Business
New investment in Saga plc
Kelso Group Holdings Plc has acquired 400,000 shares in Saga plc for an average price of 386.5p in January 2026, noting Saga's market capitalization of £551.5m and its recent achievement of exceeding net debt for the first time in over five years. Kelso highlights Saga's business evolution back to a predominantly travel focus, driven by its cash-generative cruise divisions with EBITDA approaching £100m, and a significant reduction in its leverage ratio to 4.3x as of July 2025, with forecasts to fall below 2.0x by January 2030. The investment is further justified by Saga's perceived undervaluation, its asset backing from cruise ships valued at £570.6m, and the strength of its management team, including Sir Roger De Haan's substantial ownership. Kelso has also proposed constructive ideas to Saga's board to enhance value creation. Disclaimer*
About this update from Kelso Group Holdings Plc
[{"type":"text","content":"\n\n6 January 2026\nKelso Group Holdings Plc\n(\"Kelso\" or the \"Company\")\nNew investment in Saga plc\nKelso, the main market listed acquisition vehicle, today announces a new holding in Saga plc (\"Saga\") after completing the purchase of 400,000 shares at an average price of 386.5p in January 2026. Saga's market capitalisation was £551.5m as of close of business on 5 January 2026, having recently exceeded Saga's net debt for the first time in over 5 years.\nRationale for investment\nKelso provides its shareholders with the rationale and background behind this investment below:\n· Business evolution: Founded in 1951 as a travel company, Saga evolved to being predominately an insurance business by the time of its IPO in 2014 when it was valued at £2.1bn. It has since returned to being predominantly a travel business, driven by its highly cash generative and asset backed ocean and river cruise divisions for the over 50s. Revenue in these divisions has increased more than fourfold since IPO with EBITDA in ocean and river cruising alone now approaching £100m.\n· Deleveraging: Over the last 5 years, Saga's leverage ratio of net debt to EBITDA averaged 7.9x, peaking at 12.3x in July 2021, which limited its investment attractiveness for most UK blue-chip equity investors. Leverage has now reduced to 4.3x (as at 31 July 2025) and as it continues to fall, Kelso believes this will unlock the equity story. Formal company guidance forecasts leverage to fall to below 2.0x by January 2030, due to strong cash generation from underlying group pre-tax profits exceeding £100m. Kelso anticipates this debt milestone may be achieved ahead of guidance.\n· Undervalued: Based on Kelso's internal analysis, Saga trades on an EV/EBITDA to January 2026 of c.7.5x using the last reported interim net debt level of £511m. Despite a strong share price in 2025, we believe there is significant upside from here when compared to peers. As the share price improves, we also note the potential for the company to return to the FTSE 250 in 2026 and the likely consequential buying demand from index funds.\n· Peer Group: Kelso notes the success of Viking Holdings Inc (\"Viking\") (market cap of c.$32bn), the only other travel company in ocean and river cruises that uniquely serves the over 55s m...