Saga plc ($SAGA)

Morning, everyone, and welcome to Saga's results for the year ended January -- 31st of January 2026. My name is Mike Hazell, and I'm the group CEO, and I'm joined today by Mark Watkins, our Group CFO. I'll start with a quick overview of the year, highlighting the huge progress that we've made strategically and the strong performance that we've delivered across all of our businesses. Mark will then talk you through our financial results in more detail. And finally, I'll provide an update on our strategy and the significant progress that we're making, before opening to questions. This has been a transformational year for Saga, underpinned by strong full year results and a performance that was ahead of expectations. We completed our refinancing in February last year, putting in place a new 2031 corporate debt facility. This has materially enhanced the group's liquidity position, significantly increased covenant headroom and provided funding certainty as we execute our growth plans. We restructured our Insurance business through the sale of AICL, our in-house underwriter and the launch of our Ageas partnership. We now have a less complex Insurance business, where we no longer take any underwriting risk and benefit from a more predictable income stream. Travel has now become our largest and fastest-growing driver of profits. To better support this growth, we consolidated our previously separate travel leadership teams into one customer-centric operation. As we simplify our approach to business, we are better able to place our full attention and focus on customer with brand at the heart of our decision-making. Importantly, though, we've not allowed these changes to get in the way of our continued focus on trading and performance. We've grown each of our core businesses with revenues and profits up across the group and continue to focus -- sorry, and reduced net debt significantly. The progress we've made this year is clear evidence that our plans are working. As we continue to deliver on these plans, we now have even greater confidence with regard to the GBP 100 million profit target that we laid out in April last year. This slide shows more detail on the strong performance that we've delivered right across the group. As you can see, each of our core businesses have had a very successful year, delivering significant growth in revenue and profit. At the same time, we've been working to support future growth and further strengthening our brand. With the launch of new innovative products, such as our new savings partnership with NatWest and our brilliant new podcast experience is everything. This is very much, therefore, a group-wide indeed, brand-wide turnaround. Now I'll hand to Mark to go through our financial results in more detail.

