Red Dwarf ad helps AA in battle to halt membership declines

A new Red Dwarf advertising campaign is set to help roadside assistance firm AA return its membership base to growth as it insisted it had already stemmed declines.

The group said its membership base had stabilised at 3.19 million in its first half, although this is still down slightly on the 3.25 million seen a year earlier.

It said membership numbers are set to be broadly flat this year and return to growth next year, helped by a “sustained” marketing push, including its recently launched ad campaign, which features the reunited cast of popular sci-fi sitcom Red Dwarf.

The AA reported an 8% fall in underlying pre-tax profits to £46 million for the six months to the end of July, although underlying earnings were 2.5% higher at £165 million as revenues rose 2.3% to £491 million.

Statutory pre-tax profits jumped 50% to £42 million in the six months to the end of July, but this was boosted by a raft of one-off items.

Shares slipped 2% after the results.

Simon Breakwell, chief executive of the AA, said: “In our roadside business, we have stabilised our personal membership base and are confident that this will be broadly flat this year and return to growth next year.”

Its roadside business saw interim underlying operating profits edge higher to £97 million from £96 million a year earlier.

Average income per members lifted 4% to £165.

The number of breakdown call-outs dropped to 1.65 million from 1.91 million a year earlier.

The AA recently sealed a three-year deal to offer roadside assistance to car insurer Admiral’s 4.3 million motor customers, which started this month.

It is also launching a smart breakdown service by the end of the year, using connected technology to enable early identification of faults to help prevent breakdowns and get drivers back on the road faster.

Its insurance arm saw 22% growth in motor policies to 803,000 and 3% growth in home policies to 841,000.

Revenues in the insurance business increased to £73 million over the first half from £69 million a year ago, but underlying earnings fell to £23 million from £25 million after increased marketing costs.

Mr Breakwell said: “We are making significant progress on our strategic plan and are building operational momentum across the AA, including our strategic partnership with Admiral as well as the launch of smart breakdown in the fourth quarter.”