AA PLC (LON:AA) shares rallied as its financial results highlighted a “resilient, cash generative” business, albeit the financials cover the pre-coronavirus period.
Revenue for the twelve months ended 31 January 2020 amounted to £995mln, up 2%, while operating profit increased 17% to £257mln.
Profit before tax rose by 102% to £107mln, with earnings per share at 14.1p from 6.9p in the preceding year.
Updating on the pandemic impacts, the AA said that trading in February and March was in line with expectations.
In April, trading was described as “more variable”. With fewer cars on the road the company noted that total breakdowns are materially down, new membership sales have softened and retention rates are materially down.
The company said that insurance business has been resilient and is performing in line with expectations.
In response, AA said it is making a number of changes which will result in the deferral and reduction of a range of operating costs.
It has cancelled pay rises, suspended the normal bonus scheme, frozen new hires, cut director pay by 15% and put in place tight cost controls.
AA shares advanced 15% to change hands at 30.22p.