February 21, 2018 / 7:22 AM / a year ago

AA to pay lower dividends

LONDON, Feb 21 (Reuters) - Roadside recovery group and insurer AA said on Wednesday it planned to pay lower dividends as it seeks to get the business on a more profitable footing.

AA said in a strategy update it would pay a total dividend of 5 pence per share for the financial year ending Jan 31, 2018, but that this would then fall.

“We propose paying 2 pence per share per year until such time as the Board is satisfied that the profit and free cash flow enable a change in policy,” it said.

The AA also forecast core profit for the 2019 financial year of between 335 and 345 million pounds ($468.77-$482.76 million), below this year’s forecast.

The company, which issued a profit warning last year after firing its executive chairman, confirmed last week it sees trading earnings before interest, tax, depreciation and amortisation (EBITDA) for the 2018 year of 390-395 million pounds. ($1 = 0.7146 pounds) (Reporting by Carolyn Cohn, editing by Maiya Keidan)

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