The AA has reported a 68% slump in pre-tax profits in its first set of annual results since last year's stock market float, as membership of the motoring organisation fell and the cost of servicing its debt grew.

It announced a £935m re-financing including a £200m share placing and £735m in new debt to replace expensive loan arrangements from the past, which it said would save it £45m a year.

Profit before tax for the year to the end of January fell to £60.8m from £192.8m the year before.

Finance costs rose 48% to £266.1m.

Revenue from its Irish subsidiary fell by 2.3% to £38.7m during the year, which the group blamed on the weakness of the euro.

On a constant currency basis, the AA said its Irish revenue would have risen by £1.5m.

The number of individual memberships in the country rose by 4,000 to 119,000, while the amount of insurance policies on its books also grew to 178,000.

The AA, led by executive chairman Bob Mackenzie who joined last August, issued more than £3bn worth of debt in 2013 under its previous private equity owners CVC, Permira, and Charterhouse.

The firm, which completed flotation valuing it at £1.4bn in June, said following its refinancing it would pay dividends of no less than £50m for the current financial year and adopt a "progressive dividend policy" from then.

It also revealed exceptional costs of £33.2m related to the share float.

Individual membership fell to 4.5% to 3.8 million though average income per member lifted by 7.1% over the year to £135.

The AA said business customers rose 13% to 9.6 million, although its average income per business customer fell 9.5% to £19 over the period.

It added that it would embark on a series of investments, including £128 million to improve its IT systems over the next three years.

Mr Mackenzie said: "The refinancing will help us to deliver a key financial objective set out at the time of initial public offering in June - to reduce borrowings and associated interest costs."

The firm, which was formed in 1905, said the current financial year would be one of transition as it developed its strategy and made large investment and operational changes.

It also said it would increase its marketing budget by £10m a year as it invested in its brand.

Over-50s focused firm Saga and the AA were combined in a £6.2bn deal at the height of the credit boom in 2007 to form Acromas, owned by private equity firms CVC, Permira, and Charterhouse.