Member Info for rob295

Ballantyne - key will be the cash position and movements. The statuary profit will be a bomb zone but if the cash is rising nicely that is okay for long-term holders, particularly if cash growth to market cap is a low multiple. Not sure it will help the share price though as that will focus on statuary I expect. Share price I suspect might have to wait for the 2025 results on April 30th 2026.

The upfront consideration is before Non-IFRS 16 leases. It looks like some debt positions will be transferred over based upon Appendix I though £7m interest charge in 2024 and £9.3m in 2023? Potentially US bank loans are included in there but that I think is only £2m interest pa. So something else on top I think. In Appendix I they should the non-School Bus having a lower interest payment though. Not foreign exchange as that is separately reported.

By my maths there are £900m in Exceptionals (£60m normal business, £85m Germany, £200m tax asset writeoff (I think £200m is the tax we will earn from our 2024 loss which they will just write off rather than book as an asset), £550m write down of goodwill on sale). Not sure if Germany is taking a hit while it makes no difference or if there is a cash increase. Looks like statuary loss will be about £600m. Amortisation will drop from £30m to £15m I think in future years - which cuts exceptionals by £15m a year (£30m of the £60m is amoritsation with the remainder being restructuring including incurred sale costs). All non-cash exception that Germany hit where detail will be key in the 2024 results as to what the cash impact is.

Gwillerz79 - Looks like we're going to head comfortably down in exchange for that £9m loss.

Does anyone have a good breakdown of sold vs non-sold? I think the split in North America in 2023 was :

Revenue

£713.1m - School bus SOLD

£336.4m - Transit & Shuttle HOLD?

£66.1m - Charter, private hire and leisure HOLD?

Haven't got much history of the split on adjusted operating profits but looks like we probably retain 40-70% of NA operating profit (have to guess really). £27m adjusted for NA in 2023. £9m school bus contribution in 2024.

2023 accounts aren't great for it and I hope they have delayed 2024 to give this info but would like to get the history before seeing the 2024 numbers.

Personally I'm happy with 50x adjusted operating profit. Would take that across the business if anyone wants to buy the rest of it and cash flow should be a bit smoother now with smaller upfront outflows.

I think a date is just a courtesy and common practice. Those are the rules :

https://www.handbook.fca.org.uk/handbook/DTR/4/1.html

I think everyone needs to remember its Africa. Dates normally don't get hit and equally unexpected things can happen. Seems likely to go through unless they want to tell the Chinese that they can't have their exports but this is why you never over extend on an investment in the region. So long as your position is appropriately sized doesn't feel worth worrying too much about.

No: tomorrow, 4 days next week, 4 days the week after and 3 days after. Not too much longer to wait. Back end of week after Easter feels most likely but for no particular reason.

At least they waited till after the financial year start to publish the results. Now we've had our chance to top up ISAs they are good to announce the results and BoE are good to do some more rate cuts. With only 14 more possible days to release them on so would be nice if they could update the calendar. Don't massively mind waiting so long as it is still on guidance but its a nice courtesy to give a date.

Big few weeks for good or bad. Phase 1 of waiting will come to a halt and then its phase 2 of waiting for lilthium spod to rise a bit higher than $840/mt.

Yahoo Finance says 21st April :

21 April 2025 at 8:30 am BST - 25 April 2025 at 8:30 am BST

Mobico Group Plc Earnings date

https://uk.finance.yahoo.com/quote/MCG.L/profile/

I never know if those dates are estimates or reported though - but only just appeared.

I think they have four months to report https://www.handbook.fca.org.uk/handbook/DTR/4/1.html

There has been no update on the guidance of Adjusted Operating Profit guidance at £185m to £205m so you'd hope that still holds. If it does and finance is £80m and exceptionals in the region of £60m then I think we should be expecting pre-tax £45-65m. Personally I'd be very happy with that - especially as the adjustments were just restructuring and amortisation in H1. I think that would give 9p/share which looks a bit different from H1 but the Adjusted Operating Profit in H1 also looks a bit low vs the guidance for the overall year.

That said from Q3 you can already see that Spain and NA looked good, UK not great and Germany poor so UK and Germany will still be holding everything back. UK for me is the real disappointment - and if the sale of NA goes through then UK dragging on performance will be more noticeable.

Generally I think it will still be a bumpy ride for a while - after big share price drops it seems to take a very long time for confidence to be regained, and probably rightly so. But I don't think the share price reflects the likely results - for good or bad I think the price will move on results day depending on hitting guidance and how it looks overall.

@Lumipat - valuation seems fair for phase 1. Phase 2 has more enduring value so that would be a higher multiplier. But principally once operational I think the value is in the ability to speculate in the Lithium price. A 10% increase in the price from $810 translates into a 50% increase in operating profits - same as you get a higher boost in oil stocks than the actual oil price rise. If the Lithium price drops its not too far to the floor price so that makes it more interesting for that approach. So I think the attraction here is really just to say Li might go +50%. That gives +250% value. If Phase 2 gets built that +50% in Li should happen at some point. Get back to $1000/t and that's already a 100% growth in operating profits, etc etc.

Opex not capex.