Thanks, Mike. Good morning, everyone. It's a pleasure to be here today to present such a strong set of numbers. I'll spend the next few minutes covering the details of the financial results before covering the outlook for the year 2026, '27. Saga has exceeded our guidance, delivering a strong financial performance, driven by the trading of our Travel businesses and Insurance Broking. Underlying revenue, which excludes some accounting adjustments and one-off items, increased 11% on the prior period. Underlying PBT from continuing operations of GBP 44.2 million is ahead of our expectations and 19% ahead of the prior year. This was largely driven by the continued growth in our Travel businesses and an improved performance in Insurance Broking, offset by higher finance costs associated with the successful refinancing at the beginning of last year. The Group continued to be highly cash generative with available operating cash flow of GBP 205.9 million in the period, an 88% increase, supported by stronger cash generation in Ocean Cruise and the GBP 60 million receipt from Ageas following the launch of the Insurance partnership. A strategic priority for The Group is to reduce net debt, and this accelerated this year. At the 31st of January, net debt was GBP 499.5 million, GBP 93.3 million lower than the prior period. The lower net debt and 16% growth in trading EBITDA drove a significant reduction in leverage, with our ratio now at 3.7x compared with 4.4x at the same point in the prior year. We are now focused on the headline underlying profit contributions from each of our business units. Our Travel businesses continue to generate strong customer demand. delivering GBP 87.2 million of underlying PBT, a 37% increase on the year before. Our Insurance Broking business also performed well. Performance was ahead of our expectations. The growth in profits was also achieved alongside growth in policy volumes with 3 of our 4 key products in growth, with motor traveling PMI, all returning to growth after a number of years of decline. Other Businesses and Central Costs marginally increased. This was due to investment income being slightly lower the group is carrying less cash than the prior year. The result of all of this is that underlying profit before tax increased to GBP 44.2 million, 19% higher than the prior year and ahead of our guidance. Insurance underwriting is now classified as discontinued, but the strong performance in the first half supported our ability to pay a GBP 10 million pre-completion dividend, and we received an additional GBP 11.4 million of proceeds on completion in July. I'll now spend some time covering each of our core businesses in a bit more detail, and I'll start with Ocean. Our Ocean Cruise business had an exceptional year, growing underlying PBT by 38% and continuing to show extremely strong forward bookings. Revenue grew 12%, supported by increased load factors and per diems. The load factor in the year was 93%, which compares with 91% in the prior year, and the per diem was GBP 394, 10% higher than the prior year. Underlying PBT of GBP 67.3 million was 38% higher than the prior period, driven by the strong trading performance and cost discipline. The lower finance costs reflect the continued repayment of Cruise facilities, which reduced by GBP 54.2 million in the year. Looking ahead to '26, '27, the forward bookings are strong, with booked load factors of 79% in line with last year and with a per diem of GBP 447, 13% ahead of the same time last year. Now turning to River Cruise. Revenue grew 8%, supported by strong load factors and per diems. The load factor in the year was 89%, flat against the last year despite marginally higher capacity in the period, due to the launch of the Spirit of the Moselle in July, our third Spirit-class River ship. The per diem was GBP 350, 7% higher than the year before. This supported growth in underlying PBT of 48% from GBP 4 million in the prior year to GBP 5.9 million. Bookings for '26, '27 are strong and currently reflects a load factor of 73% and per diems of [ GBP 372 ], currently 5 percentage points and 3% ahead of the same time last year. Turning now to our Holidays business. Revenue grew 10% against the prior year, supported by an 11% increase in the number of passengers that traveled with us. Marketing costs increased by 17% to GBP 12.7 million. This was to drive the expected increase in passengers this year and into next. Underlying profitability was also strong, strongly ahead at GBP 14 million, against GBP 10.7 million in the prior period. And you'll see from this slide, '26, '27 revenue growth is set to continue with current full year booked revenue 4% ahead of the prior year, with passengers marginally ahead. This is despite marketing for the current season starting later than the prior year. Insurance Broking showed an improved performance, generating underlying PBT of GBP 16.9 million. This performance supports an increased investment in policy growth heads of the Ageas partnership launch with 3 of our 4 main product lines after many years of decline, returning to growth. Motor grew by 73,000 policies and PMI in Travel grew by 41,000. The graph on the right-hand side shows the material drivers of the movements in underlying PBT, the motor contribution before overheads decreased by GBP 4.6 million, driven by the investment in price and marketing to support the higher volumes. The home contribution increased year-on-year by GBP 2.2 million, driven by higher renewal margins. Private Medical Insurance performed well with commissions and profit share, leading to an increase of GBP 4.7 million. And finally, our Travel Insurance contribution decreased by GBP 0.9 million due to investment in marketing to grow volumes in the period. Net debt reduction is a clear strategic priority for Saga, and I'm pleased with the progress we've made this year. During the year, net debt reduced by GBP 93.3 million to GBP 499.5 million. This excludes the GBP 60 million upfront affinity partnership proceeds with a leverage ratio of 3.7x, also below the year-end level of 4.4x. Available operating cash flow for the full year was GBP 205.9 million, 88% higher than last year, supported by the stronger cash generation of Ocean and the GBP 60 million receipt from Ageas. Debt service costs have increased due to the HBS refinancing, which was drawn in February last year, and restructuring costs have increased due to the AICL disposal with associated cash proceeds of GBP 68.8 million. I'll now cover the outlook of '26-'27. We've made significant financial progress this year. We've exceeded our expectations in terms of profitability. Net debt reduced significantly and as a group, deleveraging has accelerated. This is all underpinned by the long-term funding we secured last year. This is due in 2031 and also includes access to an additional GBP 150 million of undrawn committed facilities. So as I look ahead into '26-'27, our confidence is high. Our customers are resilient, and we are already seeing a great forward bookings for '26-'27 in our Travel businesses. Our exposure to the Middle East is minimal as we typically offer very few itineraries to the region, and our fuel and foreign exchange rates are hedged well into 2027. And importantly, we have a lower risk insurance model following the Ageas deal. This gives us significant confidence in our '26-'27 outlook. We expect Ocean Cruise to continue its momentum with further underlying PBT growth expected -- supported by strong load factors and per diems with no dry docks planned in the year. River Cruise load factors and per diems are expected to continue to grow alongside increased passenger numbers in Holidays. In Insurance Broking, we expect '26-'27 profitability to be at least in line with '25-'26 and above our previous guidance as we continue to embed the Ageas partnership throughout the year. Finance costs will be marginally lower than '25-'26, reflecting the lower Ocean Cruise ship debt and lower group finance costs. The effective blended pro forma rate is expected to be 7.6%. What this all means for the group is that we expect underlying profitability to take a further step forward in '26-'27 and importantly, our net debt and leverage ratio to continue to decline. And with that, I'll hand back to Mike for an update on our strategic process.

