By Slower Return to Profitability Due to Higher Costs
Shares in Mobico Group have dropped 21% after the company announced a reduction in its full-year earnings guidance and the suspension of its dividend payout. The increased costs have been cited as the primary factor behind the delay in achieving profitability.
At 0737 GMT, shares were down 17.00 pence at 68.00 pence.
Adjusted Earnings Revised Downward
The transport company, formerly known as National Express, revealed on Thursday that it now anticipates full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to be in the range of £175 million-£185 million ($215.5 million-$227.8 million). This is a revision from the previous target range of £200 million-£215 million, which was set just three months ago.
Steps Towards Sustainable Profitability
As a response to this development, the FTSE 250-listed company announced that it has taken measures to ensure sustainable profitability from its expanding revenue base. CEO Ignacio Garat affirmed the company’s strong belief in its potential but emphasized the need for increased momentum, particularly in the UK and North America, with the introduction of new leadership teams.
Strategic Review and Disposal Opportunity
Following a strategic review of its North America school-bus business, Mobico Group’s board has determined that a disposal represents an attractive opportunity. Consequently, advisors have been appointed to oversee the preparation for this sale.
First-Half Performance Affected
The company experienced a significant decline in financial performance during the first half of the year. In July, Mobico Group reported a pretax loss of £23.4 million compared to a profit of £20.5 million in the same period last year.
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