Mobico: National Express owner shares spiral after profit warning amid audit issues
National Express owner Mobico’s shares tumbled this morning after it lowered its annual profit forecast amid ongoing audit issues affecting its German rail business.
The transport group said it expected 2023 adjusted earnings before interest and tax to come in at between £160m and £175m, compared with a prior forecast of £175m and £185m.
It will also take a £70m increase to the “onerous contract provision,” plus an additional £25m, the company added in a statement on the London Stock Exchange.
Shares were down over eight per cent in early trading.
The issues mean the announcement of Mobico’s full-year results will be pushed back even further, to the end of April. Delays were first announced in February when the firm revealed accounting judgements relating to its German rail business needed to be reviewed.
That announcement sent shares spiralling as low as 20 per cent at the time as investors lost faith in the stock and management began its review.
In an update this morning, Mobico said the issues were caused by changes to the indices used by Destatis, the German statistics office, to determine energy costs in the transport sector.
“The group has made an initial assessment of the implications of the revised indices. Whilst it is the group’s expectation that the models used to calculate the profitability of the German Rail business remains valid, further work is now required to determine the full effect of the revised indices.”
It comes after a torrid year for the company, which re-branded from National Express in May last year.
Shares are down over 40 per cent in the last 12 months and hit record lows in 2023, as the firm was hit by inflation and struggles in its North American school bus division.
In October, Mobico issued a profit warning and announced plans to sell its North American arm in order to cut debt.