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H1 profit £25.4 million. Profit forecast 200-215 Mil for full year
FCF 79.7 Mil
Interim divi at 1.7p in line with policy
ALSA performing exceptionally well and carrying the profit hard for this H1
NA bus business margins down quite sharply; normally this is a big money maker
UK business swung to a loss; they are stating due to driver wage increases
Covenant net debt down a bit to 908 mil
Interest cover at 6.3; Net interest paid 16 million from 13.2 last half year.
Revenue looks like it will top 3.2 billion quite strongly, 3.3 billion even. However we need margin recovery from school contracts in US, fare increases in UK bus/public funding.
Reassuring they are projecting a FY profit increases but market might not take this profit fall well. We may be bagholding for some time still.
You need to be more patient and not panic over small movements. The best rationale for buying here is essentially betting on a post-covid recovery with anticipation of return to historic levels of earnings, dividends and growth. In my opinion this is very likely to happen but you cannot time the bottom on a share like this.
As I said, do not be surprised if the share revisits the under £1 range again. Read the last full year report and await the Wednesday release. Let fundamentals guide you, not short/medium term movements.
The speculation about further dilution some have posted on here is laughable; the business is cash flow positive with more than enough to handle rising interest payments, large majority of which is fixed. Again, interest cover is at 8.6 or 6 if you count the hybrid bond payments as debt. Gearing is within pre-Covid covenant levels and is likely to improve further given good rate of growth.
Not much of a huge volume spike yesterday so would not be too unusual for it to fall back. It's not truly a domestic business UK revenue is dwarfed by ALSA and US.
Further reversal possible with good results. Particularly interested to see if US bus margins start to recover to historic levels which would boost profits majorly but this may be more H2 when they renegotiate contracts.
I would not be surprised to see UK inflation disappoint again and the SP to drop again. UK has been hitting itself in the face economically for a decade and we are seeing the consequences.
However the lion's share of revenue and profit is USA and ALSA where inflation is nicely moderating. I have £45k invested here but will add more if we see 95 or lower again.
If year-on-year growth continues like in the last quarterly, the group should solidly hit 3.2 bil in revenue for this year. Possibly more depending on new contracts.
At current margins that would be more than enough to service the payments while still allowing for EPS growth and a dividend hike.
First post here; holding since 130p, averaged on the way down.
Bond/Loan interest was 32m 2021, jumped to 35.5m end of 2022.
Only 19% of total debt is floating but the 400m bond due to be refinanced was issued at 2.5%; refinancing will add at least 15 mil interest a year, no idea on what % they will get on this + some increase from the floating debt component.
Hybrid Instrument 500 mil; 21.3-21.5 mil a year not listed as debt but rather equity. Fixed for 5 years. Large portion of debt is due to be refinanced in late 2020s. By then one would have hoped rates will have retreated down somewhat and the business/economic outlook to be stronger overall.
Total interest was 48.6 mil. Interest cover was 8.6 on all this except hybrid bond. If you consider the hybrid bond payments as debt/payments as interest, then interest cover would be 6. For context, in 2014 interest cover was at 5.1.
If the revenue growth with current margins stays then these numbers look quite reassuring and the debt appears serviceable. It really depends on how much interest rises vs business growth.
Unless I have missed something vital out, this looks optimistic to me if one holds through the pain.