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British transport group Mobico said chief financial officer James Stamp would stand down in June after accounting issues affecting the group’s German rail business caused it to delay the publication of its annual results twice this year.
Mobico, which rebranded from National Express last year, said Helen Cowing, the former finance boss at vending machine company Selecta group, would replace Stamp on an interim basis, noting she was experienced in “turnaround situations”. Stamp is stepping down after less than two years in the role and almost seven years at the company.
The announcement came as the bus, coach and rail operator reported a 36 per cent fall in adjusted pre-tax profits for the year to the end of December, to less than £93mn, in delayed annual results on Monday.
Revenues rose by 12.2 per cent to £3.15bn, thanks in part to rising passenger volumes, but Mobico said higher wage costs and lower profitability in Germany had weighed on its earnings.
Audit issues at Mobico’s German rail business caused by changes to indices used by the country’s statistics office led the company to delay its 2023 financial results in February and March, sending shares down sharply.
Shares fell more than 6 per cent in morning trading on Monday to an all-time low, having dropped by about 55 per cent over the past year.
Chief executive officer Ignacio Garat said the delays were “regrettable” but the additional work relating to the German business was “now concluded”.
Mobico is the second-largest operator in North Rhine-Westphalia and one of the top five operators in Germany, but its business there has been affected by driver shortages and volatility in energy prices.
The FTSE 250 company has struggled to regain its profitability as the transport industry recovers from the impact of the coronavirus pandemic and transitions away from the government support packages introduced to keep buses and trains running during lockdowns.
On a statutory basis, the company reported an annual loss before tax of £98.3mn, down from a £225.3mn loss the previous year.
Mobico, which is trying to reduce its debt, said on Tuesday that a potential sale of its US school bus business was progressing well, having announced last year it was planning to sell the unit to fulfil that aim. The company’s US business has been hit by cost pressures and a dearth of drivers at its school bus operation — issues that some analysts say are easing.
Mobico said its net debt was broadly unchanged compared with the previous year. The group is also set to refinance a £500mn loan by February 2026, “or face a significant step up in rate,” according to Alexander Paterson, an analyst with Peel Hunt.
He added that deleveraging and refinancing relied on improving operational performance and a proposed sale of the US bus operation.
“It was difficult to find much to be encouraged about in the headline,” said Gerald Khoo, an analyst with Liberum, adding that a successful execution of the school bus disposal should be seen as one the key opportunities for the year ahead.
