AA’s first results release since flotation in June shows policy numbers falling
Revenue and earnings are on the slide at the AA’s insurance arm, half-year results show.
The group, posting its first half-year results since flotation, revealed revenue fell to £72.3m, compared with £75.5m in the first half of last year.
Trading earnings before interest, taxation, depreciation and amortisation (EBITDA) was also down, to £41.6m compared to £44.4m last year. Policy numbers slid to 2.22m from 2.4m.
The motor and home insurance broker said falling revenues were “due principally to lower income from fewer motor insurance customers”.
AA is also paying increased marketing costs to win new business, triggering a squeeze on trading margins.
The good news for the firm was that the rest of the business, the bulk of which is roadside assistance, showed improving financial performance.
Group revenue was up to £491.7m from £484.1m and trading EBITDA was up to £211.8m compared with £203.8m.
AA Insurance Services first-half results
|H1 2014||H1 2013|
|Trading EBITDA (£m)||£41.6m||£44.4m|
|Trading EBITDA margin (%)||57.5%||58.8%|
|Policy numbers in force* (000s)||2,222||2,447|
|Income per policy (£)||£66||£64|
* Last 12 months excluding business customers