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To follow up on this
German inflation also settled further last week/Eurozone inflation overall down.
US core PCE down to 3.9 below expectations last week
Oil prices might throw a curveball but the market and Fed pays more attention to the core reading so fingers crossed that will only be a blip.
Key dates for this month - 12th for US CPI, 18th for UK CPI
If it continues trending down then the worst is behind us. IMO by 2027-2028 we might be seeing near 0 or negative interest rates again in the UK/EU which mitigates the main refinancing threat for the other bonds.
Not particularly impactful news but reassuring that ALSA should be able to continue to perform strongly and carry the business.
And fuel prices hedged 100% for year and 75% for 2024 to soften the impact of fuel prices going a bit crazy again.
this is a franchising model. basically same as our rail in principle.
the possibly company advantage is government takes more of the fiscal risk. e.g. first group still makes good cash despite massive strikes, **** poor service. government picks up the check and directly subsidizes.
Can't exactly blame the management for inflation and central bank actions. That's the only thing driving the last few weeks of movement.
ECB signals no more hikes - up
UK inflation below forecast - up
Federal reserve forecasts less cuts next year - today happens
There was a small intra-day spike for BOE pausing today but the Fed is the biggest influence by far.
No CEO can influence that. If US inflation comes in below expectations next month you'll see another 6% day, or reverse if it's above forecast. That's all there is to it barring specific company news.
FGP is an awkward comparison. About 2/3 of profit is from UK rail which is much more heavily subsidized. Their buses do turn a 6.5% operating margin however which obviously outperforms west midlands NEX currently.
I think we may still see a lacking UK bus performance in FY. US school bus is the one to be excited about.
That would be nice but not yet...
A horrible day but just another 1000 shares added to the stash. Hope the Euro bond calmed down the members who were worried about a dilution. Fitch confirmed it's for the purpose of refinancing the 400m bond.
My impression of the 12m incremental cost was referring to the expected interest on the new bond.
400m at 2.5%=10mil interest
400m at 5.5%=22mil interest
500m euros converts to 428m sterling so that should more or less match up. They've stated they expect the bridge not be used as well so the 12m should refer to the new bond interest.
Https://www.moodys.com/research/Moodys-rates-Mobicos-proposed-senior-unsecured-notes-Baa2-outlook-stable-Rating-Action--PR_480402
Moody's Investors Service (Moody's) today assigned Baa2 rating to Mobico Group PLC's (Mobico) backed proposed senior unsecured medium term notes due 2031 currently being marketed. The other ratings of Mobico remain unchanged, including its £1.5 billion backed senior unsecured medium term note (MTN) programme at (P)Baa2, as well as the ratings of its £250 million backed senior unsecured medium term notes due 2028 at Baa2 and the ratings of its £500 million perpetual subordinated non-call fixed rate reset notes at Ba1.
It's just a yearly prospectus don't panic everybody... There won't be a 1.5bn of debt being issued. It's the upper limit of what can be issued altogether, same as last year and year before and before that..
A complete non event
Fitch has MCG at BBB. Moody's has Baa2. Both on the lower end of the investment grade spectrum.
WBD has recently issued bonds at 6.4% and they're at BBB-. If MCG gets a similar rate, it should increase the bond's interest from 10m to 24m, seems manageable. If they go for a shorter maturity date they could refinance in 2028 and knock it back down again when rates are moderated.
What do we all think?
Also nice to see the race to the bottom has finished for now. Interesting how good the insiders are at buying the dip.