12th Feb 2019 09:02
LONDON (Alliance News) - Vehicle recovery firm AA PLC said on Tuesday it expects adjusted earnings for its recently ended financial year to be in line with its guidance, but down compared to the prior year.
Trading earnings before interest, taxes, amortisation and deprecation is expected to be at least GBP340 million for the year to the end of January. The figure is in line with company guidance set between GBP335 million to GBP345 million, but down from GBP391 million the year before.
Also, capital expenditure for the year is set to be in line with company guidance at GBP105 million.
In its Roadside segment, AA said that paid personal memberships declined by 2% to 3.21 million, with retention at 80%, down from 82% the prior year. The company said the decline was expected, a result of regulatory pressure and competitor activity.
AA said that with increased marketing and investment, it expects to keep a flat membership base for its 2020 financial year, and return to growth by its 2021 financial year.
Average income per paid member however, rose by 3.0% to GBP162 from the year before, reflecting new members taking up monthly subscriptions and choosing higher levels of service coverage.
In AA's insurance division, motor policies grew by 16% to 731,000, and home policies saw a 1.5% rise to 830,000, ahead of expectations. AA is expecting further growth in its motor and home policies in its current year.
AA will publish its annual results on April 3.
Shares in AA were up 0.7% at 92.42 pence on Tuesday.
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