A growing customer base has helped boost profit at the AA after a US investor took a £450m stake in the motoring group.
The breakdown giant has posted a pre-tax profit of £39m for the six months to the end of July 2024, up 70 per cent compared to the same period in 2023.
The surge in profit comes after the AA’s revenue jumped by 14 per cent to £712m year on year.
The AA said that its higher sales were partly driven by an increase in customers, and a higher average income per member – meaning the amount it earns from customers paying for policies including breakdown cover and insurance.
The business has recently benefited from increased customer premiums, which can go up if the cost of settling claims, such as car repairs, rises.
The company added that it is expanding into other driving services amid the launch of an artificial intelligence (AI) car “wellness” app.
AA benefitting from ‘refreshed strategy’
The results come after US investor Stonepeak moved to take a £450m stake in the AA earlier this year in an agreement with former owners Warburg Pincus and TowerBrook, both investment firms that remained majority shareholders.
The AA said a large portion of that investment has been used to reduce its debts.
Warburg Pincus and TowerBrook bought the company back in 2021 for £219m, also taking on a multi-billion pile of its debts.
Since then, the owners say they have led the AA through a fresh strategy, which has seen it return to growth and accelerate profitability.
AA chief executive Jakob Pfaudler said: “The transformation of the AA continues at pace and we remain confident in our strategy and our ability to drive profitable growth.
“Looking forward, the positive momentum from the first half of the year means we are on track for a strong overall performance for FY25 (the 2025 financial year) as we expand into broader driving services.”
This included launching an app called Vixa earlier this year, which connects to a person’s car and uses AI to help monitor and alert drivers of any issues.