Pre-close statement

AA plc

Trading in line with expectations

Transformation well on track

The AA announces that it is trading in line with expectations as it enters the close period ahead of the results for the financial year ended 31st January 2016. These results will be announced on 5th April.

We are continuing to make good progress in executing our strategy to strengthen the AA as the UK's pre-eminent motoring organisation. Investment in brand marketing has continued to slow the decline in Personal Member numbers notwithstanding the adverse price impact of the recent increase in Insurance Premium Tax. We are improving our membership proposition through brand investment, new products, more attractive rewards, and the AA app which is now used in more than 10% of Personal Members' breakdowns.

The completion of the full first year of the transformation, including the first phase of the investment in new IT systems, is to budget and on time. Once operational, these systems and digital developments will enable cross-selling of a broader range of products across the business, facilitate efficiencies, improve customer experience and provide the platform to develop the AA's digital positioning.

We are encouraged by recent developments including the winning of the Lex Autoleasing contract for roadside assistance which reinforces the value of the AA's scale and service levels. Our recent strategic steps in connected car technology, including Trakm8 for fleets and the Intelematics JV, give the AA a new level of digital capability.

The Insurance Underwriter was launched in the last week of January. We will build on the strength of our brand and unique data which enables more effective pricing of risk. With new IT systems and an experienced management team, the Underwriter will initially focus on AA Members and build the business over the next few years supported by a significant level of reinsurance. The Underwriter will add an important capability to the AA's portfolio of services for motorists.

For further information please contact

Investors - The AA IR

Media - Headland Consultancy