AA profit jumps as breakdown giant grows income
The motoring group said it is expanding into other driving services amid the launch of an artificial intelligence car ‘wellness’ app.
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The AA has reported higher profits as it cashed in on a growing customer base, after a US investor took a £450 million stake in the motoring group.
The company said it is expanding into other driving services amid the launch of an artificial intelligence (AI) car “wellness” app.
It said its pre-tax profit surged 70% to £39 million in the six months to the end of July, compared with £23 million the previous year.
This was on the back of a 14% increase in revenues to £712 million year on year.
Higher sales were partly driven by an increase in customers, and a higher average income per member – meaning the amount it earns from customers paying for policies including breakdown cover and insurance.
The business has recently benefited from increased customer premiums, which can go up if the cost of settling claims, such as car repairs, rises.
Earlier this year, US investor Stonepeak moved to take a £450 million stake in the AA in an agreement with former owners Warburg Pincus and TowerBrook, both investment firms that remained majority shareholders.
The AA said a large portion of that investment has been used to reduce its debts.
Warburg Pincus and TowerBrook bought the company back in 2021 for £219 million, also taking on a multi-billion pile of its debts.
The transformation of the AA continues at pace and we remain confident in our strategy and our ability to drive profitable growth
Since then the owners say they have led the AA through a fresh strategy which has seen it return to growth and accelerate profitability.
AA chief executive Jakob Pfaudler said: “The transformation of the AA continues at pace and we remain confident in our strategy and our ability to drive profitable growth.
“Looking forward, the positive momentum from the first half of the year means we are on track for a strong overall performance for FY25 (the 2025 financial year) as we expand into broader driving services.”
This included launching an app called Vixa earlier this year, which connects to a person’s car and uses AI to help monitor and alert drivers of any issues.