Acromas Holdings, the company created from last September's £6.3 billion merger of the AA and Saga, said that it expected to pursue a stock market flotation “in due course” after reporting strong trading across all its businesses.

Andrew Goodsell, chief executive, said yesterday that he believed an initial public offering would be well received, although the timing depended on what he called “the vagaries of market conditions”.

He said that nothing was imminent, adding: “We've got lots to do before then.”

Reporting proforma results, Acromas said that underlying earnings (ebitda) in the year to January 31 had risen by 8.4 per cent to £484.5 million, from turnover up 4.1 per cent to £1.55 billion.

However, the group, which is controlled by Charterhouse, CVC, Permira and management, has £4.8 billion of debt and it lost £255.7 million after finance costs, exceptionals and goodwill.

Mr Goodsell said that trading since the year-end had been excellent in both halves of the business.

At the time of the merger, unions expressed fears about big job cuts, but Mr Goodsell said that employee numbers at the AA had risen by 7 per cent, while the total for the group as a whole had risen by 6 per cent to almost 12,000.

Mr Goodsell, who received £144 million from last year's deal, said that insurance and roadside assistance had become essential purchases, while its holiday business was benefiting from the spending power of its over-50s customers, who were increasingly opting for more exotic holidays, such as trekking or archaeology trips.

“The general view is that people still want to enjoy themselves,” he said.

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