NRMA Motoring & Services delivers strong profit result

NRMA Motoring & Services has achieved a solid net profit after tax of $47.2 million in 2005-06, confirming the financial strength of Australia´s largest mutual.

Before change in fair value of investments, NRMA achieved an operating profit of $36 million (2004-05: $28.2 million).

NRMA Motoring & Services CEO Tony Stuart, said the result reflected a solid operating performance against rising fuel costs and abnormal costs relating to the board election

?NRMA Motoring & Services´ financial position is strong ? there are dramatic differences between the NRMA of today and the NRMA of three years ago, which was losing more than $1 million each week,? Mr Stuart said.

?The Board and management set the company an ambitious task three years ago to turn the business around, secure our financial future and find new and better ways to deliver real benefits to members that go beyond roadside assistance.

?Our ?bricks-and-mortar´ strategy of diversifying NRMA´s investment portfolio to one of reduced risk, reliable income and direct assets like property means we have secured a solid foundation.

?Underpinning this strategy has been the acquisition of new businesses such as Thrifty and Treasure Island Holiday Resort that hold many synergies to our core products.

?We will continue to develop new ways to deliver value to our members and I am pleased to announce that following constructive discussions with NRMA Insurance, members of NRMA Motoring & Services will soon be able to use their NRMA membership to receive benefits from NRMA Insurance products.

 ?Sixty per cent of our members carry at least one insurance policy with NRMA Insurance and this agreement reflects the recognition NRMA Insurance has for our members.?

Details of the insurance benefits available to NRMA members are now being finalised with Insurance Australia Group, NRMA Insurance´s parent company.

NRMA´s investment income of $50.3 million is 36 per cent up on last year, which was assisted by a $17.3 million increase in dividend income to $43.3 million. Excluding the company´s strategic shareholding in IAG, the investment portfolio returned 12.3 per cent. 

Net assets have increased by 5.7 per cent to $687.8 million (2004-05: $650.4 million).

After the adoption of Australian equivalents to International Financial Reporting Standards, the company had an operating loss of $7.8 million before investment income and fair value gains (2004-05: $9.1 million) due to costs attributed to superannuation accounting changes and the Board election.

NRMA´s operating revenue has increased by 6.5 per cent to $258.8 million (2004-05: $242.9 million).

NRMA President Alan Evans said the Board was pleased that NRMA´s revenue from non-membership activities had increased by 9 per cent, reducing the company´s dependence on membership revenue.

?Creating a sustainable financial base for the company while delivering new and exciting benefits to add value to the NRMA membership has been the commitment of this Board since I joined three years ago,? Mr Evans said.

?Working alongside the management team we have delivered on this promise.

?Our purchase of three new Travelodge Hotels and the Treasure Island Holiday Resort on the Gold Coast gives our members discounts on their holiday accommodation.

?NRMA´s purchase of Thrifty Australia not only makes good business sense but holds many synergies with our existing products.

?We have invested in new patrol vans and the latest technology and equipment to ensure our patrol officers are even better placed to continue providing world-class roadside assistance to our members.

?The company has now returned its focus on doing what it was established to do 86-years ago ? serve its members. Our focus over the next 12 months is to continue delivering on this pledge and strengthen even further our role as a voice for motorists.?

Mr Evans said NRMA is now leading the debate on developing alternative fuels in Australia, fighting for a better deal for motorists with petrol prices, more road funding and an end to road closures and administration charges on the state´s newly built road tunnels.

?The company has returned to doing what it does best and we are better placed than ever before to continue delivering these benefits to our members,? Mr Evans said.

?This shows that roadside assistance and member benefits can be sustainable, if the company is managed properly.?