- Saga plc eyes a £150 million boost to capital amidst COVID-19.
- Former CEO, Roger De Haan to become Saga's non-executive chairman.
- The British insurer is scheduled to report its interim results next month.
In an announcement on Sunday, Saga plc (LON: SAGA) revealed plans of boosting its capital by £150 million to cushion the economic blow from the Coronavirus pandemic that has so far infected more than 334 thousand people in the United Kingdom and caused about 41,500 deaths.
Shares of the company closed the regular session on Friday at a per-share price of 13.61 pence that marks a year to date low for Saga in 2020. In comparison, the stock was reported trading at 54 pence a share at the start of 2020 but dropped sharply in late February due to COVID-19-related disruptions. Learn more about how to invest in the stock market.
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Former CEO to invest £100 million in Saga
Saga also said on Friday that its former CEO, Roger De Haan will join the team again as the company’s non-executive chairman. Earlier in August, Saga said it had successfully completed the sale of its subsidiary, Bennetts Motorcycle, to Ardonagh Group.
The insurance specialist that primarily caters to Britain’s older population (over 50 years of age), was sold to Charterhouse in 2004. CEO Roger De Haan had exited the firm after the private equity group took over. In separate news, Warren Buffett’s Berkshire Hathaway bought a 5% stake on Sunday in Japan’s biggest five trading firms.
According to the statement on Sunday, out of a total of £150 million of new capital that Saga wishes to raise, a £100 million of investment will come from De Haan who will also get a seat on the company’s board. The new non-executive chairman will be replacing Patrick O’Sullivan after the equity raise.
Saga to report its interim financial results on September 10th
The Kent-based company is scheduled to publish its interim financial results on September 10th. Alongside which, it added, it expects to implement its plan of raising new capital. As per Saga, it has already received approval for new capital from the regulator. In its annual report in April, Saga reported £799 million of revenue. Following its performance update for the period of February to June, the company had commented:
“The insurance business has been resilient and continues to make progress, with performance led by the success of our three-year fixed-price policies.”
Saga’s performance in the stock market was largely downbeat in 2019 with an annual loss of a little under 50%. At the time of writing, it is valued at £153 million.