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RAC profits up 2%

RAC profits rose by 2% to £88.6m in 2004, with major input from its financial services division.

Profits from continuing operations (excluding Paccar) were up 12% to £71.2m (2003, £63.6m).

The contribution from discontinuing Paccar activities was down to £17.4m (2003, £25.6m). Profit before tax amounted to £77.7m (2003, £25.7m), and net debt dropped £14.5m to £139.8m.

RAC Business Solutions profits were up 271%, Lex Vehicle Leasing profits increased by 16%, and the group noted that its financial services strategy had been strengthened through the transaction of last year when RAC bought back the rights to sell insurance and finance to its customers from Axa Direct.

Chief executive Andy Harrison says: “We have opened up a big and exciting new opportunity in financial services, following last year’s AXA transaction.”

The company expects to increase the number of RAC members taking out its insurance policies by the end of the year to some 450,000, having doubled its insurance customer base to 280,000 by December last year. The AA is said to have some 1.6m insurance policyholders.

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