio cap of 120%. The Group also purchases individual excess of loss
protections for the motor portfolio to limit the impact of a single large claim. Similar protections are in place for all years for which the Group has
underwritten motor business.
Reinsurance recoveries on individual excess of loss protections can take many years to collect, particularly if a claim is subject to a PPO. This
means that the Group has exposure to reinsurance credit risk for many years. Reinsurers are, therefore, required to have strong credit ratings
and their financial health is regularly monitored.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
iv) Sensitivities
The following tables demonstrate the impact on profit or loss before tax, and equity, of reasonably possible changes in insurance risk variables
at 31 January 2025 and 31 January 2024. These impacts are shown both gross and net of reinsurance. It is assumed that all other variables
remain constant.
2025 | 2024 | |||
Impact on profit after tax | Impact on profit after tax | |||
and on equity | and on equity | |||
Gross of | Net of | Gross of | Net of | |
£m | reinsurance | reinsurance | reinsurance | reinsurance |
Change in the confidence level of liabilities for incurred claims | ||||
5ppt increase to 90% net confidence level | (8.8) | (0.9) | (9.0) | (1.2) |
5ppt decrease to 80% net confidence level | 6.6 | 0.7 | 6.8 | 0.9 |
Change in the confidence level of the onerous contract provision | ||||
5ppt increase to 90% net confidence level | (1.9) | (1.9) | (3.0) | (2.7) |
5ppt decrease to 80% net confidence level | 1.0 | 1.0 | 3.4 | 2.8 |
Change in non-PPO claim inflation assumption within liabilities for incurred claims | ||||
100bps increase | (3.1) | (0.9) | (4.7) | (1.4) |
100bps decrease | 3.0 | 0.8 | 4.5 | 1.3 |
The impact of any change in the PPO claim inflation (specifically the carer wage inflation assumption) is not shown in the table above as
e) Operational risk
Effective operational risk management requires the Group to identify, assess, manage, monitor, report and mitigate all areas of exposure.
The Group operates across a range of segments, and operational risk is inherent in all the Group’s products and services, arising from the
operation of assets, from external events and dependencies, and from internal processes and systems.
The Group manages its operational risk through the risk management framework agreed by the Board, and through the use of risk management
tools which, together, ensure that operational risks are identified, managed and mitigated to the level accepted, and that contingency processes
and disaster recovery plans are in place. Regular reporting is undertaken to segment boards and includes details of new and emerging risks, as
well as monitoring of existing risks. Testing of contingency processes and disaster recovery plans is undertaken to ensure the effectiveness of
these processes.
All the Group’s operations are dependent on: the proper functioning of its IT and communication systems; its properties and other
infrastructure assets; the need to adequately maintain and protect customer and employee data and other information; and the ability of the
Group to attract and retain colleagues. Specific areas of operational risk by segment include:
i) Travel
The Travel segment operates two Ocean Cruise ships, which are the Group’s largest trading assets. Risk to the operation of these cruise ships
arises from the impact of mechanical or other malfunction, non-compliance with regulatory requirements, and from global weather and
socioeconomic events. The tour holidays operated by the segment are also affected by global weather and socioeconomic events, which impact
either the Group directly or its suppliers. The Travel segment transacts with multiple suppliers, which minimises the impact of any socioeconomic
events affecting its suppliers.
ii) Insurance
The Insurance segment is required to comply with various operational regulatory requirements, primarily in the UK but also within Gibraltar for
its Insurance Underwriting business (Note 38a). To the extent that significant external events could increase the incidence of claims, these would
place additional strain on the claims handling function but any financial impact of such an event is considered to be an insurance risk.
iii) Other Businesses and Central Costs
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Additional information
A structured entity is defined as an entity that has been designed so that voting, or similar, rights are not the dominant factor in deciding who
controls the entity, such as when any voting rights relate to the administrative tasks only and the relevant activities are directed by means of
contractual agreements. The Group has interests in unconsolidated structured entities in the form of investment funds comprising money
market funds. These money market funds are held by the Group’s Insurance Underwriting business (included within discontinued operations
(Note 38a))).
The nature and purpose of the money market funds is to provide maximum security and liquidity for the funds invested, while also providing an
adequate return. The money market funds used by the Group are all members of the Institutional Money Market Funds Association. They are
thus required to maintain specified liquidity and diversification characteristics of their underlying portfolios, which comprise investment grade
investments in financial institutions.
The Group invests in unconsolidated structured entities as part of its investment activities. The Group does not sponsor any of the
unconsolidated structured entities.
The Group’s total interest in unconsolidated structured entities of £62.9m (2024: £32.8m) are analysed as follows:
Carrying | Interest | Fair value | |
value | income | gains | |
At 31 January 2025 | £m | £m | £m |
Money market funds | 62.9 | 2.0 | – |
Carrying | Interest | Fair value | |
value | income | losses | |
At 31 January 2024 | £m | £m | £m |
Loan funds | – | 0.2 | – |
Money market funds | 32.8 | 0.7 | – |
These investments are typically managed under credit risk management as described in Note 20. The Group’s maximum exposure to loss on the
interests presented above is the carrying amount of the Group’s investments. No further loss can be made by the Group in relation to these
investments. For this reason, the total assets of the entities are not considered meaningful for the purposes of understanding the related risks
2025 | 2024 | |
£m | £m | |
Raw materials | 0.2 | 0.2 |
Technical stocks | 4.5 | 4.2 |
Work in progress | – | 0.1 |
Finished goods | 3.6 | 3.6 |
8.3 | 8.1 |
Technical stocks are spare parts for the Group’s Ocean Cruise ships. Finished goods primarily relate to Ocean Cruise ship fuel, food, bar and
2025 | 2024 | |
£m | £m | |
Trade receivables (Note 20b)) | 101.2 | 82.3 |
Loss allowance (Note 20b)) | (1.5) | (0.9) |
99.7 | 81.4 | |
Amounts due from discontinued operations | 2.7 | – |
Other receivables | 7.0 | 12.2 |
Prepayments | 24.6 | 24.4 |
Contract cost assets (Note 3b)) | 4.9 | 3.6 |
Other taxes and social security costs | 4.8 | 6.1 |
143.7 | 127.7 |
An explanation of how the Group manages and measures the credit risk of trade receivables can be found in Note 20b). The Group expects trade
and other receivables to be normally settled within 12 months. Due to the short-term nature of the current receivables, their carrying amount is
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
The Civil Aviation Authority (
CAA
) regulated the Group’s River Cruise and Holidays businesses during the year; these businesses are required
to hold cash in a ring-fenced arrangement. In respect of the non-flight components of the Travel business, to comply with its regulatory
obligations, the Group is required to arrange financial security to protect customer monies and this is currently provided through the
Association of British Travel Agents (
ABTA
). In addition, the Group is required to make ATOL Protection Contributions, which the Group pays
into a ring-fenced account.
Prior to 28 March 2023, 100% of customer monies were paid into trust (
Trust Accounting
) until the Group had fulfilled its obligations and the
customer had returned from their holiday. The trust was administered and controlled by an independent trustee, PT Trustees Limited. On this
date, the Group moved from Trust Accounting to a 70% escrow arrangement (
Escrow Accounting
). This means that, from 28 March 2023,
the Group pays 70% of customer monies received into an escrow arrangement. From 1 October 2024, in respect of the Holidays business,
the Group moved from Escrow Accounting to simply holding cash within the business, in respect of the 70% element of customer monies.
The remaining 30% is used to support the required prepayments in advance of operating the customer’s holiday, namely flight costs.
Interest arising from the funds held in escrow belongs to the Group.
2025 | 2024 | |
£m | £m | |
Cash at bank and in hand | 93.0 | 57.8 |
Short-term deposits and money market funds held outside of the Insurance Underwriting business | 36.2 | 130.9 |
Cash and short-term deposits | 129.2 | 188.7 |
Money market funds (Note 19) | – | 32.8 |
Bank overdraft | (0.2) | (1.9) |
Cash and cash equivalents held by disposal group (including money market funds) | 74.1 | – |
Cash and cash equivalents in the consolidated statement of cash flows | 203.1 | 219.6 |
operations (Note 38a))), and River Cruise and Holidays businesses, which are subject to contractual or regulatory restrictions (Note 35).
The amounts held are not readily available to be used for other purposes within the Group and total £123.8m (2024: £49.8m). Available Cash
17
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are typically made for varying periods of
between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective
short-term deposit rates.
2025 | 2024 | |
£m | £m | |
Trade payables | 145.5 | 139.3 |
Amounts due to discontinued operations | 54.4 | – |
Other payables | 9.0 | 9.0 |
Other taxes and social security costs | 2.1 | 10.8 |
Assets in the course of construction | 0.4 | 1.6 |
Accruals | 43.9 | 40.6 |
255.3 | 201.3 |
All trade and other payables are current in nature. The carrying amounts of trade and other payables are considered to be the same as their fair
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Additional information
The Group operates retirement benefit schemes for the employees of the Group consisting of a defined contribution plan and a legacy defined
benefit plan.
In July 2021, following the completion of a review of the Group’s pension arrangements, a consultation process with active members was
launched. The consultation process concluded during October 2021 and, with effect from 31 October 2021, the Group closed both its existing
schemes to future accrual: the Saga Pension Scheme (its defined benefit plan) and the Saga Workplace Pension Plan (its defined contribution
plan). In their place, the Group launched a new defined contribution pension scheme arrangement, operated as a master trust. This move served
to reduce the risk of further deficits developing in the future on the defined benefit scheme, while moving to a fairer scheme for all colleagues.
There was one defined contribution scheme in the Group at 31 January 2025 (2024: one). The total charge for the year in respect of the defined
contribution schemes was £5.2m (2024: £5.9m (restated
18
)). The assets of these schemes are held separately from those of the Group in funds
The Group operated a funded defined benefit scheme, the Saga Pension Scheme, which was closed to future accrual on 31 October 2021.
From 1 November 2021, members moved from active to deferred status, with future indexation of deferred pensions before retirement
measured by reference to the Consumer Price Index. There will be no further service charges relating to the scheme and no future monthly
employer contributions for current service.
The scheme is governed by the employment laws of the UK. The level of benefits provided depends on the member’s length of service and
average salary while a member of the scheme. The scheme requires contributions to be made to a separately administered fund which is
governed by a Board of Trustees and consists of an equal number of employer and employee representatives. The Board of Trustees is
responsible for the administration of the plan assets and for the definition of the investment strategy.
The long-term investment objectives of the Trustees and the Group are to limit the risk of the assets failing to meet the liabilities of the scheme
over the long term, and to maximise returns consistent with an acceptable level of risk so as to control the long-term costs of the scheme.
To meet those objectives, the scheme’s assets are invested in different categories of assets, with different maturities designed to match
liabilities as they fall due. The investment strategy will continue to evolve over time, and is expected to match the liability profile increasingly
closely. The pension liability is exposed to inflation rate risks and changes in the life expectancy of members. As the plan assets include
investments in quoted equities, the Group is exposed to equity market risk. The Group provided super security to the Trustees of the scheme,
which ranks before any liabilities under the senior facilities agreement (as detailed in Note 30). The value of the security has been increased from
being capped at £47.5m, to being capped at £51.4m, under the latest triennial valuation of the scheme at 31 January 2023, which was completed
in January 2025.
The fair value of the assets and present value of the obligations of the Saga defined benefit scheme are as follows:
2025 | 2024 | |
£m | £m | |
Fair value of scheme assets | 200.1 | 204.5 |
Present value of defined benefit obligation | (239.9) | (252.4) |
Defined benefit scheme liability | (39.8) | (47.9) |
The present values of the defined benefit obligation were measured using the projected unit credit valuation method.
During the year ended 31 January 2025, the net liability position of the Saga scheme reduced by £8.1m, resulting in an overall scheme deficit
of £39.8m, mainly as a result of a recovery plan contribution being paid by the Group, and a reduction in the value placed on the liabilities as a
result of increases in bond yields over the year. The latter was partially offset by the movement in matching assets held by the scheme, which also
decreased. The £5.8m deficit funding contribution was paid by the Group in February 2024 in relation to a recovery plan agreed under the
triennial valuation of the scheme at 31 January 2020.
The movements observed in the scheme’s assets and obligations were impacted by macroeconomic factors during the year where, at a global
level, there have been rising inflation and cost of living pressures, as well as shifts in long-term market yields. The present value of defined benefit
obligations decreased by £12.5m to £239.9m, primarily as a result of increases in bond yields over the year, partly offset by an increase in future
expectations for inflation. The fair value of scheme assets decreased by £4.4m, to £200.1m, largely driven by the recovery plan payment, being
more than offset by lower returns on assets from the fall in interest rates in the year.
18
The comparative for the year ended 31 January 2024 has been restated from the figure previously reported of £11.6m because it incorrectly included employee
contributions of £5.7m
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
The following table summarises the components of the net benefit expense recognised in the income statement, OCI and amounts recognised in
the statement of financial position for the scheme for the year ended 31 January 2025:
Defined | |||
Fair value | Defined | benefit | |
of scheme | benefit | scheme | |
assets | obligation | liability | |
£m | £m | £m | |
1 February 2024 | 204.5 | (252.4) | (47.9) |
Pension cost charge to income statement | |||
Net interest | 10.2 | (12.5) | (2.3) |
Included in income statement | 10.2 | (12.5) | (2.3) |
Return on plan assets (excluding amounts included in net interest expense) | (13.0) | – | (13.0) |
Actuarial changes arising from changes in financial assumptions | – | 18.1 | 18.1 |
Actuarial changes arising from changes in demographic assumptions | – | 0.4 | 0.4 |
Experience adjustments | – | (0.9) | (0.9) |
Subtotal included in OCI | (13.0) | 17.6 | 4.6 |
Benefits paid | (7.4) | 7.4 | – |
Total contributions by employer | 5.8 | – | 5.8 |
At 31 January 2025 | 200.1 | (239.9) | (39.8) |
The following table summarises the components of the net benefit expense recognised in the income statement, OCI and amounts recognised
in the statement of financial position for the scheme for the year ended 31 January 2024:
Defined | |||
Fair value | Defined | benefit | |
of scheme | benefit | scheme | |
assets | obligation | liability | |
£m | £m | £m | |
1 February 2023 | 224.1 | (236.2) | (12.1) |
Pension cost charge to income statement | |||
Net interest | 10.3 | (10.8) | (0.5) |
Included in income statement | 10.3 | (10.8) | (0.5) |
Return on plan assets (excluding amounts included in net interest expense) | (29.2) | – | (29.2) |
Actuarial changes arising from changes in financial assumptions | – | 15.8 | 15.8 |
Actuarial changes arising from changes in demographic assumptions | – | 13.5 | 13.5 |
Experience adjustments | – | (41.2) | (41.2) |
Subtotal included in OCI | (29.2) | (11.9) | (41.1) |
Benefits paid | (6.5) | 6.5 | – |
Total contributions by employer | 5.8 | – | 5.8 |
At 31 January 2024 | 204.5 | (252.4) | (47.9) |
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Additional information
The major categories of assets in the scheme are as follows:
2025 | 2024 | |
£m | £m | |
Equities | 49.9 | 34.8 |
Bonds | 83.6 | 80.9 |
Property and alternatives | 55.5 | 63.6 |
Hedge funds | 6.1 | 18.0 |
Insured annuities | 3.0 | 3.2 |
Cash and other | 2.0 | 4.0 |
Total | 200.1 | 204.5 |
Equities and bonds are all quoted in active markets, while property and hedge funds are not. Unit prices of approximately 28% of the assets
were not available at 31 January 2025 and were based on unit prices prior to the statement of financial position date (2024: approximately 30%).
The impacts of COVID-19 over the past five years, and the Russia-Ukraine conflict, increased the level of uncertainty and volatility in global
financial markets. While the ultimate extent of the effect of this on the asset portfolio is not possible to quantify, management used the latest
available fund pricing data to derive the valuations of assets which are not quoted in active markets. Where assets do not have an observable
market price, approximate techniques were used by the valuer to arrive at a valuation.
The scheme’s investment strategy is to invest broadly 60% in return-seeking assets and 40% in matching assets (mainly government bonds).
This strategy reflects the scheme’s liability profile and the Trustees’ and Group’s attitude to risk. The scheme’s investments include interest rate
and inflation hedging. The Trustees’ investment strategy also includes investing in liability-driven investment, the value of which will increase with
decreases in interest rates and will move with inflation expectations. During the year, the scheme hedged around 85% of interest rate risk and
inflation risk of the liabilities.
Included within bonds is a hedging component totalling £83.6m (2024: £75.8m). The property and alternatives category includes illiquid credit
funds totalling £47.0m (2024: 51.1m) held as part of the return-seeking asset portfolio.
The pension scheme has not invested in any of the Group’s own financial instruments.
