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Investing.com -- Mobico Group PLC (LSE:MCG) has completed the sale of its School Bus business, receiving net upfront proceeds of $364 million (£273 million), the company announced Monday.
The proceeds came in at the lower end of the previously communicated range of $365-385 million.
Despite this, Mobico now expects its fiscal year 2025 covenant leverage to reach approximately 2.5x covenant net debt to EBITDA, an improvement from approximately 2.8x at FY24.
This represents a better outcome than initially anticipated, as the company had previously indicated the transaction would have a "broadly neutral" impact on leverage.
Mobico maintained its guidance for FY25 adjusted operating profit, excluding School Bus, in the range of £180-195 million.
The company noted that the final School Bus balance sheet position at closing will result in a further impairment and reclassification of foreign exchange and net investment hedge reserves.
This will lead to a non-underlying charge in the first half of 2025 results, scheduled for release on September 9.
As previously disclosed, the deal includes a $70 million earn-out contingent on School Bus achieving certain revenue, EBITDA, and free cash flow targets.
Mobico shares are currently trading at 29.00 pence, with RBC maintaining a Sector Perform rating and a price target of 35 pence.
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