Member Info for wealthtrasfer

Sveres, re: Debt. Its worth reminding the final paragraph of Q1 update only a few weeks ago.

Balance Sheet and currency

Over 80% of Group debt is at fixed interest rates. As previously communicated, we have already put in place a

bridge-to-bond facility in respect of the £400m bond due November this year. We expect incremental

annualised interest costs from this bond refinance to be in the region of £12m. As we manage the currency

profile of our debt to match the currency in which EBITDA is generated, our covenant leverage is not impacted

by currency volatility. We continue to see a clear path to debt reduction, which remains a priority, and we

expect to be close to our target covenant leverage range of 1.5x to 2.0x Net Debt to EBITDA by Q1 2025.

Not that what any of us think could be done will make a blind bit of difference but Im just thinking on what I would do to get out of the doldrums and move this forward without a long slow recovery play over the next 3-5 years. They need to reduce debt (not because it cant be serviced but because the market is demanding it). They only have a couple of options: Sell off part of the business, reduce debt and rebuild or break it up. To sell off a part of the business and rebuild then really the only option is to sell the UK business. Alsa is currently the jewel but why would you sell that and keep the UK? The US could be sold but now isn't the right time and will need 1-2 years to get back on track. The US has one of the biggest opportunities to consolidate the market and grow. So I hope they sell the UK, re-list in the states raise a chunk of cash and consolidate the fragmented school bus, shuttle and transit market. Wheres that emoji for flying pigs?

The debt level and perceived ability to pay, in an environment of higher interest rates, is the over arching macro. We all know that with current operations that cash flow and margin are more than sufficient to service the debt repayments particularly with majority hedged / fixed rates. However there is an additional concern that there may be further impairment in US and Alsa should rates stay high for longer which will give the impression of a loss making business just as it did year end 22. None of this effects the underlying prospects of the business other than a stated £12m additional interest cost this year (due to an arrangement to extend the Nov loan for 18 months) which they are mitigating with an initial £25m of savings. The debt cover will also improve due to enhanced revenues and margins anticipated over the next 2 years. At some stage this will re-rate but it is going to take longer now than anticipated (just as with many other stocks). Hopefully the July statement will continue to support the ongoing recovery story and eventually the market will take note.

Yes, half year accounts and report. Although they will likely just continue with the positive progress we know is already happening. If nothing else happens earlier then full year report should start to see this recovering. It's a slow burner and needs something to shake things up if a quicker market recovery is demanded. The renaming to Mobico is an interesting step towards americanisation, taking away from the perception of being a predominantly UK business and hopefully focus investors on the world wide opportunities. Maybe be spin off UK and invest in faster market growth in US and Middle East. Re-listing in the US like many others?

Took a few weeks out to avoid the noise and come back to tumble weed!! Might go back to sleep until end of July ;/

Josey, I posted again last night on reviewing the information in the Annual Report and it seems as though CFO doesnt Have to and its a Target combined of Zero Cost Options and Purchased options with 5 years. So not as I originally thought. However, he should now be buying and showing his support and I would have thought the company would be strongly supporting him buying. So yes it is still a question of why isnt he.

I still think the basic argument holds though that having had a significant base salary increase there will be a desire on all sides for CFO to buy in.

I withdraw my previous comments that CFO must buy 200% of salary within time frame as it is a a target for LTIP awards of which partly is a mixture of Nil Cost and share Options that have to be bought or lapse. Not sure what happens if 200% target not met if incentives and options lapse due to price etc...

All LTIP awards are granted in the form of nil-cost options, save for LTIP approved CSOP awards which are granted as market value share options with an exercise price per share equal to the share price at grant. Mr Stamp’ 2022 CSOP award was granted with an exercise price of 240.4p per share. LTIP approved CSOP awards comply with the requirements of Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003 and can be exercised by way of effective set-off against any shares vesting under the corresponding LTIP award

LG/Paddy - https://www.nationalexpressgroup.com/media/rclbqxjq/national-express-annual-report-and-accounts-2022.pdf (Page 159). I must admit I had to re-read it again as id tried to digest the 300 page report in a morning. The CFO has 5 years to achieve target of 200% of base salary, not 3 years. James Stamp has until 5th dec 2027. I may have the wrong read on it?

Mulder, Im not saying its 'Bid Talk' but I am saying that given all the facts there are few options left other than Material Inside Information, which as Ive outlined could be one of many things.

p.s. I see either outcome as fairly positive. CFO Buys in, then great. CFO doesn't and theres something brewing.

JG, there was a relatively short window between the 2nd March and the next close for the 19th April update. This could have been due to politics around the strikes or it could be inside information. Those technical reasons have now gone and if CFO doesn't buy soon then given previous discussions we aren't left with any other reasonable options other than material inside information. That isn't limited to an approach and could be major contracts, refinance etc...

Poker, that is my understanding. The scheme is effectively 'Blind' and therefore isn't effected by closed periods but any subsequent sale of balance would be subject to it.

JG, I agree re: excuses. My understanding is that as the scheme dictates that shares MUST be sold as part of the scheme award to pay tax and that the award was pre-closing then this wouldn't have been something that would be prevented in a closed period.

Mulder, on the contrary it does mean something. CEO had a mandatory sale to cover TAX as part of the share award incentive scheme. The new (ish) CFO, is now obliged to purchase c. 850,000 shares as part of the scheme and as of tomorrow is eligible to do so. This was covered before but worth noting again, the CFO has, as part of his promotion, a decent increase in his disposable income and should therefore have available funds to start buying his required share holding. Couple this with the requirement to get share price over 185p for Directors to receive full bonus awards, the company and the CFO should be very aware that he needs to start buying. I think he will be especially keen due to the current price being a gift for him to start. If he doesn't start buying soon, next week or so, then I am as sure as can be that there is inside dealings going on that stops him doing so.

Now we have the technicality out of the way, James Stamp can start purchasing from tomorrow for 20 days.

Next few weeks and then there’s not technical reason not to buy and only inside knowledge remains.

Ps to qualify my believe in why CFO would buy shares if he could is that he’s just had a bumper promotion and pay rise so he’s got new income, he’s very bullish and making that clear. So even if he has committed his new pay rise to a new car :) he would have made at least a token gesture to back up his rhetoric.

Paddy, he must buy 850,000 shares within 2 years or so for his incentive scheme shares to pay out. I think he’s going to be as keen as mustard to get buying at these lows but he’s not I think it’s because he can’t. Whether that’s a technical reason or inside knowledge we will see soon enough (next 4-5 weeks)