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AA on path of continued growth, say analysts

The AA reported that pretax profits slumped a massive 70% to £60.8m for the year to end January whilst earnings rose 1.7% to £430.1m and sales rose 1% to £983.5m.

Fiona Cincotta, a senior market analyst at www.finspreads.com, said: “At face value these figure look pretty shocking, however the recently listed FTSE 250 company is going through some huge changes both in terms of strategy and restructuring which should set it on a path of continued growth for the future. Profits took a hit as the break down firm started to invest in back office functions and marketing, areas which have been starved of capital in the past but are essential in order to carry the firm into the future with a solid base.

“Despite AA share prices dipping slightly on the news last week, they have gained over 70% in value since its floatation last June. There is a lot of work to be done at AA but it appears to be in the right hands and investors seem more than willing cut the slack needed in order to turn the company around.”

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.