The challenge is really the lithium price. At around $700-800/t the gross on each tonne isn't great vs $650/t capex - although at least there is a profit guarantee. What the share price really needs is some growth in lithium pricing ahead of the likely shortfall in 2030, but I think the Chinese stocks remain fairly high.

"The onerous contract provision in respect of our RRX Lots2/3 contracts (which recognises all of the expected losses on that contract over its contract life) increases to £118.3m (FY 22 (restated): £46.9m), with an expected cash outflow of approximately £30m in FY 24, and an average cash outflow of £10m p.a. for the remainder of the contract lives"

Using the same language as above the future losses were recognised in 2023 (and previous years as well). So we have £118.3m of losses "booked" in previous years as an exceptional item. Those won't go against statuary profits in future years as they have already been recognised as ou don't recognise them in 2023 and then again in 2024.

But while there is a £5m German loss expected on the net profit, I believe it is also correct that there is a £30m cash loss expected in 2024 (largely in line with H1 cash outflows for German rail) improving to £10m from 2025 onwards as you say. That does make the business poorer in 2024 but from a net profit standpoint it has been largely swept under the rug. I'd expect 2024 to be okay net profit wise at £40m but cash to be reduced by higher capital, restructuring, Germany etc. Then cash and net profit should hopefully be a bit better in 2025 and ideally better again in 2026 if the crystal ball will go that far forwards. For me it is much more true (in fact 100% more true) to say the German rail will lose £30m in 2024 than £5m, as the £5m is accounting movements. But some of the historic profits are depressed by recognised future losses.

On North America - no one knows. I doubt even Mobico knew what it is potentially worth. It's more a punt it and see what happens IMO as if someone will pay a decent revenue multiple and invest capital it could do okay and they could do okay buying it. If not I doubt it will get sold. Sale processes are always slow so August isn't that long ago. But they are also expensive so there must be something going on else it would have ended which I think would be considered material news. Personally I treat the business as is as what I'm buying - the sale process may give upside (or downside if they sell foolishly), but if no deal there may be a drop in the share price, if a deal probably a rise in the share price. I doubt anyone knows more than that. I think value can be found in both cases but that's a personal opinion.

Germany will see smaller statuary losses than cash outflows as the losses have already been booked in 2023 and in the future a partial recovery could see smaller cash outflows than expected combined with booked profits in those years. In reality you should probably ignore the one off 2023 writedown and then restate the losses in their individual years. It will however give a slightly more positive profit number in 2024 - although equally amorisation on acquisitions will drag down the net profit figures. One thing that hurts the share price is that the accounting side has a lot of transformations required to get the true performance figures plus big irregular capital expenditures.

Really 2024 should be okay with a positive profit and decent top level figures. 2025 will hopefully be better as more unwinds and then 2026 is really going to be the year for those patient enough to stick with it. Restructuring, Germany and acquisitions will drag on cash. Amoritisation and exceptionals will drag on unadjusted net profits. And maybe by 2026 the UK coach business will cease to be a charitable arm of the business and actually make some money. Still a lot of patience required I think.

Can't really see the logic behind a rights issue. Last year without the acquisition cash flows and dividends net debt would have dropped around £65-70m by my maths. Adjusted Operating Profit should be up £30m this year so there is an underlying flow of cash there if you add the two, offset by an extra £10m or so in debt costs vs 2023. Restructuring costs will offset on a one off and there are more acquisition costs out in 2024 and investment costs associated with new revenues, but long-term with stable revenues you should have a very high two-digit underlying flow of cash to pay down debt and convenents will be helped by EBITDA improvements (£420m Adjusted EBTIDA would mean £1,470m max net debt and £120m max interest payment unless my maths is off). For now that high-two digit figure will be cut by acquisition and restructuring payments, but I think the debt is mostly just going to drag on the valuation due to the high financial costs reducing the impact of the underlying cash generation capacity.

Not sure if you have been involved in any asset disposals, but getting it over the line is a nightmare just from a paperwork perspective as every loose end needs to be closed off and legal teams on both sides tend to have about a million questions. So I wouldn't assume a delay is bad news necessarily - I think missing target dates is pretty common. That said we don't know the target sale price or whether they will walk away if is sale is too cheap so from that angle we have lots of unknowns, so I think the big question is whether you are less happy if they don't sell because they don't see enough value in a sale or if you just want the debt down to be happy. Given it has extended beyond December with no news I'd take a guess and say there is probably not no activity and probably nothing that doesn't feel like it could go somewhere as they haven't walked away from a sale yet, and for me I'd say the longer it goes the slightly higher chance of it happening as you'll have invested a lot of time, energy and money into the process by this point (if it is happening at full effort behind the scenes).

On USD vs GBP, I think the following applies :

- profit and loss statement will use average USD/GBP conversion for period which you can calculate now for 2024. So that is +1.7% I believe on 2023 revenues. So should be a bit under £20m uplift from 2023

- balance sheet will use the closing USD/gbp and would be up 1.8%

- the sale of NA if it happens would normally be the exchange rate on day of agreement which could be higher at £0.82 per $1. By my maths that would be +4.8% on the average for 2024 (0.7826) but may change. That is £4.8m uplift per £100m in price that would otherwise be so £500m is +£24m, £1bn is +£48m.