Mobico, the rebranded National Express, witnessed a significant decline in its share value following the announcement of shrinking profits and the resignation of its chief financial officer, James Stamp. The company’s financial performance fell short of expectations, with a 36% reduction in pre-tax profits to £92.9 million for 2023. Despite revenue growth, this drop in profitability was attributed to accounting complications within its German railway division, which led to a twice-delayed release of annual results.
In addressing these setbacks, Mobico CEO Ignacio Garat expressed regret over the disruptions caused by the German rail business and acknowledged that the results fell below the company’s initial projections. Garat indicated that the group’s focus remains on executing restructuring programs and recovering inflationary costs through fare adjustments. Mobico’s first-quarter trading update showed a slowdown in group-wide revenue growth to 6.7%, influenced by reduced revenues in Germany and North America.
Despite the challenges, Mobico projects an uptick in underlying earnings for 2024, anticipating a range between £185 million and £205 million, an increase from £168.6 million in 2023. In the UK, the company reported a 9.5% rise in revenues, driven by a surge in its bus division. However, the struggling private coach hire firm, National Express Transport Solutions (NXTS), will undergo further evaluation with potential restructuring and downsizing measures considered.