The principal assumptions used in determining pension benefit obligations for the scheme are shown below:
2025 | 2024 | |
Real rate of increase of pensions in payment | 3.10% | 3.05% |
Real rate of increase of pensions in deferment | 3.00% | 2.90% |
Discount rate – pensioner | 5.45% | 5.00% |
Discount rate – non-pensioner | 5.50% | 5.00% |
RPI Inflation – pensioner | 3.30% | 3.20% |
RPI Inflation – non-pensioner | 3.15% | 3.05% |
CPI Inflation – pensioner | 3.00% | 2.85% |
CPI Inflation – non-pensioner | 2.95% | 2.85% |
Life expectancy of a member retiring in 20 years’ time at age 60 – Male | 26.4 yrs | 26.4 yrs |
Life expectancy of a member retiring in 20 years’ time at age 60 – Female | 28.6 yrs | 28.6 yrs |
Mortality base tables | ||
Continuous Mortality Investigation ( CMI ) Standard tables – Male (all amounts) | S3PA | S3PA |
CMI Standard tables – Female (middle amounts) | S3PA | S3PA |
Scheme specific adjustment – Active Male | n/a | n/a |
Scheme specific adjustment – Active Female | n/a | n/a |
Scheme specific adjustment – Deferred Male | 116% | 116% |
Scheme specific adjustment – Deferred Female | 116% | 116% |
Scheme specific adjustment – Pensioner Male | 106% | 106% |
Scheme specific adjustment – Pensioner Female | 111% | 111% |
The discount rate assumption is used to calculate the defined benefit obligation. The rate is derived from high-quality corporate bonds, generally
regarded as those with an AA rating. As in the prior year, management has opted to use the XPS Single Agency curve for deriving the discount
rate assumptions at January 2025.
In recent years, management made an allowance for inflation risk premium of 0.2% due to the scheme losing some of its inflation hedge.
The inflation risk premium of 0.2% was retained for the valuation at 31 January 2025.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
Mortality assumptions are set using standard tables based on specific experience, where available, and allow for future mortality improvements.
The scheme assumption is that a member currently aged 60 will live, on average, for a further 24.8 years if they are male and, on average, for a
further 27.1 years if they are female. For the valuation at 31 January 2025, mortality assumptions were based on the latest data released by the
CMI, being their CMI_2023 data model. The core CMI 2023 model places no weight on data in 2020 and 2021 COVID-19 pandemic data and a
15% weight on data from 2022 onwards via the weight parameter. This has acted to reduce the value of the liabilities in the scheme.
A quantitative sensitivity analysis for significant assumptions at 31 January 2025 and their impact on the scheme liabilities is as follows:
Assumptions | Discount rate | Future inflation | Life expectancy at age 65 | |||
Sensitivity | +/– 0.25% | +/– 0.25% | +/– 1 year | |||
Increase | Decrease | Increase | Decrease | Increase | Decrease | |
Impact £m | (9.6) | 10.2 | 5.0 | (5.5) | 6.1 | (6.1) |
Note: a positive impact represents an increase in the net defined benefit liability.
The sensitivity analyses are based on a change in an assumption, while holding all other assumptions constant. When calculating the sensitivity
of the defined benefit obligation to significant actuarial assumptions, the same method was applied as when calculating the pension liability
recognised within the statement of financial position. The methods and types of assumption used in preparing the sensitivity analysis did not
change compared with the prior period.
The expected contribution in respect of the accrual of benefits payable to the scheme for the next financial year is £nil and the average duration
of the defined benefit plan obligation at the end of the reporting period reduced from 18 years, down to 17 years. Formal actuarial valuations take
place every three years for the scheme. The assumptions adopted for actuarial valuations are determined by the Trustees, agreed with the
Group, and are normally more prudent than the assumptions adopted for IAS 19 purposes, which are a best estimate. Where a funding deficit is
identified, the Group and the Trustees may agree a deficit recovery plan to pay additional contributions above those needed to fund the scheme.
Saga, and certain guarantor subsidiaries in the Group, have provided super security to the Trustees of the scheme, which ranks before any
liabilities under the Group’s bank facilities. The value of the security was increased from being capped at £47.5m, to being capped at £51.4m
under the latest triennial valuation. Further to this valuation, a recovery plan is in place for the scheme. Under an agreed deficit recovery plan
totalling £62.0m, the Group made an additional payment of £5.8m during the year ended 31 January 2025 and will make annualised payments
of £5.8m rising to £7.2m over the next eight financial years, with the last payment being made on 30 November 2032. In addition:
the current annual recovery plan payments will change to equal quarterly payments with effect from the 28 February 2025 payment; and
the contributions will increase in line with the Retail Price Index with effect from the contribution due 28 February 2027.
The total expected contribution in the year ending 31 January 2026 is £5.8m and relates entirely to the recovery payment.
The Group also agreed to pay additional amounts into an escrow account, should asset returns fall below an agreed level over set periods of time.
Dependent upon the level of return on the scheme’s assets between 31 January 2023 and 31 January 2033, any amount in the escrow account
will be released to either the Group, or the scheme, by 30 June 2033.
In October 2024, the Group agreed certain amendments with the Trustees in order to permit, among other things, the guarantees to be
granted in relation to the disposal of the Group’s Insurance Underwriting business and the establishment of a 20-year partnership for motor
and home insurance with Ageas (Note 38a)). On completion of the disposal of the Group’s Insurance Underwriting business, Acromas Insurance
Company Limited (
AICL
), a Section 75 debt in relation to its share of the scheme’s liabilities of c.£4.4m will be triggered for settlement by
the Company.
In January 2025, the Group agreed certain amendments with the Trustees in order to permit, among other things, the completion of refinancing
of the Group’s corporate debt (Note 30). One of the amendments agreed was an increase in the super security from being capped at £47.5m,
to being capped at £51.4m (see above).
A High Court legal ruling in June 2023 (Virgin Media Limited v NTL Pension Trustees II Limited) decided that certain rule amendments were
invalid if they were not accompanied by the correct actuarial Section 37 certificate confirmation. While the ruling only applied to the specific
pension scheme in question, it could be expected to apply across other pension schemes that were contracted out on a salary-related basis and
made amendments between 6 April 1997 and 6 April 2016. The ruling was appealed but, in July 2024, the Court of Appeal dismissed the appeal.
The Group is considering the implications of the case on its defined benefit scheme. At 31 January 2025, the defined benefit obligation for the
Group’s scheme was calculated on the basis of the pension benefits currently being administered. The Group has not, as yet, assessed any
potential impact due to the court ruling. However, the Group received initial legal advice, which suggests that there is no reason, based on the
checks carried out, to assume that any historical scheme changes were not validly made, and that it is reasonable for the Trustees to take no
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a) Reconciliation of opening and closing balances
The following tables reconcile the opening and closing balances held in relation to insurance and reinsurance contracts (Note 38a)):
Liabilities for | Liabilities for | ||||
remaining coverage | incurred claims | ||||
Estimate of | |||||
the present | |||||
Excluding | value of | ||||
loss | Loss | future | Risk | ||
component | component | cash flows | adjustment | Total | |
£m | £m | £m | £m | £m | |
At 1 February 2024 | |||||
Insurance contract liabilities | (56.6) | (16.1) | (286.4) | (40.2) | (399.3) |
Insurance revenue (Note 38a)) | 197.1 | – | – | – | 197.1 |
Incurred claims and related expenses | – | 20.7 | (148.1) | (7.1) | (134.5) |
Changes to liabilities for incurred claims | – | – | 37.0 | 15.5 | 52.5 |
Insurance acquisition cash flows expensed | (22.7) | – | – | – | (22.7) |
Losses on onerous contracts and changes in such losses | – | (6.4) | – | – | (6.4) |
Other incurred insurance service expenses | – | – | (13.2) | – | (13.2) |
Insurance service (expenses)/income (Note 38a)) | (22.7) | 14.3 | (124.3) | 8.4 | (124.3) |
Insurance finance expense (Note 38a)) | – | – | (13.6) | (1.9) | (15.5) |
Total changes in the consolidated income statement | 174.4 | 14.3 | (137.9) | 6.5 | 57.3 |
Cash flows | |||||
Premiums received | (186.8) | – | – | – | (186.8) |
Insurance acquisition cash flows incurred | 22.7 | – | – | – | 22.7 |
Claims and other expenses paid | – | – | 188.4 | – | 188.4 |
Total cash flows | (164.1) | – | 188.4 | – | 24.3 |
At 31 January 2025 | |||||
Insurance contract liabilities (Note 38a)) | (46.3) | (1.8) | (235.9) | (33.7) | (317.7) |
Assets for | Amounts recoverable | ||||
remaining coverage | on incurred claims | ||||
Estimate of | |||||
Excluding | the present | ||||
loss- | Loss- | value of | |||
recovery | recovery | future | Risk | ||
component | component | cash flows | adjustment | Total | |
£m | £m | £m | £m | £m | |
At 1 February 2024 | |||||
Reinsurance contract (liabilities)/assets | (3.1) | 1.3 | 141.3 | 33.7 | 173.2 |
Allocation of reinsurance premiums | (17.1) | – | – | – | (17.1) |
Amounts recoverable for incurred claims and other expenses | – | (1.5) | (11.3) | 3.7 | (9.1) |
Changes to amounts recoverable for incurred claims | – | – | (32.5) | (10.8) | (43.3) |
Loss-recovery on onerous underlying contracts and adjustments | – | 0.2 | – | – | 0.2 |
Effect of changes in the risk of non-performance of reinsurance contracts | – | – | 2.1 | – | 2.1 |
Net expense from reinsurance contracts (Note 38a)) | (17.1) | (1.3) | (41.7) | (7.1) | (67.2) |
Reinsurance finance income (Note 38a)) | – | – | 5.7 | 1.6 | 7.3 |
Total changes in the consolidated income statement | (17.1) | (1.3) | (36.0) | (5.5) | (59.9) |
Cash flows | |||||
Premiums paid | 10.9 | – | – | – | 10.9 |
Amounts received | – | – | (16.4) | – | (16.4) |
Total cash flows | 10.9 | – | (16.4) | – | (5.5) |
At 31 January 2025 | |||||
Reinsurance contract (liabilities)/assets (Note 38a)) | (9.3) | – | 88.9 | 28.2 | 107.8 |
28 Insurance and reinsurance contract liabilities and assets continued
a) Reconciliation of opening and closing balances continued
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
Liabilities for | Liabilities for | ||||
remaining coverage | incurred claims | ||||
Estimate of | |||||
the present | |||||
Excluding | value of | ||||
loss | Loss | future | Risk | ||
component | component | cash flows | adjustment | Total | |
£m | £m | £m | £m | £m | |
At 1 February 2023 | |||||
Insurance contract liabilities | (44.3) | (8.4) | (259.2) | (35.6) | (347.5) |
Insurance revenue (Note 38a)) | 177.6 | – | – | – | 177.6 |
Incurred claims and related expenses | – | 17.4 | (176.0) | (9.7) | (168.3) |
Changes to liabilities for incurred claims | – | – | (20.9) | 5.5 | (15.4) |
Insurance acquisition cash flows expensed | (26.0) | – | – | – | (26.0) |
Losses on onerous contracts and changes in such losses | – | (25.1) | – | – | (25.1) |
Other incurred insurance service expenses | – | – | (14.4) | – | (14.4) |
Insurance service expenses (Note 38a)) | (26.0) | (7.7) | (211.3) | (4.2) | (249.2) |
Insurance finance expense (Note 38a)) | – | – | (3.1) | (0.4) | (3.5) |
Total changes in the consolidated income statement | 151.6 | (7.7) | (214.4) | (4.6) | (75.1) |
Cash flows | |||||
Premiums received | (189.9) | – | – | – | (189.9) |
Insurance acquisition cash flows incurred | 26.0 | – | – | – | 26.0 |
Claims and other expenses paid | – | – | 187.2 | – | 187.2 |
Total cash flows | (163.9) | – | 187.2 | – | 23.3 |
At 31 January 2024 | |||||
Insurance contract liabilities | (56.6) | (16.1) | (286.4) | (40.2) | (399.3) |
Assets for | Amounts recoverable | ||||
remaining coverage | on incurred claims | ||||
Estimate of | |||||
Excluding | the present | ||||
loss- | Loss- | value of | |||
recovery | recovery | future | Risk | ||
component | component | cash flows | adjustment | Total | |
£m | £m | £m | £m | £m | |
At 1 February 2023 | |||||
Reinsurance contract (liabilities)/assets | (5.5) | 2.7 | 87.6 | 27.4 | 112.2 |
Allocation of reinsurance premiums | (17.0) | – | – | – | (17.0) |
Amounts recoverable for incurred claims and other expenses | – | (3.7) | 21.5 | 3.2 | 21.0 |
Changes to amounts recoverable for incurred claims | – | – | 32.0 | 2.8 | 34.8 |
Loss-recovery on onerous underlying contracts and adjustments | – | 2.3 | – | – | 2.3 |
Effect of changes in the risk of non-performance of reinsurance contracts | – | – | (0.9) | – | (0.9) |
Net (expense)/income from reinsurance contracts (Note 38a)) | (17.0) | (1.4) | 52.6 | 6.0 | 40.2 |
Reinsurance finance income (Note 38a)) | – | – | 1.6 | 0.3 | 1.9 |
Total changes in the consolidated income statement | (17.0) | (1.4) | 54.2 | 6.3 | 42.1 |
Cash flows | |||||
Premiums paid | 19.4 | – | – | – | 19.4 |
Amounts received | – | – | (0.5) | – | (0.5) |
Total cash flows | 19.4 | – | (0.5) | – | 18.9 |
At 31 January 2024 | |||||
Reinsurance contract (liabilities)/assets | (3.1) | 1.3 | 141.3 | 33.7 | 173.2 |
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Additional information
b) Insurance finance income or expense
The following table provides further detail on insurance finance income or expenses arising from insurance and reinsurance contracts:
| 2025 | 2024 | |||||
Insurance | Insurance | |||||
contracts | Reinsurance | contracts | Reinsurance | |||
(gross) | contracts | Net | (gross) | contracts | Net | |
£m | £m | £m | £m | £m | £m | |
Unwind of discounting of liabilities for incurred claims | (15.5) | 7.9 | (7.6) | (8.2) | 4.7 | (3.5) |
Impact of change in the discount rate on liabilities for | 1.3 | (0.7) | 0.6 | 2.1 | (1.1) | 1.0 |
incurred claims: Non-PPOs | ||||||
Impact of change in the discount rate on liabilities for | 8.7 | (5.8) | 2.9 | 10.6 | (6.4) | 4.2 |
incurred claims: PPOs | ||||||
Impact of change in carer wage inflation assumption for | (10.0) | 5.9 | (4.1) | (8.0) | 4.7 | (3.3) |
PPO liabilities for incurred claims | ||||||
Net finance (expense)/income from insurance and | (15.5) | 7.3 | (8.2) | (3.5) | 1.9 | (1.6) |
reinsurance contracts | ||||||
Insurance finance income or expenses are conceptually comparable to investment income or expenses arising from financial assets held within
the Insurance Underwriting business:
The expense created by the unwind of discounting of liabilities for incurred claims is conceptually similar to interest income derived from
financial assets.
The impact of the change in the discount rate on liabilities for incurred claims is conceptually similar to fair value gains or losses arising on
financial assets, with both significantly impacted by changes in market interest rates.
However, the relevant amounts may differ for the following reasons:
Insurance finance income or expenses arise solely from liabilities for incurred claims and corresponding reinsurance assets, whereas the
financial assets held within the Insurance Underwriting business support the Group’s wider insurance liabilities (including liabilities for
remaining coverage) and capital requirements. This leads to differences between the value and duration characteristics of those financial
assets and those of the liabilities for incurred claims which, in turn, leads to differences between the investment income or expenses arising
from those financial assets and insurance finance income or expense.
Investment income or expenses includes compensation for credit risk associated with the financial assets, with any change in credit risk
being reflected in fair value gains or losses on those securities. Credit risk is explicitly excluded from the IFRS 17 discount rate and, therefore,
there is no corresponding effect on insurance finance income or expense.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
c) Claims development tables
The following tables show the Group’s initial estimate of ultimate gross and net claims incurred in previous financial years and the re-estimation
at subsequent financial period ends. In producing these tables, the Group applied an IFRS 17 transition exemption to not disclose previously
unpublished information about claims development that occurred earlier than five years before the end of the annual reporting period in which
it first applied IFRS 17, being the year ended 31 January 2024.
