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or pay a cancellation fee.
Forgot to add - this was all PRE LOCKDOWN. Insurance is the cash cow and hopefully less driving meant fewer claims. People are not likely to have cancelled their motor insurance - people still used the cars, albeit less often, and people are precious about clocking up NCB. No one wanted to lose a year for a lockdown that may have only been weeks.
I would take comfort in the fact that the last company report showed figures - the profit especially. Note, the above details are from some months ago with regards the info about shorts
Revenue rising +2% to £1b.
Profit doubling to £107m.
Ebitda at £350m.
Roadside membership growing.
Average income per member rising.
Average income per business-customer rising.
Motor insurance unit growing +19%.
Average income per insurance policy rising +4%.
Conversion from roadside member to insurance leaping from 25% to 36%.
Free cashflow soaring sevenfold from £12m to £83m.
Cash in hand at £200m.
Pension deficit and total debt reduced by £300m.
The debt and pension corner is turning.
Dividend yield (when it returns) currently around 10%.
No material business impact from the plague.
Shorts have fallen rapidly from 11% in May 2019 to 8% in Mar 2020 and 6% in early Apr 2020.
Shorts today still have ~40 million shares to buy back.
Big short squeeze underway.
Technical charts today pointing strongly to 27p as the next stop.
Daily trading volume is currently 20-40 times higher than normal.
Rising price + rising volume = bullish sign.
Fair value is calculated at 99p.
Almost all major broker forecasts currently range from 50p to 200p.
Tony 99 - agreed. With the AA business model I cannot see how more cars on the road is a massive positive! As you say the last few months have meant that the AA has been collecting its membership fees and incurring very little cost due to the lack of cars on the road breaking down - a cash pile is possible?!
Well they don't really make money the more people who break down (unless these people don't have membership and have to pay).
Consider also the number of people staying local for holidays this year. More cars, more accidents, more claims.
Hopefully the many months of limited driving gives a nice cash pile on the insurance side
Travel stats for yesterday were massively up apparently, all those people able to go on holiday and stay away for the first time in ages.
Excellent news for us then.
Mad on the roads today tail backs and breakdowns everywhere. RAC reporting breakdown company at full stretch.
I’m watching this very closely, medium and long term I think it’s a good opportunity but very short term I do see this dipping back to 20p
agree. time to load a few more if it stays as low as now.
Just added again.