Mobico on track to meet full-year profit guidance

(Sharecast News) - Mobico said on Thursday that it was on track to meet profit guidance for the year amid continued growth in passenger demand. The company - formerly National Express - still expects to report FY24 adjusted operating profit of between £185m and £205m.

In an update for the third quarter, it said continuing growth in passenger demand has driven group revenue up 12%.

Revenues at Mobico's Spanish subsidiary - ALSA - grew 23% on the same period a year earlier. This reflects good growth across the portfolio, it said, as well as the acquisition of CanaryBus which completed in March.

In the UK, however, revenue fell 2%. The company pointed out that the UK coach business benefited from rail strikes in the same period last year.

Revenue in North America was up 19%, while Germany experienced a 21% decline.

Mobico said that previously-announced productivity and cost reduction programmes are on track to deliver £40m in FY24 and £50m annualised savings thereafter.

It also said the process for the planned divestment of the North America School Bus business is on track, and an update will be provided in due course.

Chief executive Ignacio Garat said: "Mobico is a portfolio business engaged in delivering industry-leading, low-carbon transport solutions, and consequently improving social mobility across all of the communities that we serve.

"As we move at pace to strengthen the foundations of our business - including through our focus on reducing leverage - improving returns will follow. We look forward to providing further updates on our progress."

At 1020 GMT, the shares were up 5.4% at 75.20p.