AA interim profit rises as membership numbers stabilise
Roadside assistance company and insurer AA reported a rise in interim profit and revenue on Tuesday as the roadside business saw a stabilisation in membership numbers.
In the six months to the end of July, pre-tax profit jumped 50% to £42m on revenue of £491m, up 2.3% on the year. Basic earnings per share pushed up to 5.5p from 3.8p and the interim dividend was held flat at 0.6p.
The roadside assistance membership base stabilised at 3.19 million and the AA said it was on course to deliver broadly flat membership this year and a return to growth next year, in line with guidance. Average income per paid member was up 4% since last year and 2% since year end to £165.
In the insurance segment, there was a "strong" performance from both broker and in-house underwriter. The group saw 22% growth in motor policies to 803,000 and a 3% rise in home policies to 841,000 as it benefited from investment in marketing, incremental sales and renewals through its in-house underwriter.
Chief executive officer Simon Breakwell said: "We are pleased to report a first-half performance in line with our expectations, with growth in trading EBITDA and strong free cash flow generation.
"Our insurance business continues to generate strong rates of profitable policy growth, and we expect this to continue during the second half."
The group said it remains on track to deliver trading EBITDA growth this financial year in line with current market expectations.
At 1100 BST, the shares were down 0.4% at 68.75p.