Company Announcements

Pre-close Trading Update

Source: RNS
RNS Number : 5417C
AA PLC
11 February 2020
 

11 February 2020

 

AA plc

 

Pre-close trading update

 

Trading EBITDA and strong free cash flow growth in line with market expectations

 

 

AA plc today publishes its pre-close trading update for the year ended 31 January 2020 (FY20).  

 

The Group looks forward to announcing growth in Trading EBITDA and strong free cash flow generation in line with market expectations*. The positive operational momentum in FY20 continues to gather pace and the Group remains on-track with its strategic plan.

 

Roadside return to growth

 

In line with management expectations we have successfully stabilised the decline of the paid membership base, which returned to growth during the second half of the year. This led to a broadly flat paid membership base year-on-year. We expect the growth in the second half of FY20 to continue into FY21 in line with previous guidance.

 

We were pleased to have retained or extended all our key B2B contracts due for renewal in FY20, including TSB, Toyota, Lex Autolease and Northgate. We also won several new contracts including Admiral and Uber.

 

Insurance delivering strong policy growth

 

Our Insurance business, comprising the broker, in-house underwriter and our financial services business, continues to deliver strong rates of growth, in line with our expectations.  

 

During the year, both our motor and home books grew in line with expectations, reflecting the strong profitable growth of our in-house underwriter and the benefit of ongoing investment in systems to further accelerate the growth of the broker.

 

Proactive balance sheet management

 

We were pleased with the outcome of the recent Exchange Offer as announced on 31 January 2020, which was significantly oversubscribed. This has enabled the extension of our average debt maturities from 3.3 years to 3.9 years. In light of the Group's continued positive performance, the Group intends to continue to proactively manage its capital structure, including refinancing of the A5 and B2 notes due in 2022, subject to market conditions.

 

On 5 February 2020, S&P Global Ratings reaffirmed the investment grade (BBB-) credit rating of our Class A notes and non-investment grade (B+) credit rating of our Class B2 note.

 

 

Simon Breakwell, Chief Executive Officer, commented: "We look forward to delivering full year results in line with market expectations, with growth in Trading EBITDA and strong free cash flow generation. In Roadside, we continue to deliver best-in-class customer service and have returned our paid membership base to growth. Our B2B business is performing well with strong renewal rates as well as new wins. Our focus in B2B remains building accretive long-term partnerships utilising our operational scale, service excellence, and innovative approach to customer solutions. Lastly, the Insurance business is delivering strong rates of profitable policy growth, and we expect this to continue next year."

 

AA plc will publish full year results on 31 March 2020.

 

ENDS

 

 

For further enquiries, please contact:

 

Investors:

Zeeshan Maqbool, Investor Relations and Corporate Finance

 

Tel: +44 (0)20 7395 7301

 

Media: FTI Consulting

Alex Le May

John Waples

Nick Hasell

Tel: +44 (0)20 3727 1340

 

AA plc is listed on the London Stock Exchange
Registered Office: Fanum House, Basing View, Basingstoke, Hampshire, RG21 4EA

Registered in England & Wales number: 05149111
Legal Entity Identifier number: 213800DTPE4O5OI17349

 

(*) Based on latest published estimates from seven analysts.


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