Gross claims development
| Amounts at the end of the financial year ended 31 January | ||||||
2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
Gross loss occurring in financial year(s) ending: | £m | £m | £m | £m | £m | £m |
31 January 2019 and prior financial years | 3,146.5 | 3,085.3 | 3,032.3 | 3,101.7 | 3,182.8 | 3,210.5 |
31 January 2020 | 203.7 | 196.9 | 181.5 | 174.1 | 167.5 | 167.7 |
31 January 2021 | 130.9 | 125.9 | 117.6 | 102.2 | 100.3 | |
31 January 2022 | 146.8 | 221.6 | 279.1 | 149.8 | ||
31 January 2023 | 222.4 | 221.9 | 192.1 | |||
31 January 2024 | 259.2 | 173.1 | ||||
31 January 2025 | 180.6 | |||||
Cumulative gross payments to date | (3,639.5) | |||||
Gross undiscounted liabilities – losses arising | 534.6 | |||||
from financial years 2020-2025 | ||||||
Claims handling expenses | 8.2 | |||||
Effect of discounting | (307.0) | |||||
Risk adjustment | 33.8 | |||||
Total gross liability for incurred claims | 269.6 | |||||
Net claims development
| Amounts at the end of the financial year ended 31 January | ||||||
2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
Net loss occurring in financial year(s) ending: | £m | £m | £m | £m | £m | £m |
31 January 2019 and prior financial years | 2,965.6 | 2,943.5 | 2,916.6 | 2.935.7 | 2,956.2 | 2,972.8 |
31 January 2020 | 181.7 | 185.9 | 175.4 | 171.7 | 166.1 | 166.5 |
31 January 2021 | 121.9 | 114.9 | 116.8 | 101.1 | 99.9 | |
31 January 2022 | 136.5 | 170.8 | 146.0 | 128.6 | ||
31 January 2023 | 171.3 | 149.5 | 132.4 | |||
31 January 2024 | 60.4 | 139.5 | ||||
31 January 2025 | 162.3 | |||||
Cumulative net payments to date | (3,567.7) | |||||
Net undiscounted liabilities – losses arising | 234.3 | |||||
from financial years 2020-2025 | ||||||
Claims handling expenses | 8.2 | |||||
Net effect of discounting | (95.7) | |||||
Net risk adjustment | 5.7 | |||||
Total net liability for incurred claims | 152.5 | |||||
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Additional information
2025 | 2024 | |
£m | £m | |
Deferred revenue (Note 3b)) | 176.8 | 159.8 |
176.8 | 159.8 | |
Current | 171.7 | 156.1 |
Non-current | 5.1 | 3.7 |
176.8 | 159.8 |
Deferred revenue comprises amounts received within the Travel segment for cruises and holidays with departure dates after the reporting date,
and insurance premiums and sales revenues received in the Insurance segment in respect of insurance policies which commence after the
2025 | 2024 | |
£m | £m | |
Bonds | 250.0 | 400.0 |
Ocean Cruise ship loans | 344.8 | 407.0 |
Loan facility provided by Roger De Haan | 75.0 | – |
RCF | – | – |
Accrued interest and fees payable | 5.1 | 4.8 |
674.9 | 811.8 | |
Less: deferred issue costs | (12.7) | (15.6) |
662.2 | 796.2 |
At 31 January 2025, the Group’s financing facilities consisted of a £250.0m five-year senior unsecured bond (repayable July 2026), a £50.0m
five-year RCF (expiring in March 2026) and an £85.0m loan facility provided by Roger De Haan (repayable April 2026).
i) Bonds
In May 2024, the Group repaid in full its £150.0m 2024 senior unsecured bond.
The 2026 bond is, and the 2024 bond was, listed on the Irish Stock Exchange (Euronext Dublin). The 2026 bond is, and the 2024 bond was,
guaranteed by Saga Services Limited and Saga Mid Co Limited (
Mid Co
).
Interest on the 2026 corporate bond is incurred at an annual interest rate of 5.5%. Interest on the 2024 corporate bond was incurred at
an annual interest rate of 3.375%.
Accrued interest payable on the Group’s bond at 31 January 2025 was £0.6m (2024: £1.6m).
As a result of the Group securing new credit facilities on 30 January 2025 (see overleaf), and drawing down on these on 27 February 2025,
the 2026 bond was repaid in full, cancelled and de-listed following the year end.
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164
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
ii) RCF
Interest payable on the Group’s RCF, if drawn, is incurred at a variable rate of Sterling Overnight Index Average (
SONIA
) plus a bank margin that
is linked to the Group’s Leverage Ratio
19
.
During the year to 31 January 2024, the Group announced that it had reached agreement with its banks to amend the covenants on its RCF.
The covenants within the Group’s RCF were amended as follows:
Increase in the Leverage Ratio
19
(excluding Cruise debt) covenant for 31 January 2024 from 5.5x to 6.25x.
In March 2024, the Group concluded discussions with the lenders associated with the RCF to increase the Group’s financial flexibility. As a result,
the following amendments were agreed, in addition to smaller, immaterial changes:
Increase to the Leverage Ratio
19
for all remaining testing periods to 6.25x.
Quarterly covenant testing, irrespective of whether the loan is drawn.
The introduction of a restriction whereby, post repayment of the 2024 bond, no utilisation of the facility is permitted if free liquidity is
below £40.0m.
Consent requirement for any early repayment of corporate debt or payment of shareholder dividends.
In September 2024, the Group concluded further discussions with the lenders associated with the RCF to further increase the Group’s financial
flexibility. As a result, the following amendments were agreed, in addition to other smaller changes:
Extension of the expiry date of the facility from 31 May 2025 to 31 March 2026.
Leverage Ratio
19
test for all remaining testing periods reduced to 6.0x, based on a revised definition of the calculation, which is now
performed on a Group basis inclusive of amounts relating to the Ocean Cruise business.
In November 2024, certain amendments were agreed in order to permit, among other things, the guarantees to be granted in relation to the
disposal of the Group’s Insurance Underwriting business and the establishment of a 20-year partnership for motor and home insurance with
Ageas (Note 38a)).
In December 2024, the Group drew down £20.0m of its RCF. This amount was repaid in January 2025.
At 31 January 2025, the Group’s £50.0m RCF was undrawn. Accrued fees payable on the Group’s RCF at 31 January 2025 were £0.3m (2024: £0.2m).
At 31 January 2025, the RCF was subject to covenants that are measured quarterly in April, July, October and January, being Net Debt
19
to Adjusted Trading EBITDA
19
of a maximum of 6.0x and interest cover of a minimum of 3.0x, based on measures as defined in the facility
agreement, which are adjusted from the equivalent IFRS amounts. The ratio of Net Debt
19
to Adjusted Trading EBITDA
19
at 31 January 2025
was 4.7x (2024: 5.4x) and interest cover was 4.3x (3.9x). The Group complied with the financial covenants of its borrowing facilities during the
current and prior years.
As a result of the Group securing new credit facilities on 30 January 2025 (see below), and drawing down on these on 27 February 2025, the RCF
was cancelled in full following the year end.
iii) Loan facility provided by Roger De Haan
In April 2023, the Group entered into a forward starting loan facility provided by Roger De Haan, commencing on 1 January 2024, under which
the Group could draw down up to £50.0m with 30 days’ notice to support liquidity needs and specifically the repayment of £150.0m bonds
maturing in May 2024. The facility was provided on an arm’s-length basis and was guaranteed by Saga, Mid Co Limited and Saga Services Limited.
Per the original terms of agreement, interest accrued on the drawn total of the facility at a rate of 10% and was payable on the last day of the
period of the loan. The facility was originally due to mature on 30 June 2025, at which point any outstanding amounts, including interest, were
due to be repaid. The facility was subject to a 2% arrangement fee, payable on entering the arrangement. A drawdown fee of 2% on any amount
drawn down under the facility was payable on the drawing date; and milestone fees of 2% on any uncancelled amount of the facility became
payable on 31 March 2024 and 31 December 2024 respectively.
In September 2023, the Group agreed an increase and extension to the existing loan facility provided by Roger De Haan. The increase was for
the value of £35.0m, taking the total facility to £85.0m, and the facility was extended to expire on 31 December 2025, previously 30 June 2025.
The interest rate paid on funds on the drawn total under this facility to finance the repayment of notes issued by Saga, or to provide cash
collateral demanded by providers of bonding facilities to the Group, remained at 10%, but increased to 18% for any amounts drawn to support
general corporate purposes. In addition, the previous arrangement and milestone fees of 2% remained payable; however, the drawdown fee of 2%
increased to 5% for drawdowns for general corporate purposes. The amended facility was provided on the basis of certain conditions being met,
including:
no professional advisers were to be appointed to or retained by Saga without prior approval of the Board; and
no incremental financial indebtedness, over and above the facilities already in place, was to be incurred by Group companies, including
contracts classed as finance lease arrangements under previous IFRS.
In April 2024, a reduction of the notice period required for drawdown of the loan, to 10 business days, was agreed, in addition to a further
extension to the termination date of the facility, from 31 December 2025 to 30 April 2026.
In May 2024, the Group drew down £75.0m of the loan facility provided by Roger De Haan.
In September 2024, an increase to the maximum number of permitted facility utilisation requests was also agreed, from three to 10.
In November 2024, certain amendments were agreed in order to permit, among other things, the guarantees to be granted in relation to the
disposal of the Group’s Insurance Underwriting business and the establishment of a 20-year partnership for motor and home insurance with
Ageas (Note 38a)).
At 31 January 2025, the Group had drawn £75.0m of its £85.0m loan facility provided by Roger De Haan. Accrued interest payable on the loan
facility provided by Roger De Haan at 31 January 2025 was £1.8m (2024: £nil).
As a result of the Group securing new credit facilities on 30 January 2025 (see below), and drawing down on these on 27 February 2025, the loan
facility provided by Roger De Haan was repaid and cancelled in full following the year end.
19
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
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Additional information
iv) Refinancing of corporate debt
On 30 January 2025, the Group announced that it had secured new credit facilities to refinance its corporate debt in full. The new facilities,
agreed by Mid Co, and provided by certain funds, entities (or affiliates or subsidiaries of such funds or entities) and/or accounts managed,
advised or controlled by HPS Investment Partners, LLC or its subsidiaries, comprise:
a £335.0m term loan facility that was to be drawn to:
–
repay the £250.0m senior unsecured bond, maturing July 2026;
–
repay the £75.0m drawings under the £85.0m loan facility provided by Roger De Haan, maturing April 2026; and
–
partially fund transaction costs;
a £100.0m delayed-draw term loan facility that is available for three years and may be drawn for certain purposes, including the repayment
of amortisation within the Ocean Cruise ship debt facilities, mergers and acquisitions, and capital investment; and
a £50.0m RCF.
The term loan and delayed-draw term loan facilities will mature in January 2031 and are subject to a margin ratchet based on Group net Leverage
Ratio
20
(ranging from 625bps to 700bps), priced with an initial margin of 675bps over SONIA, which will reduce as the Group de-levers. The initial
blended pro forma interest rate will be around 7.6% in combination with the Ocean Cruise ship debt facilities, which will be retained on existing terms.
Under the new credit facilities:
the term loan and delayed-draw term loan facilities are subject to a covenant test that is measured quarterly in April, July, October and
January, being Net Debt
20
to Adjusted Trading EBITDA
20
of a maximum of 8.0x, based on measures as defined in the facilities agreements,
adjusted from the equivalent IFRS amounts; and
the RCF is also subject to a covenant, tested quarterly in April, July, October and January, being Net Debt
20
to Adjusted Trading EBITDA
20
of a maximum of 8.8x, based on measures as defined in the facility agreement, adjusted from the equivalent IFRS amounts.
Closing of the new credit facilities was subject to customary conditions and took place on 27 February 2025, together with the repurchase,
repayment and cancellation of the £250.0m senior unsecured notes, the £85.0m loan facility provided by Roger De Haan, and the existing
£50.0m RCF (see above).
Ocean Cruise ship loans
In June 2019, the Group drew down £245.0m of financing for its Ocean Cruise ship, Spirit of Discovery. The financing represents a 12-year
fixed-rate sterling loan, secured against the Spirit of Discovery cruise ship asset, and backed by an export credit guarantee. The initial loan was
repayable in 24 broadly equal instalments, with the first payment of £10.2m paid in December 2019.
The Board announced on 22 June 2020 that it had secured a debt holiday and covenant waiver for the Group’s Ocean Cruise ship facilities.
The Group’s lenders agreed to a deferral of £32.1m in principal payments under the ship facilities that were due up to 31 March 2021.
These deferred amounts were to be paid between June 2021 and December 2024 for Spirit of Discovery and between September 2021
and March 2025 for Spirit of Adventure, and interest remained payable.
On 29 September 2020, the Group drew down £280.8m of financing for its Ocean Cruise ship, Spirit of Adventure. The financing, secured
against the Spirit of Adventure cruise ship asset, represents a 12-year fixed-rate sterling loan, backed by an export credit guarantee. The loan is
repayable in 24 broadly equal instalments, with the first payment originally due six months after delivery in March 2021, but initially deferred to
September 2021 as a result of the debt holiday described above.
In March 2021, the Group reached agreement of a one-year extension to the debt deferral on its Ocean Cruise ship facilities. As part of an
industry-wide package of measures to support the cruise industry, an extension of the existing debt deferral was agreed to 31 March 2022.
The key terms of this deferral were:
all principal payments to 31 March 2022 (£51.8m) deferred and repaid over five years;
all financial covenants until 31 March 2022 waived; and
dividends remain restricted while the deferred principal is outstanding.
During the year to 31 January 2024, the Group concluded discussions with its Cruise lenders in respect of the covenant restrictions attaching
to its two ship debt facilities. Lenders agreed to a waiver of the EBITDA to debt repayment covenant ratio for the 31 July 2023 testing date.
In addition, lenders agreed to amend the covenants on the two ship debt facilities to reduce the EBITDA to debt repayment ratio from 1.2x to 1.0x
for the additional periods up to, and including, 31 January 2025.
Interest on the Spirit of Discovery ship loan is incurred at an effective annual interest rate of 4.31% (including arrangement and commitment
fees). Interest on the Spirit of Adventure ship loan is incurred at an effective annual interest rate of 3.30% (including arrangement and
commitment fees). Interest payable on the Group’s Ocean Cruise ship debt deferrals is incurred at a variable rate of SONIA plus a bank margin.
During the year to 31 January 2025, Ocean Cruise ship loan repayments of £62.2m (2024: £62.2m) were made by the Group. Accrued interest
payable on the Group’s Ocean Cruise ship loans at 31 January 2025 is £2.4m (2024: £3.0m).
At 31 January 2025, the Ocean Cruise ship debt facilities were subject to covenants that are measured six-monthly in July and January, being a
debt service cover ratio and an interest cover ratio, based on measures as defined in the debt facility agreements, which are adjusted from the
equivalent IFRS amounts. The debt service ratio, at 31 January 2025, was 1.4x (2024: 1.0x), in excess of the 1.0x covenant under the ship debt
facilities at the same date. The interest cover ratio, at 31 January 2025, was 7.9x (2024: 5.4x), in excess of the 2.0x covenant under the ship debt
Total debt and finance costs
At 31 January 2025, debt issue costs were £12.7m (2024: £15.6m). The movement in the year of £2.9m represents an increase of £1.5m following
the drawdown of the loan facility provided by Roger De Haan, offset by £4.4m expense amortisation for the year.
During the year, the Group charged £42.2m (2024: £40.2m) to the income statement in respect of fees and interest associated with the bonds,
RCF, the loan facility provided by Roger De Haan and Ocean Cruise ship loans. In addition, finance costs recognised in the income statement
pension schemes, £3.6m (2024: £0.4m) in respect of arrangement, drawdown and milestone fees associated with the loan facility provided by
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
Onerous | ||||
Restructuring | contract | Other | Total | |
£m | £m | £m | £m | |
At 1 February 2023 | – | – | 5.2 | 5.2 |
Charge for the year | – | 7.3 | 14.2 | 21.5 |
Utilised during the year | – | (4.2) | (13.1) | (17.3) |
Released unutilised during the year | – | – | (1.4) | (1.4) |
At 31 January 2024 | – | 3.1 | 4.9 | 8.0 |
Charge for the year | 16.5 | 1.3 | 17.3 | 35.1 |
Utilised during the year | – | (3.1) | (18.3) | (21.4) |
Reclassification to assets held for sale (Note 38a)) | – | – | – | – |
At 31 January 2025 | 16.5 | 1.3 | 3.9 | 21.7 |
Onerous | ||||
Restructuring | contract | Other | Total | |
£m | £m | £m | £m | |
Current | 10.9 | 1.3 | 3.6 | 15.8 |
Non-current | 5.6 | – | 0.3 | 5.9 |
At 31 January 2025 | 16.5 | 1.3 | 3.9 | 21.7 |
Onerous | ||||
Restructuring | contract | Other | Total | |
£m | £m | £m | £m | |
Current | – | 3.1 | 4.7 | 7.8 |
Non-current | – | – | 0.2 | 0.2 |
At 31 January 2024 | – | 3.1 | 4.9 | 8.0 |
As detailed in Note 38a), in December 2024 the Group announced it had entered into a binding agreement with Ageas, to establish a 20-year
partnership for motor and home insurance. As a result of this announcement, at the year end, a provision of £16.5m was made to cover the
expected direct costs associated with the restructuring programme of the Group’s Insurance Broking operations, in readiness for the
partnership becoming operational (targeted to be in the last quarter of 2025). Estimated restructuring expenditure primarily includes
staff-related, legal, consultancy and other change costs directly associated with the cessation of the existing operating model for Insurance
Broking and are based on a detailed restructuring plan developed by management. The restructuring is expected to be completed by
January 2027.
The onerous contract provision relates to the Group’s three-year fixed-price product guarantee in respect of motor insurance policies.
Other provisions primarily comprise:
provisions for the return of insurance commission in respect of policies cancelled mid-term after the reporting date or as a result of being
cancelled during the statutory cooling-off period after the reporting date;
potential payments to underwriters in relation to policies cancelled as a result of a fault claim;
customer remediation relating to areas where there is likely to be a requirement to remedy various errors that have had an adverse impact
on customer outcomes; and
an employer liability provision relating to various Group-related, self-funded insurance arrangements.
Other provisions are expected to be fully utilised over a period less than the next 12 months with the exception of the employer liability provision.
The settlement cash outflows from the employer liability provision depend on the timing of the settlement of claims.
