AA: ‘transformation firmly on track’
AA plc has published its results for the year ended 31 January 2016 stating that its transformation is ‘firmly on track’.
The organisation stated results were ‘in line with expectations’ highlighting an overall reduction in revenue of 0.4% to £963m. However, revenue in Roadside Assistance rose 1.8% to £724m, while, as expected, income from Insurance Services, Driving Services and Ireland declined. Profit after tax was £6m (2015: £69m) after a net cost of £85m relating to refinancing.
The statement revealed that strategic developments in year one of its transformation included strong performance in Roadside Assistance; retention up to 81% (2015: 79%); Roadside Assistance personal members numbered 3,673k (2015: 3,770k) with a slowing in the annual rate of decline to -2.6% (2015: -4.5%); average income per member rose 4.4% to £141 (2015: £135), and business customers rose six per cent to 10,216k (2015: 9,640k) principally as a result of winning the Lex Autoleasing contract.
It pointed to positive strategic developments as the early trading of the recently launched Insurance Underwriter and its connected car development following the establishment of the Intelematics Europe JV and Trakm8 roll-out for fleet and leasing customers.
Bob Mackenzie, executive chairman, commented: ‘In this past year, the first year of our transformation, we have strengthened the foundations of the AA and put in place the platform which will allow us to revolutionise the customer experience. We also completed a major restructuring of the debt which has substantially reduced the cost of our borrowings. At the same time, we have delivered results in line with expectations with strong operational cash flow.’