Mobico shares plunge to record low after half-year profit drop
Coach and bus operator reports 12.7% fall in underlying operating profits, cites competition in UK coach market and operational issues in North America
Shares in Mobico Group Plc, owner of National Express, fell to a record low after the company reported a decline in half-year underlying operating profits and flagged increased competition and operational troubles in its North American business.
Mobico said underlying operating profit for the six months to June 30 fell 12.7% to £59.9 million, a 4.8% decline on a constant currency basis, and reported a pre-tax loss of £7.1 million compared with a £29.3 million loss a year earlier. The group attributed part of the earnings setback to issues with two contracts at WeDriveU, its North America transit and shuttle services business, which it said had been hit by temporary operational difficulties. Shares plunged more than 20% in early trading and closed down 14.7% at 27.6 pence.
In a statement accompanying the results, Mobico said the UK coach market had seen a shift in the competitive landscape. "The competitive landscape in the UK coach sector has undergone significant change, marked by increasing competitive intensity," the company said, adding that modal competition was increasing as rail services recovered from recent industrial action and staff shortages. The group said that the half-year decline also reflected the operational issues at WeDriveU.
The company outlined plans to merge its UK coach operations into its better-performing Spanish Alsa business from January next year, a move the group said is intended to deliver cost savings and enable the sharing of best practice across operations. Despite the half-year earnings hit and the share price reaction, Mobico said it remained on track to meet its full-year guidance.
Analysts and investors had been watching the transport group for signs of recovery following wider sector pressures, including fluctuating passenger demand and cost inflation that have affected margins across bus and coach operators. The narrowing of the pre-tax loss compared with the prior year was a positive sign for management, but the immediate market reaction reflected concerns about near-term profitability and competitive dynamics in the UK market.
Mobico operates coach and bus services in multiple markets and provides transit and shuttle services in North America through WeDriveU. The company did not provide updated medium-term earnings targets in its interim statement, instead focusing on integration plans for the UK coach operations and steps to stabilise the affected North American contracts.
The group’s announcement comes as broader transport and mobility sectors contend with shifts in demand patterns and increasing competition from alternative transport modes. Management highlighted the integration with Alsa as a strategic response designed to reduce costs and improve operational resilience across its European businesses.
Mobico’s full-year performance will be watched closely by investors for signs that the measures outlined, including the UK-Alsa integration and remedial actions at WeDriveU, can stabilise margins and restore investor confidence. The company said it will provide further updates at its full-year results and through regular investor communications.
