National Express owner’s new chair takes up the reins
The new chair of National Express owner Mobico faces a gargantuan task to turn around the struggling coach operator.
Presenting his first trading update on Monday, Phil White insisted “considerable value and momentum” exists across the group, with a nine per cent growth in revenue indiciative of strong demand for its services.
True, the company’s Spanish division ALSA is performing well and a number of new contracts make it well-positioned for growth in the coming years.
But the rest of the business is in a sorry state. The departure of chief executive Ignacio Garat last month capped off a torrid performance over the last couple of years, which has included multiple profit warnings and an audit screw-up that saw its 2023 full-year results delayed.
White is no stranger to the company, having served as its chief executive officer between 1997 and 2006. He oversaw the acquisition of ALSA many years ago – a move which led the Spanish dynasty, the Cosmen family, to become majority shareholders
The industry veteran has spent the first few weeks in talks with shareholders and Mobico’s many subsidiaries, while work begins on “a large-scale, complex” turnaround in the UK.
National Express’s owner’s troubles
In the UK, revenue fell by two per cent over the first quarter. The National Express coaching business in particular has struggled, with sales down six per cent as it loses out following the end of Britain’s rail strike dispute.
Mobico’s ALSA segment and North America both saw strong demand over the quarters. ALSA revenues grew by 13 per cent, boosted in particular by its long-haul offering.
The company recently closed the long-awaited sale of its North American school bus business to I Squared Capital, the private equity group known in the UK for buying Arriva.
Although the deal’s value proved a dissapointment for shareholders, at $608m (£455m), it will prove a key part of White’s efforts to spark a turnaround.
Total revenue in its North American segment rose 13 per cent in the quarter, which Mobico put down to increased billable hours in WeDriveU.
“Our priority remains in strengthening our balance sheet and accelerating the pace of operational and financial improvement to drive the change that is necessary to creating a business that can take advantage of the opportunities ahead,” White told markets on Monday.
Shares edged up around one per cent in early trading.