Shares in National Express owner Mobico Group PLC (LSE:MCG) screeched 24% lower after it reported lower underlying profits and swung to a first-half statutory loss after booking an impairment linked to the sale of its North America School Bus business.
Revenue grew 7% year-on-year to £1.32 billion, driven by record performance at Spanish road passenger arm ALSA and growth at North American transit and shuttle business WeDriveU.
But adjusted operating profit fell to £59.9 million from £68.6 million, reflecting operational issues at two WeDriveU contracts.
However, Mobico maintained its full-year adjusted operating profit guidance of £180-195 million.
The group posted a statutory loss of £254.7 million, including a £238 million non-cash impairment on its North America School Bus unit, which was sold in July for up to $608 million. Mobico received $364 million upfront, with proceeds earmarked for debt reduction.
Executive chairman Phil White called it a "solid performance" in the first half, noting that revenue growth was supported by positive passenger demand, further contract win momentum and a record performance at ALSA.
"Although our operating profit performance in the first half was mainly impacted by the under-performance of two contracts in WeDriveU, due to operational issues and a competitive trading environment in the UK, we remain confident of achieving our full year adjusted operating profit".
He said the sale of the North America School Bus business strengthens liquidity and "is an important first step in our continued focus on deleveraging".
Further "decisive action" is being taken to sharpen operational and financial performance, including additional cost reduction plans and further leveraging ALSA's best practice across the business.
UK coach operations will be integrated with ALSA to build a pan-European coach platform, while discussions with German transport authorities are progressing, with a broader update on ALSA’s growth potential and cost actions expected before year-end.