Partner Article

AA reports reduced profits following MBI and IPO

AA has reported a decrease in pretax profit of £111 million in the first half yearly report since its IPO in June.

The Hampshire-based motoring association has reported a pretax profit of £10.2 million for the year ending 31st July 2014, compared to £121.2 million for the same period in 2013.

The group reported an increase in revenue of 1.6%, to £491.7 million from £484.1 million in 2013.

The group was listed on the LSE following a management buy-in lead by chairman Bob Mackenzie in June 2014.

AA has reported an increase in financing costs to £138.6 million from £47.1 million in 2013.

The group claims that the increase in financing costs, which come as a result of the IPO and management buy-in, is the main reason for reduced profits.

Bob Mackenzie, said: “These results demonstrate the stability and hugely cash-generative characteristics of this business.

“Since arriving at the AA less than three months ago, the new executive team has focused on getting to know the business in detail, assessing the business operations and infrastructure and developing the strategy for future long term growth.

“Progress has been made on all fronts but there is more to be done. In terms of the future, our task is to better capitalise on the strength of the AA brand; make the right investments to enhance our service to members and customers, and reduce the leverage of the business. “These are the objectives we have set ourselves to deliver long-term value to our investors. The business continues to perform satisfactorily and the Board expects the full-year to be in line with market expectations.”

This was posted in Bdaily's Members' News section by Ellen Forster .