Thanks, Mark. So a very strong financial performance and confidence in our outlook that will underpin our future growth. Let me now talk to you about the strategic progress that we've made and what you can expect going forward. As I've said, this was a transformational year for Saga and serves as the launch pad for long-term sustainable growth. We've simplified our approach to business, brought focus and strategic clarity into our decision-making and reintroduced a performance culture that is driving results. The sale of AICL and the launch of our Home and Motor partnership with Ageas, means that we no longer take underwriting risk and have materially reduced the complexity of our Insurance operations. Once fully transitioned next year, the headcount for our remaining Insurance operations will have reduced from around 2,000 people to fewer than 400, with the majority of colleagues affected by the Ageas transaction transferred across to their business. Meanwhile, revenues and profits are growing, as we spend more of our time on customer experience and marketing, leveraging our unique experience in these areas. Travel is now the largest driver of profits in the group and we've consolidated our 3 businesses: Ocean Cruise, River Cruise and Holidays into a single operation, allowing us to create a more efficient, consistent focused customer-centric approach across all of our Travel products. With this simplification comes greater strategic clarity, focusing on and leveraging our core strengths. At the heart of everything we do at Saga is our customer and our brand. By simplifying our approach and leveraging partners to deal with operational complexity, we are able to adopt a more focused customer-led mindset. Saga's brand and long-standing customer principles are now the driver of decision-making across the group. As you can see -- and you can see the results in our performance. We've had a strong -- we have a strong streamlined management team, some of whom are in the room today and have combined a passion for our customer with a reset of performance that is driving success across the group. Nobody understands older people better than us, which isn't surprising because we've been doing this for a long time. This year marks the 75th anniversary of the founding of Saga and we'll be celebrating the enduring strength of our business and our brand. Over our 75 years of business, we've built up a huge amount of information and experience that we use to ensure we deliver for our customers in ways that others simply can't. Our approach is built on recognizing that our customers have different needs and expectations and constantly working to better understand those needs and meet those expectations. Through a simple set of principles shown here at the bottom of the page, we seek to protect and leverage the unique competitive advantage we have, and in doing so, deliver products and services for our customers that keep them coming back. So we're in a great position to win in a highly attractive market with an affluent thriving and growing demographic. As Mark has already touched on, in a volatile world, they are a resilient customer group with wealth and income generally well sheltered from changing market conditions. As you can see from the left-hand side of this page, people over 50 already make up 38% of the U.K. population. And over the next 30 years, that will increase to almost 50%. It's a customer group that is typically more affluent and with improvements in medicine and health care, they are living longer and increasingly feel younger and more active than previous generations. I'll go on to show you a breakdown of the different stages of later life because we recognize that there are different stages and different needs at those different stages. But in general, our customers are looking to make the most of their later years while they have health and wealth to enjoy themselves. It's no surprise, therefore, that travel is at the top of the list of things that they wish to spend their time enjoying. 81% tell us that travel is to think that makes their life most fulfilling. Not just any travel, though, and you'll see later how we understand and cater for their range of travel needs through a variety of products designed with them in mind. But they also have needs beyond purely travel and those needs much like in travel are typically not well understood or served. Saga has built its business on identifying those needs and meeting them better than anyone else. All of the products we offer derived from this. And indeed, there are plenty of opportunities to help older people in ways that we don't today. At the heart of what we do is trust. Our customers trust that Saga understands them and we'll meet their needs in ways that others don't. And it is by getting that right that we've become the leading brand in this market. As I said, there are different stages older people go through as they approach and then enter retirement. These stages are not uniform or linear and are often shaped by events like changes in health, retirement or family circumstances. Our products are designed to meet different needs across these stages. Insurance and personal finance products are typically very relevant to customers in their 50s, seeking security from a brand they trust, while planning their later life finances. Some of our more active tools and long-haul holidays might also start to appeal with a little more support and comfort than available elsewhere. As customers age, other parts of our proposition become more relevant. Our equity release product, for example, allows customers with more time on their hands to free up funds to start traveling more or make changes to the home that they likely now spend more time in. At the other end of the spectrum, our Ocean Cruise customers tend to be in their 70s and ready for a slower pace, more luxurious experience without the hassle of airports and baggage to deal with and the convenience of our door-to-ship chauffeur service. These are just examples. But the point is, one size doesn't fit all, and we are the trusted brand for customers through all of these stages. So we're operating in a great market with a customer group that we understand better than anyone else. But success comes from how we use this position to do things differently. This is a busy slide, and I'm not going to talk to every aspect. But what you should take away from it is how every product we offer is designed with our customer in mind. Our Ocean Cruise ships and our whole cruising approach has been developed for our demographic. For example, they have more single cabins to cater for solo travelers, more crew to ensure high levels of service and our all-inclusive pricing keeps things simple. Travel Insurance is a barrier to a lot of older people's holiday plans and so is included for all Saga Travel products. And it's not just in travel. In a world where Insurance products can feel generic, our products have specific features that are uniquely designed for our customers. For example, great coverage for preexisting medical conditions in our private medical cover, or extended empty house home insurance cover for customers who like to take longer holidays. We don't just understand that our customers are different. We are different and our products are different because of that. I've deliberately spent some time on the long-term enduring principles that have served Saga very well for 75 years and they will continue to serve us well as we move forward. We use these principles to guide and drive our decision-making and underpin our shorter- to medium-term priorities. You'll be familiar with these priorities on the page. They're consistent with the plans that we laid out last year. And we will continue to deliver on them in the same way as we have done so