Transport giant Mobico, the parent company of National Express, has launched a significant cost-cutting programme, slashing back-office jobs across its UK operations. The move comes as the group warned that its full-year profits are set to fall at the lower end of expectations.
Financial Performance and Market Pressure
The company revealed that its underlying operating profit for the full year is now projected to be towards the bottom of its £180 million to £195 million forecast range. This announcement triggered a sharp, though temporary, reaction in the markets. Shares plummeted as much as 14% before staging a recovery to trade just 0.32% down at 21.63 pence.
Mobico pointed to intense competition within the UK coach market and a decline in bus passenger numbers as key challenges. Its UK coach revenues dropped 7.4% in the third quarter to the end of September. The group has also been offloading loss-making businesses, including Clarkes of London, The Kings Ferry, Lucketts, and Worthing Coaches.
Restructuring and Strategic Shifts
In response to these trading woes, a large-scale cost reduction programme is now underway. While the exact number of roles affected has not been disclosed, the cuts are focused on support and back-office positions within the UK arm. A significant part of this restructuring involves the planned merger of its UK coach operations into its more profitable Spanish division, Alsa, scheduled for January next year.
Executive Chairman Phil White, who returned to lead the business earlier this year following a series of profit warnings and the departure of former boss Ignacio Garat, stated: "We continue to focus on simplifying and strengthening the group, taking decisive actions to improve operational and financial performance." He outlined that these actions include the cost savings programme, leveraging Alsa's best practices, and exploring options to monetise assets of the UK bus business.
Mixed Results Across the Group
The financial picture across Mobico's global operations was mixed. While the UK market struggled, the group's overall turnover saw a 5.4% rise in the latest quarter. This was driven by strong performances elsewhere:
- The Spanish Alsa business delivered a 4.1% rise in revenues.
- The German rail arm notched up an impressive 14.3% hike in turnover.
However, the company also faced headwinds in North America, where a loss-making contract at its WeDriveU transit and shuttle services business dragged on revenue. The firm's stock has been under severe pressure, down 74% over the past 12 months, reflecting the difficult trading conditions and previous profit alerts.
