Mobico (MCG), Hipgnosis Songs (SONG), Brave Bison (BBSN), Lok'n Store (LOK), Elixirr International (ELIX), Tyman (TYMN) and Chrysalis Investments (CHRY)
There is a lot to worry about in Mobico’s (MCG) full-year results. Adjusted operating profit fell by 15 per cent to £169mn in 2023 as a result of cost inflation, a reduction in Covid subsidies and profit problems in Germany. The statutory figures are significantly worse, with the bus company banking an operating loss of £21.4mn.
After an unsettling delay, figures for 2022 have also been lowered to better reflect an onerous contract provision in the German rail business.
The group has now rolled out a series of cost-cutting measures, but plenty of problems remain. Chief financial officer James Stamp is stepping down, and Mobico is very highly levered, with net debt/Ebitda sitting at 3 times. This means dividends have been suspended.
The potential sale of the North American school bus business continues to rumble on, which could improve the balance sheet. However, analysts have warned that a quick sale is likely to deliver poor value.
Shares in Mobico fell by 10 per cent in the wake of the results. JS
Read more: Mobico and FirstGroup head in opposite directions
Bidding war kicks off for Hipgnosis
A bidding war for Hipgnosis Songs (SONG) has kicked off after Blackstone made a counter-offer for the troubled fund's assets.
The board said it would be "minded to recommend" the Blackstone bid of $1.24 per share, were as a firm offer made. This compares with the $1.16 offer made by US music rights group Concord last week, which the board continues to unanimously recommend for now. DB
Read more: Rival lands Hipgnosis Songs with £1.4bn cash offer
Lok'n Store sees ‘positive but muted revenue growth’
Earlier this month, it was announced that Europe's biggest self-storage landlord Shurgard (BE:SHUR) would purchase UK rival Lok'n Store (LOK) for £378mn. Lok'n Store's board has backed the all-cash takeover, but it appears as if the Belgian firm may have to do a spot of housekeeping when the deal is finalised. Lok'n Store said its pre-tax profit fell in the first six months of its fiscal year and flagged lower customer demand. Pre-tax profit fell to £4.3mn, against £4.7mn at the same point in 2023.
Profit was constrained by a 15 per cent increase in overall costs. Management noted that customer demand remains above pre-pandemic levels, although it has softened compared to the same period 12 months ago. Since the period-end, the group “has continued to observe positive but muted revenue growth”. MR
Read more: Does the self-storage hype stack up?
Quanex comes knocking for Tyman
Tyman (TYMN), the manufacturer of parts for windows and doors, has become the latest UK-listed company to receive a takeover bid from a US competitor.
Quanex Building Products (US:NX) has made a part-cash, part-share offer that values Tyman’s shares at 400p, or around £788mn. This is a 35 per cent premium to Friday’s closing price of 296p, or almost 40 per cent based on its ex-dividend price of around 285p.
The offer equates to around 13 times FactSet consensus forecast earnings of 29.9p a share, or 12 times next year’s earnings of 34p. Shareholders can either accept 60 per cent of the offer in cash and 40 per cent in Quanex shares, or the entire amount in Quanex shares.
Tyman’s board have recommended the bid, with chair Nicky Hartery describing it as offering “the best path to maximising value” for shareholders, who would end up owning around 30 per cent of the enlarged Quanex.
However, Peel Hunt’s analysts argued that the bid is “not a knockout offer” and that some shareholders may hold out for more. Tyman’s shares rose by 29 per cent to 383p. MF
Read more: Tyman hit by a ’significant reduction in volumes’