successfully this year. So let me talk you through some of the detail on the great progress that we're making on all of them. Ocean Cruise remains at the heart of Saga's travel offer with its enduring popularity only getting stronger. We are extremely pleased with the performance we've seen across this year and confident in the performance in the year ahead. Our ships, the Spirit of Discovery and Spirit of Adventure launched in 2019 and 2021, respectively, providing a luxury experience that is truly unique and differentiated at every stage. And the results speak for themselves. Customer satisfaction is at an all-time high, with a TNPS of 83 and repeat rates of 64% show that our customers are quick to book again. Load factor is now into the 90%. This, combined with changes to itineraries and more higher quality on- and off-board inclusions has allowed us to continue to drive per diems. Building on a very successful '25-'26, we've had a strong start to '26-'27, with load factors of 79% and per diems of 13% ahead of last year. The chart on the right shows the growth that we've achieved over recent years, and we expect this growth to continue over the coming years without the need for material incremental capital investment. With ship lives of 30 to 40 years, you can see the opportunity for capital-efficient growth ahead of us. Our River Cruises offer the perfect holiday for customers who want to wake up each morning in an exciting new destination, ready to enjoy the excursions that we lay on. All the well surrounded by the boutique luxury they can expect from the Saga Cruise brand, a bit more fast pace than ocean cruising, but more relaxed than a touring holiday avoiding lengthy drives and multiple changes in hotels. We combined the River Cruise and Ocean Cruise leadership team several years ago to ensure a more consistent customer experience and to better drive cross-selling. Customer satisfaction has been increasing ever since and has again stepped up this year. Load factors continue to grow, and this demand together with ever-improving proposition, is driving sustained per diem growth. And you can see from the chart on the right, how that is translating into strong and consistent profit growth, with a 48% increase this year. I'm extremely pleased with the progress that we're making in our Holidays business. It's a flexible, capital-light business model that plays to our strengths. Our Touring Holidays offer a relatively energetic holiday for typically younger more active customers, not quite ready for the more relaxed cruising options that we offer. Alternatively, we offer a range of carefully selected hotels complete with Saga host available to help our customers get the most out of their holidays. Whatever their choice, customers can expect a holiday designed for them. With more time available, the pace of our tours can be more relaxed and longer hotel stays allow for our customers to more deeply experience the culture and cuisine of their chosen holiday destination. Our ever-expanding range of special interest holidays are designed to indulge our customers' hobbies and passions in ways that more standard holiday businesses don't cater for. Think food and wine, bird watching even archeology and history. And this year, we're trialing a series of U.K. holidays for customers that might wish to avoid the stress of airports or indeed supplement their overseas holiday with a shorter U.K. holiday in one of our many historical cities. Whatever the choice, customers feel the difference of a saga holiday when they choose to travel with us. And you can again see the benefits of this in our results. Customer satisfaction, always a bit lower for holidays involving third-party hotels and airports has improved from 45 to 54 this year. And passenger numbers are up 11% and profits have grown 31%. As we continue to build out our proposition properly reinforcing the things that make us different you can expect growth to continue. As you can see, bookings and revenues are already ahead on the same point last year. As you are aware, we've reset our approach to Insurance. We completed the sale of our Underwriting business in July and began the rollout of our Ageas partnership in December, starting with Motor new business. Home new business follows this month with all Renewal business switching later this year. By which point, our Home and Motor Insurance business will be a simple, more stable and predictable commission-based income stream. By simplifying our operations and removing underwriting risk and applying our focus more prominently towards sales, marketing and customer engagement, we have already begun to reset the performance of this business. This year, we've seen improved customer satisfaction, growth in policy numbers for the first time in 4 years and a turnaround in profitability, up 17% on last year. This gives us a solid platform from which to continue growing in '26-'27 as we complete the transition to Ageas to fully benefit from the powerful partnership between our 2 businesses. As a data and insight-driven business with a strategy built on our understanding of older people, our publishing business serves as a unique asset, one that we've been expanding and modernizing over the past couple of years. Our print magazine, combined with our hugely popular series of informative newsletters and the engaging multimedia content now available through our website is a powerful customer engagement engine. It is also a huge source of data and insight. This year, we generated almost 15 million visits to our magazine website, with monthly visits rising by around 50% compared to last year. And we issued around 10 million newsletters a month, achieving market-leading opening rates of almost 50%. A significant proportion of the traffic we are driving to our website, our customers new to Saga. So this is all evidence of the depth of customer engagement our Publishing business can drive. A great example of how we use our publishing skills to build brand, build brand affinity and reach new customers is our fantastic new fortnightly podcast, Experience is Everything. Having launched in December with the Paul Merton interview, we're extremely pleased with the early success that we've seen. Viewer figures across all platforms have now exceeded 8 million viewers, with new followers finding us all the time. During each podcast, we drive awareness of the products and services we offer with exclusive Saga adverts. Finally, before I wrap up with some key takeaways. I wanted to pause on the medium-term targets that we set out last year and our performance against them. You will remember the chart on the left, showing our plans to deliver GBP 100 million profit by January 2030, with leverage reducing to less than 2x, albeit with a temporary drop in profits anticipated in '25-'26. You'll see on the right-hand side, that our performance this year has exceeded those expectations in every respect. Having delivered this strong performance and with good visibility on '26-'27, we remain extremely confident in meeting those targets and expect this year to continue ahead of our originally planned trajectory. And so to conclude, we've had a transformational year. Revenues and profits have grown at a group level and for each of our core businesses. We have exceeded guidance with a strong start to '26-'27. And having further confidence about our performance this year with continued progression towards the GBP 100 million profit target. As you have heard, the impact of Saga on the situation in the Middle East is very limited, and we are successfully hedged against it. Having established a strong performance culture with consistency of delivery built on our simplified, more focused business model, we remain very confident about the future that we are building. We'll now move to Q&A.

