National Express owner Mobico sees shares tank after miserable trading update
Shares in Mobico, formerly National Express, tanked nearly 30 per cent today after it suspended its full year dividend and announced plans to sell its North American school bus business.
The coach operator said now was the “opportune” time to consider the disposal, with advisers appointed to prep the business for sale in 2024.
In a downbeat trading update this morning, Mobico said it had been hit by rising costs and expects group pre-tax earnings to come in lower, at between £175m to £185m.
Mobico shares have slumped this year and are down nearly 50 per cent, as the firm struggles to rein in costs and recover to pre-pandemic profits, primarily due to soaring inflation.
Ignacio Garat, Group Chief Executive, said “we recognise that the recovery of our profitability will take longer than we had previously expected. That is why we are announcing decisive actions to ensure we deliver sustainable profitability from our growing revenue base.”
“Our actions to ensure a strong North America School Bus start up positions that business well for a potential disposal which would accelerate debt reduction and increase flexibility for growth investment.”
He added that the decision to suspend the dividend was “not taken lightly.”
Despite revenues rising over 10 per cent in its primary UK coach business, Mobico – renamed from National Express earlier this year – said that passenger numbers had been lower than anticipated, lowering its per-tax earnings forecast for the UK and Germany division by £15m to £20m for 2023.
The operator has announced a number of leadership changes this year, with Alex Jensen brought in in September to head up the UK division.
Tim Wertner was also appointed chief executive of its start up North America School Bus business over the summer.
The bus and coach group said that Alsa, its Spanish long haul business had continued to trade well, with passenger volumes up 29 per cent as it continued its expansion into European markets.