BREAKDOWN AT THE AA
£100m wiped off firm as profits plunge Bosses blame former private equity owners But sacked chief exec says it’s all THEIR fault
The sacked former boss of the AA has launched an extraordinary attack on the current management after £100m was wiped off the company’s value following a profit slump.
Bob Mackenzie, 65, who was kicked out last year for gross misconduct after allegedly punching a colleague, is suing his ex-employer for £225m.
he, and the AA’s previous private equity owners were blamed by new chief Simon Breakwell,
left, for the poor performance. But ousted Mackenzie, right, blasted back: ‘The AA results announced today are truly dreadful.
‘The company appears to be in chaos, reflecting a management team who seem to have no plan for fixing the core business’.
The AA said profits had taken a hit because it ploughed money into new IT systems, call-centre staff and breakdown patrols needed to help manage higher levels of calls.
Its profits fell 65pc in the first half compared with a year earlier, dropping to £28m from £80m, while breakdowns rose 8pc. AA shares yesterday fell 13.7pc, or 16.35p, to 103.15p.
Asked why more patrols and other investment had not been sorted out sooner, Breakwell, 53, said: ‘Unfortunately the previous chief executive [Mackenzie] isn’t here to answer that.’
Under the old regime, he said, there had been ‘too much focus put on short-term profitability’ and not enough on investing and delivering top class service.
The AA was owned by CVC, Permira and Charterhouse before floating on the London Stock exchange in 2014.
The breakdown and insurance company said the profits dip was also due to an extra-cold winter and boiling hot summer, which created a pothole ‘epidemic’ on Britain’s roads.
The AA has so far spent £1m fighting a legal claim from Mackenzie who wants up to £225m, the potential value of share awards he amassed before his sacking. No cash has been set aside to cover costs as the firm expects to win the case, as well as recover its £1m outlay.
Mackenzie has blamed stress and exhaustion for an outburst in which he punched insurance chief Mike Lloyd, 38, in the wood-panelled bar of the five-star Pennyhill Park hotel, Surrey, after a day of strategy meetings last summer. he alleges there was no proper investigation and claims the AA ‘dismissed and belittled’ his mental health to justify his dismissal.
he told the Daily Mail last year: ‘I still feel deeply embarrassed and ashamed by the incident. It’s been devastating, not only for me, but for my wife Jane, who is mortified, and the whole family. I have very little recollection of what happened.’
Despite the fall in half- year profits, the AA said it is on track to meet profit guidance for the year.