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Mobico: Short sellers circle struggling National Express owner

By:

Transport Reporter

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The deal is valued at £460m and is expected to create upfront net proceeds of around £275m to £290m while also trimming debts.
The deal is valued at £460m and is expected to create upfront net proceeds of around £275m to £290m while also trimming debts.

Short sellers including the hedge fund owned by GB News baron Paul Marshall are circling Mobico Group after a torrid share price performance in the last 12 months.

The owner of National Express faced a tough year after rebranding to Mobico in May 2023.

Shares are down over 50 per cent amid a near-billion pound debt pile and rising costs across the business. In particular, the transport firm’s North American school bus segment has sucked out cash and is now likely to be flogged off in an effort to cut spend.

Mobico also saw shares plummet in the first quarter of the year as it was forced to delay publication of its full-year results twice due to accounting issues in its German rail business.

Short sellers have been circling Mobico for months. They include Marshall Wace and GLG Partners, which ticked up 0.1 per cent this month, and Systematica, according to FCA data.

The three hedge funds have an aggregate short of 2.6 per cent. Marshall Wace, the hedge fund run by GB News’ Paul Marshall, has taken the largest bet of 1.1 per cent as of May.

Mobico declined to comment.

The bets underscore the challenge facing the company, whose chief financial officer James Stamp departed suddenly in April amid the audit hiccups in Germany.

While demand across its business, particularly in Europe, has held strong, Mobico’s debt sits at around £987m and it has cautioned this will stay higher for longer.

A deal for the North American bus business has yet to come through and analysts have been downbeat on the value this could deliver, although it will undoubtedly play a critical role in Mobico’s turnaround plans.

Ahead of its full-year results, forecasts for adjusted earnings before interest and tax (EBIT) were downgraded from between £175m and £185m, to between £160m and £175m.

And investor confidence may fall further this week as Mobico looks set for a relegation from the FTSE 250 in the latest reshuffle, according to results from the index compiler FTSE Russell.

Marshall Wace declined to comment. Systematica and GLG Partners have been approached.