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Motoring group AA's interim core profit flat, appoints CEO

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Motoring group AA's interim core profit flat, appoints CEO

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LONDON (Reuters) – British motoring group AA’s <AAAA.L> core profit was steady in the first half of its financial year, the firm said on Tuesday, as it announced that acting chief executive Simon Breakwell is to take on the role permanently. The company, which provides roadside recovery and motor insurance services, just beat analyst expectations for earnings before interest, tax, depreciation and amortisation (EBITDA), which were 193 million pounds for the six months to the end of July, compared with 192 million a year ago. Analysts had forecast EBITDA at 191 million pounds. The results are the first since AA issued a profit warning and dismissed its executive chairman in August. The firm reported growth in its insurance broking and underwriting businesses and membership base, and a 1 percent rise in trading revenue to 471 million pounds. It maintained its interim dividend at 3.6 pence per share. Breakwell said he was reviewing what the company needs to deliver its potential. “I am confident that we have the financial strength to build the right team and equip it appropriately to deliver a distinctive business proposition which can generate growth,” he said in a statement. AA cut its full-year forecasts back to 2016 levels and fired executive chairman Bob Mackenzie for gross misconduct in early August. Mackenzie was fired due to a fight with a colleague, according to media reports. Mackenzie’s sudden dismissal from his roles as both chief executive and chairman and the news that costs related to “erratic work load”, particularly in June and July, had dragged on profits hit AA’s share price. The company’s shares have fallen more than 30 percent the start of August.

(Reporting by Emma Rumney; Editing by Rachel Armstrong)
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