First, taking questions in the room and then to any online.

Tim Barrett from Deutsche Numis. I had a question first on Cruise -- on Ocean Cruise. Just to understand a bit better your pricing strategy. And as you said, you've had a good uplift, GBP 50 uplift in the per diem. Just really interested in how -- whether you think that can be maintained for the year as a whole? And then a question for Mark. That Slide 13 on the waterfall of net debt. Just wanted to understand the interaction, if you like, between the working capital inflow and the GBP 60 million outflow. Should we think of those in net terms as sort of the same fact -- partly the same factor?

Okay. So taking your point on pricing and per diem growth. You're right. We've seen great growth over the last few years on load factor and equally great growth on per diems. So as we move forward, with load factors now into the 90%. There is an opportunity to continue to grow load factor to some extent. But clearly, as you head towards 100%, then -- and we'll never get to 100% because there will always be single people in twin-cabin for example. So the sweet spot for load factors will be somewhere between where we are today, 93% and that 100%. So some opportunity there. In terms of per diem growth, that load factor performance is driving demand and excess demand that is then driving per diem growth. So you can see the supply and demand factor now shifting into further growth in per diem. But it's not all about supply and demand. It's also about the quality of the proposition and us continuing to build out that proposition to drive that demand. So what you'll see each year that we're adding in more investment into the proposition and changes in itineraries that will also drive value. So it's not just about prices going up. It's also about the quality of the proposition that we're investing in every year. But you can certainly expect per diem growth to continue. We've got Nigel Blanks in the audience today. He's done a great job running our Travel business. So it's right that I'd probably give him a moment to correct me where I've got wrong and take some credit for the performance is -- anything you want to add, Nigel?

I'd never correct you Mike. I think the point you make is really relevant that the differentiation that we built up for that time allows us also to differentiate itself in the marketplace. So one of the things that means that effectively ,there's no direct competitor. So we can price our products to maximize the return and not have to be in situ providers as well. That's quite unique and different from most of the mass market. That's another strand in addition to the point that Mike made. So again, we're different by design. That's the way our business works, we continue to maintain that position.

I think there is an important point to make on pricing, and it plays to Nigel's point that we are different and we run our business differently. So our customers book earlier. So we don't play in the late market. We offer our best prices to customers that book first. that encouraged them to book early, and you can see our customers are booking earlier and earlier every year. And that then gives us confidence very early into the year as to the performance ahead. So when we sit here right now, we've got strong visibility of the year ahead because of that forward booking profile.

