Saga forced to restate accounts

Saga, the insurance and travel company for the over 50s, has been forced to restate its accounts for last year after a balance sheet review discovered a £30m discrepancy.

Documents filed at Companies House show that the company posted a new set of accounts for 2003 last month. The revision relates to a corporate restructuring involving Saga Leisure, which operates the group's holidays business. Saga is currently up for sale.

Separately, Saga's recently filed 2004 accounts, in the 12 months to 31 January, show that Roger De Haan, the company's chairman and owner, paid himself £3.2m compared to £2.76m the year before.

Mr De Haan also took a 50 per cent increase in dividends, receiving £6m from his ordinary shares with another £2m being paid in February after the financial year end.

In a revised set of 2003 accounts, filed last month, the company said: "The original report did not comply with the requirements of the Companies Act to present a true and fair view in respect of the valuation of the consideration with which the company acquired Saga Leisure on 13 June 2002."

Saga originally put an estimate of the fair value of the consideration for Saga Leisure at £327.1m. This value was determined by the directors having taken professional advice. After Ernst & Young, the company's auditor, revisited the valuation, it found the actual value of the consideration should have been £30m higher, at £357.1m. The goodwill on the company's balance sheet increased by £30m while its amortisation charge rose from £8.35m to £9.28m.

Mr De Haan intends to retire when the sale of the company is complete. A decision is expected in October on whether to pursue a float or sale to a trade buyer or a private equity fund. In July 2002, Roger took full control of the group, buying out his brother Peter, a former finance director of the business.

Since then the two have been embroiled in a dispute over a so called "anti-embarrassment" clause designed to provide Peter and his children with an extra payout if the business was sold. However, that clause runs out at the end of July and an offer by Roger to buy out the clause before the July deadline have failed. Peter and his family are likely to get nothing from any future sale of the business.