Well this is going to worry a few people – a six-month interim report from Over-50s insurer Saga Plc has flagged up that the company is looking to sell its motorcycle venture, Bennetts Insurance.
The news, pre-reported in the Evening Standard, comes on the back of Saga’s interim results for the six months up to July 31 this year. Earlier this year group Chief Executive Lance Batchelor said that Saga would: “be making a bold and fundamental change,” to the company which would include a shift in the insurance part of the business.
Now it appears that Bennetts could eventually be sold for less than the £26.6 million Saga paid for the firm upon acquisition in 2015.
Saga’s interim results put aspects of the business’ cash-generating-unit (CGU) – basically the bits that make the money – like this:
- Insurance (not including Bennetts) – £1.1 billion
- Insurance (just Bennetts) – £13.6 million
- Travel – £72.8 million
A statement from Saga, which also talked about another element of its travel business Destinology, said: “The group has tested all goodwill balances for impairment at July 31, 2019. The impairment test compares the recoverable amount of the goodwill of each CGU to its carrying value. The goodwill associated with the Bennetts and Destinology businesses have been considered separately, as these businesses represent separate CGUs.”
According to the Evening Standard:
“Bennetts is one of a number of non-Saga brands that the company owns which are up for review as it struggles to refocus itself since it announced a massive profit warning and dividend cut in April.
“It has never been integrated into Saga’s IT systems, and cross-selling has not been as strong as hoped.
“Sources said the company is questioning whether owning any non-Saga brands is the best use of its capital. It put its Titan and Destinology travel brands on the market in March but has yet to find buyers.”