National Express owner Mobico's shares hit record low as CFO exits

(Reuters) -National Express owner Mobico's finance chief will step down in June, the company said on Monday after reporting a more than 14% fall in 2023 profit on a drop in pandemic funding, high inflation and costs linked to accounting issues at its German rail business.

Shares in the transport firm, the market value of which has nearly halved since it rebranded in May last year, dropped almost 11% to a record low of 53.50 pence.

Chief Financial Officer James Stamp, who took on the role in December 2022 after 5 years at the company, will be succeeded by outsider Helen Cowing, who was previously finance chief at food tech company Selecta Group.

Stamp's exit comes after a year in which the company warned on profit, suspended its dividend and twice delayed reporting annual results, citing a review into accounting issues related to its German rail business.

Mobico, which operates bus, coach and rail services in Britain, North America, continental Europe, North Africa and the Middle East, faced high costs in 2023 and a 105 million pound reduction in COVID-19 funding.

Profit for the year to Dec. 31 fell to 168.6 million pounds ($207.63 million), in line with its latest guidance which it had revised down from 175 million pounds to 185 million pounds last month.

"Although group revenue growth was encouraging, driven by passenger demand and actions taken to recover inflation, this has not translated into an improvement in reported profitability," CEO Ignacio Garat said in a statement.

Mobico remains focused on recovering inflationary costs through pricing, Garat added.

The company forecast 2024 annual adjusted operating profit of between 185 million pounds and 205 million pounds.

Analysts at Peel Hunt put Mobico's rating and price target under review, citing a disappointing update with "many causes for concern".

The company said that its plan to sell its North America School Bus business in an effort to cut debt was progressing well, without giving further details.

($1 = 0.8120 pounds)

(Reporting by Radhika Anilkumar and Eva Mathews in Bengaluru; Editing by Sherry Jacob-Phillips, Kirsten Donovan)