RAC’s H1 profits show that it is well on the way to meeting its full year target of 6% pre-tax profit growth. The company’s success is down to strong performance across all of its businesses and brand utilization will continue to be central to their performance.

Probably best known for its breakdown and recovery services, RAC has developed into an automotive services company, incorporating BSM, Britain’s largest driving school, and Lex Vehicle Leasing, one of Britain’s best known and largest contract hire companies. In terms of brand recognition, RAC probably couldn’t have two better names in their respective markets. The company also provides financial services, insurance services, vehicle testing, accident management services plus several other automotive related products.

The breakdown and recovery sector has seen the emergence of Green Flag as a serious competitor to RAC and AA the last few years; despite this the RAC announced a strong performance in this sector, recording a membership of over 2.2 million.

BSM has increased its size by 7% to over 3,000 instructors and recorded revenues of GBP16.8 million for the first half of the year, an increase of 4% over the same period a year ago.

A key contributor to the group’s results was the performance of Lex Vehicle Leasing, a jointly owned venture with HBOS. Revenue increased by 16% to reach GBP118.7 million (for RAC’s share only). Overall, the RAC group recorded a turnover of GBP753.2 million for the 6 months to 2004.

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The last five years have seen RAC develop from primarily being a breakdown and recovery company into an overall automotive services company with some success. This has largely been through the utilization of its strong brand as well as investing wisely in other well-established brands. Further leverage of this cross business brand strength is key to the company’s continued growth.

SOURCE: DATAMONITOR COMMENTWIRE (c) 2004 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.