The following statement was made today by Sir Trevor Chinn, Chairman of RAC plc, the motoring and vehicle solutions company, at the Company’s Annual General Meeting:
The following statement was made today by Sir Trevor Chinn, Chairman of RAC plc, the motoring and vehicle solutions company, at the Company’s Annual General Meeting:
“Our performance in the first quarter shows significant growth and demonstrates the benefits of the transformation that has taken place since the acquisition of RAC Motoring Services in 1999. We continue to focus on our growth opportunities in consumer and business services, based on our strong brands and our unique motoring and vehicle capabilities.
In the first quarter, the Company has traded significantly ahead of last year. Our Consumer business has continued to grow; we have extended our track record of winning large business services contracts; and, through the sale of our larger mechanical handling businesses, we have taken another important step in focusing the Company on its growth opportunities in consumer and business services. Our financial position is strong, driven by good underlying net cashflow and Ł98.7 million proceeds from the mechanical handling disposal, which will be earnings enhancing.
Consumer Services: our individual roadside membership base continues to grow at 5% per annum, as it has done since we acquired RAC, and increased to 2.16 million in the first quarter of 2003. Our non-roadside businesses are maintaining the rapid growth rate they have established over the last two years.
Our new deployment systems, implemented in 2002, are delivering the planned improvement in service and efficiencies. We are nearing the completion of the major investments in RAC core systems, which provides the platform for greater efficiency, higher service levels and continuing growth.
Business Services: We have a unique set of capabilities in outsourced motoring and vehicle solutions. A further example of our success in this area is the recent award of a 10 year contract by British Airways to manage their 6,300 ground fleet vehicles and equipment. This builds on the continued success of our 12,500 vehicle White Fleet contract with the Ministry of Defence and illustrates our leading position in the provision of vehicle solutions for larger complex fleets in a high service environment.
Lex Vehicle Leasing, our largest business services profit contributor, is an important part of our service offering and continues to grow, whilst maintaining its good shareholder returns. RAC Business Solutions has continued to perform well in 2003.
Manufacturer Support Services: Lex Auto Logistics will benefit from the British Airways ground fleet contract and we are encouraged by the pipeline of new contract opportunities. Our Hyundai importership increased its market share in the first quarter, with registrations increasing by 7%. These businesses continue to generate substantial cashflow.
Prospects: As we said in our 2002 Annual Report, the ingredients are in place for RAC to deliver another good year in 2003. We remain confident about our full year performance, driven by significant progress in our Consumer division and continuing growth in business services, supported by strong cashflow.
After 47 years’ service with Lex and RAC, I will be retiring as Chairman after this Annual General Meeting. I am proud to hand on the Chairmanship to my successor, Peter Smith, while the Company goes from strength to strength as a result of the transformation of the past four years. I look forward to many years of continued success for RAC under the leadership of Peter and our Chief Executive, Andy Harrison.”
For further information, please contact:
Andy Harrison, Chief Executive, RAC plc 020 7705 1257
Niall Addison, Group Finance & Investor Relations, RAC plc 01628 843 820
Anita Scott / Stuart Bruseth, Brunswick 020 7404 5959