UK's Mobico launches sale of N.America bus business to cut debt
Adds shares in paragraph 1, analyst comment in paragraph 5 and background
Aug 21 (Reuters) -British transport company Mobico MCG.L reportedon Wednesday a 28.1% jump in first-half profit, and said it has initiated the sale process for its North American school bus business in an attempt to cut debt, sending its shares up more than 19%.
The Birmingham-based company, which changed its name from National Express to Mobico last year, said it will launch new debt-reduction initiatives in the second half of 2024.
The bus unit generated 1.12 billion pounds ($1.46 billion) in revenue in 2023, while the group's net debt at the end of June stood at 1.24 billion pounds.
"Strong +10.2% pricing on North America School Bus contracts is likely supportive for both disposal interest and valuation potential", analysts at Jefferies said in a note.
Last year, Mobico suspended its dividend and decided against an interim dividend.
The company was hit hard during the pandemic as lockdowns restricted travel and governments had to support transport operators.
The company last year refinanced its 400 million pound senior unsecured bond maturity with a 500 million euro bond due 2031.
Mobico, which operates across 12 countries, on Wednesday logged an adjusted operating profit of 25.4 million pounds for the six-month period ended June 30.
The company retained its forecast for an annual profit of between 185 million pounds and 205 million pounds.
($1 = 0.7682 pounds)
Reporting by DhanushVignesh Babu in Bengaluru; Editing by Sherry Jacob-Phillips and Louise Heavens
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