Member Info for John33

Any possibility MCG are working on a placing?

Could be a kitchen sink with the results a month later than normal, don't know if that's a good thing or bad.

I note the short increased the other day by 600k shares the other days.

SP seems to be climbing don't know if its a sell into the rise opportunity, as the trend rolled over after double topping out @c.58p

NA $157M or £120M operating profit 2019 x9.55 = $1.5B

NA $157M or £120M operating profit 2024 x9.55 = $1.5B

Mobico $157M or £120M operating profit 2019 x9.55 = $1.5B

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North America £68.4M operting profit 2022

£27.1M operting profit 2023

Mobico $157M or £120M operating profit 2024 x9.55 = $1.5B

Are those figures pie in the sky bearing in mind the current operating profit for NA is £20M/$27.1M,..this would mean they have to get their act together, is that possible based on the shower in control, recent passed events!

To get $1B based on say x10 they would need operating profit of $100M/£77M so not beyond the realms of fantasy or am I living in la la land.

The alternative based on 2009 events where they raised 3.3x new shares does not bare thinking about.

Hope I'm wrong but the down trend is trying reassert itself, nowt of substance from MCG as of yet to offer any momentum to the upside that is in the public domain. Could be just pausing, the later HY 2024 to August really worried me as it is completely out of kilter with all prior years, is it just setting up for more disappointment.

Is just maybe he is so astute he has timed the bottom for the sp, really is a pi55 take though.

No surprise he hasn't dipped his hand into own pocket, no risk to himself with all the potential upside thrown in for free, one big jolly, gravy train. I hope he doesn't come asking the mullered shareholders to dip into their pocket.

I'm beginning to question the value of the assets minus the debt if sold off as the disconnect between sp and what investors on this website have claimed is unreal. Several have claimed in such a scenario if sold cash left would pay off debt and leave anywhere between 150-200p on numerous occasions, the market thinks otherwise at the moment. It's eally soul destroying day after day!

Just continue to pummel to the sell side until something changes for the better.

I'm concerned to why decide on a date 4 wks later than normal which is unheard for this stock although scheduled/notified, unlike the unscheduled delay to the FY2023 results.

If there was further material red ink/impairments surely they would have to notify with RNS as and when they became aware.

CFO to do a kitchen sink to cover own ar5e who knows?

The later date just gives more room/momentum for the drift to continue unless macros change for the better.

21 Aug 2024, as if there was not enough to worry about, 4 weeks later than normal.

I'm try to take positives in the full yr Apr 2024 results where they said about NA:-

'The division also demonstrated good pricing power in the market in order to continue to recover the investment in driver wages made in 2022. Prices for contracts due for renewal in the current school year (approximately 40% of the portfolio) have been increased by an average an average increase of 13%. This followed price increases for approximately 40% of contracts of circa 10% in the previous year. There remains a block (circa 20%) to be re-priced in 2024, and we are confident that similar levels of price increase will be delivered. The very successful, dependable 23/24 school year start-up will certainly help support that pricing process. Mobico retained circa 97% of its School Bus customers, in an already highly competitive SY23/24 bid season, and in the context of significant price increases.'

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Hopefully NA is turning a corner and the re-priced contracts will be starting to catch up/outstripping the wage rises and some normality will return.

If we only we had the benefit of hinsight 6-12 months and what Cosmens are going to do.

This is from Oct 2023

Peel Hunt said it was “unlikely there will be a trade buyer,

as they all suffered weak trading and rising leverage during Covid”.

The broker also argued that high finance costs would weigh on valuation, and said a buyer

“may not want to take the risk that driver wage inflation is persistently higher than a broader

inflation index like CPI to which prices are linked in years two, three and four of a contract, if

there is one”.

What size CR would you anticipate/envisage to get it away with the mcap sub £300m now. I assume a RI would need to be priced some what lower than the current sp, but depends on what is achievable from NA sale/ if it acceptable to proceed or hold onto it and try to turn it around for a later date but that would require massive dilution.

Without NA there will be less income to service remaining debt pile so a RI as well.

Current exchange = $632m

NA sale, taking account of sale expenses I assume 5-10%, so $700m needed to clear hybrid.

Are we confident this is even achievable baring in mind the sp is signalling distressed sale, high interest rates for the aquirer, it's no surprise shorts have been increasing, Wace increased again on the 13th.

This could end up a combination distressed sale and rights issue/placing.

What I find disconcerting all the directors barring the following two only have token gesture shareholdings.

Jose Ignacio Garat CEO 1,812,299, don't know if these were freebies, options or purchases (certainly not recent and meaningful) and

James Stamp, head bean counter, 800,508, left of his own volition/shown the door/rat sinking ship, take yer pick!

It's going to be a real slog to make inroads into the remaining £1.2b net debt.

There was a lot of discussion about FCF yesterday.

Upon re-reading that article:-

'Cash Flow Generation to Remain Weak: MCG management have refocused growth on its asset-light business, to mitigate the impact of lower profitability on its credit profile. This results in lower growth capex than earlier forecasts but maintenance capex is forecast to remain high relative to profits, resulting in negative free cash flow (FCF) on average in the next three years. However, we believe MCG has scope to postpone or increase efficiency on capex and we do not expect dividends payments till 2026.'

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With negative cash flow for 3 yrs I'm assuming they won't be able to pay down debt or dividends, so it is all about no further profit warnings and what is achievable from the NA sale which really is an appalling predicament to be in and an indictment to the mismanagement/ineptitude by those at the helm failing to grasp the severity of the situation until forced to do so to the detriment of shareholders,..are certain shareholders more equal than others I ask?

I personally don't subscribe to the following but what are others view ie conspiracy theorists might conclude this sorry situation has been contrived/orchestrated as a means to an end?

They need to buy enmasse.

14/05/2024 director bought 40k @63.50 it's been on way ever since.

Doesn't have to go bust, dilution is the worry over the unsustainable debt, the board have proved to be inept. They need the NA sale for a decent price, the mkt is betting a distressed sale is coming, which would be like a stay of execution based on the debt mountain.

If we are to be pessimistic as in my opinion most pi's have rose tinted glasses ever the optimists and in the main have long positions and undestandably want the sp to rise. What is the worst case scenario offer we can expect for NA,..$300-500m?

Would the board sanction it, be forced to accept if desperate for a sale, and what does that leave behind, yes ALSA doing great, the rest not so, and more importantly a still heavily indebted company, maybe the sp is see this as the outcome and the sp is floundering.

Brokers tend to be behind the curve, it must have had an effect, giving further momentum to the downside, but I am alwsy of the opinion that someone knows something, the NA sale should have moved further forward by now if A decent offer had been made. the bord are just praying something will turn up. Maybe the sp has to fall to an extreme, further before it turns who knows. But it the current sp has to be siganalling something.