At the time of the IPO, we established a broad outline of our strategy for the AA that built on the AA’s key strengths and was fundamental to the investment case. The strengths we intend to develop and enhance to generate value for our shareholders are set out below.
1 Strengthen the AA as the pre-eminent motoring services organisation in the UK
The AA is dedicated to serving the needs and interests of our members and customers and to continually improve our offering. We will develop our services while maintaining the outstanding experience delivered in our roadside assistance business, our core segment. Our aims are to strengthen Member benefits to improve loyalty; work more closely with business partners as car technologies develop; and further enhance the motoring propositions we offer within the UK’s consumer motoring market.
2 Reduce Group borrowings and the associated interest costs
We are highly cash generative with low maintenance capital expenditure requirements and a negligible working capital investment requirement. Continuing to improve our operating profit will help generate significant further free cash flow. This will facilitate a sustained reduction in leverage and associated interest costs as well as allowing us to pursue a progressive dividend policy. The refinancing represents significant progress in addressing this objective.
3 Revolutionise customer experience through investing in and embracing new technologies
We intend to invest in new technologies and improved customer systems to stimulate growth and enhance productivity across our business. As part of this we will invest in enhanced customer relationship management systems to allow our members to engage with us more easily. In addition, we will invest in our digital capabilities to help us provide tailored and distinctive products for them. We have a unique position as “Britain’s most trusted commercial brand” and a leading position with motor manufacturers. This will provide the foundation for our investment in advanced diagnostics, using remotely gathered data to deliver emergency support. We are currently exploring a number of potential partnership opportunities in this area. We will also develop new distinctive services as the mobile connected motoring market develops.
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Fanum House, Basing View, Basingstoke, RG21 4EA.
Company number: 5149111
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