Saga chairman Sir Roger De Haan says the firm’s former private equity owners “made some bad decisions” by loading the company with debt but is confident in the current leadership’s ability to take it forward post-Covid.
Sir Roger has rejoined the company as chairman after pumping £100 million into the firm, taking 20% of shares.
“I hope it’s clear from the investment that I’ll be making in the business how confident I am for its future,” he said. “Saga is a very special business with a unique, loyal and growing customer base.”
During a financial results call on Thursday, where Saga reported a half year pre-tax loss of £55.5 million, Sir Roger added: “The business I sold was very successful in 11 years building up to the date of sale, and achieved 27% average growth in profits each year. For a few years it continued to do well but then it went wrong. The owners clearly made some bad decisions.”
Saga was owned by private equity investors Charterhouse, CVC and Permira before it went public in 2014.
Sir Roger, who was the 11th employee at Saga as a 17-year-old, said the company had “lost its way and lost its confidence” after his sale 15 years ago.
He said the private equity investors had left Saga with an “over- leveraged balance sheet” but said he was “convinced” the current leadership team had Saga “in a good place”.
“The future should be good for Saga,” he said, noting it had been “underpinned by its strong insurance business” despite holidays being “held back by the Covid pandemic”.
“When people begin to travel again, Saga will be in a good place,” Sir Roger said. “It will be in particular demand as older people start to travel.
Chief executive Euan Sutherland said private equity ownership had left Saga in a “weaker position” with high debts and noted that it had “lost sight of the core Saga DNA”.
He said Saga had shown “progress” in recent cost-reductions and the disposal of non-core businesses, including tour operation Destinology, by taking “decisive action” amid Covid-19 to minimise costs – and noted that customer feedback scores have increased during the pandemic.
“We are returning Saga to its heritage, to its DNA, of people over 50-years-old in a modern data-driven way relevant to 2020 and beyond,” he said, noting plans for investment in “data and digital”.
Sutherland said Sir Roger’s return as chairman brought “a wealth of experience and an understanding of our customers”.
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