Member Info for ronnie2204

Does anyone have a rough estimate of how much operating profit NA School Bus contributes to the overall numbers? I'm trying to work out how much profit the new leaner entity could produce. Also, does anyone have an estimate of what they think NA bus could be sold for?

Hi all - I've taken a look at the historical valuation of Mobico/NE. On a trailing MCAP/EBT basis excluding unusual items, we are now trading at 2009 levels (I've only got the closing MCAP for a given year so fluctuations throughout the year may differ). 2009 multiple - 5.13x vs today's multiple 5.25x. If we assume no multiple expansion at all, and Mobico hit £100m EBT in 2023, then the MCAP would be £525m. This equates to a share price of 85.6p. Incidentally, this is the price I bought my last batch of shares at. It therefore looks as if this really is trading at a very low valuation. Pre 2020, the average MCAP/EBT multiple was 12.9x. Even if we assume a multiple of 8x, which is a 38% haircut to it's history (albeit in a completely different interest rate environment), this stock could be worth £800m or £1.31 a share. A multiple rerating however, will not take place until the management restore confidence, and actually hit the targets they outline in their investor meetings

Based on what? What a ludicrous statement

Sorry, what is piffle? Care to add any actual analysis here or just going to throw around hopes and dreams? Even when the debt is paid, the business as a whole will generate less FCF as it has sold some of its business. Paying down the debt will help, but the earnings and multiple will ultimately determine the valuation going forward

This is called being realistic - I've been holding since September 2020. I'm still holding now and intend to for several years. PBT is now expected to be around £100m for 2023, which is the lowest since 2014 with about £1bn more in revenue

Fair point - but using EBIT/EV it trades at 13x. Again, not a screaming bargain as many people think when the company faces this many headwinds and has such awful management

£1.6b is the enterprise value and not the market cap. This factors in the debt and represents the entire business

After today's drop this trades at roughly £1.6b enterprise value. PBT for 2023 will likely be in the region of £100m, meaning this is trading at 16x EV/PBT. Unfortunately, that is not cheap for a company with this many problems. I recently added at 86p, but I will not being adding any more until I see an improvement in their execution and guidance, which has been appalling to say the least. I'm still amazed that their guidance was so far off and they've been forced to pull the dividend. Absolutely embarrassing to be honest. The CFO needs to go IMO, as well as the CEO

I find it absolutely shocking that a director bought 65k shares at £0.76 in August. The board really seem clueless, and for the first time since holding these shares for 3 years, I am really concerned about their competency

Https://www.investopedia.com/terms/b/ba2-bb.asp

Baa2 is equivalent to lower medium grade

It's not just the total debt pile, it's the short term need to refinance with the interest rate being uncertain. Look at their short term debt vs other companies

I'm not sure how many other companies have large, short term bonds that need to be refinanced in the next few months either. Inflation and interest rates are the main driver of the negative sentiment here because of their debt situation. From a technical perspective, it's below its 50, 100 and 200 day moving averages. The 50 day has been rejected the last 3 times it was tested - around 13th June, 26th July and yesterday. Money managers aren't likely to buy into this stock in the short term until it starts showing some strength, and this will be hampered by the interest and inflation outlook

Https://www.bloomberg.com/news/articles/2023-09-12/uk-labor-market-shows-record-wage-growth-and-rising-joblessness?leadSource=uverify%20wall

You're right that labour demand is cooling, but we still have record number of people on the sick and wage growth is still really strong. Unless the demand for labour falls quicker, we are likely to remain in a sticky inflation environment and the BOE will be tilted towards rate increases

Https://www.msn.com/en-us/money/markets/what-does-record-wages-growth-mean-for-me-and-for-the-uk-economy/ar-AA1gBh8O

After it bounced off and rejected the 50 day moving average

The drop in price today is almost certainly down the fact that wage data in the UK came in strong again today with a tight labour market. The expectation is that rates will need to go higher than hoped

90p is right on the 50 day moving average and it rejected it this morning. We need a catalyst such as inflation falling faster than expected or the BOE signalling a pause. This 90p barrier will be stiff resistance until then I suspect

'The Board has announced an interim dividend of 1.7p, which is in line with our previously communicated policy that the

Group’s interim dividend will be set at a level equivalent to approximately one third of the prior full year dividend. The Group’s

policy is to maintain a dividend cover ratio in excess of two times.'

This is from the results posted yesterday - maybe I'm misinterpreting this and if I am that's good news :)

Hi - they are paying 1/3 of the annual dividend here so they are still maintaining the full year dividend at 5p. However, as we have already received the 5p, from a timing perspective you are correct. But, going forward, we should expect 5p annually until they say otherwise