(Alliance News) - AA PLC said Tuesday the Covid-19 virus outbreak has yet to materially harm the company, but noted it is cancelling its final dividend payment for financial 2020 to preserve cash.
As at January 31, the motoring association had cash and cash equivalents of GBP149 million and an available working capital facility of GBP50 million.
AA noted it remains "well within" its financial covenants at year-end.
The company delayed its annual results and instead issued a trading statement. This showed pretax profit doubled in the twelve months to January 31.
In financial 2020, AA's pretax profit rose to GBP107 million from GBP53 million the year before.
Revenue rose 2% to GBP995 million from GBP979 million.
AA said: "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."
In financial 2020, AA's trading Ebitda rose 3% year on year to GBP350 million.
In the firm's Roadside unit, membership was up 0.2%, ending the period at 3.2 million, with retention rates of 80%.
The average income per member was up 2% to GBP165, with the average income per B2B customer growing 5% to GBP22.
AA's Insurance unit saw 19% growth in motor policies to 869,000, with 2% growth in home policies to 844,000. AA said the rise can be attributed to investment in marketing, incremental sales and renewals through its in-house underwriter as well as systems investments including Insurer Hosted Pricing.
Conversion rates from its Roadside business into Insurance was 36% in the period, up sharply from 25% the year before.
Average income per motor and home policy was up 4% year on year to GBP83.
"The AA has proved resilient through previous economic downturns and the steps we are now taking will help us maintain that resilience. The management team has successfully turned the operational and commercial performance of the AA around in the last two years and remains focused on navigating the challenges ahead," the company added.
Shares in AA were 4.0% higher in London on Tuesday at 17.16 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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