After a pretty rough time of late, the AA provided a decent recovery after a stronger-than-expected trading update.
The company’s share price rose 2.74% in early morning trading to 137.49, this in a week when the AA has been targeted by short-sellers with the FTSE 250 firm tumbling to an all-time low.
The sacking of former boss Bob Mackenzie, for allegedly lashing out at a colleague as well as speculation of a merge with insurance rival Hastings have proved unsettling. The company’s share price has taken a hit as the City looks for some stability and direction within the company.
New chief executive Simon Breakwell has insisted he can turn around the scandal-hit breakdown cover provider by focusing on the AA’s core businesses of roadside rescue and insurance.
In its latest trading statement today, the AA says it expects to deliver trading EBITDA in line with the guidance of between £390m and £395m as provided in September 2017.
New members grew 7% year-on-year and, despite the challenges of passing through insurance premium tax increases and the costs arising from regulatory changes, retention was broadly flat at 82%.
However, paid members declined by around 1% to 3.29 million, principally as a result of the discontinuation of free roadside membership for AA insurance customers from December 2015.