Member Info for wealthtrasfer

I'd look at SAGA as a good example of a similar situation. They hit the skids at 60p due to debt. They didn't want to sell the silver either but then got a bid for the insurance business and the share price tripled. The sale didnt go ahead as planned and the share price went backwards but still double what it was. Way more than a predictor would have bid for it and they would have retained a good chunk of the business and future value.

What Im advocating is look at what the market is demanding.. reduce debt. Sell off some of the non core parts of the business (and yes I understand that its not the best time etc... but needs must). Better to sell 25% now and double the SP than get 100% taken off us for double the SP. Thats the choice.

I understand that some may want a quick win but what Im taking about is protecting the future value. Why be forced to sell something for £2 thats worth £4? just because the BoD don't want to consider what they need to do to unlock the £4 as they have a long term plan. If they took stronger action then the £2 could be yours to take today by selling and leaving others to stay and take the £4. At the minute the choice will be taken out of our hands. It doesn't make sense and they underestimate the risk of that happening. After all they are caretakers of our investment, it is not their company and they don't have all the time they like. The long term plan is good and they are operationally smart but unless they have the assured backing of enough II's to give them the time they need then they risk a raid on our silverware.

The board are completely underestimating the risk to the company being taken out. Comments from the CEO " ... we cant control the market..." well yes you can, but you don't want to or don't think you have to because everything will come right in the end.... Well it just might not, so do something proactive about it!

If the business was left to run as usual then there will be a rerate over the next 2 - 3 years, however I don't think we will get the luxury of time to see that happen which is why they need to respond to the market demands. Ive said this before and worth saying again, unless they protect 'our' company and react with a strong defensive move then 'our' company will get taken out by someone who will do something about it. Likely break it up and reap the rewards and 'our' loss of opportunity with it!

Its a bit of a no brainer: Offer £1.80 a share, Pay £1bn.

Sell off US and UK, pay down half the debt and keep ALSA for song!

Ive been looking around at what the Cosmens may be doing and how that may effect MCG.

They have a few 'mobility' interests of their own since selling off ALSA to NEX and been planning Evolyn (channel tunnel) for over a year. They have other interests in escooter projects and the like as well. Seems as though they are keen to build some periphery businesses in the Mobility sector. and again explains why Mobico was named as it is.

Also interesting that their plan to take over NEX in Sept 2009 involved selling off NEXWM and keep the coach business. Which is exactly what MCG should do now in my view.

Are their ambitions being resurrected again to make a bid for MCG and combine their interests?

The euro tunnel consortium under the. And of Evolyn looks to be run by Cosmens. They have a Ltd company Evolyn Mobility Ltd ready!

The ‘Mobility’ theme in the name change seems to be popular and maybe shows where the influence lies.

Could be another bid from Cosmens coming?

AKASM. They did win a contract in Saudi but the contract was due to be finalised and operational by July 2023. The point that Lara also made is that it is now in the slides but no announcement was made and it was a sizeable 'asset light' project worth around £500m. Why haven't they made the most of that news? is it they don't want to highlight working in Saudi or they just forgot or don't think its material? or maybe just not got round to it?

Im in for the long haul and so Im also trying to keep positive and looking over the accounts to reassure things are positive: Even after the withdrawal of covid support funding, if you take the wage inflation, impacting H1 costs, and before recovery in H2, voluntary furlough repayment and restructuring costs into account there would have been a c. £150m operating profit. Add the forecast H2 OP of £150m then thats a pretty decent £300m and large uplift on 23-23.

Obviously this isn't helping us in the short term and there may be other items to come and disappoint but the underlying business is still sound and on track. I think theres going to be a real step change when all the noise drops away but I feel its going to be more 24-25 when the real numbers will be clear to see.

