14th Sep 2023 12:01
(Alliance News) - Trainline PLC delighted investors on Thursday with an upbeat interim update, and the launch of a new share buyback.
The online rail ticket seller reported faster-than-expected growth in the first half of its financial year. In the period to August 31, total net ticket sales jumped 23% year-on-year to GBP2.65 billion, driving revenue up 19% to GBP197 million.
UK consumer revenue jumped 16% to GBP102 million, International Consumer revenue rose 26% to GBP30 million, and Trainline Solutions revenue surged 23% to GBP65 million.
"Investors are getting on board the love train for online rail ticketing platform Trainline. Despite another period marred by industrial action, the group has seen an eye-catching increase in ticket sales, suggesting it is gaining traction with travellers not just in the UK but overseas too," said AJ Bell investment director Russ Mould.
The overseas growth is especially "exciting", Mould posits. "European rail is cheaper, more reliable, has better infrastructure and therefore potentially wider appeal."
Trainline reconfirmed guidance for the financial year as a whole. It expects annual net ticket sales growth of between 13% and 22% in financial 2024, and revenue growth between 13% and 22%.
It also announced a new capital allocation framework, and launched a share buyback of up to GBP50.0 million to take place over the next 12 months.
Shares in Trainline were up 13% to 278.60 pence each in London on Thursday around midday.
"A share buyback puts shareholders on track for added returns and the one big threat in its UK market – the launch of a Great British Railways state-backed hub for tickets – seems to have receded into the distance," Mould considered.
Great British Railways is a planned state-owned body set to control UK rail transport. GBR would set timetables and prices, sell tickets in England and manage rail infrastructure.
As part of these changes, the new body aims to sell tickets via a website and app, potentially putting it in competition with Trainline.
However, while first proposed in 2021, GBR has steadily slipped down the government's list of priorities.
As it stands, Trailine's brand is becoming "increasingly entrenched", according to Mould.
"[This] should provide it with a measure of protection from any prospective rivals. The company continues to focus on innovative features like flagging cost savings through splitting your journey into multiple tickets that cost less in total than one ticket for the whole route," he continued.
By Elizabeth Winter, Alliance News senior markets reporter
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