National Express crashes as US arm sold on the cheap

Shares in the owner of National Express crashed yesterday after it sold its US yellow school bus business on the cheap.

The coach operator’s stock tumbled 41 per cent to a record low after it agreed a deal to offload the unit for £457m – up to £740m less than expected by some in the City.

The sharp decline – accelerated by a warning of lower profits – means shares have cratered 84 per cent since early 2020.

And 66.6 per cent has been wiped off the Birmingham-based company’s share price since it changed its corporate name from National Express to Mobico in 2023.

The group has agreed to sell its American school bus division to infrastructure investor I Squared Capital for £457m.

City analysts at broker Jefferies had estimated that the business could be worth between £489m and £1.2billion.

Investors were also spooked by Mobico’s warning that last year’s profits came in at the lower end of expectations at around £185m.

Russ Mould, investment director at AJ Bell, said: ‘If Mobico’s latest update was one of the company’s coaches it would be sent straight to the scrap yard.

‘There is a growing list of negative factors putting Mobico in the slow lane.

‘Long-running issues coming out of the pandemic have hurt the company.

Bumpy road: National Express was the title of a song by The Divine Comedy (frontman Neil Hannon, pictured)

‘A lacklustre corporate rebrand of National Express seems to have gained limited traction and last March results had to be delated thanks to audit issues.’

Mobico put the US school bus business up for sale in October 2023 to help pay down its debts, which have ballooned to more than £1billion. Yesterday the company said it had made ‘significant operational improvements’ to help the business recover from the pandemic.

But the unit, which is the second largest player in the North American school bus market with 14,135 vehicles, still requires ‘significant’ maintenance and investment, a Mobico spokesman said.

Donald Trump’s tariff war has the potential to push up driver wages and the cost of running its fleet of buses.

Mobico chief executive Ignacio Garat said: ‘This agreement is a significant milestone for Mobico. It is a first step in strengthening the group’s balance sheet and will allow us to reallocate resources away from a capital-intensive business as we focus on continued deleveraging alongside funding our pipeline of growth projects.’

Mobico also operates transport services in the US, Canada, Spain, Morocco, Switzerland, France, Germany, Portugal, Ireland, Bahrain and Saudi Arabia.

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