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The following tables analyse the cash and non-cash movements for liabilities arising from financing activities:
| Non-cash changes | |||||
Financing | New leases | ||||
2024 | cash flows | (Note 18) | Other | 2025 | |
£m | £m | £m | £m | £m | |
Lease liabilities (Note 37) | 26.3 | (7.3) | 8.0 | (0.9) | 26.1 |
Ocean Cruise ship loans (Note 30) | 407.0 | (62.2) | – | – | 344.8 |
Loan facility provided by Roger De Haan (Note 30) | – | 75.0 | – | – | 75.0 |
Bonds (Note 30) | 400.0 | (150.0) | – | – | 250.0 |
RCF (Note 30) | – | – | – | – | – |
Deferred issue costs (Note 30) | (15.6) | – | – | 2.9 | (12.7) |
| Non-cash changes | |||||
Financing | New leases | ||||
2023 | cash flows | (Note 18) | Other | 2024 | |
£m | £m | £m | £m | £m | |
Lease liabilities (Note 37) | 32.6 | (11.6) | 5.9 | (0.6) | 26.3 |
Ocean Cruise ship loans (Note 30) | 469.2 | (62.2) | – | – | 407.0 |
Bonds (Note 30) | 400.0 | – | – | – | 400.0 |
Deferred issue costs (Note 30) | (20.1) | – | – | 4.5 | (15.6) |
Included within ‘Other’ for lease liabilities are amounts relating to foreign exchange movements of £0.6m debit (2024: £0.6m debit) and lease
re-assessments of £0.3m (2024: £nil) (Note 18).
Included within ‘Other’ for deferred issue costs is the amortisation of costs of £4.4m (2024: £4.5m), offset by an increase of £1.5m (2024: £nil)
following the drawdown of the loan facility provided by Roger De Haan (Note 30).
Accrued interest payable on the Ocean Cruise ship loans, loan facility provided by Roger De Haan and bonds above is disclosed in Note 30.
| Ordinary shares | |||
Nominal | |||
value | Value | ||
Number | £ | £m | |
Allotted, called up and fully paid | |||
At 1 February 2023 | 140,337,271 | 0.15 | 21.1 |
Issue of shares – 1 August 2023 | 1,458,551 | 0.15 | 0.2 |
At 31 January 2024 | 141,795,822 | 0.15 | 21.3 |
Issue of shares – 3 May 2024 | 1,565,919 | 0.15 | 0.2 |
At 31 January 2025 | 143,361,741 | 0.15 | 21.5 |
On 1 August 2023, Saga plc issued 1,458,551 new ordinary shares of 15p each, with a value of £0.2m, for transfer into an EBT to satisfy employee
incentive arrangements. The newly issued shares rank pari passu with existing Saga shares.
On 3 May 2024, Saga plc issued 1,565,919 new ordinary shares of 15p each, with a value of £0.2m, for transfer into an EBT to satisfy employee
Share-based payment reserve
Prior to vesting, the share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to
employees, including key management personnel, as part of their remuneration. More detail is provided in Note 36.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments used in cash flow
hedges pending subsequent recognition in profit or loss as the hedged cash flows or items affect profit or loss.
Own shares held reserve
The own shares reserve represents the cost of shares in the Company held by the Group’s EBT to satisfy options under the Group’s share option
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
The Group’s objectives, when managing capital, are to safeguard the Group’s ability to continue as a going concern to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
For the purposes of the Group’s capital management, capital comprises total equity of £57.7m (2024: £223.5m) as shown on the consolidated
statement of financial position. The Group operates in a number of regulated markets and includes subsidiaries which are required to comply
with specific requirements in respect of capital or other resources.
The Group’s financial services businesses are regulated primarily by the Financial Services Commission (
FSC
) in Gibraltar and by the FCA in the
UK; and the cash requirements of its River Cruise and Holidays businesses are regulated by the CAA in the UK. It is the Group’s policy to comply
with the requirements of these regulators in respect of capital adequacy, or other similar tests, at all times.
The Group’s regulated Insurance Underwriting business is based in Gibraltar, and regulated by the FSC, and is required to ensure that it has a
sufficient level of capitalisation in accordance with Solvency 2 Technical Standards (effective 31 December 2024). Prior to 31 December 2024,
the Group’s Insurance Underwriting business was required to have a sufficient level of capitalisation in accordance with Solvency II.
The Group, and its subsidiaries, have complied with externally imposed capital requirements during the year. The amounts set out in the following
three paragraphs are provisional and unaudited.
The Group monitored its ability to comply with the requirements of Solvency II and Solvency 2 throughout the year to 31 January 2025, having
previously received approval from the FSC for the Undertaking of Specific Parameters when applying the standard formula to measure capital
requirements for this business under Solvency II and Solvency 2 rules. Under Solvency 2, AICL remained well capitalised and, at 31 January 2025,
available capital was £95.4m (unaudited) against a Solvency Capital Requirement of £44.7m (unaudited), giving 213% (unaudited) coverage.
At 31 January 2024, under Solvency II, available capital was £83.4m (unaudited) against a Solvency Capital Requirement of £54.0m (unaudited),
giving 154% (unaudited) coverage.
The Group’s regulated Insurance Broking business is based in the UK and regulated by the FCA. Due to the nature of the business, the capital
requirements are significantly less than for the Insurance Underwriting business, but the Group is required to comply with the Adequate
Resources requirements of Threshold Condition 2.4 of the FCA Handbook. The Group undertakes a rigorous assessment against the
requirements of this Condition on an annual basis and, as a consequence, calculates and holds an appropriate amount of capital in respect of
the Insurance Broking business. The Minimum Regulatory Capital requirement of this business at 31 January 2025 was £3.0m (2024: £4.4m).
The regulated River Cruise and Holidays businesses are required to comply with a main test based on liquidity. The CAA liquidity test is a
requirement to hold at least 70% of advanced customer receipts in cash on the last day of each month. The Group monitors its compliance
with this test on a monthly basis, including forward-looking compliance using budgets and forecasts. At 31 January 2025 and 31 January 2024,
the businesses had sufficient coverage against this covenant.
From time to time, the Group purchases its own shares on the market; the timing of these purchases depends on market prices. The shares are
primarily intended to be used for issuing shares under the Group’s share option programmes. Buy and sell decisions are made on a specific
The Group has granted a number of different equity-based awards to employees and customers that it has determined to be share-based payments:
a) Share options and Free Shares offer granted at the time of the Initial Public Offering (
IPO
)
On 29 May 2014, nil cost options over 13,132,410 shares were granted to certain Directors and employees with no exercise price and no
service or performance vesting conditions. There were no cash settlement alternatives.
Eligible customers and employees who acquired their shares under the Customer or Employee Offers in the Prospectus received one
bonus share for every 20 shares they acquired and held continuously for one year to 29 May 2015. As these were bonus shares, there was
no exercise price and no cash settlement alternative.
b) Saga Transformation Plan (
STP
)
In July 2022, the Board and shareholders approved the issue of an additional new award called the STP. The STP has a five-year vesting
period and participants receive a 12.5% share in shareholder value (share price plus dividends) created above a £6 per share hurdle over
a five-year performance period commencing from the grant date, subject to continuing employment. For Directors and senior leaders,
the STP will be equity-settled. For other employees, the STP will be settled in cash. There is a cap of £88.0m on the value of awards that
may vest, and the awards have a range of grant dates based on the tranche that each participant falls into.
On 5 July 2022, nil cost options were issued under the STP to certain Directors and other senior employees which vest and become
exercisable on the fifth anniversary of the grant date, subject to continuing employment.
c) RSP
The RSP is a discretionary executive share plan under which the Board may grant options over shares in Saga plc.
On 8 July 2024, nil cost options over 2,386,409 shares were issued under the RSP to certain Directors and other senior employees
that vest and become exercisable on the third anniversary of the grant date, subject to continuing employment. There were no cash
settlement alternatives.
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d) Long-term Incentive Plan (
LTIP
)
The LTIP is a legacy discretionary executive share plan, under which the Board may, within certain limits and subject to applicable
performance conditions, grant options over shares in Saga plc. There are no cash settlement alternatives.
Up to 31 January 2017, these options were 50% linked to a non-market vesting condition, earnings per share, and 50% linked to a market
vesting condition, total shareholder return (
TSR
).
From 1 February 2017 to 31 January 2018, these options were 60% linked to non-market vesting conditions (30% linked to basic earnings
per share and 30% linked to organic earnings per share) and 40% linked to a market vesting condition, TSR.
From 1 February 2018, these options were 60% linked to non-market vesting conditions (30% linked to organic earnings per share and
30% linked to return on capital employed (
ROCE
)) and 40% linked to a market vesting condition, TSR.
From 1 February 2019, these options were 75% linked to non-market vesting conditions (50% linked to operational and strategic measures
and 25% linked to ROCE) and 25% linked to a market vesting condition, TSR.
e) DBP
On 28 May 2024, nil cost options over 663,426 shares were issued under the DBP to Executive Directors, reflecting their deferred bonus
in respect of 2023/24, which vest and become exercisable on the third anniversary of the grant date. Under the DBP, executives receive a
maximum of two-thirds of the bonus award in cash and a minimum of one-third in the form of rights to shares of the Company. There were
no cash settlement alternatives.
f) Employee Free Shares
On 11 June 2024, 550,672 shares were awarded to eligible employees on the 10
th
anniversary of the IPO and allocated at nil cost; these
shares become beneficially owned over a three-year period from allocation, subject to continuing service. There were no cash settlement
alternatives.
Each employee share option converts into one ordinary share of the Company on exercise. No amounts are paid, or payable, by the recipient
on receipt of the option. The options carry neither rights to dividends, nor voting rights. Options may be exercised at any time from the date
of vesting to the date of their expiry. With the exception of share options granted at the time of the IPO, if an employee ceases to be employed
by the Group, the option rights will be forfeited, except in limited circumstances that are approved by the Board on a case-by-case basis.
The table below summarises the movements in the number of share options outstanding for the Group and their weighted average exercise price:
Employee | |||||||
IPO options | RSP | LTIP | DBP | STP | Free Shares | Total | |
At 1 February 2024 | 2,374 | 4,293,466 | 32,385 | 937,680 | – | 877,099 | 6,143,004 |
Granted | – | 2,386,409 | – | 663,426 | – | 550,672 | 3,600,507 |
Forfeited | – | (381,133) | – | – | – | (115,406) | (496,539) |
Exercised | (2,374) | (655,725) | (22,882) | (256,140) | – | (80,575) | (1,017,696) |
At 31 January 2025 | – | 5,643,017 | 9,503 | 1,344,966 | – | 1,231,790 | 8,229,276 |
Exercise price | £nil | £nil | £nil | £nil | £nil | £nil | £nil |
Exercisable at 31 January 2025 | – | 259,553 | 9,503 | – | – | 313,966 | 583,022 |
Average remaining contractual life | – | 1.5 years | – | 1.6 years | 2.4 years | 1.5 years | 1.5 years |
Average fair value at grant | £27.75 | £1.49 | £8.75 | £1.51 | n/a | £2.46 | £1.65 |
The average fair values at grant date were restated to reflect the impact of the share consolidation on 13 October 2020.
The weighted average share price at the date of exercise for share options exercised during the year ended 31 January 2025 was £1.11
(2024: £1.33).
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
The following information is relevant in the determination of the fair value of options granted during the year under the equity-settled
share-based remuneration schemes operated by the Group.
RSP | DBP | |
Expected life of share option | 3 years | 3 years |
Weighted average share price | £1.11 | £1.31 |
At 31 January 2025, the Group did not hold any liability in relation to cash-settled share-based remuneration that had vested by the end of
the year.
As only limited historical data for the Group’s share price is available, the Group estimated the Company’s share price volatility as an average of
the volatilities of its TSR comparator group over a historical period commensurate with the expected life of the award immediately prior to the
date of the grant for awards under the RSP, DBP and Employee Free Share scheme.
For awards under the STP scheme, approved in July 2022, a volatility assumption of 31% was employed, calculated based on volatility in Saga plc’s
historical share price in the five years to 31 December 2019. This time period was selected to strip out the impact of the COVID-19 pandemic,
which had a significant impact on Saga since the beginning of 2020. The impacts on the share price of profit warnings in December 2019 and
April 2019 were also excluded from the calculation.
The Group charged £4.2m (2024: £3.4m) during the year to the income statement in respect of equity-settled share-based payment
transactions. This was charged to administrative and selling expenses.
The Group leases various River Cruise ships, offices, warehouses, equipment and vehicles. The contract lengths of the leases vary considerably
and may include extension or termination options. Where it is reasonably certain that an extension option will be triggered in a contract, lease
payments to be made in respect of the option are included in the measurement of the lease liability. Future minimum lease payments under lease
contracts, together with the present values of the net minimum lease payments, are as follows:
2025 | 2024 | |
£m | £m | |
Within one year | 6.7 | 6.9 |
Between one and five years | 19.9 | 16.5 |
After five years | 4.2 | 7.6 |
Total minimum lease payments | 30.8 | 31.0 |
Less amounts representing finance charges | (4.7) | (4.7) |
Present value of minimum lease payments | 26.1 | 26.3 |
At 31 January 2025, the value of lease liabilities contracted for, but not provided for, in the financial statements in respect of right-of-use assets
amounted to £22.5m (2024: £22.3m). For the current year, these commitments relate to the River Cruise vessels, Spirit of the Moselle and
Spirit of the Main. The lease commitments in the prior year related to the River Cruise vessels, Spirit of the Douro and Spirit of the Moselle, and
b) Commitments
At 31 January 2025, the capital amount contracted for, but not provided for, in the financial statements in respect of property, plant and
The Travel businesses are each members of ABTA, a trade body which provides customers with financial protection when booking their holiday,
if there is no flight component. Under this membership, the Group is required to provide bonds for this purpose, and at 31 January 2025, the
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a) Discontinued operations
On 11 October 2024, the Group announced its decision to divest itself of the underwriting and claims handling sections of its Insurance business.
On 16 December 2024, the Group announced it had entered into a binding agreement with Ageas, to establish the Affinity Partnership.
In addition, the Group announced that Ageas will acquire its Insurance Underwriting business, AICL. Pursuant to a share purchase agreement
(
SPA
), Ageas (UK) Limited (
Ageas UK
) will acquire AICL for a base consideration of £65.0m (subject to adjustments) payable at completion of
the sale of AICL, and an additional consideration of £2.5m payable following the commencement of the Affinity Partnership and therefore the
sale of new policies and the renewal of existing ones, targeted to be in the last quarter of 2025. On 16 December 2024, Saga, Mid Co, Saga Leisure
Limited and Ageas UK entered into the SPA, following which, Mid Co agreed to sell to Ageas UK, and Ageas UK agreed to purchase, the entire
issued share capital of AICL.
At 31 January 2025, the requirements of IFRS 5 were met and accordingly AICL has been classified as a disposal group held for sale in the
statement of financial position and as discontinued operations in the income statement. The sale of AICL is subject to the satisfaction of certain
conditions, including receipt of regulatory approvals. Completion is expected to be in the second quarter of 2025.
The profit/(loss) before tax in the income statement in respect of discontinued operations comprises:
2025 | 2024 | |
£m | £m | |
Profit/(loss) before tax | 22.7 | (5.2) |
Costs of disposal incurred to date | (3.6) | – |
19.1 | (5.2) |
The profit/(loss) after tax in the income statement in respect of discontinued operations comprises:
2025 | 2024 | |
£m | £m | |
Profit/(loss) after tax | 16.5 | (5.0) |
Costs of disposal incurred to date, net of tax | (2.7) | – |
13.8 | (5.0) |
The impact of the discontinued operations on the reported loss per share is as follows:
2025 | 2024 | |
Basic and diluted earnings/(loss) per share from discontinued operations | 9.8p | (3.6p) |
‘Disposal group eliminations and adjustments’ referred to in the tables below comprise the following:
The Group adopted IFRS 17 for the first time in the year ended 31 January 2024. IFRS 17 applies to all insurance and reinsurance contracts,
covering the principles of recognition, measurement, presentation and disclosure. IFRS 17 only applies to insurance contracts that are
underwritten by the Group and related reinsurance contracts held. It does not affect the accounting for the Group’s Insurance Broking
activities. As AICL, the Group’s Insurance Underwriting business, has been classified as part of the disposal group held for sale in the
statement of financial position and as discontinued operations in the income statement, all IFRS 17 related consolidation entries have also
been classified as such accordingly.
The written to earned adjustment is required on consolidation of the Insurance Broking and AICL’s results, to ensure that consistent
accounting policies are applied to the full customer insurance premium for insurance policies that are sold and underwritten by the Group.
For insurance policies that are also underwritten by AICL, the adjustment effectively spreads the broker revenue that is recognised up front
by the Insurance Broking business, and the associated directly attributable acquisition costs, over the life of the policy on a straight-line
365
th
basis so that, in total, from a Group perspective, a liability for remaining coverage and deferred acquisition cost debtor are established
correctly. Upon consolidation, the Insurance Broking business and AICL act as an insurer and are, therefore, governed by IFRS 17 and fall
outside the scope of IFRS 15. The written to earned adjustment has been classified as a discontinued operation as, following the expected
disposal of AICL, all insurance policies that were previously underwritten by the Group, where revenue was recognised on a straight-line
time apportioned basis over the coverage period, will become aligned to the Group’s existing accounting policy for insurance policies not
underwritten by the Group, and recognised up front instead.
Intra-disposal group revenue and cost of sales were eliminated on consolidation.
