AA chief sacked for misconduct as flat performance blamed on 'erratic workload'

Roadside recovery firm the AA has sacked executive chairman Bob Mackenzie for gross misconduct as it warned over full-year results.

The group said Mr Mackenzie had been "removed" by the board with immediate effect.

A spokesman said it was a "personal conduct-related matter", but declined to give more information.

Mr Mackenzie has been replaced by non-executive chairman John Leach, who has been senior independent director at the AA since November 2014, while it has also named Expedia founder Simon Breakwell as acting chief executive.

The group made the shock announcement as it also said first-half performance has been hit by "erratic workload patterns", as it failed to adequately book roadside patrols to match demand.

Shares plunged as much as 18% as it said it now expects its annual performance to be flat on the year before.

Analysts at Liberum slashed their full-year earnings forecast for the AA by 3% from £414 million to £413 million after the results warning.

The AA had already begun plans to split the executive chairman role and will now speed up the appointment of a permanent chief executive following Mr Mackenzie's departure.

Mr Breakwell, who takes on the chief executive position on an interim basis, has been a non-executive director at the AA since 2014.

As well as spending 10 years on the board of Expedia, he also set up the European operations for taxi hailing giant Uber.com.

The AA insisted that it had otherwise enjoyed a "robust" first half, with membership expected to be "marginally" up year-on-year in the first half, at around 3.33 million from 3.32 million last July.

It said this comes despite upping prices after it passed on the 2% extra Insurance Premium Tax.

The group has been leading a turnaround and in March it reported the first rise in membership in eight years, as investment in its app and digital offerings helped stem a near decade of declines.

It helped drive the company to a pre-tax profit of £74 million for the year to January 31, compared to a loss of £1 million a year earlier, while revenues rose 1.6% to £940 million.

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