Mobico Share Discussion Threads

[nigel_man] 03/2/2009 12:33

All speculation, last trading updates were bullish. The Shorters have seized their opportunity but I expect a surge a week or so out from the results. Director buying at £4.70+ is indicative that not much is wrong. Jorge Cosman's & family have a long histroy in the transport sector.

[value viper] 03/2/2009 10:13

stating the obvious probably but must be getting shorted this - co needs to say something imo I think with FT press y'day etc

[themoreiseeyou] 02/2/2009 09:56

All of this would have been known to Jorge Cosman who spent nearly £7 million pound less than one month ago at an average of £4.90. We will soon see his reasons I suspect.
If they give back the East Midlands line the share price will rocket.

[steeplejack] 02/2/2009 09:45

Yes but the dividend will be slashed even if negotiation is forthcoming following the example of Cookson ,Xstrata etc.

[nigel_man] 02/2/2009 07:47

Well, Prudential have been increasing there stake over the last month, now up to +6% from 3%. If the terms need to be refinanced HMG will oviously do so, since nobody else will step in during the current climate. They are not compelled to opeate the franchise and if giving it up can lift earnings by 6% I see that as positive. The valuation of £530m at the current share price needs to be viewed with suspicion.

[haywards26] 31/1/2009 18:02

Jan 2009 - The Guardian


National Express may abandon rail business• Train operator likely to quit as earnings are hit
• DfT contract demands payment of £133.6mDan Milmo, transport correspondent The Guardian, Wednesday 28 January 2009 Article historyNational Express, once Britain's biggest rail operator, could quit the train business altogether if its £1.4bn east coast franchise places too great a strain on group profits, according to a city commentator.

Public transport groups are under pressure after the Department for Transport revealed last week that five franchises - out of 19 across the UK - have been classed as "red" under a "traffic light" system monitoring the financial health of rail contracts. National Express has the toughest payment schedule after agreeing to pay the DfT £1.4bn for the right to operate trains between London and Edinburgh until 2015. That contract was struck in August 2007, at the peak of an economic boom that pointed to rising passenger numbers, with customer willingness to absorb inflation-busting fare rises.

However, a note published this month by the investment bank JP Morgan said the east coast contract could miss revenue targets this year and make an underlying loss of £26.1m. National Express needs revenue growth of about 10% to meet targets this year but it could be heading for flat growth instead, said JP Morgan. If the UK economy shrinks by 2.3% in 2009, said JP Morgan analyst Damian Brewer, the group's rail division could slip into an earnings trajectory that will see it remain loss making, or narrowly profitable at best, until the middle of the next decade. National Express also owns the National Express East Anglia and c2c franchises, which expire in 2013 and 2011 respectively.

"If our projections were to materialise, then by 2010 the rail operations would carry a negative NPV [net present value], and it might prove economically positive to exit UK rail," he said. JP Morgan added that, due to the underperforming rail business, it is cutting its earnings per share forecast for National Express by 30% for 2009. By exiting rail, said JP Morgan, National Express will lift earnings per share by 6.4% in 2011.

JP Morgan described the east coast franchise as the "key swing factor" in its parent group's fortunes. National Express has a stockmarket value of about £530m and its debt burden of £1.1bn is a cause of concern to analysts, standing at more than three times projected earnings for 2009. Alongside its rail operations, National Express owns coach and bus businesses in the UK, Spain and the US.

Brewer said a further decline in the UK economy could see short-term losses on the contract increase but could also lead to radical action by train operators such as handing back the franchise or seeking a change in payment terms.

The contract requires a premium payment to the DfT of £133.6m this year, rising steadily to £521.7m in 2014. Under DfT guidelines, any rail company that defaults on a contract can be ordered to hand back its other franchises and an attempt to renegotiate financial terms could trigger a default.

Other analysts have also warned that National Express might need to hand back the east coast franchise or renegotiate it.

"There could be a point where the company sees substantial losses for several years and decides that perhaps the sensible thing is to hand back the keys. But we are not at that stage yet," said Gert Zonnefeld , analyst at Panmure Gordon. A National Express spokeswoman said the company did not comment on market speculation.

She added: "We will update the market on 26 February as normal and we don't have any reason to update the market before that time."

[value viper] 30/1/2009 09:32

pru buying more

[nigel_man] 30/1/2009 09:30

Thanks call-logger, the drop to this level seems extreme, results obviously eagerly awaited. I think they have a much stronger operation than SGC.

[armistead34] 30/1/2009 09:17

This looks like the floor to me, so I've bought some more. SGC also looking like they've reached a double bottom, but without NEX div yield. Of course I could be completely wrong, but I'm drawn by the heavy director buying in December and the mutli year bottom. And 3 quid coming up providing the next psychological support.

[call-logger] 28/1/2009 19:00

Preliminary results announcement 26 February 2009

[nigel_man] 28/1/2009 18:39

Should have issued notice of results already, anybody know when results are due?

[pictureframe] 28/1/2009 14:12

moving up now - next update due when anyone?

[pictureframe] 28/1/2009 13:26

In at 3.45 - 10% divi and chance of good capital gain make this a share to hold

[bonzo1] 28/1/2009 09:40

buying more, far too cheap. Also picking up xstrata - was at 800p on friday today 620p, metal prices strong.

oil fallen so should benfit national express and shares off 70% in a few months, decent director buying recently at far higher price than current price.