Inter-group transactions with the disposal group were eliminated on consolidation.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
i) Results of the disposal group for the year
Disposal group | ||||
Disposal | eliminations and | |||
group | adjustments | 2025 | ||
Notes | £m | £m | £m | |
Revenue from Insurance Broking services | 21.1 | (29.5) | (8.4) | |
Other revenue (non-Insurance Underwriting) | 8.1 | (0.1) | 8.0 | |
Non-insurance revenue | 29.2 | (29.6) | (0.4) | |
Insurance revenue | 28 | 186.4 | 10.7 | 197.1 |
Total revenue | 215.6 | (18.9) | 196.7 | |
Cost of sales (non-Insurance Underwriting) | (19.5) | 17.1 | (2.4) | |
Gross profit/(loss) (non-Insurance Underwriting) | 9.7 | (12.5) | (2.8) | |
Insurance service expenses | 28 | (101.5) | (22.8) | (124.3) |
Net expense from reinsurance contracts | 28 | (66.5) | (0.7) | (67.2) |
Insurance service result | 18.4 | (12.8) | 5.6 | |
Administrative and selling expenses | (2.1) | 23.1 | 21.0 | |
Impairment of non-financial assets | (4.1) | – | (4.1) | |
Net finance expense from insurance contracts | 28 | (15.5) | – | (15.5) |
Net finance income from reinsurance contracts | 28 | 7.3 | – | 7.3 |
Investment income | 14.5 | (3.3) | 11.2 | |
Profit/(loss) before tax | 28.2 | (5.5) | 22.7 | |
Tax (expense)/credit | (7.1) | 0.9 | (6.2) | |
Profit/(loss) from discontinued operations attributable to equity holders | 21.1 | (4.6) | 16.5 | |
of the parent |
Disposal group | |||
Disposal | eliminations and | ||
group | adjustments | 2025 | |
£m | £m | £m | |
Reconciliation to Underlying Profit/(Loss) Before Tax 21 | |||
Profit/(loss) before tax | 28.2 | (5.5) | 22.7 |
Fair value gains on debt securities | (5.1) | – | (5.1) |
Changes in underwriting discount rates on non-PPO liabilities | (0.6) | – | (0.6) |
Onerous contract provision | (17.1) | 4.1 | (13.0) |
Impairment of assets | 6.3 | – | 6.3 |
Restructuring costs | 0.3 | – | 0.3 |
Underlying Profit/(Loss) Before Tax 21 | 12.0 | (1.4) | 10.6 |
21
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
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Disposal group | ||||
Disposal | eliminations and | |||
group | adjustments | 2024 | ||
Notes | £m | £m | £m | |
Revenue from Insurance Broking services | 23.0 | (28.9) | (5.9) | |
Other revenue (non-Insurance Underwriting) | 4.9 | (0.1) | 4.8 | |
Non-insurance revenue | 27.9 | (29.0) | (1.1) | |
Insurance revenue | 28 | 164.1 | 13.5 | 177.6 |
Total revenue | 192.0 | (15.5) | 176.5 | |
Cost of sales (non-Insurance Underwriting) | (20.6) | 21.5 | 0.9 | |
Gross profit/(loss) (non-Insurance Underwriting) | 7.3 | (7.5) | (0.2) | |
Insurance service expenses | 28 | (227.4) | (21.8) | (249.2) |
Net income from reinsurance contracts | 28 | 40.1 | 0.1 | 40.2 |
Insurance service result | (23.2) | (8.2) | (31.4) | |
Administrative and selling expenses | (2.6) | 27.1 | 24.5 | |
Impairment of non-financial assets | (5.3) | – | (5.3) | |
Net finance expense from insurance contracts | 28 | (3.5) | – | (3.5) |
Net finance income from reinsurance contracts | 28 | 1.9 | – | 1.9 |
Investment income/(expense) | 12.1 | (3.3) | 8.8 | |
Loss/(profit) before tax | (13.3) | 8.1 | (5.2) | |
Tax credit/(expense) | 2.2 | (2.0) | 0.2 | |
(Loss)/profit from discontinued operations attributable to equity holders | (11.1) | 6.1 | (5.0) | |
of the parent |
Disposal group | |||
Disposal | eliminations and | ||
group | adjustments | 2024 | |
£m | £m | £m | |
Reconciliation to Underlying (Loss)/Profit Before Tax 22 | |||
(Loss)/profit before tax | (13.3) | 8.1 | (5.2) |
Fair value gains on debt securities | (3.5) | – | (3.5) |
Changes in underwriting discount rates on non-PPO liabilities | (1.0) | – | (1.0) |
Onerous contract provision | 11.7 | (2.6) | 9.1 |
Impairment of assets | 3.1 | – | 3.1 |
Restructuring costs | 1.4 | – | 1.4 |
Underlying (Loss)/Profit Before Tax 22 | (1.6) | 5.5 | 3.9 |
22
Refer to the Alternative Performance Measures Glossary on pages 183-185 for definition and explanation
Saga plc
Annual Report and Accounts 2025
174
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
ii) Assets and liabilities of the disposal group
The assets and liabilities of the disposal group classified as held for sale at 31 January 2025 were as follows:
Disposal | ||||
group | ||||
Disposal | eliminations and | Book | ||
group | adjustments | value | ||
Notes | £ | £ | £m | |
Assets | ||||
Intangible assets | 15 | – | – | – |
Financial assets | 19a) | 241.6 | – | 241.6 |
Deferred tax assets | 10 | 7.8 | 3.0 | 10.8 |
Reinsurance contract assets | 28 | 108.5 | (0.7) | 107.8 |
Trade and other receivables | 69.0 | (15.9) | 53.1 | |
Cash and short-term deposits | 25 | 12.6 | – | 12.6 |
Total assets classified as held for sale | 439.5 | (13.6) | 425.9 | |
Liabilities | ||||
Insurance contract liabilities | 28 | 324.8 | (7.1) | 317.7 |
Provisions | 31 | 0.1 | (0.1) | – |
Financial liabilities | 19b) | 1.4 | – | 1.4 |
Deferred tax liabilities | 10 | 11.2 | – | 11.2 |
Contract liabilities | 29 | 1.2 | (1.7) | (0.5) |
Trade and other payables | 17.1 | – | 17.1 | |
Total liabilities classified as held for sale | 355.8 | (8.9) | 346.9 | |
Net assets/(liabilities) classified as held for sale and directly associated | 83.7 | (4.7) | 79.0 | |
with disposal group |
Under IFRS 5, a disposal group held for sale must be measured at the lower of the carrying amount and fair value less costs to sell. Having
compared the current carrying value of the disposal group against the estimated fair value of expected sale proceeds, management identified
an impairment loss of £6.9m to the carrying value of the disposal group’s net assets as at 31 January 2025.
The fair value of the disposal group was determined by considering the SPA (see above), under which Ageas UK will acquire AICL for a base
consideration of £65.0m (subject to adjustments) payable at completion of the sale of AICL, and an additional consideration of £2.5m payable
following the commencement of the Affinity Partnership. The adjustments made to the base consideration include settlement of a Section 75
debt in relation to AICL’s share of the pension scheme’s liabilities of c.£4.4m, a property asset value adjustment in respect of its Solvency II value,
and a net asset value adjustment reflecting an estimate of the excess or shortfall of AICL’s Solvency II net asset valuation at completion. Control
over property assets, currently owned by AICL, will transfer to a subsidiary of Saga plc through the contractual arrangements contained within
the SPA at the point of sale. These property assets are not, therefore, reflected in the disposal group statement of financial position above.
Paragraph 23 of IFRS 5 requires an impairment loss on a disposal group to be allocated to non-current assets within the scope of the standard,
limited to the carrying value of those assets. Since there are no non-current assets within the scope of IFRS 5, for which the impairment identified
by management can be allocated against, the impairment loss will be recognised at the time of disposal.
iii) Net cash flows of the disposal group
The net cash flows of the disposal group during the year were as follows:
2025 | 2024 | |
£m | £m | |
Operating | 14.9 | (16.8) |
Investing | 45.0 | 43.5 |
Financing | (19.1) | (14.0) |
Net cash inflow | 40.8 | 12.7 |
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Additional information
b) Property assets held for sale
At the end of the year ended 31 January 2021, the Group made the decision to initiate an active programme to locate buyers for a number of its
freehold properties and one of its long leasehold properties. At the point of reclassification to held for sale, the carrying values were considered
to be equal to, or below, fair value less costs to sell, and hence no revaluation at the point of reclassification was required.
At the end of the year ended 31 January 2023, the Group made the decision to initiate an active programme to locate buyers for a further two of its
freehold properties. The Group also reclassified to held for sale the related fixtures and fittings associated with one of these freehold properties.
At 31 January 2023, the carrying values of the properties classified as held for sale, totalling £31.2m, were representative of either each
property’s fair value or historic cost less accumulated depreciation and any impairment charges to date, whichever was lower.
During the year ended 31 January 2024, the Group declassified one of the properties held for sale at 31 January 2023, to property, plant and
equipment, since it was no longer being actively marketed for disposal. The carrying value of this property at 31 January 2023 was £3.4m. Other
than this one property, there were no changes to the Group’s intention to sell any of the properties classified as held for sale at 31 January 2023.
At 31 January 2024, the Group obtained updated market valuations of its freehold properties held for sale, to determine the fair value of each
building. As a consequence of the remeasurement of the properties to the lower of fair value less cost to sell and the carrying value, management
concluded that net impairment charges totalling £10.4m should be recognised against the Group’s property assets held for sale at 31 January 2024.
During the year ended 31 January 2025, the Group declassified one of the properties held for sale at 31 January 2024, to property, plant and
equipment, since it was no longer being actively marketed for disposal. The carrying value of this property at 31 January 2024 was £6.0m. Other
than this one property, there were no changes to the Group’s intention to sell any of the properties classified as held for sale at 31 January 2024.
At 31 January 2025, the Group obtained updated market valuations of its freehold properties held for sale, to determine the fair value of each
building. As a consequence of the remeasurement of the properties to the lower of fair value less cost to sell and the carrying value, management
concluded that net impairment charges totalling £0.4m should be recognised against the Group’s property assets held for sale at 31 January 2025.
At 31 January 2025, the carrying values of the properties classified as held for sale, totalling £11.0m, were representative of either each
property’s fair value or historic cost less accumulated depreciation and any impairment charges to date, whichever is lower. These properties
are being actively marketed and the disposals are expected to be completed within 12 months of the end of the financial period. The held for sale
designation is considered to remain appropriate for all properties at 31 January 2025. All properties classified as held for sale at 31 January 2025
The entities listed below are subsidiaries of the Company or Group at 31 January 2025. The ordinary equity shares of all subsidiary undertakings
are 100% owned. All subsidiary undertakings are included within the consolidated financial statements. The registered office address for all
entities registered in England is 3 Pancras Square, London N1C 4AG, United Kingdom. The registered office address of Acromas Insurance
Company Limited is 57/63 Line Wall Road, Gibraltar.
Company name | Country of registration | Nature of business |
Saga Personal Finance Limited | England | Delivery of regulated investment products |
Saga Services Limited | England | Regulated insurance broking |
Acromas Insurance Company Limited | Gibraltar | Insurance underwriting |
CHMC Limited 23 | England | Motor accident management |
PEC Services Limited 23 | England | Repairer of automotive vehicles |
ST&H Limited | England | Tour operating |
Saga Travel Group (UK) Limited | England | Tour operating |
Titan Transport Limited | England | Tour operating |
Saga Cruises Limited | England | Cruising |
Saga Cruises V Limited | England | Cruising |
Saga Cruises VI Limited | England | Cruising |
Saga Crewing Services Limited 23 | England | Cruising |
CustomerKNECT Limited 23 | England | Mailing house |
Saga Mid Co Limited | England | Debt service provider |
Saga Publishing Limited 23 | England | Publishing |
CHMC Holdings Limited | England | Dormant holding company |
ST&H Group Limited | England | Holding company |
Saga Leisure Limited 23 | England | Holding company |
Saga Group Limited | England | Provision of administrative function for central costs |
Confident Services Limited | England | Dormant company |
Saga Membership Limited | England | Dormant company |
Saga Travel Group Limited | England | Dormant company |
Saga Radio (North West) Limited | England | Dormant company |
In addition to the above, the Directors consider that, under the terms of the contractual arrangements in place, Saga plc has control over the
Saga EBT. The results and net assets of the EBT have, therefore, been included in the Group consolidation. The registered office of the EBT is
26 New Street, St Helier, Jersey JE2 3RA.
23
These subsidiaries will take advantage of the audit exemption set out within Section 479A of the Companies Act 2006 for the year ended 31 January 2025. As required,
Saga plc, the ultimate parent undertaking and controlling party of the Group, guarantees all outstanding liabilities to which these subsidiary companies are subject at the
end of the financial year, until they are satisfied in full. This is in accordance with Section 479C of the Companies Act 2006. The guarantee is enforceable against Saga plc
Saga plc
Annual Report and Accounts 2025
176
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
As set out in Note 30, in April 2023, the Group entered into a forward starting loan facility provided by Roger De Haan, commencing on
1 January 2024, under which the Group could draw down up to £50.0m with 30 days’ notice to support liquidity needs and specifically
the repayment of £150.0m bonds maturing in May 2024. The facility was provided on an arm’s-length basis and was guaranteed by Saga,
Mid Co and Saga Services Limited. Per the original terms of agreement, interest accrued on the drawn total of the facility at a rate of 10% and
was payable on the last day of the period of the loan. The facility was originally due to mature on 30 June 2025, at which point any outstanding
amounts, including interest, were due to be repaid. The facility was subject to a 2% arrangement fee, payable on entering the arrangement.
A drawdown fee of 2% on any amount drawn down under the facility was payable on the drawing date; and milestone fees of 2% on any
uncancelled amount of the facility became payable on 31 March 2024 and 31 December 2024 respectively.
In September 2023, the Group agreed an increase and extension to the existing loan facility provided by Roger De Haan. The increase was for
the value of £35.0m, taking the total facility to £85.0m, and the facility was extended to expire on 31 December 2025, previously 30 June 2025.
The interest rate paid on funds on the drawn total under this facility to finance the repayment of notes issued by Saga, or to provide cash
collateral demanded by providers of bonding facilities to the Group, remained at 10%, but increased to 18% for any amounts drawn to support
general corporate purposes. In addition, the previous arrangement and milestone fees of 2% remained payable; however, the drawdown fee
of 2% increased to 5% for drawdowns for general corporate purposes. The amended facility was provided on the basis of certain conditions
being met, including:
no professional advisers were to be appointed to or retained by Saga without prior approval of the Board; and
no incremental financial indebtedness, over and above the facilities already in place, was to be incurred by Group companies, including
contracts classed as finance lease arrangements under previous IFRS.
In April 2024, a reduction of the notice period required for drawdown of the loan to 10 business days was agreed, in addition to a further extension
to the termination date of the facility, from 31 December 2025 to 30 April 2026.
In May 2024, the Group drew down £75.0m of the loan facility provided by Roger De Haan.
In September 2024, an increase to the maximum number of permitted facility utilisation requests was also agreed, from three to 10.
In November 2024, certain amendments were agreed in order to permit, among other things, the guarantees to be granted in relation to the
disposal of the Group’s Insurance Underwriting business and the establishment of a 20-year partnership for motor and home insurance with
Ageas (Note 38a)).
At 31 January 2025, the Group had drawn £75.0m of its £85.0m loan facility provided by Roger De Haan. Accrued interest payable on the loan
facility provided by Roger De Haan at 31 January 2025 was £1.8m (2024: £nil).
As a result of the Group securing new credit facilities on 30 January 2025 (see below), and drawing down on these on 27 February 2025, the loan
Since the year end, the Group closed the new credit facilities detailed in Note 30 and drew down the £335.0m term loan facility on 27 February 2025,
utilising the proceeds to repay, and cancel in full, the £250.0m senior unsecured notes maturing in July 2026, and the £75.0m drawn under the
Saga plc
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Additional information
Balance sheet
2025 | 2024 | ||
Note | £m | £m | |
Fixed assets | |||
Investment in subsidiaries | 2 | 659.3 | 167.3 |
Current assets | |||
Debtors – amounts falling due after more than one year | 3 | 337.2 | 505.4 |
Debtors – amounts falling due within one year | 3 | 0.1 | 2.2 |
337.3 | 507.6 | ||
Creditors – amounts falling due within one year | 4 | (2.1) | (5.8) |
Net current assets | 335.2 | 501.8 | |
Creditors – amounts falling due after more than one year | 5 | (249.0) | (398.2) |
Net assets | 745.5 | 270.9 | |
Capital and reserves | |||
Called up share capital | 6 | 21.5 | 21.3 |
Share premium account | 648.3 | 648.3 | |
Own shares held reserve | (1.4) | (1.2) | |
Retained earnings/(deficit) | 67.5 | (407.6) | |
Share-based payment reserve | 9.6 | 10.1 | |
Total shareholders’ funds | 745.5 | 270.9 |
The Company has not presented its own profit and loss account as permitted by Section 408(3) of the Companies Act 2006 (the
Act
). The profit
included in the financial statements of the Company, determined in accordance with the Act, was £470.5m (2024: £22.0m loss).
Company number: 08804263
The Notes on pages 179-182 form an integral part of these financial statements.
