The euro’s weakness hit the Irish arm of insurance and roadside recovery firm AA last year with revenues and earnings declining despite an increased number of customers.
Revenues at AA Ireland fell to £18.8m (€25.92m) in the six months to the end of July 2015, according to the interim results of its parent group.
This compares to revenues of £19.4m at the same period last year.
The Irish group’s trading earnings before, tax, interest, depreciation, and amortisation also declined in the first half of the year from £7.1m to £6.9m.
In the report, the company says its Irish division performed strongly in the insurance and roadside assistance markets.
The 3.1% and 2.8% declines in revenue and earnings reflect the weakness of the euro, it added.
On a constant currency basis, revenues climbed £1.6m with earnings before, tax, interest, depreciation, and amortisation up £0.6m.
The group doesn’t break down details of its Irish insurance business bar listing its number of insurance policies which increased by 10,000 to 182,000.
Its pool of roadside assistance personnel members rose from 116,000 to 122,000 in the six months.
At group level, revenue declined 2.5% to £484.6m while earnings before, tax, interest, depreciation, and amortisation also fell from £211.8m to £119.2m. Basic earnings per share fell from 11.6p to 8.2p.
The company said that the results “demonstrate good progress in the transformation of the AA in line with the strategic objectives set at the time of our IPO 15 months ago”.
It said the full benefits of the transformation outlined at the end of the last financial year would not be seen in its results until the latter half of 2017.
The restructuring programme included a plan to raise £200m via an equity placement while also refinancing £735m of debt.
A renewed emphasis was also placed on modernising its IT systems, improving the company’s back office functions and website, and increasing investment in advertising.
In the results just released, AA said its “award-winning advertising campaign” is showing positive signs and added that the transformation of its IT systems are within budget and on track to be completed by July of next year.
It said it now expects the restructure to produce annual savings of at least $40m in the medium term.
© Irish Examiner Ltd. All rights reserved