Mobico CEO steps down as profits disappoint

(Sharecast News) - Troubled transport operator Mobico said chief executive Ignacio Garat would be stepping down, days after the company issued a profit alert that sent its shares plunging by more than 40%. Guarat will step down on Wednesday with Phil White, chair designate, taking on the role of interim-executive chair from May 1.

Mobico also reported annual adjusted operating profit of £187.7m - just above the lower end of the £185m - £205m range of analyst expectations.

On a reported basis, operating losses widened to £520m from £43m and pre-tax losses were £609m from £120m, due to goodwill impairments, a write-off of deferred tax assets in UK and North America and an increased onerous contract provision in German Rail.

Shares in the firm, formerly known as National Express, hit the skids last week on the news. The stock, which was at 467p just before the Covid pandemic struck, was languishing at 33.5p on Monday with a market capitalisation of around £206m compared with £2.4bn at the end of December 2019.

The news completely overshadowed the sale of its North America school bus business to I Squared Capital for up to $608m (£457m), from which Mobico expects net proceeds of up to £385m - less than markets expected.

"In FY25, on a continuing business basis, the group expects to make continued revenue and adjusted operating profit progress, with further strong performance from ALSA and ongoing growth in WeDriveU, alongside further recovery in UK & Germany," the company said on Tuesday.

Reporting by Frank Prenesti for Sharecast.com