Signed for and on behalf of the Board on 15 April 2025 by
Mike Hazell
Mark Watkins
Group Chief Executive Officer
Group Chief Financial Officer
Saga plc
Annual Report and Accounts 2025
178
COMPANY FINANCIAL STATEMENTS OF SAGA PLC
Statement of changes in equity
Called up | Share | Retained | Share-based | |||
share | premium | Own shares | (deficit)/ | payment | Total | |
capital | account | held reserve | earnings | reserve | equity | |
£m | £m | £m | £m | £m | £m | |
At 1 February 2023 | 21.1 | 648.3 | – | (386.6) | 9.0 | 291.8 |
Loss for the financial year | – | – | – | (22.0) | – | (22.0) |
Issue of share capital (Note 6) | 0.2 | – | – | – | – | 0.2 |
Share-based payment charge | – | – | – | – | 2.9 | 2.9 |
Own shares transferred in the year | – | – | (1.2) | (0.8) | – | (2.0) |
Transfer upon vesting of share options | – | – | – | 1.8 | (1.8) | – |
At 31 January 2024 | 21.3 | 648.3 | (1.2) | (407.6) | 10.1 | 270.9 |
Profit for the financial year | – | – | – | 470.5 | – | 470.5 |
Issue of share capital (Note 6) | 0.2 | – | (0.2) | – | – | – |
Share-based payment charge | – | – | – | – | 4.2 | 4.2 |
Transfer upon vesting of share options | – | – | – | 4.6 | (4.7) | (0.1) |
At 31 January 2025 | 21.5 | 648.3 | (1.4) | 67.5 | 9.6 | 745.5 |
The Notes on pages 179-182 form an integral part of these financial statements.
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Financial statements
Additional information
Notes to the Company financial statements
1.1 Accounting policies
a) Accounting convention
These financial statements were prepared in accordance
with Financial Reporting Standard (
FRS
) 101 ‘Reduced
Disclosure Framework’.
In preparing these financial statements, the Company applies the
recognition, measurement and disclosure requirements of
UK-adopted international accounting standards, but makes
amendments where necessary in order to comply with Companies
Act 2006 (the
Act
) and has set out below where advantage of the
FRS 101 disclosure exemptions has been taken.
The financial statements are prepared under the historical cost
convention, as modified by derivative financial assets and financial
liabilities measured at fair value through profit or loss and, in
accordance with the Act, are prepared on a going concern basis
(please refer to Note 2.1 of the Saga plc consolidated accounts on
page 111 for an assessment of the going concern basis for the Group
and the Company).
The Company’s financial statements are presented in sterling and all
values are rounded to the nearest hundred thousand (£m), except
when otherwise indicated.
The accounting policies which follow set out those policies which
apply in preparing the financial statements for the year ended
31 January 2025.
The Company has taken advantage of the following disclosure
exemptions under FRS 101:
The requirements of International Financial Reporting Standard
(
IFRS
) 7 ‘Financial Instruments: Disclosures’.
The requirements of paragraphs 10(d), 10(f), 16, 38A, 38B-D,
40A-D, 111 and 134-136 of International Accounting Standard (
IAS
) 1
‘Presentation of Financial Statements’.
The requirements of IAS 7 ‘Statement of Cash Flows’.
The requirements of paragraphs 30 and 31 of IAS 8 ‘Accounting
Policies, Changes in Accounting Estimates and Errors’.
The requirements of paragraphs 17 and 18A of IAS 24 ‘Related
Party Disclosures’.
The requirements in IAS 24 ‘Related Party Disclosures’ to disclose
related party transactions entered into between two or more
members of a group, provided that any subsidiary which is a party
to the transaction is wholly owned by such a member.
The requirements of paragraphs 45(b) and 46-52 of IFRS 2
‘Share-based Payment’.
Investments in subsidiaries are accounted for at cost, less a provision
for impairment, and are reviewed for impairment when events or
changes in circumstances indicate the carrying value may not be
recoverable. If there is an indication that the recoverable value of
a previously impaired investment in a subsidiary has increased,
previously recognised impairments are reversed up to the lower
c) Debtors
Trade and other debtors are initially recognised at fair value and,
where the time value of money is material, subsequently measured
at amortised cost using the effective interest rate (
EIR
) method.
Provision for impairment is made using the simplified approach
set out in IFRS 9 ‘Financial Instruments’, whereby no credit loss
allowance is recognised on initial recognition and then, at each
subsequent reporting date, the loss allowance will be the present
value of the expected cash flow shortfalls over the remaining life of
the debtors (i.e. lifetime expected credit losses (
ECLs
)). Balances
are written off when the probability of recovery is assessed as
being remote.
Amounts due from Group undertakings are classified as debtors.
They have no fixed date of payment and are payable on demand.
The amounts due from Group undertakings are disclosed at
amortised cost.
d) Deferred tax
Deferred tax is provided on temporary differences between the tax
bases of assets and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that
it is probable that taxable profit will be available, against which the
deductible temporary differences, and the carry forward of unused
tax credits and unused tax losses, can be utilised.
The carrying amount of deferred tax assets is reviewed at each
reporting date and is reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or
part of the deferred tax asset to be utilised. Unrecognised deferred
tax assets are reassessed at each reporting date and are recognised
to the extent that it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that
are expected to apply in the year when the asset is realised or the
liability is settled, based on tax rates (and tax laws) that have been
enacted, or substantively enacted, at the reporting date. Deferred
tax is charged, or credited, in the income statement, except when
it relates to items charged or credited in other comprehensive
income (
OCI
), in which case the deferred tax is dealt with in OCI.
Deferred tax assets and deferred tax liabilities are offset if a legally
enforceable right exists to set off current tax assets against current
tax liabilities and the deferred taxes relate to the same taxable entity
and the same taxation authority.
e) Share-based payments
The Company provides benefits to employees (including Directors)
of Saga plc and its subsidiary undertakings, in the form of share-based
payment transactions, whereby employees render services as
consideration for equity instruments (equity-settled transactions).
The cost of equity-settled transactions is measured by reference to
the fair value on the grant date and is recognised as an expense over
the relevant vesting period, ending on the date on which the employee
becomes fully entitled to the award.
Fair values of share-based payment transactions are calculated using
market price valuation modelling techniques.
In valuing equity-settled transactions, assessment is made of any
vesting conditions to categorise these into market performance
conditions, non-market performance conditions and service conditions.
Where the equity-settled transactions have market performance
conditions (that is, performance that is directly or indirectly linked
to the share price), the fair value of the award is assessed at the time
of grant and is not changed, regardless of the actual level of vesting
achieved, except where the employee ceases to be employed prior
to the vesting date.
For service conditions and non-market performance conditions,
the fair value of the award is assessed at the time of grant and is
reassessed at each reporting date to reflect updated expectations
for the level of vesting. No expense is recognised for awards that
ultimately do not vest.
At each reporting date prior to vesting, the cumulative expense is
calculated, representing the extent to which the vesting period has
expired and, in the case of non-market conditions, the best estimate
of the number of equity instruments that will ultimately vest or, in the
case of instruments subject to market conditions, the fair value on
grant adjusted only for leavers. The movement in the cumulative
expense since the previous reporting date is recognised in the
income statement, with the corresponding increase in the
share-based payments reserve.
Upon vesting of an equity instrument, the cumulative cost in the
share-based payments reserve is reclassified to reserves.
Saga plc
Annual Report and Accounts 2025
180
COMPANY FINANCIAL STATEMENTS OF SAGA PLC
Notes to the Company financial statements continued
1.1 Accounting policies continued
f) Equity
The Group has ordinary shares that are classified as equity.
Incremental external costs that are directly attributable to the issue
of these shares are recognised in equity, net of tax.
g) Own shares
Own shares represent the shares of the Company that are held by an
Employee Benefit Trust (
EBT
). Own shares are recorded at cost and
deducted from equity. The Directors consider that, under the terms
of the contractual arrangements in place, the Company has control
over the EBT. The results and net assets of the EBT have, therefore,
been included in the Group consolidation.
h) Financial instruments
i) Financial assets
On initial recognition, a financial asset is classified as either amortised
cost, fair value through other comprehensive income (
FVOCI
) or fair
value through profit and loss (
FVTPL
). The classification of financial
assets is based on the business model in which a financial asset is
managed, and its contractual cash flow characteristics.
The Company measures all financial assets at fair value at each
reporting date, other than those instruments measured at
amortised cost.
The Company’s financial assets at amortised cost include amounts
due from Group undertakings. The Company does not hold any
financial assets classified as FVOCI or FVTPL.
(a) Financial assets at amortised cost
Initial recognition and measurement
A financial asset is classified at amortised cost if it meets both of the
following conditions and is not elected to be designated as FVTPL:
It is held within a business model whose objective is to hold assets
to collect contractual cash flows.
Its contractual terms give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal
amount outstanding.
Subsequent measurement
These assets are subsequently measured at amortised cost using
the EIR method. The amortised cost is reduced by impairment losses
(see (b) to the right). Impairment losses are recognised in profit or loss
as they are incurred. Any gain or loss on derecognition is recognised
in profit or loss immediately.
Derecognition
A financial asset is derecognised when the rights to receive cash flows
from the asset have expired or when the Company has transferred
substantially all the risks and rewards relating to the asset to a
third party.
(b) Impairment of financial assets
The ECL impairment model applies to financial assets measured at
amortised cost and debt investments at FVOCI.
The Company measures loss allowances at an amount equal to
12-month ECLs, except for trade receivables and contract assets that
result from transactions within the scope of IFRS 15.
When determining whether the credit risk of a financial asset has
increased significantly since initial recognition and when estimating
ECLs, the Company considers reasonable and supportable
information that is relevant and available without undue cost or effort.
This includes both quantitative and qualitative information and
analysis, based on the Company’s historical experience and informed
credit assessment and including forward-looking information.
Measurement of ECLs
ECLs are measured as a probability-weighted estimate of credit
losses. Credit losses are measured as the probability of default in
conjunction with the present value of the Group’s exposure. Loss
allowances for ECLs on financial assets measured at amortised cost
are deducted from the gross carrying amount of the assets, with a
corresponding charge to the income statement.
ii) Financial liabilities
Initial recognition and measurement
All financial liabilities are classified as financial liabilities at amortised
cost on initial recognition.
All financial liabilities are recognised initially at fair value and, in the case
of loans and borrowings, net of directly attributable transaction costs.
The Company’s financial liabilities comprise loans and borrowings.
Subsequent measurement
After initial recognition, interest-bearing loans and borrowings and
other payables are subsequently measured at amortised cost using
the EIR method. Amortised cost is calculated by taking into account
any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in finance
costs in the income statement.
Derecognition
A financial liability is derecognised when the obligation under the
liability is discharged, cancelled or expires.
When an existing financial liability is replaced by another from the
same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability and
the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the income statement.
i) Audit remuneration
Amounts receivable by the Company’s auditor and its associates
in respect of services to the Company and its associates, other
than the audit of the Company’s financial statements, have not been
disclosed as the information is required instead to be disclosed
on a consolidated basis in the consolidated financial statements.
Saga plc
Annual Report and Accounts 2025
181
Strategic Report
Governance
Financial statements
Additional information
1.2 Significant accounting judgements, estimates and assumptions
The preparation of financial statements requires the Company to select accounting policies and make estimates and assumptions that affect
items reported in the primary Company financial statements and Notes to the Company financial statements.
Significant estimates
All estimates are based on management’s knowledge of current facts and circumstances, assumptions based on that knowledge and predictions
of future events and actions. Actual results may, therefore, differ from those estimates.
The table below sets out those items the Company considers susceptible to changes in critical estimates and assumptions, together with the
relevant accounting policy.
Acc. policy | Items involving estimation | Sources of estimation uncertainty |
1.1b) | Investment in subsidiaries | The Company determines whether the investment in subsidiaries needs to be impaired when indicators |
impairment testing | of impairment exist. This requires an estimation of the value-in-use of the subsidiaries owned by the | |
Company. The value-in-use calculation requires the Company to estimate the future cash flows expected | ||
to arise from the subsidiaries, discounted at a suitably risk-adjusted rate to calculate present value. | ||
Sensitivity analysis was undertaken to determine the effect of changing the discount rate, the terminal | ||
value and earnings before interest, tax, depreciation and amortisation ( EBITDA ) multiple on the | ||
present value calculation, which is shown in Note 2 below. |
2 Investment in subsidiaries
£m | |
Cost | |
At 1 February 2023 | 4,132.7 |
At 31 January 2024 and 31 January 2025 | 4,132.7 |
Impairment | |
At 1 February 2023 and 31 January 2024 | 3,965.4 |
Amounts reversed in the year | (492.0) |
At 31 January 2025 | 3,473.4 |
Net book value | |
At 31 January 2025 | 659.3 |
At 31 January 2024 | 167.3 |
See Note 39 to the consolidated financial statements for a list of the Company’s investments.
The net assets of the Company were in excess of its market capitalisation of £177.5m at 31 January 2025, thus constituting an indicator of
impairment. An impairment assessment was, therefore, performed in which the recoverable amount of the investment was compared with
its carrying value.
A value-in-use of the Company’s subsidiaries was determined based on a sum-of-the-parts valuation for each of the Group’s businesses, using
discounted cash flow projections from the Group’s Board-approved five-year plan to 2029/30 for certain parts of the business, and EBITDA
multiples to estimate the present value of future dividend streams for other subsidiaries.
For the discounted cash flow projections, a terminal value was calculated using the Gordon Growth Model based on the fifth year of those
projections and an annual growth rate of 2.0% (2024: 2.0%) as the expected long-term average nominal growth rate of the UK economy.
Cash flows for a base case scenario and a stressed case scenario were then discounted to present value using a suitably risk-adjusted nominal
discount rate relevant to each of the segments.
At 31 January 2025, the range of pre-tax discount rates used was 12.6% to 15.2% (2024: 13.0% to 15.3%). EBITDA multiples of 6.6x to 12.0x
(2024: 6.0x to 9.5x) were used for the Travel businesses. As per IAS 36.44, incremental cash flows directly attributable to growth initiatives not
yet enacted at the balance sheet date were removed for the purpose of the value-in-use calculation. In the year ended 31 January 2025, the
recoverable amount calculated using this methodology when compared against the carrying value of the investment in subsidiaries resulted
in headroom of £492.0m in a probability weighted scenario of base case to stressed case cash flows. The headroom was identified as being
reflective of strong trading forecasts for the Travel businesses and reduced financing risk resulting from the successful refinancing of our
corporate debt. No further impairment was therefore assessed as necessary and management have reversed impairments recorded in
previous years of £492.0m at 31 January 2025.
In the prior year, an impairment assessment was also performed in which the recoverable amount of the investment was compared with its
carrying value. The recoverable amount, when compared against the carrying value of the investment in subsidiaries, resulted in headroom in a
base scenario. Management, therefore, concluded that it was not necessary to impair the investment in subsidiaries, nor would it be appropriate
to reverse any impairment already recognised in previous years at that point.
The headroom calculated is most sensitive to the EBITDA multiple, the discount rate and the terminal growth rate assumed. A quantitative
sensitivity analysis for each of these at 31 January 2025 and its impact on the headroom/(deficit) against the carrying value of investment in
subsidiaries as calculated against the base case cashflow is as follows:
EBITDA multiple | Pre-tax discount rate | Terminal growth rate | ||||
+1x | –1x | +1.0ppt | –1.0ppt | +1.0ppt | –1.0ppt | |
£m | £m | £m | £m | £m | £m | |
Impact | 114.6 | (114.6) | (22.0) | 26.5 | 22.3 | (18.5) |
Saga plc
Annual Report and Accounts 2025
182
COMPANY FINANCIAL STATEMENTS OF SAGA PLC
Notes to the Company financial statements continued
3 Debtors
2025 | 2024 | |
£m | £m | |
Amounts falling due after more than one year | ||
Amounts due from Group undertakings | 337.2 | 505.4 |
337.2 | 505.4 |
2025 | 2024 | |
£m | £m | |
Amounts falling due within one year | ||
Deferred tax asset | – | 2.2 |
Prepayments | 0.1 | – |
0.1 | 2.2 |
For amounts due from Group undertakings, the ECLs are considered to be immaterial.
4 Creditors – amounts falling due in less than one year
2025 | 2024 | |
£m | £m | |
Other creditors | 0.1 | 0.1 |
Accruals | 1.4 | 4.0 |
Accrued interest and fees payable | 0.6 | 1.7 |
2.1 | 5.8 |
5 Creditors – amounts falling due in more than one year
2025 | 2024 | |
£m | £m | |
Bonds | 250.0 | 400.0 |
Unamortised issue costs | (1.0) | (1.8) |
249.0 | 398.2 |
Please refer to Note 30 of the Saga plc consolidated accounts on pages 163-165 for further details relating to the bonds.
6 Called up share capital
| Ordinary shares | |||
Nominal | |||
value | Value | ||
Number | £ | £m | |
Allotted, called up and fully paid | |||
At 1 February 2023 | 140,337,271 | 0.15 | 21.1 |
Issue of shares – 1 August 2023 | 1,458,551 | 0.15 | 0.2 |
At 31 January 2024 | 141,795,822 | 0.15 | 21.3 |
Issue of shares – 3 May 2024 | 1,565,919 | 0.15 | 0.2 |
At 31 January 2025 | 143,361,741 | 0.15 | 21.5 |
On 1 August 2023, Saga plc issued 1,458,551 new ordinary shares of 15p each, with a value of £0.2m, for transfer into an EBT to satisfy employee
incentive arrangements. The newly issued shares ranked pari passu with existing Saga shares.
On 3 May 2024, Saga plc issued 1,565,919 new ordinary shares of 15p each, with a value of £0.2m, for transfer into an EBT to satisfy employee
incentive arrangements. The newly issued shares ranked pari passu with existing Saga shares.
