22nd Apr 2024 13:17
(Alliance News) - Analysts were downbeat after Mobico released disappointing results and guidance, plus the exit of its chief financial officer on Monday.
Shares in Mobico slid 7.6% to 55.50 pence in London on Monday. They have fallen 55% in the last 12 months.
"Although in line with recently downgraded guidance, the 2023 results were poor, and [first quarter] trading shows concerning trends in North America and Germany," analysts at Peel Hunt remarked.
Mobico Group, the Birmingham-based public transport provider, formerly known as National Express, announced a 2023 pretax loss of GBP98.3 million, narrowed from GBP225.3 million the year prior, while basic loss per share totalled 30.2 pence compared to 41.4p.
The results had been delayed while the company clarified accounting issues at its German rail arm.
Revenue rose 12% to GBP3.15 billion from GBP2.81 billion.
Adjusted operating profit of GBP168.6 million in 2023 fell 15% from GBP197.3 million in 2022. This compared to guidance given in March of between GBP160 million to GBP175 million.
The total dividend was slashed to 1.7p per share from 5.0p.
Mobico said the loss reflected GBP30 million of restructuring costs and a GBP99 million charge in its German Rail business.
In a "challenging year", Mobico said profitability was also hit by significant cost inflation, especially wage costs, and significantly reduced Covid subsidies.
Chief Executive Ignacio Garat said: "Our 2023 results are below the expectations we set ourselves at the beginning of the year. The delays due to the additional work relating to the German Rail business was regrettable, but it is now concluded."
Looking ahead, Mobico predicted 2024 adjusted operating profit to be in the range GBP185 million to GBP205 million, meaning an improvement of at least 9.7%.
It said revenue in the first quarter rose 3.5% to GBP801.9 million, or by 6.7% at constant currency.
Mobico said James Stamp will stand down as group CFO on June 11.
Helen Cowing will join Mobico on May 8 and will be appointed as interim CFO on June 11. Cowling has previously held CFO roles at Selecta Group, Ideal Standard International BV and Octopus Group.
"It was difficult to find much to be encouraged about in the headlines, with the FY results missing consensus and guidance, 2024 guidance disappointing and the CFO leaving," said Gerald Khoo at Liberum.
Khoo explained full-year results were below consensus and came in towards the lower end of the guidance range, despite management having stated a month ago that the upper end of the range was more likely.
Operating profit GBP168.6 million, was below consensus of GBP175.7 million, and his forecast of GBP174.0 million.
However, revenue growth remains strong and pricing improvements in North American School Bus appear encouraging, he said.
Nonetheless, Khoo expects consensus estimates to slip to reflect guidance.
He pointed out management’s profit guidance for 2024 is for operating profit between GBP185 million and GBP205 million, below consensus of GBP211 million.
On a brighter note, Khoo sees a previously-flagged successful sale of the North America School Bus business and "negotiating mitigations" with customer passenger transport authorities in German Rail as key opportunities for the year ahead.
"The planned disposal ought to reduce leverage materially, although it is likely to be earnings dilutive," he remarked.
But analysts at Peel Hunt fear the poor performance of the North American bus business means that its disposal would be unlikely to achieve a "decent value."
By Jeremy Cutler, Alliance News reporter
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