Member Info for Sneedway

It's an investment grade rating dude

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.

The hike itself isn't what drove up the market. More the commentary; they've basically admitted no more hikes. If BoE makes similar sounds we'll see more good rises here and elsewhere.

3.7% monthly headline - monthly bump from oil prices

Core CPI down to 4.3% however

MCG Hasn't crashed on the release but let's see in an hour..

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

EU inflation revised up slightly is the cause I believe.

Will surge if ECB chickens out on rates

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.

Yes but it's adjusted for constant currency on reports for underlying business performance. In nominal shareholder returns then definitively beneficial.

The Cosmen Family are still the largest shareholders. For some reason some websites don't list them. they've held since 2005

I should perhaps familiarize myself with the no fee automatic reinvestment option.

Reinvested mine. Only an extra 600 shares and HL fees bite but who knows what the SP will be by my next LISA top up and final divi. Certainly it won't be 60p (not financial advice.)

HL held divi cash separate for me from investable cash, had to manually move it.

Share price targets are a joke. I remember BATS being given a target of 4200p back in 2022 prior to the fall.

Weak US jobs data, UK manufacturing negative with food inflation down all contribute to less perceived upwards pressure on rates. Stock is oversold therefore up.

Pretty much. It's all macro. BoE are no hawks. If inflation allows, they will 100% cut rates (not yet, but in time for the other refinancing/hybrid bond reset).

We're looking at 82m in interest next year as per the board forecast.

Keep in mind a lot of the borrowing is short term and it comes and goes.

The main thing to look at is the treasury management page; it's after the free cash flow statement. This shows the breakdown of the financing instruments and their maturity dates where refinancing is likely to take place. Fortunately by 2027-2028 where the majority of refinancing starts to come in, I am hopeful we will see rates nice and relaxed again.

Hybrid is also fixed until 2026 and looks to track UK Gilts when its rate changes - rates permitting, we may actually see a decrease in the payments? If I am reading it correctly.

From memory, the yield on UK coach is actually 20% higher than 2019 according to the CFO as of 2023. They're doing pretty well with that given stiff competition from Flixbus/Megabus.

The actual bus service is the problem. 16% pay rise for drivers (not undeserved). Fare increases of 12.5% for this year are only about half of cumulative inflation since their last increase and we don't yet know how far the new subsidy package will go. Perhaps JG was right and the UK bus business should just be sold. Let somebody else deal with it.

FT has a good feature that shows some institutional buyers/sellers alongside top holders, although data only to the end of June.

How are we feeling about rates after 2025? We got a 250m bond and 400m in private placements due 2028-2032. My personal opinion is US rates might not go back down to ultra low levels like before. But UK rates are likely to hit very low levels again as soon as the inflation is behind us. It's the only way our zombie economy can function. There is also the ECB that has actually dabbled in negative interest rates. Presumably that would make refinancing more favourable but not sure if comparatively higher rates in US would affect refinancing rates in Europe.

Looks like from the HY2023 report the value in use for the NA business actually exceeded the carrying amount by £371.7m in June 2023 which is higher than £225.9m in December 2022. So we are trending away from an NA impairment barring any FY surprises.

JG

Saw the video. We're definitely not gonna be seeing a 15 p/e valuation in current circumstances. But UK rates will inevitably go low again in some years and the organic expansion the business has going for it could take it back up there. In some years. The leverage conversation is an interesting one since Liberum argues the hybrid bond should be considered for the leverage purposes which would make it substantially higher.

Agree with broad sentiment on lack of confidence. In hindsight even looking at 2022 FY there was sizeable cash adjustment for onerous contracts which I don't agree with. Fortunately those are just about gone this HY.

200 EBIT with no bs cash adjustments would be a very pleasing result.