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JG68
Cosmen knows business very well and management in two year did not forget how to run a business. This is not a charity business where Uk buses are being run for community service and they sign onerous contract and did not foresee what’s coming ahead. NA a business is up and running, US government granting millions for electric busses. ALSA is in the gulf region now and hence company is unable to achieve OP as little as 100 m out of 3.2 billion revenue. I must say I suspect this stock is being manipulated.
Very Fishy imo.
No wonder people have lost confidence in them, and possibly they've only picked that up and changed it this pm is because they read this board.
If you're reading Mr Dean, pull your finger out, start communicating with investors more regularly, tell Mr Stamp we hope he's got his finances worked out correctly for once, and tell Mr Garat it would very nice if he actually oversaw a share price recovery before his tenure ends.
At first it read 26 March but they seemed to have changed it.. Last business day in March
bit fishy
Where do you see 26th of March? I only see 28th of March as the release date when I click on the link and register for the call
Smokey - Fitch (ratings) stated that there was no imminent need for additional finance. I quote ..."Near-term refinancing requirements are limited ". This was stated after the Q3 update and revised forcast.
Fitch Ratings-London-16 October 2023: Mobico Group Plc’s (Mobico; BBB/Stable) plan to dispose of its North American school bus business would likely help in mitigating the impact from weaker trading in UK businesses, assuming a timely disposal with the majority of sale proceeds used to repay debt, Fitch Ratings says.
The announced sale of the North American school bus business is part of the company’s strategic review focused on de-leveraging and accelerating capacity for growth investments. We expect Mobico to use the majority of the proceeds to repay its debt and to move leverage towards a net debt/EBITDA ratio of 1.5x-2.0x (from 2.8x at end-June 2023), in accordance with the company’s financial policy. We expect EBITDAR net leverage to decline (pro forma for the disposal) to less than the existing negative rating sensitivity of 3.5x, even though the timing, asset valuation and use of proceeds are not yet certain. However, the sensitivities for the current rating might be revised due to changes in the business profile as explained below.
In our view, the potential disposal of the North American school bus business would result in a significant reduction in Mobico’s exposure to the US, in addition to the loss of contracted revenue. This will result in ALSA (mostly in Spain) becoming its largest business, contributing almost 50% of group EBIT. However, Mobico will still be a more well-diversified business than other Fitch-rated passenger land transport peers with operations in several countries, including the UK, the US, Spain, Germany, Morocco, Portugal and Switzerland. The company is also well-diversified by sector with operations in local buses, regional and inter-city coach in the UK, Spain and Morocco; transit and shuttle services in the US and rail in Germany.
Operating performance in 2023 YTD, particularly in North American school bus and UK bus businesses, has been weaker than previous expectations, due to price increases lagging cost inflation and slower recovery in volumes. The elimination of pandemic-related government aid this year is also adversely affecting North American school bus profits compared with 2022.
We expect the measures taken by Mobico, namely increasing its UK bus pricing and reducing costs (target of GBP15 million in 2H23), along with the ongoing recovery post-pandemic, to support deleveraging. This is despite the fact that the company’s results were lower than expected in 1H23 (EBIT of GBP57.5 million), and that the management further reduced their EBIT guidance by GBP25 million-30 million in 3Q23 trading update (EBIT of GBP175 million-185 million in 2023 vs GBP197 million in 2022).
Near-term refinancing requirements are limited as Mobico has recently issued EUR500 million senior unsecu
Smokey, if there was to be a RI, Cosmans wouldn't be loading up now, they'd do it afterwards at a much lower price. It's not going to happen.
Pretty clear a rights issue is on the cards here. Results date is secretly disclosed which is not right and seems to be more bad news on the way as otherwise they would want us and the market to know. Cosmens have been loading up as a few have pointed out to block a low ball offer from some foreign company for the US business as it is becoming clear that they are not going to achieve the price that they were after and that only means one thing.....rights issue as the profits generated currently will take too long to wipe the debt out.
I hope I'm wrong but the way the board are behaving the signs are all started to appear
" However if achieved that's £50m better in 2024. Less the £30m additional interest on debt"
yeah ...and..the div savings if "no div" remains
last 2 div costs ....
