eBusiness Weekly
British motoring group AA AAAA.L said on Tuesday acting Chief Executive Simon Breakwell will remain in the role permanently while lowering its full-year profit forecast as it seeks to stabilise the business after firing its executive chairman last month.
Shares in the roadside recovery and motor insurance services company fell 9,3 percent.
Bob Mackenzie’s sudden dismissal in August from his roles as both chief executive and chairman and the news that costs related to an “erratic work load”, particularly in June and July, had dragged on profits hit shares in AA.
AA cut its forecast for earnings before interest, tax, depreciation and amortisation (EBITDA) for the full-year ending January 2018.
Hedge funds AQR Capital Management, GLG Partners and Miura Global Management all held outstanding short positions in AA on Monday, according to filings with the British regulator, suggesting they were positioned for a fall in the stock price.
Veteran investor Neil Woodford’s firm Woodford Investment Management owns 13 percent of AA after increasing its stake on August 1, according to Thomson Reuters Eikon.
Core profit for the half-year ending July 31 was flat at US$252 944 835.
The firm said planned capital expenditure would increase by US$45 874 247 695,60 more than expected due to delays to an IT transformation.
Analysts at Jefferies said that while Breakwell’s appointment was welcome, earnings per share downgrades and increased capital spending were not.
A trader who declined to be named told Reuters that delays to restructuring and increased spending were concerns.
Speaking to Reuters by telephone, Breakwell said there was “nothing fundamentally wrong” with the business. — Reuters.
