MARKET REPORT: National Express firm dives on profit warning

Shares in the company behind National Express crashed to a record low after it issued a profit warning and scrapped its dividend.

Mobico Group’s boss Ignacio Garat said the recovery of the FTSE 250 firm’s profits will take longer than it expected amid rising costs in the UK and North America. It now expects to make at least £175m to £185m of profit for 2023 – down from a previous forecast of £200m and £215m.

Shares in Mobico, as the parent company is now known, plunged 27.5 per cent, or 23.4p, to 61.6p.

As part of efforts to cut costs, the group scrapped its final dividend. It is also preparing its North America school bus business for a potential disposal.

Higher costs linked to recruiting and training drivers mean profits at this part of the business are expected to be £5m to £10m lower than previously thought.

In a jam: Mobico Group’s boss Ignacio Garat said the recovery of the FTSE 250 firm’s profits will take longer than it expected

In the UK, the coach business enjoyed a strong rise in revenues and passengers. But sluggish passenger growth and inflation pressures in the bus division has weighed on the UK and German arm, where profit is likely to be £15m to £20m below expectations.

Mobico was not alone in issuing a profit warning. Revenues at SIG, the building materials firm, fell 2 per cent to £681m in the three months to September 30 as it warned market conditions were challenging amid weaker demand.

It expects to make between £50m and £55m of profit this year – far less than the £65.3m to £84m range set by analysts. Shares sank 8.8 per cent, or 3p, to 31p.

The update came a day after Travis Perkins slashed its profit forecasts by as much as £65m amid pressures in the housing market. The FTSE 100 rose 0.32 per cent, or 24.75 points, to 7644.78 while the FTSE 250 was down 0.23 per cent, or 40.55 points, to 17,835.69.

Official figures showed the UK economy bounced back in August with growth of 0.2 per cent following a sharp fall in July. Inflation in the US remained unchanged at 3.7 per cent due to rising petrol prices.

Back in London, commodity stocks were on the move with BP up 3 per cent, or 15.8p, to 536.1p while Rio Tinto added 0.5 per cent, or 23p, to 5078p and Endeavour Mining rose 0.6 per cent, or 10p, to 1587p.

Gold producer Centamin made gains after it unveiled a plan for a mine in Egypt that aims to increase production, lower costs and reduce carbon emissions. It rose 0.6 per cent, or 0.45p, to 82.8p.

Hays was the latest recruiter to report a slump in a further sign of pressures in the hiring market. Fees fell 7pc in the three months to the end of September. Shares dipped 0.8 per cent, or 0.8p, to 102.1p.

It is turning out to be a week to forget for ITV. Days after its star presenter Holly Willoughby quit This Morning after 14 years, it said it was among several organisations being investigated by the competition watchdog over suspected breaches relating to the purchase of freelance services and staff hires. Shares slid 1 per cent, or 0.66p, to 67.56p.

Safestyle came under further pressure as the double glazing giant explores a possible sale.

Shares, down 94 per cent so far this year, plunged 25.3 per cent, or 0.59p, to 1.76p yesterday.

Another company under the cosh was N Brown as the clothing retailer’s revenue slumped 10.4 per cent to £297m in the six months to September 2 on the back of unseasonable weather.

The group behind brands such as Simply Be and JD Williams, also swung to a half-year loss of £4.1m, having made a £7.2m profit in the same period a year earlier. It fell 1.1 per cent, or 0.22p, to 19.77p.

Payments firm Wise rose 0.6 per cent, or 4.4p, to 724.6p after income shot up 51 per cent to £345m in the three months to the end of September.