Member Info for rob295

In the H1 report they put the whole NA writedown into discontinued operations so the impariments and forex wouldn't really offset against any unwinding of the German provisions. Instead you would get :

PRE-TAX PROFIT FROM CONTINUING OPERATIONS = 180-185m expected - 90m Net Finance Cost expected - 28m Amortisation - Other Exceptionals + German Provision Improvements

PRE-TAX PROFIT FROM DISCONTINUED OPERATIONS = NA School Bus Profit (inflated by writedowns) + Impairment + Forex = (likely about -130m if the +100m Forex thing still holds)

Other Exceptionals in H1 was 12m and excludes the German issues as those are already provisioned (so will likely over state performance), but still subject to movement. UK asset sales shouldn't add too much in terms of writedowns as a lot of those assets were already written down. From this report a line will start to be drawn under NA School Bus as once you look at 2025 you are lifting the continued operations and then adjusting for changes.

If there were unwinding of the German provisions then there could be a massive profit from continued operations. That would be a completely false exaggeration, but so are the historic losses.

In my last comment, the revenue total should have been £2.76bn - I typed in my 2026 number (you'll see it doesn't add up from the geographies)

"Rob, revenue is vanity profit is sanity"

The costs aren't that hard to estimate. It's pretty basic arithmetic - I'd assume a bit of cost fallback in UK, and a bit of a climb for NA/ALSA over H1 numbers if I were you. I've never worked in a business where people didn't want revenue because "revenue is vanity"

I'm not a fan of only getting percentages, but if the same percentages repeat in Q4 this would translate into :

ALSA - £1.43bn revenue (+7.5%, +11.4% H1, +4.1% H2)

UK - £0.61bn revenue (-3.2%, -3.3% H1, -3.2% H2)

NA - £0.44bn revenue (+5.7%, +13.2% H1, -0.9% H2)

Germany - £0.28bn revenue (+7.8%, +0.5% H1, +14.3% H2)

Combined that would give revenue of £2.88bn (+5.0%), so I think their target for Q4 is probably to maintain the growth figures in Q3. If those do hold, I don't think UK, NA or Germany will do much in terms of operating profit (maybe a bit of operating profit for Germany after the provisions)... so operating profit is likely to be almost entirely covered by ALSA imo (more than the total for the business as there are group items to cover). I'd be surprised if those revenues wouldn't get them to the target for the adjusted operating profit though - I would love to know the Q3 vs Q4 split though to know how complete the year is though

ALSA will almost certainly have it's first year of single digit percentage growth in five years, and it feels like it only grows 5%pa from here. NA looks the only segment at risk of further exceptionals, but UK will have booked some with the disposals in H2, Germany shouldn't need provision changes if it continues like this I think? The accounts look interesting once you strip out all School Bus items (including the disposal exceptionals)

Looks like self driving buses have been added to the fleet in Madrid https://www.busplaner.de/en/news/autonomous-otokar-e-centro-operation-first-time-europe-174397.html Can’t see too much information

Auditors retain liability for any issues they are aware of but do not disclose in their resignation statement.

My feeling is we will get there on the German PTA resolution but I feel it will be post year end, because I think they will feel it is worth holding out for a good deal rather than a quick deal - and a good deal will probably only come when everyone is tired of negotiating.

38p average on just under 600k shares. No plans to buy any more shares as it's already a big enough position - and it's probably a hold till at least 2028 sort of thing - ie wait around till there are clean years.

jp morgan has bumped up it's lithium forecasts.

"lyndon ***an, head of basic materials at jpmorgan, announced on thursday that the 2026/2027 spodumene forecast has been adjusted upwards to between $1100 and $1200 per tonne, a notable increase from the previous $800. the long-term price projection has also been revised, rising from $1100 to $1300. these adjustments reflect the escalating demand for electric vehicles and the continuing uncertainty surrounding the resumption of operations at a major lithium mine in china owned by contemporary amperex technology."

https://www.finnewsnetwork.com.au/archives/finance_news_network3062270.html

drivers behind the move seem to be increased demand for storage projects and the fact that miners seem to be slowing mining activity (although many are thought to be likely to ramp back up at $1200/t).

"Kodal rns'd first trucks had left on the 20th, Hainan said the 14th didnt they? So why are kodal saying it took 5 days?"

I think the delta in time from the 20th is customs: "and are completing final customs formalities before transporting to the Cote d'Ivoire port of San Pedro"

"Delighted to confirm that our first trucks loaded with spodumene concentrate from Bougouni Project were successfully transported to Port of San Pedro, Côte d'Ivoire.

