Mobico saw shares tumble as it reported a 36% fall in underlying group pre-tax profits to £92.9million for 2023
Shares in Mobico, the owner of National Express, plunged after it reported shrinking profits and announced the resignation of its financial boss following accountancy complications which led to twice-delayed annual results.
The group, which rebranded as Mobico from National Express last year, saw shares fall by as mcuh as 11% as it revealed a 36% drop in underlying pre-tax profits, bottoming at £92.9million for 2023. Statutorily, the company remained significantly in loss with pre-tax losses amounting to £98.3million. This is, however, less damaging than the £225.3million losses experienced in 2022.
The disclosure of these results, originally scheduled for February 29, had been delayed twice due to finance issues within its German railway division. The problems arose from unexpected changes to indices used by Germany’s statistics office. Mobico disclosed that chief financial officer James Stamp will step down from his role during the firm’s annual general meeting on June 11.
Stamp will be succeeded, on an interim basis, by Helen Cowing, who starts her stint with the company on May 8, before formally assuming the position on June 11. She has prior experience as group chief financial officer at companies such as Octopus Group, Selecta Group, and Ideal Standard International.
Concerning the disappointing figures, Ignacio Garat, Mobico chief executive, acknowledged that they fell “below the expectations we set ourselves at the beginning of the year”. He conceded that the disruptions, stemming from additional work involving the German rail business, were “regrettable”.
“Although group revenue growth was encouraging, driven by passenger demand and actions taken to recover inflation, this has not translated into an improvement in reported profitability,” he warned. On a constant currency basis, statistics showed a 10.9% rise in revenues.
Mr Garat hinted at further fare increases for passengers, stating that “our focus remains on delivering the benefits of our restructuring programs and in recovering inflationary costs through pricing”. Alongside the fees, the group released an update on the first quarter trading, displaying a slowdown in group-wide revenue growth to 6.7%, on a constant currency basis, due to decreased revenues in Germany and North America.
However, it forecasted an uptick in underlying earnings for 2024, projecting between £185million and £205million, a rise from £168.6million in 2023. In the UK, the company revealed a 9.5% increase in revenues, courtesy of a whopping 18.3% surge in its bus division due to fare hikes, a bounce back in passenger numbers and the absence of any disruption from driver strikes.
The firm disclosed a moderate rise in UK coach revenues by 3.4%, whilst hinting at potential further steps to give a much-needed boost to its struggling private coach hire firm, National Express Transport Solutions (NXTS). In October last year, two depots within NXTS based in Gillingham, Kent, and Sydenham, London were shut down, with warnings on Monday that “all potential options are being considered, including further rationalisation and rightsizing” as work continues to revamp the division.