7 Commitments
The Company provided guarantees for the Group’s bond, Ocean Cruise ship debt, Revolving Credit Facility and bank overdraft (please refer to
The Group uses a number of Alternative Performance Measures (
APMs
),
which are not required or commonly reported under International
Financial Reporting Standards, the Generally Accepted Accounting
Principles (
GAAP
) under which the Group prepares its financial
statements, but which are used by the Group to help the user of the
accounts better understand the financial performance and position
of the business.
Definitions for the primary APMs used in this report are set out below.
APMs are usually derived from financial statement line items and are
calculated using consistent accounting policies to those applied in
the financial statements, unless otherwise stated. APMs may not
necessarily be defined in a consistent manner to similar APMs used
by the Group’s competitors. They should be considered as a
supplement to, rather than a substitute for, GAAP measures.
Underlying Revenue
Underlying Revenue represents revenue excluding the Insurance
Broking onerous contract provision, the AXA profit share payable on
cessation of the private medical insurance (
PMI
) contract, revenue
associated with the exit from some of our smaller, loss-making
activities and Ocean Cruise insurance compensation and
discretionary ticket refunds to customers.
This measure is useful for presenting the Group’s underlying trading
performance as it excludes non-cash technical accounting adjustments
and one-off financial impacts that are not expected to recur. In the
case of the Insurance Broking onerous contract provision, this is
excluded due to it being a fair value type adjustment to revenue that
will reverse over time.
Underlying Revenue reconciles to the statutory measure of revenue
as follows:
£m
12m to
Jan 2025
Change
12m to
Jan 2024
Underlying Revenue
768.2
4.8%
732.7
Ceded reinsurance premiums
earned on business underwritten
by the Group
17.1
0.6%
17.0
Insurance Broking onerous
contract provision
1.8
158.1%
(3.1)
AXA profit share payable on
cessation of PMI contract
(2.6)
(100%)
–
Ocean Cruise insurance
compensation for refund paid
to customers
–
100.0%
(5.0)
Ocean Cruise discretionary
customer ticket refunds
–
100.0%
(0.9)
Profit commission relating to
Insurance Underwriting activities
–
100.0%
(0.9)
Exit from smaller, loss-making
activities
0.5
61.5%
1.3
Included within discontinued
operations
(196.7)
(11.4%)
(176.5)
Revenue per statutory financial
statements
588.3
4.2%
564.6
Underlying Profit Before Tax
Underlying Profit Before Tax represents the loss before tax excluding
the impairment of Insurance Broking goodwill and the following other
exceptional items:
unrealised fair value losses on derivatives;
discretionary Ocean Cruise customer ticket refunds and
associated costs;
additional Ocean Cruise dry dock costs and customer
compensation relating to Spirit of Adventure;
impairment of the carrying value of other non-financial assets;
impact of changes in the discount rate on non-periodical payment
order (
PPO
) liabilities
1
;
fair value gains on debt securities;
foreign exchange gains on River Cruise ship leases;
costs and amortisation of fees relating to the loan facility provided
by Roger De Haan;
movements in the insurance onerous contract provisions
(net of reinsurance recoveries)
2
;
profit share payable to AXA on cessation of PMI contract;
costs in relation to the acquisition and disposal of The Big Window
Consulting Limited (the
Big Window
);
the International Financial Reporting Standard (
IFRS
) 16 lease
accounting adjustment on River Cruise vessels; and
restructuring costs.
It is reconciled to statutory loss before tax within the Group Chief
Financial Officer’s Review on page 25.
This measure is the Group’s key performance indicator and is useful
for presenting the Group’s underlying trading performance, as it
excludes non-cash technical accounting adjustments and one-off
financial impacts that are not expected to recur.
As Underlying Profit Before Tax includes the benefits of restructuring
programmes, but excludes significant costs, such as impairment of
non-financial assets and restructuring items, it should not be
regarded as a complete picture of the Group’s financial performance,
which is presented in its financial statements. The exclusion of other
underlying items may result in Underlying Profit Before Tax being
materially higher or lower than reported loss before tax. In particular,
when significant non-financial asset impairments and restructuring
charges are excluded, Underlying Profit Before Tax will be higher than
earnings reported in the financial statements.
Alternative Performance Measures Glossary
1
This adjustment reduces the risk of residual volatility from changes in market interest rates adversely affecting Underlying Profit Before Tax
2
The IFRS 17 onerous contract requirements create a timing mismatch between when claims are incurred and when they are recognised in profit before tax. Underlying
Profit Before Tax adjusts for this timing mismatch by reversing the impact of these requirements
Financial statements
Governance
Saga plc
Annual Report and Accounts 2025
183
Additional information
Strategic Report
3
This adjustment reduces the risk of residual volatility from changes in market interest rates adversely affecting Underlying Profit Before Tax
4
The IFRS 17 onerous contract requirements create a timing mismatch between when claims are incurred and when they are recognised in profit before tax. Underlying
Profit Before Tax adjusts for this timing mismatch by reversing the impact of these requirements
Trading EBITDA
Trading EBITDA is defined as earnings before interest payable, tax,
depreciation and amortisation, and excludes the International
Accounting Standard 19R pension charge, exceptional costs and
impairments.
Trading EBITDA , on a rolling 12-month basis, is a key component of
Adjusted Trading EBITDA (see opposite), which acts as the denominator
in the Group’s Leverage Ratio covenant calculations applicable to the
Revolving Credit Facility (
RCF
) that was in place at 31 January 2025.
It reconciles to Underlying Profit Before Tax as follows:
£m
12m to
Jan 2025
Change
12m to
Jan 2024
Ocean Cruise Trading EBITDA
89.2
19.3%
74.8
River Cruise Trading EBITDA
4.0
29.0%
3.1
Holidays Trading EBITDA
10.8
350.0%
2.4
Insurance Broking Trading EBITDA
22.4
(52.5%)
47.2
Insurance Underwriting
Trading EBITDA
19.6
>500.0%
1.2
Other Businesses and Central
Costs Trading EBITDA
(8.9)
27.0%
(12.2)
Trading EBITDA
137.1
17.7%
116.5
Depreciation and amortisation
(35.4)
(2.9%)
(34.4)
Net finance costs (including Ocean
Cruise and Insurance
Underwriting)
(53.9)
(22.8%)
(43.9)
Underlying Profit Before Tax
47.8
25.1%
38.2
£m
12m to
Jan 2025
Change
12m to
Jan 2024
Depreciation and amortisation
per above table
35.4
(2.9%)
34.4
Depreciation included within other
exceptional items
4.7
49.5%
9.3
Amortisation included within other
exceptional items
–
100.0%
0.4
Depreciation and amortisation per
statutory financial statements
40.1
9.1%
44.1
£m
12m to
Jan 2025
Change
12m to
Jan 2024
Net finance costs (including
Ocean Cruise and Insurance
Underwriting) per above table
53.9
(22.8%)
43.9
Included within other exceptional
items
5.4
(80.0%)
3.0
Included within discontinued
operations
(8.8)
252.0%
(2.5)
Net finance costs per
consolidated income statement
50.5
(13.7%)
44.4
Adjusted Trading EBITDA
Adjusted Trading EBITDA represents Trading EBITDA, excluding the
impact of IFRS 9 ‘Financial Instruments’, IFRS 15 ‘Revenue
Recognition’, IFRS 16 ‘Leases’ and IFRS 17 ‘Insurance Contracts’ and
acts as the denominator in the Group’s Leverage Ratio covenant
calculation applicable to the RCF that was in place at 31 January 2025.
Adjusted Trading EBITDA is calculated as follows:
£m
12m to
Jan 2025
Change
12m to
Jan 2024
Trading EBITDA (12 months rolling)
137.1
17.7%
116.5
Impact of accounting standard
changes since 31 January 2017
(11.1)
(>500.0%)
1.0
Adjusted Trading EBITDA
126.0
7.2%
117.5
Gross Written Premiums
Gross Written Premiums represent the total premium that the
Group charges to customers for a core insurance product, excluding
insurance premium tax but before the deduction of any outward
reinsurance premiums, measured with reference to the cover start
date of the policy. This measure is widely used by insurers so provides
a meaningful comparison of performance with our peers. It is analysed
further within the Group Chief Financial Officer’s Review on page 29.
Written Gross Profit After Marketing Expenses
Written Gross Profit After Marketing Expenses is calculated as written
revenue, less cost of sales and marketing expenses. This measure
provides a meaningful view of the contribution of each Insurance Broking
product, before accounting for operating expenses, and is analysed
further within the Group Chief Financial Officer’s Review on page 29.
Underlying Basic Earnings Per Share
Underlying Basic Earnings Per Share represents the basic loss per
share excluding the post-tax effect of:
unrealised fair value losses on derivatives;
discretionary Ocean Cruise customer ticket refunds and
associated costs;
additional Ocean Cruise dry dock costs and customer
compensation relating to Spirit of Adventure;
impairment of the carrying value of other non-financial assets;
impact of changes in the discount rate on non-PPO liabilities
3
;
fair value gains on debt securities;
foreign exchange gains on River Cruise ship leases;
costs and amortisation of fees relating to the loan facility provided
by Roger De Haan;
movements in the insurance onerous contract provisions
(net of reinsurance recoveries)
4
;
profit share payable to AXA on cessation of PMI contract;
costs in relation to the acquisition and disposal of the Big Window;
the IFRS 16 lease accounting adjustment on River Cruise vessels;
and
restructuring costs.
This measure is reconciled to the statutory basic loss per share in
Note 12 to the accounts on page 135.
This measure is linked to the Group’s key performance indicator,
Underlying Profit Before Tax, and represents what management
considers to be the underlying shareholder value generated in
the period.
Saga plc
Annual Report and Accounts 2025
184
Alternative Performance Measures Glossary continued
Available Cash
Available Cash represents cash held by subsidiaries within the Group
that is not subject to regulatory restrictions, net of any overdrafts held
by those subsidiaries. This measure is reconciled to the statutory
measure of cash in Note 25 to the accounts on page 154.
Available Operating Cash Flow
Available Operating Cash Flow is net cash flow from operating
activities after capital expenditure but before tax, interest paid,
restructuring costs and other payments, which is available to be used
by the Group as it chooses and is not subject to regulatory restriction.
Available Operating Cash Flow reconciles to net cash flows from
operating activities as follows:
£m
12m to
Jan 2025
Change
12m to
Jan 2024
Net cash flows from operating
activities (reported)
113.2
35.2%
83.7
Exclude cash impact of:
Trading of restricted divisions
(61.9)
(376.2%)
(13.0)
Restructuring costs and
other payments
27.1
(21.7%)
34.6
Interest paid
41.7
9.2%
38.2
Tax received
(3.6)
(12.5%)
(3.2)
3.3
(94.2%)
56.6
Cash released from restricted
divisions
23.0
(20.7%)
29.0
Capital expenditure funded from
Available Cash
(18.4)
27.8%
(25.5)
Cash collateralised Association
of British Travel Agents bonding
(11.5)
(100.0%)
–
Available Operating Cash Flow
109.6
(23.8%)
143.8
Net Debt
Net Debt is the sum of the carrying values of the Group’s debt facilities
less the amount of Available Cash it holds and is analysed further within
the Group Chief Financial Officer’s Review on page 36.
Leverage Ratio
Leverage Ratio is the ratio of Net Debt to Adjusted Trading EBITDA as
of the last day of a relevant period. It is a key metric used to report the
Group’s capacity to service its debt and acts as the denominator in the
leverage covenant calculation for the Group’s credit facilities.
Financial statements
Governance
Saga plc
Annual Report and Accounts 2025
185
Additional information
Strategic Report
ABTA (Association of British Travel Agents)
the trade association
for tour operators and travel agents in the UK, of which the Group’s
Travel businesses are members
Act
the UK Companies Act 2006, applicable to Saga, as amended
from time to time
Add-on
an ancillary insurance product that is actively marketed and
sold in addition to a core policy
Affinity Partnership
the binding agreement between Saga and
wholly owned UK subsidiaries of Ageas SA/NV, to establish a 20-year
partnership for motor and home insurance
Ageas (wholly owned UK subsidiaries of Ageas SA/NV)
provider
of personal insurance in the UK with whom Saga have agreed a
20-year partnership for motor and home insurance, alongside the
sale of the Insurance Underwriting business, Acromas Insurance
Company Limited
AGM (Annual General Meeting)
to be held at 11.00am on
24 June 2025 at Numis Securities Limited, 45 Gresham Street,
London EC2V 7BF
AICL (Acromas Insurance Company Limited)
the Group’s
discontinued Insurance Underwriting business
Annual Bonus Plan
an incentive provided to Executive Directors,
linked to achievement in delivering goals that are closely aligned with
the Group’s strategy
Annual policies
12-month insurance policies, sold by the Group’s
Insurance Broking business, with no option for the customer to fix the
premium at renewal
APMs (Alternative Performance Measures)
a series of measures
which are not required, or commonly reported, under accounting
standards but are used by the Group to help users better understand
the financial performance and position of the business
ATOL (Air Travel Organisers’ Licencing)
government-run financial
protection scheme operated by the Civil Aviation Authority, the
regulators of the Group’s River Cruise and Holidays businesses
Board
Saga plc Board of Directors
BU (business unit)
term used to refer to an area of the business,
such as Cruise, Holidays, Insurance, Money or Publishing
CAA (Civil Aviation Authority)
one of the bodies that regulates the
Group’s River Cruise and Holidays businesses
CEO (Chief Executive Officer)
Mike Hazell for the 2024/25
financial year
CFO (Chief Financial Officer)
Mark Watkins for the 2024/25
financial year
CGR (Corporate Governance Reforms)
a range of legislative and
business-led measures, designed by the UK Government to improve
corporate governance
CGU (cash generating unit)
smallest identifiable group of assets that
generates cash inflows that are largely independent of the cash inflows
from other assets or groups of assets
CII (Carbon Intensity Indicator)
regulations, applicable to the
Group’s Ocean Cruise business, introduced during 2023/24, enabling
the cruise industry to meet their emission targets
CIIA (Chartered Institute of Internal Auditors)
the professional
body dedicated to raising the profile of the vital work of internal
auditors in the UK and Ireland
Clawback
a requirement, within the Group’s Remuneration Policy,
for Executive Directors to return remuneration or benefits to a
company in special circumstances
Code
the UK Corporate Governance Code 2018 published by the
UK Financial Reporting Council setting out guidance in the form
of principles and provisions to address the principal aspects of
corporate governance
Company
Saga plc
Contract boundary
the measurement of the Group’s insurance
contracts issued, and reinsurance contracts, which reflects all future
cash flows arising from insurance coverage within the boundary of
each contract
COR (combined operating ratio)
the ratio of the claims costs and
expenses incurred to underwrite insurance (numerator), to the
revenue earned by the Group’s discontinued Insurance Underwriting
business (denominator) in a given period. Can otherwise be calculated
as the sum of the loss ratio and expense ratio
CPO (Chief People Officer)
Roisin Mackenzie for the 2024/25
financial year
CustomerKNECT
the Group’s in-house mailing and printing business
DBP (Deferred Bonus Plan)
reward scheme, within the Group’s
Remuneration Policy, used to incentivise colleagues over the longer
term, ensuring alignment with Company goals
DEI&B (diversity, equity, inclusion and belonging)
the agenda under
which the Group is committed to creating an inclusive culture, where
all colleagues can bring their full and authentic selves to work
DPA (Data Protection Act)
a UK law, applicable to the Group, that
regulates the use and protection of personal data
DTRs (Disclosure and Transparency Rules)
rules published by
the UK Financial Conduct Authority relating to the disclosure of
information by a company, such as Saga plc, listed in the UK
Earnings per share
represents underlying shareholder value
generated in a given period
EBITDA (earnings before interest, tax, depreciation and
amortisation)
of acquired intangibles, non-trading costs
and impairments
EBT (Employee Benefit Trust)
a discretionary trust set up by the
Group to hold shares on behalf of its colleagues
ECL (expected credit loss)
probability-weighted estimate of credit
losses over the life of a financial instrument
Economic Crime and Corporate Transparency Act
legislation
designed to improve transparency over UK companies and other legal
entities to strengthen the business environment, support national
security and disrupt economic crime
EEXI (Energy Efficiency Existing Ship Index)
benchmark used to
indicate a ship’s energy efficiency, in which the Group’s Ocean Cruise
ships achieve an ‘A’ rating
EIR (effective interest rate)
the rate that exactly discounts the
Group’s estimated future cash flows to the gross carrying amount
of a financial asset or amortised cost of a financial liability
EQ (Equiniti)
the Group’s share registrar and first point of contact
for shareholding enquiries
Equity-settled transactions
instances where services received
from colleagues are settled in the form of shares, or share options,
in the Group
Escrow Accounting
an arrangement with the Civil Aviation Authority
whereby the Group holds 70% of customer monies received in
advance, in relation to Air Travel Organisers’ Licencing bookings, until
they return from their holiday
ESEF (European Single Electronic Format)
the electronic reporting
format that the Group must use to prepare annual financial reports
ESG (Environmental, Social and Governance)
central factors in
measuring the sustainability and societal impact of the Group
Executive Director
of Saga plc (unless otherwise stated)
Expense ratio
the ratio of expenses incurred to underwrite insurance
(numerator) to the revenue earned by the Group’s discontinued
Insurance Underwriting business (denominator) in a given period
Experienced Voices
a panel of our customers who participate
in research for the Group
FAME (fatty acid methyl ester)
a biofuel which has recently been
trialled on board our Ocean Cruise ships
FCA (Financial Conduct Authority)
the independent UK body that
regulates the financial services industry, including the Group’s
Insurance Broking and Money businesses
FRC (Financial Reporting Council)
independent regulator in the
UK and Ireland responsible for regulating auditors, accountants
and actuaries
Glossary
Saga plc
Annual Report and Accounts 2025
186
Free Shares
the gift of shares to colleagues to recognise their
contributions towards the Group’s performance
FRS (Financial Reporting Standard)
accounting standards issued
by the International Financial Reporting Standards Foundation
FSC (Financial Services Commission)
regulator for the non-bank
financial services sector and global business
FTSE Women Leaders Review
