THE OWNER of the AA and Saga has revealed huge annual losses thanks to the cost of servicing its massive private equity debts.
Accounts filed at Companies House show Acromas posted a pre-tax loss of £529m for the year to 31 January, with operating profits of £183.5m dwarfed by interest payments of £705m.
The company’s net debt stood at £6.4bn, an increase of 3.5 per cent on the previous year. A consortium of private equity groups, including Charterhouse, Permira and CVC, acquired the group in June 2007, funded by £4.8bn of bank borrowings and £1.5bn of shareholder loans.
Despite Acromas’s losses, chief executive Andrew Goodsell said the company performed strongly in its second full year of trading since the merger of AA and Saga into one organisation.
Turnover rose 2.3 per cent to £1.65bn after a solid performance from Saga, the specialist insurance and travel group that serves the over-50s. Growth in financial services helped Saga deliver sales of £793m, up nearly six per cent. Sales at AA, however, were down slightly at £855.1m. Gross profits excluding one-off items were flat at £882m.
The company described the performance as “robust” in difficult conditions. The AA’s roadside patrols had to deal with the worst winter weather in 30 years and Saga’s motor insurance arm also suffered from a dramatic rise in personal injury claims.
The company is in the process of moving into the care sector, but its plans suffered a setback last week when its £102m bid for Nestor Healthcare was rebuffed.