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AA profit soars in full-year results

AA has announced that its profit before tax rose by 102% to £107m in the full-year ended January 2020.

In the same period, total revenue increased 2% to £995n, whilst operating profit increased 17% to £257m.

There was a 19% growth to 869,000 in motor policies, and a 2% growth in home policies to 844,000.

The group said that its insurance division benefitted from investment in marketing, incremental sales and renewals through its in-house underwriter as well as systems investments including Insurer Hosted Pricing.

The average income per motor and home policy, including income from underwriter and accident management business, was up 4% to £83. 

In a statement, the AA said: “The outbreak of Covid-19 has been unprecedented in its impact on society and the global economy, and our priority is to protect the health and wellbeing of our staff, customers and suppliers. 

The AA provides an essential service and we have initiated a number of actions across our Roadside and Insurance businesses to ensure the continuity of our operations and services.”  

It added: “To date, the spread of Covid-19 has not impacted the group materially but there continue to be risks, including disruptions to our operations and, consistent with the rest of the market, there can be no certainty as to the future impact. 

“We are planning and executing changes to our operations that include the deferral or reduction of operating costs and capital expenditure across the group to ensure we limit as much as possible the impact to our Trading EBITDA and cash flow forecasts.”

The AA added that it has “proved resilient through previous economic downturns” and the steps it is now taking will help it to “maintain that resilience”. 

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