5p = £30.5m
1.7p = £10.4m
The share price today has behaved lliterally like a bouncing bomb. 4 times it has met resistance at yesterday's close (effectively the Cosmen buy level ?) .
Presumably the removal of some management will be reflected in the results.
Only 4 days to go to sanity returning ?
With no effect on front line services! Does kind of make you wonder why the costs were needed in the first place?
However if achieved thats £50m better in 2024. Less the £30m additional interest on debt
£50 million cost savings !!
. was there an executive jet to manage this global empire ?
....£30m cost savings
and from Q3 update a further £20m being sought on top.
"But forward guidance will have to deal with a slightly higher interest rate environment, and for longer, by the looks of things.. That also implies higher inflation and so on"
Genghisinvestor
yes..very true...this year 2024 Finance Costs £83m, up from £75m ...so a considerable increase from £51m a couple of years ago ...definitely doing real damage ...but no final div absorbs that (£30m 2023) , along with £30m pa cost savings too
yeah... UK economy and price rises bit of a headwind for revenue maybe
"Why RR and so many other were in 60s"
RR has immense IP that cannot be readily replaced, if at all . It was a given that it would bounce back hard
Added to my holding at 67.1p - for me the sell off is overdone - good enough for the Cosmans at the price it is good enough for me -
gla dyor etc
Then why are we here in this situation at 67p?
Covid - and the fall out following. The world will and is getting back to normal
Why RR and so many other were in 60s. Don’t mobico has capacity to turn this ship around? I guess , yes. That’s how financial markets work.
Lara - yes then why are we here in this situation at 67p?
Genghisinvestor
Considering what you said , look what I am paying 0.67 p for a company which has footsteps in three continents and expanding their business as well. Also a very well diversified business. Has 3b plus revenue and £175- £185 estimated ebit.
US school buses are always going to have a problem with finding drivers .. Its a tough job because of the hours - 4 hours morning and 4 hours evening .. That makes it a long day for a low pay job
PC: fair point and the FY results refer to the past . But forward guidance will have to deal with a slightly higher interest rate environment, and for longer, by the looks of things.. That also implies higher inflation and so son
Lara
I suspect Cosmen will support a US Bus sale ( price dependent) and a move towards an ALSA type modelling for the future . I suspect £1700m will be a bit of a big ask, myself ..however I do reckon Tim Werner will have achieved a lot within US Bus to get routes and drivers fully restored and contract fully price re-negotiated, and the business back towards good shape,ready for a potential sale
Cosmen would want to return to a cash generative model, with lower finance costs, lower CAPEX asset investment, strong margins and good ROCE ....with a higher level of retained operational cash which would then support dividends once more ...something that the ALSA model is capable of delivering
New pipeline opportunities are adding £170m to annual revenues and achieving a ROCE of 28%....which Cosmen are no doubt keen to advance further ,as the model for growth
I dont see any Takeover at present IMO .. The company is in a period of transition and margin recovery ...and it would be somewhat disruptive for Cosmen to undertake a Takeover during this period.... IMO
GenghisInvestor
"margins" refer to Operating Profit margin which has nothing to do with Finance payments. Here Finance costs are 80% fixed and 20% related to derivative rate swaps
In H2 the UK and US price rises and UK Bus support from WM will have kicked in to assist strengthening the Operating margins after a weak H1...plus H2 revenue is always higher than H1
Lara: Margin increased in H2 and will increase this year as well along with revenue.
Nationwide have just increased their interest rates marginally so its not a good environment for margins unfortunately . Low expectations unless there are good cost cutting savings to be found .
e.g. 4.25% to 4.5% for 1 year ISA deposit , and 4.0% to 4.2% for 2 years
I suspect they have booked a slot with World-Television for the broadcast who have inputted the date ahead of the RNS Release ...so it could be WT who have jumped the gun in terms of a co-ordinated release of the date ..
They need to co-ordinate with Analysts and key shareholders ..
Any RNS tends then to be more of a market confirmation having previously co-ordinated with key stakeholders/analysts and any Presentation Video production company
I wouldn't get too upset by it ..