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AA stays in low gear as cold snap prompts rise in breakdowns

Roadside call-outs rose by 8% to 1.91mln in the half-year to July
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Membership dropped again

The AA PLC (LON:AA.) kept its reduced profit forecast for the year unchanged even though bad weather sparked a surge in breakdowns.

Roadside call-outs rose by 8% to 1.91mln in the half-year to July, which was much higher than expected and the ten-year average.

READ: AA driven lower by Barclays downgrade

That meant higher costs, said the insurer, as it had to use third-party garages to deal with breakdowns.

AA membership dropped by 1% to 3.25mln, in part due to renewal price transparency rules.

Insurance did well, with the number of motor policies sold rising by 7% to 659,000, while the decline in home insurance slowed.

In February, the group cut its dividends and earnings expectations and unveiled a strategy to invest more into new technologies and roadside improvement.

Today, it said it was on-track to meet the reduced guidance of underlying profits [trading EBITDA] of between £335mln to £345mln for the year to next January.

Shares were little changed at 114.6p.

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