RAC Holdings has culled the number of potential bidders for its motoring services arm down to 'single figures' but insists it could still decide a flotation is the best option. News of the shortlist was revealed as RAC Holdings announced its annual profits, which showed the scars of preparing for disposal of RAC Motoring Services.

Results for the year to December 31, 1998 showed that an increase in income of 14% to £310.9 million (1997: £271.2 million) and a 45% rise in pre-tax profits to £24.7 million (£17.0 million) were wiped out by exceptional charges. The demerger of RAC Motoring Services from the Royal Automobile Club and wrangles with shareholders over who benefited from any sale created a one-off cost of £29.9 million, leaving an annual loss of £13.2 million (1997: £4.2 million).

At the presentation of the results, the firm revealed that a shortlist of potential buyers which had numbered 27 has now been whittled down to single figures. A spokesman for RAC Holdings told FNN: 'We cannot comment on market speculation. We are continuing our twin track approach and a decision will be made at the end of May.'