Kelso Group Holdings, the main market listed investment vehicle, has bought a further 100,000 shares in Saga, the over-50s travel and insurance group, after its interim results.
Kelso now holds 600,000 Saga shares at an average cost of 446p, valued at £4.6 million, or about 20% of its total investments.
Saga shares closed on Friday at 761p, giving the company a market value of £1.1 billion, against Kelso's first purchase of 400,000 shares in January at an average of 387p.
Underlying pre-tax profit almost doubled, rising 98% to £46.6 million in the six months to 31 July 2026.
Leverage, which measures debt against earnings, fell to 2.7 times from 4.3 times a year earlier, having peaked at 12.3 times in July 2021.
Two types of debt
Kelso splits Saga's £429 million net debt into cheap and expensive borrowing.
Some £262 million is secured on its two cruise ships at fixed rates averaging about 3.7%, and should be repaid by 2032.
The rest is mainly a £335 million term loan costing 10% to 10.75%, or roughly £35 million a year in interest.
Every £10 million of interest saved would add about 15% to underlying pre-tax profit, which Saga guides at £65 million to £70 million for the full year.
City backing
Four City analysts' price targets average 979p, about 29% above the current share price.
Sir Nigel Knowles, Kelso's chairman, said Kelso believes in running its winners, which is why it bought more shares after the results.
Saga is the third Kelso investment to double in value this year, alongside Filtronic and The Works.
