Business
National Express owner sees shares hit the skids after earnings fall
National Express owner Mobico has seen shares plunge after posting a drop in half-year earnings.
The coach and bus giant reported a worse-than-expected 12.7% fall in underlying operating profits to £59.9 million for the six months to June 30, down 4.8% on a constant currency basis.
It also remained in the red with statutory pre-tax losses of £7.1 million, although this was narrowed from £29.3 million a year earlier.
Shares in the firm plunged more than 20% at one stage in morning trading on Tuesday as the earnings disappointed.
The company flagged increasing competition in the UK coach sector, while it also put the earnings drop down to issues with two contracts at WeDriveU, its North America transit and shuttle services business, which have been hit by temporary operational troubles.
It posted operating losses of £9.6 million for the UK, against losses of £12.6 million a year ago, as revenues fell 3.3%.
Revenues were weighed down by a 7.2% drop in the UK coach arm, although it said this was partly due to a strong performance a year earlier when trading was boosted by rail strikes.
In a statement, Mobico said: “The competitive landscape in the UK coach sector has undergone significant change, marked by increasing competitive intensity.
“Additionally, modal competition is increasing from other sectors including rail as it recovers from industrial action and staff shortage issues.”
The group will merge the UK coach operations within its better performing Spanish Alsa business from January next year, with aims to drive cost savings and share best practice.
Despite the half-year knock to earnings, the group said it remained on track for full-year guidance.
It will look to ramp up cost cutting going forwards, it added.
Phil White, Mobico executive chairman, said: “Although our operating profit performance in the first half was mainly impacted by the under-performance of two contracts in WeDriveU, due to operational issues and a competitive trading environment in the UK, we remain confident of achieving our full-year, adjusted, operating profit guidance of between £180 million and £195 million.”
“We see significant opportunities to simplify and strengthen the group and are taking decisive action to sharpen our operational and financial performance, including additional, cost reduction plans and further leveraging Alsa’s best practice across the business,” he added.
Mr White, who had been chief executive of the then National Express Group between 1996 and 2006, returned to take the helm at the business earlier this year after former boss, Ignacio Garat, left in April following a series of profit warnings.
Shares have been severely under pressure this year due to the profit alerts and Mr Garat’s departure, with the latest declines leaving the stock down nearly 60% in the past six months.
High home prices, stubbornly high mortgage rates and now less supply are all weighing on potential homebuyers.
Sales of previously owned homes rose just 0.5% in November from October and were 1% lower than November 2024, according to the National Association of Realtors. Sales came in at an annualized rate of 4.13 million units.
This count is based on closings, so it reflects contracts likely signed in September and October, when mortgage rates initially came down slightly but then stayed in a tight range.
Supply, which had been gaining for much of this year, fell in November. There were 1.43 million homes for sale at the end of the month, down 5.9% from October but up 7.5% year over year, according to the association. At the current sales pace, that represents a 4.2-month supply. A six-month supply is considered balanced between buyer and seller.
“Inventory growth is beginning to stall,” Lawrence Yun, chief economist for the Realtors, said in a release. “With distressed property sales at historic lows and housing wealth at an all-time high, homeowners are in no rush to list their properties during the winter months.”
Sellers who were on the market also began to delist their properties at a higher rate than usual. Sellers often take unsold homes off the market heading into winter, but that dynamic was much stronger this year.
And that is keeping pressure on home prices. The median price of a home sold in November was $409,200, an increase of 1.2% from November 2024, and the highest November reading on record. The Realtors use a median measurement, which can skew to what end of the market is selling most. The high end is currently doing much better than the low end. Sales of homes priced in the $100,000 to $250,000 range were down nearly 8% from a year ago, while homes priced at more than $1 million were up 1.4%.
“Wage growth is outpacing home price gains, which improves housing affordability. Still, future affordability could be hampered if housing supply fails to keep pace with demand,” Yun said.
Homes are staying on the market longer, at 36 days compared with 32 days last November. First-time homebuyers made up 30% of sales, unchanged from a year ago, but historically they make up about 40%. Investors stepped back into the market, making up 18% of transactions, up from 13% in November 2024.
Business
US monetary policy: Fed’s official sees no urgency for further rate cuts, flags distorted inflation data – The Times of India
A senior US Federal Reserve official has said there is no immediate need to cut interest rates further, cautioning that recent inflation data may have been distorted due to disruptions in data collection during the federal government shutdown, AFP reported.Speaking to CNBC on Friday, New York Federal Reserve President John Williams said inflation readings for recent months were likely affected because government agencies were unable to collect price data in October and the first half of November amid the record-long shutdown.“Because of that, I think the data were distorted in some of the categories, and that pushed down the consumer price index reading probably by a tenth or so,” Williams said, adding that it was difficult to precisely quantify the impact.He said inflation data for December could provide a clearer picture of the extent of the distortion.Williams’ remarks followed the release of a delayed US consumer price index report earlier this week, which showed inflation easing to 2.7 per cent in November from 3 per cent in September. Several economists had warned that the figures may not fully reflect underlying price pressures.Some analysts pointed out that a higher share of price quotes may have been collected during the Black Friday discount period, potentially biasing the data downward — a concern Williams echoed.Asked how the latest data influenced his outlook on interest rates, Williams said the Fed’s policy stance was appropriate for now.“I don’t personally have a sense of urgency to need to act further on monetary policy right now,” he said, adding that the rate cuts already delivered had positioned policymakers well.The Federal Reserve has cut interest rates three times this year as the labour market weakened, but has signalled a higher threshold for additional easing. The central bank’s next policy meeting is scheduled for late January.
Young people will be hit hardest by successive governments’ failure to focus on financial and societal challenges caused by an ageing population, a House of Lords report has suggested.
They will need to plan and prepare to work longer and save more from a much earlier age, the economic affairs committee said.
The report also found that the crisis in adult social care “remains a scandal” which needs to be addressed urgently.
Committee chair Lord Wood of Anfield told the BBC it was a “struggle to find where in government” there was a focus on ageing and the “transformational effects” it was going to have on people.
“Ageing is something that we’re just watching happening”, he told BBC Radio 4’s Today programme, adding: “We know that adaptation is the way forward”.
Policies governments have used to address the impact of declining fertility and rising life expectancy in the UK – raising the state pension age or increasing immigration for example – were not adequate solutions on their own, the report said.
Getting more people in their 50s and 60s to stay in or return to work “is key”, the committee said, and the government must prioritise incentives to do so.
It found that while age discrimination may reduce the number of over 50s working, it heard evidence that its most damaging form may be self-directed, with older workers mistaken about the extent they faced and then limiting their own decisions.
It also said an ageing population will need more care workers, leaving fewer workers for other parts of the economy.
There is “widespread ignorance” of how much it costs to retire, it said, and the government should consider an education campaign – as well as finding out if the UK’s financial services sector is equipped to provide for the population as it ages.
Lord Wood said that the government and financial services industry needs to devise “more innovative ways of getting younger people to think about lives frankly they can’t conceive of at the moment – when they’re in their eighties and early nineties.”
“There’s a long time for them to be financially planning for at a time when we know young people are doing less financial planning,” he added.
“Raising the state pension age, which saves the government money, but increases pensioner poverty as many people have already stopped working by their sixties, is a red herring.
“To successfully confront this challenge, the approach to financial management of today’s and tomorrow’s young people will need to change.”
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