First trucks arrived on Monday and so far 75 trucks-loads navigated the ~900km journey in just over 5 days. (1/2)."

"Our stockpile of lithium spodumene concentrate at the port has now reached 4,500 tonnes in readiness for export to China. (2/2) #kod #aim #mining"

From twitter - hopefully stays above 900 by the time it triggers a payment.

@bertmoney - he said it before... he lost almost £3k. My mind boggles as to how he has managed to cope so well with such a major loss. Puts everything into perspective really.

Intra-Group is running coaches for National Express Coach (I think 9-10% of total NE Express Coach revenue is done through the sold subsidiaries so not just the odd bus and more a core part of the operation imo).

The assets have performed very poorly since Covid but had value before. With patience and accepting near term pain they should in theory recover. If they do it’s a good buy, if they don’t it’s a good sell. Mirrors School Bus really - you can really judge it either way.

"moving towards asset light business"

I think that is exactly it. There is a lot of inter-company revenues in the £56.7m revenue total for those businesses (£34.2m in fact). And from the news article it is pretty obviously the case that TCTG will continue the same service: "while maintaining their trusted service delivery in private hire, contract work and coach services, which will continue under the new ownership" and "We are pleased to complete this deal with The Coach Travel Group and we welcome them as our new partner operator on the scheduled coach network"

For more information on the disposal, what they have sold I think is :

THE KINGS FERRY LIMITED and LUCKETTS HOLDINGS LIMITED

Both can be found on Companies House with full accounts in September that include the information that both are being held for sale with a target sale date of October 2025.

You have to be a bit careful as these are holding company accounts for a subsidary company - so there can be movements and overlap etc so I don't think it is worth taking it all at face value. But for what it's worth the headline figures on Companies House are :

Lucketts Holdings Limited

Revenue: £23.0m 2024, £27.5m 2023 (high proportion of inter-group revenues)

Operating Loss: -£1.3m 2024, -£5.1m 2023

Operating Costs: -£24.3m 2024, -£32.6m 2023

Total loss incl exceptionals, interest, tax etc: -£13.6m, -£8.6m 2023

The Kings Ferry Limited

Revenue: £33.7m 2024, £39.0n 2023 (high proportion of inter-group revenues)

Operating Loss: -£2.1m 2024, -£8.0m 2023

Operating Costs: -£35.8m 2024, -£47.0m 2023

Total loss incl exceptionals, interest, tax etc: -£20.4m 2024, £11.5m 2023

The exceptionals involve a lot of restructuring which includes write-downs on intangibles etc. There are notes about those in the accounts.

Mortons was sold at a £0.5m loss on disposal, Stewarts for £1.0m loss on disposal (to the same guys buying now). Stewarts was bought by National Express for £9.2m but it does look like all the goodwill had been completely written down so a low acquisition fee seems likely from the figures (it doesn't merit a mention in the 2024 accounts), Luckett's Travel was bought by National Express for £25.3m. Stewart's headline financials are in the THE KINGS FERRY LIMITED accounts and were £5.4m revenue in 2024 with an operating loss of £0.8m. The fees on the disposals were not cheap for Stewarts and likely weren't cheap here again.

One of the more puzzling items is how TCTG now have 700 staff given the two holding companies report having 700 staff between them and given that TCTG had 700 staff 1 year ago as well - and there is plenty of inter-company revenues that leave a lot of questions, maybe some staffing is included from the National Express side. I don't know if that is a mistake or if the staff stay, but it looks clear that they are selling the holding companies which you'd think would move the staff over (otherwise who drives the buses etc?).

But the accounts on Companies House are very detailed (although with all the above caveats). Taken on face value it looks like a decent drop in revenues, but a helpful move for the bottom line, and possibly a few more one-off items to add to the overall tab for 2024 in the costs to complete the exit.

But based upon those accounts, it looks the right thing to sell and move on. The role these were playing within National Express definitely looks like it wasn't working.

@Lorenzo - it would also be good to see ALSA clear 200m operating profit also. That gets to the level where you can feel very confident in the numbers.

“ Alsa has been awarded a new contract in Saudi Arabia, in Qiddiya, the new city located on the outskirts of Riyadh. It is one of the country's most emblematic strategic projects within the framework of Saudia Vision 2023, and is set to become the largest entertainment destination in Saudi Arabia.

The contract includes the operation of 156 vehicles, 126 of which will be electric, in two key areas of the visitor experience: Park Ride between the parking garages and the parks; and the connection between Riyadh and Qiddiya, bringing visitors from the country's capital to the parks. The contract is for eight years and has a total value of €500 million. It also includes the construction and operation of three logistics bases to support the fleet.

