Mobico shares slump as Nat Express owner warns on profit
By Frank Prenesti
Date: Monday 25 Mar 2024
(Sharecast News) - Shares in National Express owner Mobico slumped on Monday after the transport company issued a profit warning and said its annual results would be delayed further due to auditing issues at its German rail business.
Adjusted earnings before interest and tax was now expected to be at the upper end of a £160m - £175m range, compared with previous guidance of £175m - £185m.
The company, which last month said it needed to review "accounting judgments" relating to its regional trains operations in Germany, had hoped to publish results at the end of March, but pushed the expected date to "the second half of April".
At the time it said it expected charges on two rail contracts to rise by between £40m - £70m more than previously forecast.
On Monday the group said the German statistics office had "recently and unexpectedly published restated and rebased versions" of two indices to calculate and agree the recovery of energy costs from relevant passenger transit authorities.
"The group has made an initial assessment of the implications of the revised indices. Whilst it is the group's expectation that the models used to calculate the profitability of the German rail business remain valid, further work is now required to determine the full effect of the revised indices," Mobico said in a statement.
"However, it is unlikely that those points will be resolved before the group intends to publish its 2023 results. At this stage the group currently estimates that the maximum effect of the revised indices, before any mitigation, is a reduction in total cost recovery over the term of the contracts (to 2032) of around £15m."
Reporting by Frank Prenesti for Sharecast.com
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