UK operating profit in 1H25 spiked 3-fold to S$33.9mil due to the acquisition of Addison Lee taxi and repricing of London bus routes. However, part of the earnings growth was offset by higher interest expense and amortisation of intangibles acquired.
ComfortDelGro's 1H25 revenue was within expectations, but net profit was below due to amortisation of acquisition intangibles. Revenue/PATMI were 46%/40% of our FY25e forecast. Acquisitions and repricing of London bus routes drove underlying earnings growth of 7% y-o-y to S$99mil in 1H25.
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ComfortDelGro is delivering stable growth through re-pricing of contracts, acquisitions, and new contracts. We expect a stronger 2H25 earnings driven by seasonally stronger CMAC and continued repricing of London bus routes. FY26 earnings will be supported by contributions from recent contract wins, namely Manchester bus and Stockholm rail.
The Positive
UK driving up group results.
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Manchester is expected to contribute more when S$175mil capex on new buses is completed and the transfer of bus drivers.
The Negative
High interest expense and capital expenditure.
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