(Alliance News) - AA PLC on Tuesday posted a first-half revenue and profit fall and added that a private equity consortium now has a little longer to table a bid for the roadside assistance firm.
AA last Thursday said it had agreed to a request from the remaining two bidders to make a joint offer for the London-listed firm, which also sells car insurance.
AA said TowerBrook Capital Partners UK LLP and Warburg Pincus International LLC have confirmed a "strong interest" in making an all-cash takeover offer, acting as a consortium. The pair also would intend to significantly pay down AA's hefty debt pile.
"Discussions with the consortium have continued positively and due diligence is on-going," AA said on Tuesday.
The consortium has until the close of play on October 27 to make an offer to acquire AA.
Turning to its results for the six months ended July 20, AA said its revenue slipped 2.6% annually to GBP478 million from GBP491 million a year earlier.
Pretax profit was 38% lower year-on-year at GBP26 million from GBP42 million.
AA's paid membership base slipped 2.0% during the half, with customer retention flat at 80%.
"This was due to the early impact of the lockdown restrictions in March which limited driving on Britain's roads and led to an initial decline in new business volumes. Following the gradual lifting of the lockdown restrictions in June and our recently launched above the line marketing campaign in July, we have seen a steady improvement in new business volumes and expect progressive recovery to continue into the second half," the company said.
"Looking ahead, Covid-19 continues to create uncertainty in the macro environment and the group remains cautious about the second half of the year. However, given the benefit of the actions already taken in the first half and our flexibility to adjust to further changes in trading, the group reiterates its previous expectations of delivering a robust performance in financial 2021, only slightly below that of the prior year."
In financial 2020, AA posted pretax profit of GBP107 million on revenue of GBP995 million.
AA shares were 1.5% lower at 28.95 pence each in London on Tuesday morning.
By Eric Cunha; ericcunha@alliancenews.com
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