Mobico lifts 2026 profit guidance as Alsa and German Rail strengthen

Mobico Group's latest audited results contain genuine signs of operational recovery, led by Alsa and German Rail. The transport operator has also raised its adjusted operating profit guidance for calendar 2026.

However, shareholders still need to look beyond the adjusted numbers. Large one-off charges, continuing UK Coach losses and cash demands from legacy liabilities mean the balance sheet remains central to the investment case.

There is also an important reporting detail. Mobico Group PLC extended its financial year-end, so these statutory results cover the 15 months to 31 March 2026. The company has provided an unaudited 15-month comparator to help investors assess the underlying progress.

Mobico's key figures

Metric	15 months to March 2026	Comparator	Change
Adjusted revenue	£3.42 billion	£3.23 billion	5.9%
Adjusted operating profit	£231.0 million	£196.5 million	17.6%
Adjusted operating margin	6.8%	6.1%	0.7 percentage points
Adjusted profit before tax	£136.1 million	£96.5 million	41.0%
Statutory operating profit	£11.7 million	£42.5 million	Down 72.5%
Statutory loss before tax	£89.2 million	£60.3 million	Loss increased
Free cash flow	£131.8 million	£215.9 million for 12 months to December 2024	Not directly comparable
Net debt	£1.13 billion	£1.25 billion at December 2024	Reduced
Covenant gearing	2.9 times	2.8 times at December 2024	Increased

Adjusted figures exclude items that management considers unusual or not reflective of underlying trading, such as acquired intangible amortisation, impairments, restructuring costs and changes to onerous contract provisions. An onerous contract provision, or OCP, is money set aside for expected losses on a contract.

The difference between adjusted and statutory performance is substantial. Mobico reported £231.0 million of adjusted operating profit, but just £11.7 million on a statutory basis after £219.3 million of adjusting items from continuing operations.

Alsa remains Mobico's strongest division

Alsa delivered adjusted revenue of £1.84 billion, up 11.5%, while adjusted operating profit rose 14.5% to £249.0 million. Its adjusted operating margin improved from 13.2% to 13.5%.

Growth was supported by the Spanish Regional and Urban businesses, with passenger volumes in Spain rising 8.8%. The final three months of the reporting period also remained positive, with revenue up 8.8% and adjusted operating profit up 18.2%.

This matters because Alsa is increasingly being used as the operating model for the wider group. Its leadership, technology and tendering experience are being introduced elsewhere, including UK Coach.

There are still risks. Alsa has reduced its footprint in Morocco, while long-haul services in Spain face competition from rail and an upcoming concession renewal process. Management expects to retain most existing concessions, although it anticipates lower margins initially because of reduced fares.

German Rail moves back into adjusted profit

German Rail produced one of the clearest improvements. Adjusted revenue increased 5.8% to £333.0 million, while the division moved from an £11.9 million adjusted operating loss to a £17.0 million profit.

Full service levels were restored from late 2025 following improved driver availability. The result also included a £6.3 million settlement relating to the historic RRX emergency award, so investors should not treat all of the improvement as recurring.

More importantly, Mobico signed revised contracts with five German public transport authorities after the period ended. The revisions transfer passenger revenue risk to the authorities and provide better protection against staff costs, engineering work and externally caused disruption.

The benefits were not included in these accounts, but the contracts were backdated to 1 January 2026 and will affect future results. Mobico expects the combined German rail contracts to be cash neutral over their remaining lives, with potential for a small positive benefit, excluding repayment of historic advances.

UK Coach remains the main operating problem

UK Coach revenue fell 7.0% to £380.2 million as increased competition hit passenger volumes and ticket yields. Its adjusted operating loss widened sharply from £2.0 million to £22.9 million.

The final three months were particularly weak, with revenue down 10.6% and the adjusted loss increasing to £11.0 million. That figure included a provision of around £4 million relating to a supplier legal claim.

Mobico is integrating the division into Alsa and expects benefits from network optimisation, improved revenue management and digital upgrades. Around £3 million of operating profit benefit was delivered during the first quarter of 2026, but management still expects UK Coach to record a loss for calendar 2026.

UK Bus also remains low margin. Revenue increased 1.5% to £337.8 million, but adjusted operating profit was only £2.4 million and included a £4.5 million property disposal gain. Passenger volumes fell 5.1%, with an 8.6% fare increase helping to offset the decline.

Debt reduction is still constrained

Net debt declined to £1.13 billion, assisted by business disposal proceeds, but covenant gearing reached 2.9 times. This compares with 2.7 times at December 2025 and leaves Mobico some distance from a comfortably low level of leverage.

Liquidity appears adequate in the near term. The group had £242 million of net cash and cash equivalents alongside an undrawn £600 million revolving credit facility at 31 March 2026.

The problem is that legacy liabilities continue to absorb cash. These include approximately £132 million of German public transport authority advances, a £53.3 million UK pension deficit and £100.5 million of legal claim provisions. The latter is heavily weighted towards claims retained following the North America School Bus disposal.

Mobico is also disputing a post-completion claim from the buyer of that business. The provision recognised is not disclosed, while the maximum potential payment is £34.9 million.

Management is considering further asset sales, cost reductions and other strategic or financial options to accelerate debt reduction. An update is expected in the second half of 2026.

Higher guidance provides encouragement

Mobico increased its adjusted operating profit guidance for calendar 2026 from £195 million to £210 million, to a new range of £215 million to £230 million.

The group remains on track to deliver £75 million of cost savings in 2026, rising to £100 million on an annualised basis from 2027. It is also targeting annual capital expenditure below £120 million in 2027.

Fuel exposure is relatively well protected in the short term. The company states that it is 100% covered for 2026, 53% for 2027 and 23% for 2028 at prices below 2025 levels.

Investors can read the original company announcement for the complete audited statements and accounting notes.

What investors should watch next

The raised guidance and strong performances from Alsa and German Rail show that Mobico's underlying trading direction has improved. The cost programme is also starting to contribute, while the revised German contracts remove some important operational risk.

Yet this is not a clean recovery. UK Coach is losing money, the gap between adjusted and statutory profit remains wide, and legacy liabilities are restricting the pace of debt reduction.

The next important tests will be whether UK Coach losses narrow, whether the German contract revisions translate into cash improvement, and what action the board proposes to reduce leverage. Until those points become clearer, Mobico's progress is encouraging but still dependent on careful execution.