Mobico shares slump to record low as profits come under pressure
National Express owner says annual profits will come in lower end of forecastsMobico is cutting costs in efforts to to boost its balance sheet
Mobico shares fell sharply on Thursday after the transport business warned its annual profit looked set to come in at the lower end of forecasts. The National Express owner expects its annual adjusted operating profit to come in at the lower end of its £180million to £195million guidance, amid sluggish demand in its UK buses arm and losses from a WeDriveU contract in Washington. The group reaffirmed its quest to cut costs across the business and double down on its mission to boost its balance sheet. Mobico is also undertaking a review of its non-core operations, with the group 'exploring options to monetise the assets' of its UK bus business ahead of incoming changes to franchising rules. Shares in Mobico fell 6.73 per cent or 1.46p to a record low of 20.24p, having slumped over 75 per cent in the past year. The firm's UK arm saw mixed results, with coach revenue falling 7.4 per cent and UK bus passenger volumes down 3.7 per cent, although revenue increased modestly. Phil White, chief executive of Mobico, said: 'We continue to focus on simplifying and strengthening the group, taking decisive actions to improve operational and financial performance.' Outlook: Mobico shares fell sharply on Thursday after the firm warned its annual profit looked set to come in at the lower end of forecastsWhite said he would scrutinise best practice from thriving Spanish arm ALSA across the business, while 'exploring options to monetise the assets of the UK Bus business ahead of franchising.'Discussions with German passenger transport authorities were ongoing, White added.ALSA grew revenue by 4.1 per cent year-on-year, bolstered by strong performance across its regional and health transport contracts. As part of its ongoing expansion outside Spain, the division secured a new €500million, eight-year contract to operate Park and Ride services in Riyadh, Saudi Arabia.Mobico also confirmed it will not redeem its perpetual hybrid bond at the first call date. The bond’s coupon will reset in February 2026.In September, shares in the National Express owner plummeted to a record low amid a drop in half-year earnings.In September, Mobico reported a worse-than-expected 12.7 per cent fall in underlying operating profits to £59.9million for the six months to 30 June – down 4.8 per cent on a constant currency basis.It also stayed in the red with pre-tax losses of £7.1million, although this was narrowed from £29.3million a year earlier. The group will merge the UK coach operations within its better performing Spanish Alsa business from January next year, with aims to drive cost savings and share best practice. DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
Share or comment on this article:
Mobico shares slump to record low as profits come under pressure