Lara, we've known about the Saudi contract for a while but it's not been announced by the company. The thought was that until the contracts were finalised (due by July 23) then they were playing it cautiously and kept it quiet. But as you say its now appeared on the contract wins slide but no announcement !! are they trying to fly under the radar? who knows but they certainly aren't banging a drum to help the sp.

Manz, the loss is not due to reducing covid loans. They have repaid, voluntarily, the furlough payments (£9m) and the covid 'subsidy' has now been withdrawn.

Interesting though that without the £9m voluntary furlough repayment and £14m restructuring costs *to achieve annualised £30m savings) the profit would have been okay.

JG, they are forecasting the same Operating profit as last year, which if you consider the time lag between inflation cost increases and passing it through, is not a bad achievement. The concern could be another non cash impairment but looking at the half year report the headroom has improved based on June 23 discount rates. As long as things dont worsen again then this time we may see a bottom line net profit which is what a lot of people are looking for. The US appears to be the biggest risk of impairment due to drop in EBITDA %.

2024 - 2025 is when all the negatives should drop out and things really start to improve.

Hi LG, welcome back. You're not alone in the high entry price. Hopefully tomorrow is the start of the reversal of fortunes! You are right in the long term prospects and hopes for the company. Heavily linked to interest rates at the minute but forecasting 1.5 to 2 x EBITDA to Debt ratio in 18 months should also make a big difference. Should interest rates return to pre-inflation levels as well then we are all in for a good ride.

MMan - my point is that casual investors think they know what National Express is ie a UK bus company and because of that they scroll past as you say. With a new group name they may take the time to look at who and what Mobico Group actually is.

On your last post, Megabus is StageCoach and FlixBus is greyhound lines. So just a rebranding of what was already there in the example of Megabus which also shows that rebranding can be useful as its got your attention.

Not sure why anyone is concerned about the Group Name and how it effects consumers? as all operating brands remain in use in the respective regions that they are know. The point of the group rebranding was to widen the view that Mobico is not just National Express and buses which is what most casual investors and onlookers in the UK (where the company is listed) think.

With a bit of luck the UK will follow the US drop and then good results on the 27th and we may have seen the back of the crazy low share price. Let's hope for a good July.

Its just accounting policy and practice. Its doesn't effect anything other than expected future value based on todays inflation and interest rates. Its saying if nothing changes from today (income, margin, interest rates, sales etc) then this is what we would be worth. As we know this isn't the real world and can go up or down. Investors have to take a view it based on their timeframe. No impact to cash or underlying profit or future prospects for growth or margin improvement. As the company moves further toward asset light contracts then the numbers change again.

For Alsa: (figures in brackets is the impairment in £m)

WACC (weighted Average Cost of Capital - ie increase to cost of financing) Increase of 1% (65.1)

Perpetual Growth rate Decrease of 1% (45.6)

Underlying Operating Profit Margin Decrease of 2% (192.7)

Long Haul Underlying Operating Profit

Margin Decrease of 2% (17.3)

North America:

For North America, sensitivity analysis has been completed on each key assumption in isolation. This analysis

indicates that the value in use of the North America division will be equal to its carrying value with an increase

in the pre-tax discount rate of 110 basis points (2021: 250 basis points) or a reduction in the growth rates used

to extrapolate cash flows into perpetuity of 120 basis points (2021: 270 basis points) [the carrying amount is the headroom ie undervalued Goodwill currently being carried]

In addition, for North America, a reduction in operating profit margin of 130 basis points (2021: 360 basis points)

will result in the value in use of the division being equal to its carrying amount.

Management has also performed sensitivity analysis to assess the impact that a combination of reasonably

possible changes in the key assumptions would have on the recoverable amount of the North America division.

In combination, a 20% reduction in the cash flows in 2023 and 2024, a 100 basis points reduction in the longterm growth rate and a 100 basis points increase in the pre-tax discount rate would lead to a £178m impairment

in North America.

An example of various future impairment scenarios in each region and the values that could be attributed are shown in the companies accounts.