And then there's the question around working capital. So you're right. So the GBP 86.9 million inflow from working capital includes the GBP 60 million payment from Ageas. And we've shown that at the end of the bridge effectively being excluded from net debt. And the reason why we've done that is if you remember when we announced the Ageas deal, we said the GBP 60 million and the GBP 20 million, which we'll receive in the second half of this year. So combined GBP 80 million of proceeds from the partnership. That effectively was going to fund the working capital unwind as the business transfers over to Ageas. So we've shown it as a but there is a -- we've excluded it from our net debt calculations because ultimately, that cash will leave the business as the renewal book transfers over to Ageas later this year.

Sahil?

Yes. Thank you, Mike. It's Sahil from Singer Capital Markets here. A few questions from me. Probably looking beyond sort of near-term issues, thinking more medium term here, probably related to both of these. So when I look at the River Cruise business and where the load factors are at the moment, relative to Ocean Cruise. Aspirationally, is it possible for River Cruise to be sort of north of 90% over the medium term? And what would drive that? And just, again, taking a medium-term view on Holiday business. You've got circa 60,000 customers and your database is well into the millions. I mean, aspirationally, how should we be thinking about that customer base going forward, from the 60,000. And the next question is essentially around efficiencies going forward. So the last 12 months, you've obviously had a lot on your plate in terms of executing the strategy and everything around and what have you. Stepping back, I almost feel you've got cleaner year or years ahead of you now to focus on the core business. And with that in mind, is there scope for any sort of cost efficiencies to come through over the next few years or so? And if so, where? And finally, just to update us I know it's early days, but how the NatWest partnership is going and how we should be thinking about that over the next 12 to 18 months or so?

Okay. So taking those in each. So in terms of River Cruise load factor, so you're right, it the load factors of River Cruise are slightly behind Ocean Cruise. You got to remember that, that is on a slightly slower journey than Ocean Cruise So what we did several years ago was move River Cruise under our Ocean Cruise leadership team Nigel's leadership at that point to recognize that we could frankly do a better job in River Cruise than we were doing at the time and have the qualities of our Ocean Cruise business shining through. And so what you'll have seen since then is customer satisfaction growing, load factors growing and per diem is growing. But it's a year or 2 behind the Ocean Cruise model -- because we're building out that quality. So that's the first point. Secondly, we are adding new River ships, and therefore, that impacts load factor because it takes time to sell the new capacity. So we launched the Spirit of the Moselle last year. We launched that in July. Actually, I was on that ship in August, and it was already full. But it takes a while to build out that capacity and there's more capacity as we go forward. So and then we'll add new ships in the future. So it is a scalable model that is easier to scale than our Ocean model that has 2 large ships. We can add smaller ships to new rivers or existing rivers. So I guess the takeaways, you absolutely should expect the continued progression of load factors and per diems at rivers. But you should also expect more capacity to come online because that is a scalable model. And our next ship arrives in 2027 being the Spirit of [ Loral ]. In terms of Holidays, yes, you're absolutely right. 60,000 -- it's a point that I make all the time. We take 60,000 people on a holiday in holidays. And that is relative to 9 million people on our database. What that demonstrates is the opportunity that we have. But actually, I think our Holidays business, in particular, was the area where when we talk about Saga's ability to differentiate, I think in recent years, that is the area that became a bit generic. So we are building out that property and building back that differentiation. So it's taking time to do that. Really pleased with the early progress. But I would caution you again drawing a straight line between the 60,000 and the 9 million. It would be nice, but it might take some time to get there. In terms of efficiencies, look, I'll ask Mark to cover a little bit more on this, but I wouldn't underestimate the level of efficiencies and cost restructuring we've done during our transformation. That is underpinning a lot of the work that we've done. So we are a lean and more agile operation. We'll always have an eye on it going forward. But I think we've done some pretty heavy lifting over the last couple of years on costs. Is there anything you want to add on that?

I think that's right. I think within the Ageas deal, the plan was to reduce the overheads and deliver a significant amount of efficiencies as part of that model. And then as Mike has said, we've combined the Travel delivered some efficiencies by running the Travel businesses differently. And I think as we look forward, we'll always look to run the business efficiently. I think it's an interesting question actually because as the business sort of simplifies I think, the capacity of the management team to do more. And it is probably where I would focus my attention as opposed to crystallizing lots of cost savings.

