Listen to this article
The AA has finally halted its decline in membership amid higher adoption of its breakdown smartphone app.
The group, which returned to the stock market in 2014 following several years of private equity ownership, reported pre-tax profits of £100m, compared to just £9m a year earlier, with revenues climbing from £925m to £940m.
Membership numbers, which had been in decline for eight years, rose from 3,331,000 to 3,335,000, while the average amount paid per member rose 1.3 per cent.
The company is on a programme to cut costs and invest in technology to make itself more attractive to younger, tech-savvy customers.
Its app is now used in 22 per cent of the 3.6m breakdowns it attended.
Executive chairman Bob Mackenzie said:
We are realising the AA’s potential. We are now capable of building on our technologies, brand and positioning in our markets to take advantage of the abundant opportunities that arise from our ability to fulfil a wider set of consumer and business needs.
The group is also expanding its offerings, with a telematics monitoring service “Car Genie” that can pre-empt some breakdown problems, ready to be launched in the next few months.
It also said the number of motor insurance policies has risen for the first time since 2008.
The company set aside £31m for exceptional items, which included £14m towards the restructuring programme and £10m to compensate customers who ended up being covered twice by the group.
The AA has also worked to reduce its debt, which at 31 January 2017 stood at £2.7bn, compared to the group’s equity market capitalisation of £1.5bn.
During the year the AA sold its Irish business, and used £106m of the £130m proceeds of the sale to pay down debt.
The annual cost of its borrowing since the IPO in 2014 has come down by £75m.
Get alerts on AA PLC when a new story is published