Today’s results “demonstrate the stability and hugely cash-generative
characteristics of this business,” said Mr Mackenzie. “Since arriving at the
AA less than three months ago, the new executive team has focused on getting
to know the business in detail, assessing the business operations and
infrastructure and developing the strategy for future long-term growth.
Progress has been made on all fronts but there is more to be done.”

The company acknowledged in the results that it needs to strengthen its board
to attain the premium stock market listing it wants, and that the speedy way
in which it was floated means this is yet to be achieved. AA has begun a
search for a new chief financial officer to replace Andy Boland, who is due
to leave. Mr Mackenzie’ position as executive chairman is not in line with
the good corporate governance practice but it is understood that major
investors insisted on him taking the dual role.

Over the six months the AA said profitability at its core Roadside Assistance
division – which represents more than 80pc of the business – had improved by
120 basis points to 49.8pc.

The number of breakdowns the AA’s distinctive yellow vans attended fell by
100,000 to 3.4m on an average annual basis. Personal members over the six
months declined by 2.2pc to 3.955m but average income per member rose by
5.8pc to £128. The number of business customers rose by 2.7pc to 8.814m,
boosted by agreements with VW, Hyundai and Porsche, helping AA consolidate
its number position in the car manufacturer sector with 68pc of the market.

AA’s insurance arm’s revenue fell by 4.2pc to £72.3m as the number of policies
in force declined by 9.2pc to 2.222m.

The driving instruction division’s revenues rose by £3.3m to £45.7m and
trading margin increased by 330 basis points to 23.4pc.

Mr Mackenzie said the task for the company now is to invest to secure its
future now it is a listed company.

“The recent history of the AA shows exactly why it is such a great business.
Through one of the worst consumer downturns in living memory it has
continued to grow profits and generate cash. It will continue to do so but
there is also the potential to grow the business substantially,” he said.
“The new management team has already identified a number of opportunities
and initiatives that have the capacity to deliver significant returns. As a
public company committed to delivering long-term shareholder value, now is
the time to invest for the future.”