Trainline eyes long-term opportunities despite near-term headwinds

(Alliance News) - Trainline PLC on Wednesday predicted future revenue growth below market expectations despite strong financial progress in the financial year just ended.

In response, shares in the London-based rail ticketing platform fell 5.7% to 264.00 pence each in London on Wednesday morning.

Pretax profit jumped 68% to GBP80.9 million in the financial year to February 28 from GBP48.1 million a year prior.

Adjusted earnings before interest, tax, depreciation and amortisation increased by 30% to GBP159.1 million from GBP122.1 million.

Net ticket sales increased 12% to GBP5.91 billion from GBP5.29 billion while revenue increased 11% to GBP442.1 million from GBP396.7 million a year ago.

Revenue growth reflected increased net ticket sales and enhanced monetisation which offset the dilutive effects of faster growth in short distance travel in the UK, which generates relatively lower rates of revenue than longer-distance travel, Trainline said.

Diluted earnings per share improved 79% to 12.66 pence from 7.09p.

Chief Executive Jody Ford said: "Our sustained investment in tech innovation over the last three decades is delivering for customers, driving industry growth."

Ford estimates liberalised routes across Europe will be worth EUR12 billion by 2030, almost three times their size today.

UK ticket sales rose 13% to GBP3.91 billion from GBP3.47 billion, International Consumer sales edged up 1.9% to GBP1.06 billion from GBP1.04 billion and Trainline Solutions sales increased 20% to GBP941 million from GBP785 million.

In Europe, ticket sales in Spain grew 41%, were broadly flat in France and Italy, but fell 6% in Germany and the rest of Europe.

Looking ahead, Trainline said it sees "significant long term growth opportunities", but expects some headwinds in the current financial year, as previously announced.

These include Transport for London's phased expansion of their contactless travel zone, the ongoing impact from Google's changes to its search engine results page while recent global macroeconomic uncertainty may impact foreign travel.

As a result, Trainline expects net ticket sales growth in the range of 6% to 9% for financial 2026.

As announced in March 2022, the commission rate in the UK reduces from April 2025.

As a result, Trainline expects revenue growth to be slower than net ticket sales, in the range of 0% to 3% for financial 2026.

Despite that, the firm expects adjusted earnings before interest, tax, depreciation and amortisation to grow broadly in line with net ticket sales, at a rate of 6% to 9%.

UBS pointed out guidance for revenue growth was below the 3.4% consensus, with forecast net ticket sales below consensus of 8.5% at the mid-point.

By Jeremy Cutler, Alliance News reporter

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