AA motor insurance delivers 'strong' growth; roadside breakdown continues to stutter

Writer, Stock Market Wire
Tuesday, February 12, 2019 - 07:23

AA said Tuesday its motor insurance division delivered 'strong' growth, but its roadside breakdown business continued to stutter.

In insurance, motor policies grew 16% at 731,000, and in house insurance policy book returned to growth, rising 1.5% to about 830,000.

New AA breakdown paying members declined by 2% to 3.21m with retention just over 80% as at 31 January, while average income per paid member rose to about £162, up 3% from a year earlier.

The company blamed the decline in paid members on 'the re-phase our summer marketing campaign as well as the impact of regulatory pressures and continued competitor activity.'

The company said, however, that it would target a broadly flat membership base in 2020 and return this to growth by 2021.

Capex and earnings for the full year were both expected in-line with guidance.

Underlying earnings (EBITDA) was expected to be above £340m, in line with previous guidance of about £335m to £345m, the company said.

'We expect total capex spend for 2019 to be broadly in line with our guidance of £105m, reflecting the investments we are making in our people, products, systems and operations to reposition the AA as the pre-eminent membership services organisation.'


Related content

Broker Forecast - Berenberg issues a broker note on AA Plc

Berenberg today reaffirms its sell investment rating on AA Plc (LON:AA.) and cut its price target to 50p (from 65p).

Broker Forecasts data provided by...

Fri, 27/09/2019 - 08:10


AA reaffirms trading remains in line with expectations

AA is set to reaffirm that trading remained in line with expectations, according to the company's AGM statement.

The company was also expected to...

Wed, 05/06/2019 - 09:03


Stagecoach moves up a gear and AA continues to invest despite growing debts

“Sterling made a small comeback on Wednesday morning, up 0.4% against the US dollar and gaining 0.3% against the euro, as the Brexit chaos rumbles...

Wed, 03/04/2019 - 10:03


AA profits more than halve as rising costs offset revenue; inks contract with Admiral

AA reported its annual profits more than halved as costs to steady performance in its roadside and Insurance businesses weighed on margins. The company also...

Wed, 03/04/2019 - 07:25


Short-sellers may be on to something in the UK (but they are getting stomped in the US)

Untitled Document

Not everyone approves of the practice of short-selling but supporters will point to the diligent research involved, the risk posed by the...

Fri, 15/02/2019 - 15:40