Breakdown recovery firm AA reported an 8 percent rise in operating profit on Tuesday, after a strong performance from its insurance arm offset a weaker performance from roadside recovery.
Operating profit rose 8 percent to £307 million for the year to the end of January, with trading revenue up 2 percent to £959 million. The group reported strong performance in the insurance business, with revenue rising 11 percent to £145 million, coming from both its underwriter and insurance broker and roadside.
Roadside trading revenue rose 1 percent to £814 million, with new memberships up by 7 percent. Driving Services revenue was remained flat.
AA said it expects a 2019 trading profit of between £335 million to £345 million, aiming for an annual growth rate of between 5 and 8 percent from 2019 to 2023.
Simon Breakwell, chief executive, said the group had “delivered a solid performance despite the difficult weather conditions.”
“We have made a positive start to the 2019 financial year as we begin to execute on our new strategy to put service, innovation and data at the heart of the AA with additional investments to grow Roadside and to accelerate the growth of Insurance.
“We remain confident our financial requirements are well funded and will continue to seek ways of lowering the cost of borrowings and de-lever over time”, Beakwell concluded.
AA cut its dividend for the year to 5p per share.
