27th Jul 2023 11:44
(Alliance News) - Mobico Group PLC on Thursday said it swung to a first half loss, as operating costs offset revenue gains, and pointed to improved performance when taking into account its transition away from "significant" Covid-19 support.
The Birmingham-based public transport provider, formerly known as National Express Group PLC, swung to a pretax loss of GBP23.4 million from a profit of GBP20.5 million a year earlier.
Revenue was up 19% to GBP1.57 billion from GBP1.32 billion, but this was offset by operating costs rising 22% to GBP1.56 billion from USD1.28 billion. Furthermore, finance costs rose 47% to GBP33.8 million from GBP23.0 million.
Mobico highlighted revenue growth across all business lines, including price increases of over 13% on the 40% of contracts that were up for renewal this bid season in North America. UK revenue meanwhile was up 20%, reflecting strong growth in Coach and Bus passengers which was partly offset by the impact of reduced Bus funding.
Mobico declared an interim dividend of 1.7 pence, up from nothing a year earlier. With its 2022 results, it reinstated its dividend scheme with a 5.0p per share payout.
"2023 is a year where the group transitions away from significant Covid-19 support. We saw strong revenue growth in the first half, driven by customer demand. The profit result compared to prior year was impacted by a GBP60 million reduction in Covid-19 funding. Although operating profit was down on the year, once the GBP60 million reduction in 2022 Covid support is taken into account, adjusted operating profit grew significantly," said Chief Executive Ignacio Garat.
Adjusted operating profit in the first half fell to GBP57.5 million from GBP90.5 million a year earlier. Looking ahead, Mobico expects adjusted operating profit for 2023 in the range of GBP200 million to GBP215 million. In 2022, underlying operating profit was GBP197.3 million.
Garat continued: "In addition, we have seen significant wage inflation however, we expect this to be recovered - as planned - in the second half. Although there remain some market uncertainties, encouraging passenger growth, pricing power, continued pipeline conversion, high levels of contract retention, the actions we have taken on pricing and costs, and the ongoing successful mobilisation of contracts all support our confident full-year outlook."
Shares in Mobico were down 6.9% to 99.51p each in London on Thursday late morning.
By Greg Rosenvinge, Alliance News reporter
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