Business

AA extends takeover deadline amid profit slump

AA has announced that pre-tax profits tumbled 39% to £26m in the six months ended 31 July 2020.

Revenue also fell by 2.6% to £478 in the first half of the year, down from £491m reported the year before. 

Nonetheless, the same period saw an 11.2% and 0.9% increase in motor and home policies, respectively.

Trading EBITDA was also up by 4.8% to £173m in the period, reflecting the “resilience of core operations and prudent cost management actions to mitigate the impact of Covid-19”. 

Alongside its latest results, the insurer also released an update on its potential joint takeover by Towerbrook Capital Partners LLP and Warburg Pincus International LLP.

The insurance and roadside assistance provider stated the consortium now has until 27 October to express a definite intention to put forward an offer, an extension of the previous deadline which was 29 September.

Simon Breakwell, CEO, said: ‘‘We delivered a remarkably strong performance in the first half, reflecting the resilience of our operations and the swift actions we took to mitigate the challenges presented by COVID-19

‘‘In a time of national crisis, I am very proud that our employees exemplified the true culture of the AA by going above and beyond for our members and by supporting thousands of NHS employees and several ambulance services across the country.’’

He added: ‘‘As we look ahead, despite the continued uncertainty and challenges of COVID-19, we are reiterating our full year guidance of delivering a robust performance in the year ending 31 January 2021, only slightly below that of the prior year, demonstrating our confidence in our resilient and flexible business model.’’

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