Mobico shares fall over 25% as group cuts profit outlook and suspends dividend

  • Mobico, previously known as National Express, posted a gloomy update 
  • It will sell its North America school bus arm in a bid to raise cash  

By JANE DENTON

Updated:

Mobico shares fell over 25 per cent on Thursday after the transport firm cut its annual profit forecast and suspended dividends.

The former National Express group has seen high costs dent profitability for longer than anticipated, which has also forced Mobico to put its North American school business up for sale in a bid to boost its bottom line. 

The transport operator expects its operating profit for the year to come in at around £175million to £185million, down from its earlier forecast of between £200million and £215million. 

Gloomy: Mobico's shares fell over 25% on Thursday after it cut its annual profit forecast

Gloomy: Mobico's shares fell over 25% on Thursday after it cut its annual profit forecast

The company operates bus, coach and rail services in the UK, North America, continental Europe, North Africa and the Middle East. 

Mobico shares were down 28.22 per cent or 23.99p to 61.01p this afternoon, having slumped over 62 per cent in the last year. 

Boss Ignacio Garat said in a statement: 'Our actions to ensure a strong North America School Bus school year start-up positions that business well for a potential disposal which would accelerate debt reduction and increase flexibility for growth investment.'

In the UK, bus commercial passenger volumes were down around 97 per cent on 2019 levels in the third quarter, with revenue growth expectations tempered by a lower-than-expected rise in passenger numbers.

The group said: 'The Board will continue to consider the dividend position as progress is made on deleveraging,' the company said. It did not specify when it expects profitability to recover fully.'

The business 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.

'Investors may well treat the updated guided range as a "show me story" at this stage,' RBC Capital analysts wrote in a note.

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