This contract is the first phase of the Qiddiya project and represents a major success for Alsa, as the company aims to remain the leading operator for subsequent phases of Qiddiya.

12 THEME PARKS AND 600,000 INHABITANTS

The city of Qiddiya will feature 12 theme parks, including a Formula 1 circuit, as well as sports complexes, cultural and leisure venues. The new city is expected to have a population of over 600,000.

For Francisco Iglesias, CEO of Alsa and Director of Operations at Mobico Group, "this new contract consolidates Alsa's presence in the Middle East and demonstrates the company's ability to compete and win contracts in large-scale international projects. It positions us as a leading operator of innovative transport services, while reinforcing our commitment to sustainability, thanks to the use of a predominantly electric fleet."

Alsa began operations in the Kingdom of Saudi Arabia in October 2023, operating intercity services across 27 long-distance lines, connecting 80 destinations in the southern part of the country with a fleet of 129 coaches.”

They don’t give the JV share (need to wait for FY25) but in Saudi I think it was 15% before which would be €9.4m gross revenue per annum I think ($62.5m per annum total)?

"Selling ALSA at full value isn't going to happen imo."

You'd be daft to sell ALSA, because that is the part of the business that is most able to take on new contracts profitably. Everything is about tendering well and not taking on contracts with unnecessary risk to reward profiles. ALSA are good at that and inventive in how they do it both geographically and in the service they provide - UK is stale and tries the same thing with the same result, Germany clearly had a poor risk/reward, WeDriveU has promise but could seemingly improve on execution.

If you can tender and choose your targets well it is a very simple business. If you can't it can be challenging. That ALSA capability is really the only reason to invest in Mobico... without that it has no value.

"The result is FlixBus is worth $3bn while Mobico is worth £176m"

Just to be clear that is enterprise vs market cap because I was being a bit lazy - the full maths to not make that be misleading is :

FlixBus $3bn vs $2.3bn Mobico at enterprise (post debt - using current Mobico net debt with US money). For that you get 2023 adjusted EBTIDA of 100m on FlixBus vs 340m Mobico. Revenue FlixBus 2bn EUR, Mobico 2.74bn EUR. Since that is at enterprise level, the debt is out the equation in the comparison.

"In 5 yrs first group share price has gone from 40p to 220p , company worth 1.2b"

Wasn't the First Group share price £6.64 at the close of 2007 - and didn't it then drop to 34p in 2020 (there was one smal stock split that isn't material but I can't see any others)? If so what we are looking for is a share with a big drop capable of a strong recovery? That said, I'd be happier with Mobico over First Group in any case as First Group has some serious nationalisation risk on the train side. They have tried open access, but there are limited routes opened up. That's why you'd almost think they'd be a good fit to buy National Express coach to diversify. I can't really see what they are going to do long term. I looked to invest but couldn't see the long-term story.

On the other hand FlixBus is really interesting, and genuinely problematic because it is basically a classic PE play in the coach space. It's goal is growth and it seems to have no requirements to earn a true profit. The latest data for the group is 2bn EUR revenues in 2023, with it's first decent adjusted EBITDA coming in that year at 104m EUR. That is roughly comparable revenue with ALSA and UK coach in 2023 but they probably had about 250m EUR EBITDA in 2023 (group was about 340m for the year) - ie 2.5 times the EBITDA for the same revenues. Given what they charge per ride I suspect the depreciation is additionally going to be a big overhang relative to revenue as you will get less recovery on a lower far on a proportional basis. According to PitchBook though, Flix bus has raised $2.19bn and AI says it is worth about $3bn (which feels about right as a PE play in that space). This is because it is an ESG PE play, and that adds many noughts. The result is FlixBus is worth $3bn while Mobico is worth £176m. In reality revenue growth rather than profitability is what matter to PE and I'd expect FlixBus to keep pushing revenues at the expense of profits - and that is a problematic competitor.

There are 2024 accounts for FlixBus UK and their UK business is actually much better on the surface with a £1.16m profit in 2024 on revenues of £31.69m. That is until you see the £1.4m gross profit vs £8.1m administrative expenses - which suggests a £6.7m loss without whatever Other Operating Income/Charges are. These turn out to be mostly positive License Payments from somewhere. I'm not sure what those License Payments are but it doesn't strike me as likely to be profitable on a real basis. That fits in with the general FlixBus position imo.

https://find-and-update.company-information.service.gov.uk/company/11941533/filing-history