Mobico Group PLC (LSE:MCG) announced Monday the completion of its School Bus business sale, netting upfront proceeds of $364 million (£273 million).
This amount landed near the lower end of the previously indicated range of $365-385 million.
Despite this, the company now anticipates its fiscal 2025 covenant leverage ratio—net debt to EBITDA—will be approximately 2.5x, improved from around 2.8x at the end of fiscal 2024.
This outcome surpasses earlier expectations, as Mobico had initially described the sale’s effect on leverage as “broadly neutral.”
The company reiterated its adjusted operating profit forecast for fiscal 2025, excluding the School Bus segment, within £180-195 million.
Mobico also highlighted that the final balance sheet position for School Bus at closing will trigger further impairment and the reclassification of foreign exchange and net investment hedge reserves.
This is expected to result in a non-underlying charge in the first half of 2025, with results due on September 9.
As disclosed before, the deal includes a $70 million earn-out tied to School Bus hitting specified revenue, EBITDA, and free cash flow milestones.
Shares of Mobico are currently priced at 29.00 pence, with RBC maintaining a Sector Perform rating and a 35 pence price target.
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