[armistead34] 27/1/2009 17:55

I'd say we're as good as there - at the secular bottom. Not to say I could be very wrong, but it's very near that 3.25 I'm looking for. Also, compare with SGC, which is just rising from a double bottom. Look sectoral to me - and oversold.

[jas_ron] 27/1/2009 02:16

far too cheap, down 70% in last few months.screaming buy at these levels, div yield 10% if holds.

[andyderbys] 24/1/2009 11:39

Just been playing a bit more with the chart function and in particular comparing NEX's performance with that of it's peers (SGC, FGP, GOG & ARI).

I was interested to note that although NEX has horribly underperformed over the last year (-65%, compared with ARI -20%, SGC -40%, GOG -50% and FGP -44%), if the last two months are taken as a whole we have performed exactly in line with FGP and SGC, and until the beginning of last week with ARI & GOG.

So I am a little reassured to have some small evidence that this latest sell off at least is perhaps more a 'sector' issue than a NEX issue.

Andy

[armistead34] 24/1/2009 10:39

Watching too, and completely at a loss as to why this is falling so deeply, except there are concerns about government subsidies. But 10% divi covered more than twice.. In transport sector..

Very interested in your chart, as this may offer more guidance in my experience, fwiw, than knowledge of fundamentals. It's now at a six year low.

Edit: Might also be subject to what I'll call the 'half to a quarter rule': shares that fall to over half their peak, commonly continue falling to 25%. That would be 25% of 13 - about 3.25. I shall be watching carefully!

Edit: Also of interest, very substantial purchases in late December by Jorge Cossman, dep. chairman @ between 4.75 and 5.

[andyderbys] 23/1/2009 22:25

Getting to interesting levels I think - looks like we managed to repeat the 1999-2003 performance in less than a year :s

[themoreiseeyou] 21/1/2009 11:19

The director that spent nearly £7 million on shares less than ten days ago is now nearly £2 million pounds poorer. He either doesn't undeerstand his company or is very silly. I suspect niether is true. I stick by my view. He bought for a very good reason. I hope so because I followed his actions.
Also institutions have been buying in heavily, nb the last two rns announcements.

[glenowen] 20/1/2009 20:53

Looks like the market is taking the view that the dividend promise is untenable - a 10% yield takes NEX much too firmly into the "too good to be true" category. Better to keep my cash in a bank account paying 1% interest or take what might be a huge risk with these shares? As with so many other operationally sound companies, NEX is being hammered because of the debt position. Think I might keep it in the bank for a while longer!

[andyderbys] 19/1/2009 12:32

NH:
and also a real buzz around national express
NH:
which last hit the headlines, when chairman David Ross was ousted
NH:
but this story is Ross
NH:
the word in the market is that one of their biggest shareholders is plotting something
NH:
possibily a break up bid
PM:
Who??
NH:
Jorge Cosmen
NH:
a Spanish guy
PM:
Who he??
NH:
currently a non-executive director
NH:
has been adding to his stake in NEX recently
NH:
now up around 20%
NH:
he got most of that stake when he sold his business to NEX a few years ago
PM:
(Barcl back below a quid )
NH:
Mr Cosmen was appointed to the board in December 2005 after National Express completed the takeover of Spanish transport firm Alsa.
He was previously corporate manager for the Alsa Group from 1995, becoming chairman in 1999.
NH:
trying to get some detail on this rumour
NH:
but some pretty good bandits are talking about it
NH:
and I think Mr Cosmen is a Spanish businessman who has managed to preserve most of his capital
NH:
the only stumbling block could be the fact that NEX has to refinance EUR500m of debt
PM:
Thanks for that
NH:
worth keeping a watch on




NH:
just going back to NEX for a minute
NH:
does look like it could be a break up target
NH:
here's a recent note from RBS
NH:
Operationally NEX faces similar challenges to the rest of the sector
National Express (NEX) faces the prospect of a downturn at its rail business. The
subsidy profile at East Anglia is not onerous but still requires growth, so we think
profits will be impacted, albeit not by as much as elsewhere. The major concerns
surround East Coast, where revenue growth of c10% is required. We are more
positive than some for long distance given the ability to yield-manage (which is not
the case for commuter rail). Therefore, the downturn appears to be more than
factored in now.NH:
Even Spanish concerns do not explain the valuation disconnect
Along with rail, the market is still struggling to understand the Spanish operation
(even though the company has spent a lot of time attempting to explain it).
Although we believe in the quality of this business, we also believe fares are
unlikely to rise significantly in 2009 given the emergency fare rise in 2008 to cover
increased fuel costs (which, of course are now lower). However, sterling-reported
profits should still be up in 2009 due to translation.NH:
The big difference is over refinancing risk
The biggest issue impacting NEX is re-financing, with €540m of debt falling due
in February 2010. The problem we have is that in normal circumstances this would
not be an issue, with NEX perhaps paying a higher rate to renew facilities.
However, in the current circumstances we do not know what will happen. At the
very least we believe it is unrealistic to believe the company will grow its dividend
by 10%, as previously stated.
Valuation: SOTP-based price target moves from 700p to 500p
We retain our Neutral rating. Although our SOTP analysis puts NEX's intrinsic
fair value at 576p, we apply a 15% discount to reflect refinancing risk, leading to
our new 500p price target (see Appendix, page 28).