AA (AA) H1 2025 earnings summary

Executive summary

• H1 revenue grew 14% and adjusted EBITDA 9%; profit before tax rose 70% to £39m.

• Stonepeak proceeds supported debt reduction, including redemption of £155m of B Notes; S&P upgraded A Notes to BBB from BBB-.

• Customer service improved, with higher NPS and Trustpilot ratings alongside improved operational metrics.

• H2 began with strong momentum, with continued focus on cash generation, debt reduction and profitable growth.

Financial highlights

• Revenue rose 14% to £712m from £625m; adjusted EBITDA increased 9% to £225m from £206m.

• Operating profit increased 32% to £127m; profit before tax rose 70% to £39m, and profit for the period increased 81% to £29m.

• Operating cash flow reached £190m, up from £174m; free cash flow increased 74% to £33m, supported by reduced capex and positive working capital.

• Reported EBITDA was £192m, up from £174m.

• Group net debt fell to £1,994m from £2,174m at FY24.

Outlook and guidance

• Management was confident of a strong full-year performance, with H2 growth focused on driver services, profitable growth and continued transformation.

• B2C roadside membership growth was expected to remain steady, with no material acceleration in the mature market.

• Management expected further growth in Home Insurance and Accident Assist and confidence in retaining key B2B accounts.

• Pricing increases had largely covered prior inflationary pressures; a calmer year-on-year pricing environment was expected.