Trading Statement

RNS Number:1215T
RAC PLC
11 December 2003

RAC plc

PRE-CLOSE TRADING UPDATE - DECEMBER 2003



RAC plc (RAC), the motoring and vehicle services company, will announce full
year results to 31 December 2003 on 25 February 2004.

At the time of our AGM statement in April and again when announcing half year
results in July we were able to report strong progress. We are now pleased to
report that trading performance remains in line with our expectations, and
significantly ahead of last year.

Consumer Services

Consumer Services continues to perform strongly, with individual membership
numbers increasing for the fourth consecutive year and roadside revenues up by
8% over last year. Roadside service performance and customer satisfaction have
improved further following the implementation of our new despatch system in 2002
and the successful launch this year of our patented rapid deployment trailers.

Non-roadside revenues have continued to perform well and are 14% up on prior
year. Both BSM and Legal Services maintained the strong profits momentum
reported at the half year, whilst the restructured Financial Services business
is beginning to build.

The new management team at RAC Auto Windscreens is making good progress.
Revenues will be broadly flat with last year.

The implementation of our new customer management and data warehousing system
has now been completed. The cut-over from our legacy systems was effected
seamlessly during the fourth quarter and these are now being retired.

Business Services

The 10 year contract with British Airways to manage and maintain its 6,300
strong ground fleet has now been implemented and will provide the platform for
further growth in airside, one of the five target sectors we have identified.

Lex Vehicle Leasing has continued the good progress reported at the half year,
and its fleet has now grown organically to over 100,000 vehicles, a first for
the industry. Used car prices have remained stable during the year, but our
current pricing continues to be cautious.

As anticipated, Lex Auto Logistics has been impacted in the second half by the
expiry of our contract with Paccar to distribute DAF parts. In the current year,
this has been more than offset by the improved margins resulting from Paccar's
previous decision to terminate Leyland production. The terms of our contract
will result, as expected, in additional profits of approximately #12m in 2003.
Unity, our collaboration with Norwich Union to source and provide parts for its
accident repair network, is continuing to grow strongly with around 260 centres
being serviced.

RAC Business Solutions has performed well, with sales up 11%. The division has
delivered solid growth in its roadside business following new vehicle
manufacturer contract wins and growth in the insurance sector.

Hyundai has delivered sales growth of 6% during the year, and - in a record new
car market - has increased its market share to 1.24%.

The performance of our remaining Mechanical Handling businesses has improved
during the second half of the year, although they will still generate modest
trading losses during the period. Following the disposal of Lex Harvey and Lex
Birchwood in the first half, we are in discussions with a number of interested
purchasers for our remaining operations. An impairment charge of around #30m in
respect of our remaining Mechanical Handling businesses will be taken as an
exceptional item at the year end.


Debt

Our cash flow for 2003 as a whole will be strongly positive. As anticipated,
there will have been a net outflow during the second half of the year due to the
timing of Hyundai's working capital requirements. Net debt is expected to be in
line with our expectations.



Management

As announced separately today, we are pleased to report that Debbie Hewitt, our
Group HR Director, has been appointed Managing Director of our Roadside
business. She will take up her new appointment in May 2004 following the
retirement of Barrie Thrussell.



11 December 2003



Enquiries:

Richard Pennycook - Group Finance Director                     01628 843703

Niall Addison - Group Finance & Investor Relations Manager     07764 624701

For the media release:

Anita Scott, Emily O'Connell - Brunswick                       020 7404 5959


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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