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National Express Owner Mobico is cutting back-office jobs at its business, according to annual warning profits Now expectations will come to a lower level.
A “large-scale cost cutting programme” is underway, with further savings being explored across the group. This comes as Mobico grapples with continued competition in the UK coach market and declining bus ridership.
The job cuts mainly affect support and back-office roles at the UK branch, as Mobico accelerates savings efforts amid challenging trading.
The exact number and location have not been disclosed, but some of the redundancies arise from plans to merge its UK coach operations with its better-performing Spanish Alsa business from January next year.
This renewed cost focus follows a revised outlook for full-year underlying operating profit, which is now forecast towards the lower end of the range of £180 million to £195 million.
This announcement caused a sharp reaction in the market shares It fell as much as 14 percent early in Wednesday’s trading before recovering later.
Mobico said UK coach revenue fell 7.4 per cent in the third quarter to the end of September as it marked “increasing competition on key routes” and sold loss-making businesses including Clark. LondonKings Ferry, Lucketts and Worthing Coaches.
Bus revenues across the UK increased by 2.9 per cent, but passenger numbers and commercial revenues both saw a 3.7 per cent decline, which the company attributed to a decline in consumer confidence.
As well as the UK coach and bus crisis, this is also due to contract issues driving the losses at WeDriveU. North America Transit and shuttle service businesses by group.
Overall, the latest quarter saw group-wide revenue rise by 5.4 per cent, as its Spanish Alsa business posted a 4.1 per cent increase in revenue and its German rail arm posted a 14.3 per cent rise in turnover.
Phil White, executive chairman of Mobico, said: “We are focused on taking decisive action to simplify and consolidate the group, improving operational and financial performance.
“These actions include a comprehensive cost savings programme, leveraging Alsa’s best practice across the business and exploring options to monetise the assets of the UK bus business prior to franchising.”
Mr White, who was chief executive of the then National Express Group between 1996 and 2006, returned to take the helm of the business earlier this year after former boss Ignacio Garrat left in April following a series of profit warnings.
shares The company has been under severe pressure this year due to profit alerts and Mr Garratt’s departure and the stock has fallen 74 per cent in the last 12 months.