Stockopedia review this morning3 Mar 2023 12:20
National Express (LON:NEX)
139p (rose strongly yesterday)
Market cap £856m
Final Results
I should emphasise that this is the first time I’ve looked at this international bus & rail operator. That’s because it’s been too big for the SCVRs here, but it’s near all time lows currently, and I’ve increased my upper limit to c.£1bn mkt cap.
I went through the FY 12/2022 results statement last night, but this was only a quick initial review, on a large and complex group, so please bear that in mind when reading this section - I’m not claiming to properly understand the group yet.
Key points (not comprehensive) -
UK operations returned to profit.
Dividend reinstated, at a fairly good 5.0p - indicating to me that financial health and debt are probably not a problem.
Underlying EPS 15.0p (seems ahead of 13.4p forecast), up from barely breakeven in 2021.
Covenant net debt £986m (2.8x EBITDA, so still quite high, but reduced from 3.6x)
Non-cash goodwill impairment charge of £261m - doesn’t matter to me, as I write-off all goodwill anyway.
Fuel 100% hedged for 2023, and 56% for 2024. Help or hindrance, now fuel costs are lower?
Q1 2022 was impacted by Omicron virus, but since then trading has recovered strongly.
Has negotiated price rises, to recover cost increases.
Outlook - 2023 expectations unchanged. Momentum continuing.
** This bit really made me sit up & take note. Cumulative (not clear what the starting point is though) free cashflow of £1.25bn expected by 2027. That’s considerably more than the market cap, so could mean the equity is too cheap? **
Covid support on costs & revenues was still big in 2022, at £132m (2
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