Mobico shares jumped on Thursday after the National Express owner revealed an eight-year deal with Saudi Arabi to provide transport services for a new city in the country.
The city of Qiddiya is one of the flagship initiatives under the kingdom’s ‘Saudi Vision 2030’ plan, which aims to diversify the country’s economy and reduce its reliance on oil revenues.
Located 45km southwest of Riyadh, the city has a bold vision to become a new global capital of entertainment, sports and culture.
Qiddiya is expected to eventually cover a 360km to 376km area and become home so around 600,000 people.
Mobico told shareholders on Thursday the deal is worth 500million (£434million) in revenues and will see a local company operate 156 vehicles, 126 of which will be electric, on its behalf.
Qiddiya is envisioned as a new global capital of entertainment, sports and culture
The group, which has been operating in Saudi since October 2023, said the contract involves the operation of park-and-ride facilities and shuttle services connecting Riyadh and Qiddiya.
Mobico shares were up 4.9 per cent at 29.1p on Thursday morning.
The Qiddiya deal is welcome news for shareholders after Mobico shares tanked to a record low in September when the group revealed a drop in half-year earnings.
Mobico shares are down roughly 63 per cent since the start of the year.
Mobico 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.
Executive chair Phil White said on Thursday: ‘This new contract, which meets our disciplined return hurdles, strengthens Mobico’s presence in the Middle East and showcases ALSA’s ability to win competitive contracts in large-scale overseas projects, positioning ourselves as a leading operator of innovative, sustainable transport services.’
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