Hosking Partners LLP on Saga plc
Thesis
Hosking believes Saga is becoming a more capital-light, higher-return company despite its legacy reputation. Annualized return on invested capital reached roughly 25% in the first half of 2026, while cruise ships were effectively fully booked. The company is extending a well-known older-consumer brand into financial services, with a NatWest partnership gathering £2.1 billion of deposits within nine months. Hosking believes continued growth of capital-light activities leaves further upside even after a strong recovery in the share price.
“Despite an 11x increase in the share price from the 2022 lows, we see further upside”
Key risks
- The shares have risen around elevenfold from their 2022 lows, reducing the valuation margin of safety.
- Cruise bookings could weaken from their currently near-full levels.
- The new NatWest-linked financial-services venture must sustain deposit growth and attractive economics.