Racv Accelerates To Healthy $97.5m Result
The Age
Friday September 16, 2005
BUOYANT conditions in the insurance industry and investment markets sent RACV's earnings speeding to a record in the year to June 30. The 12.5 per cent rise in the mutual society's profit to $97.5 million was underpinned by further reductions in operating costs, managing director Colin Jordan said.
The RACV claimed a tax credit of $6.31 million in the previous year, compared with paying $20.1 million in the year to June 30. Revenue for the year was up 13 per cent, or $45 million, to $383 million. The bulk of the increase came from the club's insurance interests, which include commissions and dividends from its 30 per cent stake in Insurance Manufacturers Australia. The IMA dividend was up $23.7 million to $94.9 million. Commission income edged up 1.5 per cent to $52.7 million.The IMA dividend reflected both the "sustainable pricing" now prevailing in insurance markets and the strength of investment markets. This second factor also underpinned a doubled return of $21.8 million on the club's $557 million investment portfolio. The flood of cash allowed the club to pay off all the debt associated with the building of the RACV Centre and club at 501 Bourke Street before it opened on July 4.Mr Jordan said club revenue was up 4.2 per cent to $17.4 million, despite the move to the new premises. While revenue from member services (roadside service and the club) rose, the segment result eased from $4.08 million before tax to $1.55 million. The roadside service club continued to grow, with membership rising 2.1 per cent to just more than 1.3 million. They answered 2.2 million calls for help during the year. Chief financial officer Anne Flanagan said this meant the club had continued to increase its presence among the state's car owners as the total number of cars on the roads had risen by 2 per cent during the year.Roadside service revenue rose $4.2 million to $112 million, with the bulk of the increase coming from improved subscriptions for the premium Extra Care and Total Care services, where revenue was up $3 million to $38.3 million.
© 2005 The Age