AA grows revenue and earnings as it reverses decline in member numbers

Caitlin Morrison
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Membership numbers are getting better at AA (Source: AA)

AA has reported an upturn in revenue and earnings for the six months to 31 July - and said membership numbers are showing positive signs of growth.

The figures

Trading revenue was up 2.2 per cent to £467m from £457m in the same period of last year.

Operating profit was flat at £132m, while pre-tax profit was £48m, compared with a loss of £69m in 2015.

Earnings per share swung from a loss of 9.6p to 6.2p.

The insurer and roadside assistance group raised its dividend from 3.5p per share to 3.6p.

AA said it had used £106m of the £130m net proceeds from the sale of its Irish business to partially repay its debt.

Why it's interesting

The company reported that paid personal members grew in each of the last three months of the period to 3,321,000, which contributed to a slowing in the rate of decline to 0.6 per cent year on year and to 0.3 per cent for the six months since January as "retention and new business improved".

What AA said

"We are extremely encouraged by the reversal of the decline in paid personal members over the last few months," said AA chairman Bob Mackenzie.

"The marketing strategy is achieving a significant impact on new business, and we are continuing to improve customer experience through digital innovation.

"Now in the second year of the transformation of the AA, the investment we are making in technology is on track. We are increasingly confident about the scale of the opportunity for the brand across the group's many products and services from breakdown cover to mortgages."

Mackenzie added: "Overall the performance of the business has been robust in the first half and we continue to trade in line with expectations. To date we see no impact on our operations from any Brexit related issues and, as we look forward, we believe we are creating significant momentum for the 2018 financial year."