Yes. I think it's an important point that what you are seeing this year and you'll see going forward is our attention is diverting towards value-adding growth now as opposed to managing the complex business that we had in the past, and that's really refreshing. And I spent a lot of time with my management team now coming out, talking about actually the great things that they can now focus on rather than sort of with the span of turning the nuts on bolts on what was previously complicated business. And in terms of NatWest, look, I'd broaden it to money, but I'll touch on NatWest and the savings partnership. So there is a great opportunity to grow and expand our range of personal finance products beyond what we do today. They are very relevant products for our customer base. I use equity release is a good example in the current environment where older people have a lot of equity tied up in their houses, but they have time to spend either on holidays, either on the house that they want to develop because they're spending more time in or indeed to help the next generation pass that wealth down. So that's a great product that enables us to meet needs in a way that others don't, our later life mortgage is another product designed for older people with equity in their house that are well served by a market that typically serves a younger demographic. So, we've got strong growth plans there, but those are medium-term growth plans as opposed to the growth we're seeing across our more core Insurance and Travel businesses. You remember on that chart that I showed you earlier, there's a blue bar there for money growth that comes towards the back end of the 5-year plan as opposed to the earlier stage. The earlier stage is really about getting the proposition right and investing in that proposition. NatWest is a big start of that growth plan because we signed that partnership. They're a brilliant brand. It is a very flexible savings model. This year, we're focused on getting it up and running getting it working, being sure we can deliver the right customer experience. It's actually started very well. We've got over GBP 200 million of deposits already taken, and we only launched that properly in January. So to be where we are, gives me confidence about the growth that we can achieve, but the profits will catch up in the out years as opposed to something that will transfer on profitability for the next 2 or 3 years.

Ivor Jones From Peel Hunt. Perhaps I could ask questions one at a time so I don't forget. There's a splendid amount of gross cash now on the balance sheet, not a problem, obviously, but does it create opportunities? I was thinking about paying down the deferred payments earlier or selling the defined benefit pension scheme to get it off the balance sheet? Or is that a problem for a question for 2027?

They sound like CFO questions.

No, I think it is a consideration for us. And I think probably got a bit more work to do this year in terms of delivering the business performance and the deleveraging. And then I think there's a broader capital allocation piece that comes into play. We will always look to optimize the sort of gross debt position. And I think, as you say, the deferred COVID cruise loans is an option for us. And as I said, I don't want to sort of give too much away, but it is something we're thinking about.

The allocation of other operating expenses in the divisions affects the profits that you report in Ocean Cruise it was flat, in River Cruise it was down a bit. What's in those numbers?

Do you want to take that Mark?

Yes. So broadly, I mean I'll ask Nigel to comment sort of specifically as well, broadly, it is the cost of running those businesses. So Ocean, Rivers and Holidays have dedicated teams to them and those people will be within those numbers. And then Nigel has a shared management team that sort of oversees all 3 of those businesses, and there is an appropriate sort of allocation methodology for those shared costs. I don't know if Nigel, do you want to sort of say anything extra on that.

Yes. And I think part of that is in terms of where the focus needs to be. Obviously, the Ocean Cruise business is solid and stable. It doesn't quite look after itself, but it's like steaming in the right direction. Rivers takes a bit more effort because we've had to redirect, balance it, so that will take proportionally more [indiscernible] Time, same with Holiday business as well. So it's just truing up allocation of costs.

So why is the River Cruise allocation down '26 over '25?

It's just where we're the biggest folks of my time now and my leadership team is into the Holiday business as a greatest amount of sort of surgery, to bring it up to the level. So we just redeploying our team [indiscernible]

But what you are seeing across the board is the ability under a single team to take savings by running the overall Travel business more efficiently. So yes, we're switching focus between the different businesses to make sure they're all rocking and rolling, but there's definitely inherent efficiencies coming through within that.

That's helpful. And we talked several times about per diem and Ocean Cruise in particular. What is that an average of what is the highest and lowest per diem that is being charged? So we've got a sense of what the maximum price point. Most importantly, someone is prepared to pay, albeit you never get necessarily there.

No. I think, Nigel, you know better than I will.

[indiscernible] the top of my head, the lowest price point is around about [indiscernible]. And the highest price point is around about [ 650, 680 ]. So sweet down to the lowest grade cabin. Remember the lowest grade cabin that we have is still a standard cabin with a balcony. We don't have any inside cabins, which other ship lines have. So it's sort of proportion on that basis.

But you couldn't get the [ 680 ] across the whole estate of cabins because that's the suite.

That's like my older suites [indiscernible] Of the accommodation. But that per diem, if you was to look and benchmark against the market is extremely respectful.

Yes. I think the other thing when it comes to per diems is that's where we are today. We talked a lot about supply and demand and the proposition growing per diems across Ocean and River. But I think there's another relevant factor when it comes to Ocean and that is, the cost of new ships hitting the water right now is much higher than the cost of ships -- the costs that we incurred when we rolled out those ships, which means that the pricing point for new vessels landing is going to be higher, and therefore, that also helped us price match and compare favorably to the market.

Great. That's helpful. And you talked about repeat rate. what proportion of sales are from repeating customers?

