25th Mar 2015 07:48
LONDON (Alliance News) - Roadside assistance company AA PLC on Wednesday outlined its refinancing plans, including a GBP200 million share issue, as it said its pretax profit fell in the financial year to the end of January due to continued investment in its IT functions and restructuring costs.
AA PLC said it will seek to raise a total of GBP935 million in aggregate via an equity issue and the issue of Class B notes. It will raise GBP200 million via a share placing of 51.9 million new shares at 385 pence per share, and will raise the further GBP735 million via the Class B notes issue.
AA shares closed Tuesday at 427.10p.
The funding is to be used to refinance its existing debt obligations, alongside a further GBP209 million from its balance sheet.
The company, which joined the FTSE 250 on Monday, also published its results for the year to January 31, showing pretax profit falling to GBP60.8 million from GBP192.8 million.
Revenue rose to GBP983.5 million from GBP973.9 million, but this was more than wiped out by higher administrative and marketing costs related to the investment the company is making in its IT systems and by higher exceptional items related to the restructuring of the business.
AA will not pay a dividend, but said it intends to recommend dividends totalling no less than GBP50 million for 2016 and will adopt an aggressive dividend policy going forward.
"Today we have announced robust full year results, the details of our strategic investment plans, the refinancing that will significantly reduce the cost of debt, and our intention to pay a dividend with respect to the 2016 financial year," said AA Chairman Bob Mackenzie.
By Sam Unsted; [email protected]; @SamUAtAlliance
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