Member Info for wealthtrasfer

While enjoying an up day its crazy to think this was 50% higher just 4 weeks ago

Fair Value and SP are very different numbers as we've seen in MCG and across the board. Fair Value is there to be seen but SP relies more on market confidence in the wider market and the company. Both are at extreme lows.

Https://www.shorttracker.co.uk/company/GB0006215205/

'ShortTracker website'

Notice: We no longer track disclosures after they drop below 0.5%. It is possible that the manager still holds a short position even if we are showing it as zero.

Not sure its totally cleared unless you have access to better info? If a short drops below 0.5% is doesn't get reported on most trackers and GLG went to 0.49% yesterday, so its probably dropped off the radar.

Lara - although I agree with your medium term view, inflation matters a lot. Firstly with regard to impairment, we really don’t want any impairment this year and need to see the operating margins drop through to the bottom line and to report a profit. That’s very important to market sentiment and will drive a recovery in share price. Secondly the debt burden is of concern to the market and peak or lower interest rate futures take some Of the pressure off even though we don’t need to refinance anytime soon. Thirdly it takes away concerns about spiralling cost inflation with lagging price recovery. So I would say it’s very important to be dropping in US and EU particularly.

Interesting read and sums up the management performance: https://www.investorschronicle.co.uk/news/2023/10/30/battle-of-the-buses-mobico-and-firstgroup-head-in-opposite-directions/

I think if they achieve the lower end of the analysts expectations ($1.5b) then that wipes out all debt after costs, with the possible exception of the Hybrid. If they get the upper end then that wipes 100% of debt. The remaining business must be worth around £2b at full market value, possibly a bit more if ALSA keeps motoring ahead and someone wants UK Coach. So somewhere between £2 - £3.50 ps depending on a lot of things. I doubt someone will offer that as a take out as they will want their profit.

Ronnie - the valuation came from various Analysts and quoted Goldman Sachs:

"Mobico, a British transport group that owns Alsa and has the Cosmen family as its main shareholder, wants to take advantage of the strong interest of infrastructure funds in its sector to launch the sale of the school bus division in the United States, in a transaction aimed at raising some 1,700 million euros that will serve to clean up the balance sheet.

Ignacio Garat, CEO of Mobico, announced last Thursday the decision to begin the process of divestment of that business, which operates a fleet of the famous yellow vehicles, which serve schools located in about 30 states.

Market sources indicate that Mobico has hired the investment bank Goldman Sachs as advisor and coordinator of the process. It will have the support of Bank of America, the group's regular strategic advisor. The operation could last half a year: after preparing the sales notebook and formulating the first round of offers, the candidates must carry out an extensive operational, accounting and legal review of the subsidiary (due diligence) before formulating binding proposals.

Analysts consider that, taking into account previous transactions in the sector, the operation could be between 1,500 and 2,000 million dollars (1,400 to 1,900 million euros). Matthew Copeland, an analyst at Jefferies, points out that the sale could reduce the group's net debt from 4.1 to 2.5 times annual EBITDA.

The interest of the funds

In principle, the great candidates to carry out the acquisition are infrastructure investment funds. In recent years, these entities have begun to buy various bus operators in Europe and North America, understanding that their concessions and contracts allow them to ensure relatively stable income in the medium term. For example, EQT acquired First Group's subsidiaries in the United States in 2021 (including school buses for $4.6 billion)....."

Genghis - I didnt read it like that. I read that as 'Fitch' saying that the cash raised would make up for any weakness in the struggling UK business. Not the company sayng thats what they would use the cash for.

Fitch comments posted here but haven’t seen the Moodys comments, so here it is:

Moody's, which affirmed the issuer's Baa2 rating but downgraded its outlook, said the move reflects its "expectation that Mobico's performance and credit profile will not strengthen by the end of 2023 as previously anticipated".

Mobico, formerly known as National Express, issued new debt only a month ago, selling a €500m 4.875% September 2031 note at 175bp over swaps. Pricing had tightened from IPTs of plus 190bp area for the no-grow deal though, as a result, the book fell from a peak of more than €1.1bn to about €575m.

That immediately put pressure on the bonds, which drifted wider after they were free to trade. Last week's profit warning triggered another bout of selling, with the bonds now quoted at plus 245bp, according to LSEG data, as of 1:10pm in London on Tuesday. In cash price terms, they are bid at 94.15, five points below where they were reoffered.

Mobico said that it expects its annual operating profit to be £175m–£185m, which is £25m–£30m lower than previous guidance. "Full recovery in profitability [is] taking longer to deliver; decisive action [is] being taken on our cost base and to accelerate deleveraging," it said.

The company also announced a £20m cost savings programme, in addition to a £30m cost-cutting exercise already under way. Mobico is also suspending its final dividend payment due this year.

Moody's said it expects Mobico's total leverage "to remain material" at 4.4x at the end of 2023. This figure would correspond to a net leverage of 3.6x, slightly above the rating guidance of 3.5x.

Similarly, Mobico's funds from operations' interest coverage of 4.4x is anticipated to be below the rating guidance of 5x, said Moody's, and its RCF/net debt of 16% is expected to be just inside the mid-teens guidance range.

Still, the ratings agency "expects Mobico's metrics to improve following the disposal of its North American school bus business and the application of at least a portion of the proceeds to leverage reduction".

It also said that Mobico has "ample liquidity", including £311m of cash and equivalents as of June 30, and a £600m RCF maturing in 2028.

Last month's bond issue, which priced on September 19, addressed a £400m November 2023 maturity.

Mobico also has a BBB rating from Fitch with a stable outlook. On Monday, the ratings agency also highlighted its plan to sell its North American school bus business, saying it "would likely help in mitigating the impact from weaker trading in UK businesses".

Too often

At risk of posting to often: Alsa short listed alongside others inc. Moventia and Transdev for another Saudi contract which is twice the size of this one. https://www.partnershipsbulletin.com/article/1840641/shortlist-saudi-bus-ppp

Dubai contract was even bigger, earlier last year, and Alsa were in last 2 with Transdev but neither company reported anything since, so can only assume its been cancelled?

This is Oct 2022. Moventia announced their part of the contract win ages ago.

https://www.eleconomista.es/transportes-turismo/noticias/11996531/10/22/Alsa-y-Moventia-ganan-los-contratos-de-autobuses-interurbanos-de-Arabia-Saudi-de-mas-de-1000-millones.html

That link seems to have expired. Interestingly this was also posted 3 days ago. Amazing we are always last to know https://www.agenzianova.com/en/news/Saudi-Arabia-Spain%27s-Alsa-launches-bus-transport-service-for-500-million-euros/

I posted this last November but others on here had already seen it previously https://metatoursae.com/the-spanish-alsa-and-moventia-win-the-bus-contracts-from-saudi-arabia/

Pedro - as much as I would love for you to be right, I think you're going to get tired of repeating the same thing for 6 months. Unless something comes out of the blue then its unlikely much will happen other than a drift up towards March when investors will anticipate (or in the case of ii's get: get wind of) results or sale of US Bus.

HV -from the original contract announcement they were looking at 570m over 10 years (based on estimated revenues) so this has been pared back a little or rounded down. This is ALSA's income for running the contract. Assets/Capex provided by others.

Just another 1% a day for the next 12 months should do it ;)