- Delay caused by German business
- Figures being reviewed back to 2022
- Increase in onerous contract provisions
After spooking the market less than six months ago by cutting guidance and suspending the dividend, UK bus and rail group Mobico (MCG) – formerly known as National Express – has done it again by delaying its full-year results due to ‘accounting adjustments’ for its German business.
The shares, which dropped more than 20% shortly after the open to 66p, were trading 7% lower at 78p by late morning.
EARNINGS RELEASE DERAILED
The group said that while the audit of its 2023 results was ‘well progressed’, it had identified that accounting judgements relating to the German rail business ‘should be subject to further review’, including its full-year 2022 results.
The German operations are expected to account for less than 6% of last year’s group adjusted EBIT (earnings before interest and tax), which the firm is confident will be in the range of £175 million to £185 million in line with its guidance last October.
PROVISIONS TO RISE
While the firm’s UK and North American businesses have performed in line with expectations, the German rail side has been impacted by driver shortages, volatile energy prices and lower energy recovery costs than hoped.
As a result, the ‘onerous contract provision’ for the year to last December is likely to increase by between £40 million and £70 million which will be utilised over the remaining life of the contract to 2033.