By which product?

Sorry, in Ocean particular. I think you talk about a 68% repeat rate.

So that would be a repeat rate of purchases from customers that have cruised with us previously.

Yes, I get that. But of the cruises that were sold last year, what proportion was sold who were repeating?

Well, I think that's the point, 64% of people on the Cruise will be those that have come back from previous cruises.

No. So the 68% is a previous 3 years. So it's people that have traveled with us in the past 3 years that have repeated, I don't have the number to hand, but it will be lower than the 68%.

But -- what I'm trying to get at is a potential driver of lower marketing cost because you're addressing existing customers...

The important thing to remember with that repeat rate is the Cruise customers because it is a big ticket item, don't necessarily buy every single year from us. So I think it would be misleading for us to look at a 1-year purchase repeat rate because that's not customer...

No, sorry, I'm asking a different question, which is the benefit to marketing cost of having repeating customers in there.

Yes. Look, rather than go down to rabbit hole, I think your overall point is right, which is our repeat rates do mean that we spend less on marketing for those customers that are coming back naturally without having the marketing costs, the precise numbers, perhaps we can help us.

Yes. But what we do have as well is the demographic we target is time rich. So the other thing we focus on customers buy multiple cruises. So it is not unheard of to have a lot of our customers buy 2, 3, 4, 5 cruises in the same year. That drives CPA, that drives [indiscernible]. If you deliver the right product, people keep coming back. So as Mike talked about, we invest in the customer, that side of things that's extremely important is about customer satisfaction, enjoys repeat rates of all levels.

Okay. Any more questions?

Could you just expand on spend on that? Because you talk about unified travel business, but you report in 3 silos. Can you talk a tin about the cross-sell between products to...

Yes. Look, without diving too deeply into this, Look, the reason we consolidated the travel business was to drive operational efficiencies, customer consistency and make sure we're doing a great job across the business. But frankly, that we're running at silos as well. So I think that by consolidating Ocean and River in recent years, we're already seeing the cross-sell coming through there. There is -- there hasn't been as much cross-sell between Holidays and Cruising as I would like because actually, it wasn't that long ago, you would pick up a holidays brochure, and you wouldn't see did cruises. So one of the reasons we made that change. So I'd very much put the greater cross-selling is an opportunity for the future rather than one that I think we could shine a light on today.

John Gould at Kelso. I just wanted to understand, if I could, the Board's thinking around medium-term financing. You have your target of 2x leverage in 2030. And I wonder to what extent that is a level you would maintain or whether you want to see that lower. And I ask it with kind of 2 observations, if you like, because around that point that the loans on the ships directly will be near paid off. And also with half and in given the shape of your register and the potential for return to the dividend list there ever say. And any kind of just Board thinking around those few points, please.

I'll start, and then I'll have Mark correct me. But I think the way to look at our deleveraging and the 2x target is, firstly, we're ahead of that trajectory. So we're going great guns on that deleveraging and that profit growth. Clearly, as we move through that trajectory, then we have decisions to make as to the target leverage. Right now, we're focused on getting our leverage down because I think we've got -- we -- we've started -- made a great start. We need to deleverage. We need to continue to drive the growth. As we get towards the back end of that profile, then optionality opens up as to how do you choose to use the capital flexibility that opens up to us. So we're not giving guidance as to exactly where that looks like. But clearly, dividend decision has come back on to the table target, capital structure and the extent to which we use some of that ongoing deleverage to then reinvest in proposition. So we're not giving guidance on that state. I think the comment you should take right now is that optionality is going to open up pretty quickly as we go forward. But it does mean actually in the not-too-distant future, the opportunity to refinance into a more efficient capital structure also opens up. Anything you want to add to that?

I guess just in terms of where the guidance was from was we didn't assume that we would do anything in the back end of the plan. So in terms of our guidance, we haven't assumed we've switched dividends on within that assumption. So might completely agree with Mike's point. I think there comes a point where the capital allocation becomes a real question for us. And it's -- as Mike said, we've made a fantastic start in deleveraging, but we've got a bit to go before that -- before that's a question we need to answer.

Any other questions? Any questions online? Well, look, in which case I will wrap up. Look, what I'll leave you with is a couple of things. Great to see everybody here today. So we're garnering interest, which is great. Mark and I have got a busy few weeks ahead of us. Look, this is a business that this year has transformed the outlook. So we've done a lot of heavy lifting that puts the business in a great position, but we've also delivered a fantastic set of results. So very proud of what we've done this year. Our team deserve all of that credit. But it really gives us confidence in how we go forward into this year. So I look forward to updating you on more progress next time we see you. Thank you.

Thank you.