Revenue strong at Mobico, but profit down
Mobico Group, the new name for National Express Group, has reported strong revenue in its financial report for the six months ended 30 June 2023.
Group revenue rose 18.5% to £1.57bn during the period (H1 2022: £1.32bn).
Despite this, group operating profit is down to £8.7m (H1 2022: £42.3m), which it says is as a result of the reduction in Covid-19 funding from the government. The group looked to reassure shareholders, saying cost inflation came before price rises and cost actions that will be delivered in the second half of the year. Actions already taken give confidence in stronger than normal H2 weighting, according to the company.
Group adjusted operating profit has increased by £27m, driven by the strong revenue performance.
UK revenues were up 20% in the period, which Mobico says reflects strong growth in passengers in coach and bus partly offset by the impact of reduced bus funding.
Mobico expects its full-year adjusted operating profit to be between £200m and £215m.
“The profit result compared to prior year was impacted by a £60m reduction in Covid-19 funding” – Ignacio Garat, Mobico Group Chief Executive
Ignacio Garat, Mobico Group Chief Executive, said: “2023 is a year where the Group transitions away from significant Covid-19 support. We saw strong revenue growth in the first half, driven by customer demand. The profit result compared to prior year was impacted by a £60m reduction in Covid-19 funding. Although operating profit was down on the year, once the £60m reduction in 2022 Covid support is taken into account, adjusted operating profit grew significantly.
“In addition, we have seen significant wage inflation however, we expect this to be recovered – as planned – in the second half. Although there remain some market uncertainties, encouraging passenger growth, pricing power, continued pipeline conversion, high levels of contract retention, the actions we have taken on pricing and costs, and the ongoing successful mobilisation of contracts all support our confident full-year outlook.
“I’d like to pay tribute to all of our employees, customers and partners for their considerable efforts, in a challenging environment, as we continue to lead the modal shift from cars to mass transit, improving social mobility and reducing carbon emissions in the process.”