Shares in bus and rail business Mobico (MCG) have fallen 37% over one year and more than 80% over five years as the slow post-pandemic margin recovery at the renamed National Express continues to frustrate long-suffering investors.

Having spooked the market less than six months ago by cutting guidance and suspending the dividend, the FTSE 250 firm has now delayed its results for the 2023 calendar year due to ‘accounting adjustments’ for its German business.

On 20 February, the transport group warned that while the audit of its 2023 results was ‘well progressed’, it had identified that certain accounting judgements relating to its German rail business should be ‘subject to further review’, including its full-year 2022 results.

The German operations are expected to account for less than 6% of last year’s group adjusted EBIT (earnings before interest and tax), which Mobico is confident will be in the £175 million to £185 million range, in line with guidance given last October.

While Mobico’s UK and North American businesses have performed in line with expectations, the German rail side has been impacted by driver shortages, volatile energy prices and lower energy recovery costs than hoped. As a result, the ‘onerous contract provision’ for the year to last December is likely to increase by between £40 million and £70 million which will be utilised over the remaining life of the contract to 2033.

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