an independent business-led
framework, supported by the Government, that sets
recommendations to improve the representation of women on the
Boards and Leadership teams of the UK’s largest companies
FuelEU Maritime
regulation that came into force in January 2025,
applying to our Cruise business, encouraging the adoption of low
or zero carbon fuels
Fulfilment cash flows
in relation to the measurement of liabilities for
incurred claims under International Financial Reporting Standard 17
‘Insurance Contracts’, the sum of the expected future discounted cash
flows; and a risk adjustment margin above the expected future cash
flows that represents the compensation required for bearing
non-financial uncertainty
FVOCI (fair value through other comprehensive income)
one of
three classification categories for the Group’s financial assets under
International Financial Reporting Standard 9 ‘Financial Instruments’
FVTPL (fair value through profit and loss)
one of three classification
categories for the Group’s financial assets under International
Financial Reporting Standard 9 ‘Financial Instruments’
GAAP (Generally Accepted Accounting Principles)
a common set
of accounting principles, standards and procedures issued by the
Financial Accounting Standards Board
GDPR (General Data Protection Regulation)
data protection
regulation introduced in 2018 that applies to most UK businesses,
including the Group
GHG (greenhouse gas)
a type of gas for which Saga provides annual
reporting on its emissions
Gibraltar Financial Services Commission
independent Gibraltar
body that regulates the Group’s discontinued Insurance Underwriting
business
GIPP (General Insurance Pricing Practices)
a review into pricing
practices within the UK insurance market conducted by the Financial
Conduct Authority
Going concern
an accounting term for a business that is assumed
to be able to meet its financial obligations when they fall due
Gross premium
the premium that the Group charges to a customer
in respect of insurance cover
Group
the Saga plc group
Host insurance contract
the total cash flows arising from all
insurance contracts of the Group, considered as a whole
IAA (Internal Audit and Assurance)
the Group’s Internal Audit and
Assurance function
IAS (International Accounting Standards)
accounting standards
issued by the International Accounting Standards Committee
IBNR (incurred but not reported)
a claims reserve provided to meet
the estimated cost of claims that have occurred, but have not yet been
reported to the insurer
IEA (International Energy Agency)
global organisation which
provides policy recommendations, analysis and data on the
energy sector
IFRS (International Financial Reporting Standards)
accounting
standards issued by the International Accounting Standards Board
IMO (International Maritime Organization)
a specialised agency
of the United Nations responsible for regulating shipping
Insurance acquisition cash flows
acquisition costs arising from the
selling or renewing of insurance policies underwritten by the Group
Insurance service result
insurance revenue less insurance
service expenses
Interest cover
the ratio applicable to the Group’s Revolving Credit
Facility in place at 31 January 2025, calculated by dividing Adjusted
Trading EBITDA (numerator as described in the Alternative
Performance Measures Glossary) by net cash interest (denominator)
IPCC (Intergovernmental Panel on Climate Change)
the United
Nations body for assessing the science related to climate change
IPO (Initial Public Offering)
the first sale of shares by a previously
unlisted company to investors on a securities exchange
IPT (insurance premium tax)
tax payable on general insurance
premiums in the UK
IR (Investor Relations)
the team responsible for facilitating
communication between the Group and its investors
JFSC (Jersey Financial Services Commission)
the regulatory body
for financial services in Jersey, Channel Islands, which regulates our
Insurance Broking and discontinued Insurance Underwriting
businesses
KPI (key performance indicator)
quantifiable measures that the
Group uses to evaluate performance
KPMG (KPMG LLP)
the Group’s external auditor
Load factor
the booked proportion of the total capacity across the
Group’s ships, calculated by dividing the number of berths booked
by the total berths available
Loss ratio
the ratio of the claims costs (numerator) to the net earned
premium (denominator) in a given period
LSE (London Stock Exchange)
the stock exchange upon which
Saga plc is listed
LTIP (Long-term Incentive Plan)
legacy reward scheme used to
incentivise colleagues over the longer term, ensuring alignment
with Company goals
Malus
an arrangement that permits the forfeiture of unvested
remuneration awards in circumstances the Company
considers appropriate
Management Report
the Directors’ Report, together with the
Strategic Report within this document
Master Trust
the Group’s defined contribution pension scheme,
operated by Aviva
MMQ (middle market quotation)
the average of the best buying
and selling prices quoted by market makers, taken at the close of the
market each day
Net premium
the component of gross premium that is charged by the
Group’s discontinued Insurance Underwriter for each insurance claim
New business
new insurance policies, sold by the Group, to customers
that do not have an existing policy
Notice
formal communication sent to shareholders to inform them
about the upcoming Annual General Meeting
OCI (other comprehensive income)
revenues, expenses, gains and
losses under International Financial Reporting Standards that are
excluded from the income statement
Operating Board
the first layer of the Group’s management below
Board level
PAA (premium allocation approach)
a simplified method for
measuring the Group’s insurance revenue and expenses over time
Parker Review
an independent framework of business professionals
who each bring, on a voluntary basis, a wide range of gender and
ethnically diverse perspectives
People Champion
Julie Hopes for the 2024/25 financial year
People Committee
a monthly forum, chaired by the Chief People
Officer and attended by Lead Colleague Ambassadors from across
the Group, allowing colleagues to share their thoughts and views
Per diem
the total amount of Cruise revenue earned per passenger
per day
PMI (private medical insurance)
one of the products offered within
the Group’s Insurance Broking business
Financial statements
Governance
Saga plc
Annual Report and Accounts 2025
187
Additional information
Strategic Report
Policies in force
the number of core insurance policies in force at any
given time
PPO (periodical payment order)
a court order prescribing
settlement of an insurance claim through regular payments
PRUs (principal risks and uncertainties)
the most significant risks
threatening the Group
PwC
PricewaterhouseCoopers, the Group’s remuneration advisers
RCF (Revolving Credit Facility)
the facility that the Group has in place
with its lenders, allowing drawdown of funds up to £50.0m
Real Living Wage
a pay rate that is independently calculated, based on
the cost of living and is typically higher than the national minimum wage
Reinsurance
contractual arrangements where an insurer transfers
part, or all, of the insurance risk written to another insurer, in exchange
for a share of the customer premium
Relationship Agreement
the agreement that regulates the
relationship between the Group and Roger De Haan
Risk adjustment
one of the components for measuring the liability for
incurred claims under International Financial Reporting Standard 17
‘Insurance Contracts’, being an explicit margin above the expected
future cash flows that represents the compensation required for
bearing non-financial uncertainty
ROCE (return on capital employed)
a financial ratio used as a
performance condition under the Group’s legacy long-term
incentive plan
RSP (Restricted Share Plan)
share scheme, and corresponding
share awards used to incentivise colleagues over the longer term,
ensuring alignment with company goals
Saga Cruise
ST&H Limited, Saga Cruises Limited, Saga Cruises V
Limited, Saga Cruises VI Limited and Saga Crewing Services Limited
Saga Holidays
Saga Travel Group (UK) Limited, Saga Travel Group
Limited and Titan Transport Limited
Saga Insurance
Saga Services Limited, Acromas Insurance
Company Limited, CHMC Holdings Limited, CHMC Limited and
PEC Services Limited
Saga Money
Saga Personal Finance Limited
Saga Publishing
Saga Publishing Limited
Saga Travel
the Group’s Cruise and Holidays businesses
SBTi (Science Based Targets initiative)
a global platform that helps
companies set and validate science-based greenhouse gas emissions
reduction targets
Scope 3 emissions
greenhouse gas emissions present in the value
chain, which are not directly controlled by the Group
SECR (Streamlined Energy and Carbon Reporting)
a sustainability
reporting framework, which is mandatory for large organisations in
the United Kingdom
Senior Managers and Certification Regime
a financial services
regulation in the UK, designed to impose personal accountability on
senior managers in finance and insurance
Shareholder information
annual reports, notices of shareholder
meetings and other documentation that Saga is required to send
to shareholders
Shareholder Reference
a unique reference number issued to
shareholders of Saga plc
Shareview Portfolio
an online portal, accessed via
www.sagashareholder.co.uk that allows shareholders to manage
all aspects of their shareholding in Saga plc
SID (Senior Independent Director)
Peter Bazalgette for the
2024/25 financial year
SIP (Share Incentive Plan)
a plan available to all colleagues,
allowing them to purchase shares in Saga plc through a monthly
payroll deduction
SLT (Senior Leadership Team)
the second layer of the Group’s
management below Board level
SMC (Small and medium cap)
an index containing the Financial
Times Stock Exchange largest 250 companies and those of small
market capitalisation
Solvency capital/Solvency II
insurance regulations designed to
harmonise European Union insurance regulation, primarily concerning
the amount of capital that European insurance companies must hold
under a measure of capital and risk
SONIA (Sterling Overnight Index Average)
a replacement for the
London inter-bank offered rate, introduced in the UK in 2021
SPA (Share Purchase Agreement)
a binding agreement for Ageas
(UK) Limited to purchase the shares of the Group’s discontinued
Insurance Underwriting business, Acromas Insurance Company
Limited
Speak Up Champion
Gareth Hoskin for the 2024/25 financial year
SPF (Saga Personal Finance Limited)
the Group’s personal finance
business, known as Saga Money
SSL (Saga Services Limited)
the Group’s Insurance Broking business
SSP (Shared Socioeconomic Pathway)
climate changes scenarios
of projected socioeconomic global changes up to 2100, as defined in
the Intergovernmental Panel on Climate Change’s Sixth Assessment
Report on climate change in 2021
STP (Saga Transformation Plan)
a long-term incentive, as part of the
Group’s Remuneration Policy, for participants to receive a portion of
the value created above a stretching hurdle over a five-year period
STP Pool
the maximum number of share awards which may vest
under the Saga Transformation Plan, being 12.5% of the value created
above £6.00 of shareholder value
Street pricing adjustment
any adjustment to the net premium of an
insurance policy that is applied during the broking service
Subsidiaries
entities controlled by the Group, which form Saga
Cruise, Saga Holidays, Saga Insurance, Saga Money, Saga Publishing
and CustomerKNECT
Swaps
fixed price contracts used by the Group to manage its
exposure to fuel prices
TCFD (Task Force on Climate-related Financial Disclosures)
part of the regulatory framework introduced by the Financial Stability
Board to improve, and increase, reporting on climate-related
financial information
tCO
2
e
tonnes of carbon dioxide equivalent
the Big Window
the Big Window Consulting Limited, a specialist
research and insight business focussed on the ageing process,
which was sold on 31 December 2023
Three-year fixed-price product
an insurance product, provided by
the Group, with the option for the customer to fix the premium for
three years
tNPS (transactional net promoter score)
represents the
willingness of customers to recommend the Group’s products and
services to others following a recent transaction
Trust Accounting
a historical arrangement with the Civil Aviation
Authority, whereby 100% of customer monies received in advance,
in relation to Air Travel Organisers’ Licencing bookings, were held in
trust until after they returned from their holiday
Trust Fund
property held, including inter-alia money and ordinary
shares in the Company, in trust in favour of, or for the benefit of,
colleagues of the Group
TSR (total shareholder return)
the theoretical growth in value of a
shareholding over a period, by reference to the beginning and ending
share price, assuming that dividends, including special dividends,
are reinvested to purchase additional units of the equity
UMAS
a university-based commercial energy and environmental
advisory service to the shipping sector
UK
United Kingdom
Saga plc
Annual Report and Accounts 2025
188
Glossary continued
UKLR (UK Listing Rules)
a set of mandatory regulations of the
UK Financial Conduct Authority applicable to a company listed
on the London Stock Exchange
VaR (Value at Risk)
a probability-based estimate of the risk of loss
in relation to the Group’s portfolio of insurance contracts
Workplace
the Group’s internal communications platform that keeps
colleagues informed and connected via a single, mobile-first channel
Written to earned adjustment
the Insurance Broking accounting
adjustment, required under International Financial Reporting
Standard 15 ‘Revenue from Contracts with Customers’, that spreads
revenue and, historically, associated costs, which are underwritten
by the Group over the life of the insurance policy
Financial statements
Governance
Saga plc
Annual Report and Accounts 2025
189
Additional information
Strategic Report
Financial calendar
2025 Annual General Meeting – 24 June 2025
Shareholder information online
The Company will publish annual reports, notices of shareholder
meetings and other documents, which we are required to send to
shareholders (
shareholder information
), on our website. Consenting
shareholders will be notified either by post or email, if preferred, each
time the Company publishes shareholder information. This allows us
to increase the speed of communication, reduce our impact on the
environment and keep costs to a minimum.
You can change your communication preference via your
Shareview Portfolio which can be accessed on our website
(www.sagashareholder.co.uk) or by contacting Equiniti (
EQ
).
To register, you will require your Shareholder Reference which
can be found on most communications from EQ.
Shareview Portfolio is free, secure, easy to use and allows you to
elect to receive certain shareholder communications electronically,
update your UK bank account details, send your general meeting
voting instructions in advance of meetings, keep your contact details
up to date, and buy and sell shares easily.
Shareholder fraud
Shareholders are advised to be wary of any unsolicited advice or
offers, whether over the telephone, through the post or by email.
If any such unsolicited communication is received, please check that
the company or person contacting you is properly authorised by the
Financial Conduct Authority (
FCA
) before engaging. Fraudsters use
persuasive and high-pressure tactics to lure investors into scams.
They may offer to sell shares that turn out to be worthless or
non-existent, or to buy shares at an inflated price in return for an
upfront payment. While high profits are promised, if you buy or sell
shares in this way, you may lose your money. For more information,
or if you are approached by fraudsters, please visit the FCA website
(www.fca.org.uk/consumers/scams), where you can report and
find out more about investment scams. You can also call the
FCA Consumer Helpline on 0800 111 6768. If you have already
paid money to share fraudsters, you should contact Action Fraud
on 0300 123 2040.
Advisers
Corporate brokers
Deutsche Numis
45 Gresham Street
London EC2V 7BF
Media relations advisers
Headland Consultancy
3rd Floor
One New Change
London EC4M 9AF
Independent auditors
KPMG LLP
15 Canada Square
Canary Wharf
London E14 5GL
Legal advisers
Herbert Smith Freehills LLP
Exchange House
Primrose Street
London EC2A 2EG
Registrars
Equiniti Group
For shareholder enquiries, please contact:
Equiniti Group
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Shareholder helpline: +44 (0) 371 384 2640
Calls to freephone numbers will vary by provider. Calls from outside
the UK will be charged at the applicable international rate. Lines are
open 8.30am to 5.30pm, Monday to Friday, excluding public holidays
in England and Wales.
customer@equiniti.com
Information for shareholders
Information for investors is provided online via the Group’s corporate
website (www.corporate.saga.co.uk/investors).
Registered office
Saga plc
3 Pancras Square
London N1C 4AG
Registered in England and Wales. Company Number: 08804263
Corporate websites
Information made available on the Group’s websites does not, and
is not intended to, form part of this Annual Report and Accounts.
Shareholder information
Saga plc
Annual Report and Accounts 2025
190
This publication is produced by a
CarbonNeutral® company and the paper
is Carbon Balanced with World Land Trust.
Balancing is delivered by World Land Trust,
an international conservation charity,
who offset carbon emissions through the
purchase and preservation of high
conservation value land.
Through protecting standing forests,
under threat of clearance, carbon is
locked in that would otherwise be released.
These protected forests are then able to
continue absorbing carbon from the
atmosphere, referred to as REDD
(Reduced Emissions from Deforestation
and forest Degradation). This is now
recognised as one of the most cost-effective
and swiftest ways to arrest the rise in
atmospheric CO
2
and global warming
effects. Additional to the carbon benefits
is the flora and fauna this land preserves,
including a number of species identified
at risk of extinction on the IUCN Red List
of Threatened Species.
CBP00019082504183028
Designed and produced by
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This report has been printed on
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The mill and printer are both
certified to ISO 14001 environmental
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by a CarbonNeutral® printer.
Forward-looking statements
This Annual Report and Accounts contains certain forward-looking
statements with respect to Saga’s expectations, including strategy,
management objectives, future developments and financial position
and performance. These statements are subject to assumptions,
risks and uncertainties, many of which relate to factors that are
beyond Saga’s ability to control and which could cause actual results
and performance to differ materially from those expressed or
implied by these forward-looking statements. Any forward-looking
statements made are based upon the knowledge and information
available to Directors on the date of this Annual Report and Accounts
and are subject to change without notice. Shareholders are cautioned
not to place undue reliance on the forward-looking statements.
Nothing in this Annual Report and Accounts should be construed
as a profit estimate or forecast.
SAGA PLC
3 Pancras Square
London
N1C 4AG