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Profits have more than doubled for the AA

Since private equity firms Permira and CVC purchased the AA from Centrica in 2004 for £1.75bn, profits have more than doubled to £200m and are set to increase by a further 20% in 2006.

Tim Parker is the man behind the profits surge. Under him about 2,000 workers, a quarter of the workforce, were made redundant, leading to a more efficient organization.

The number of jobs attended to by patrols has gone up and the proportion of cars fixed at the roadside has also increased.

“Currently we’re fixing eight out of 10 cars at the roadside, but we’re always looking to increase this number,” says a spokeswoman for the AA.

Despite this, the number of garages employed by the AA has remained steady. “We’ll add more when the demand is there,” says the spokeswoman.

Over the next few months, the AA is set to unveil plans involving the acquisition of two businesses, totalling £100m in costs. Parker recently told the Sunday Times that one of these will be a smaller rival roadside-assistance business and the other an insurance firm.

It will use the latter to expand its market share in the insurance sector, where it has more than one million motor customers.

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