15th Mar 2023 17:41
(Alliance News) - Trainline PLC on Wednesday said it achieved record ticket sales in its most recently ended financial year, despite the damage caused by industrial action in the UK.
For analysts at Peel Hunt, the update was "significantly better" than thought this time last year.
The rail and coach ticket platform said net ticket sales in the year that ended February 28 totalled GBP4.32 billion, representing growth of 75% year-on-year from GBP2.52 billion the year prior.
Trainline said this came in slightly behind its guidance expectations due to the impact of industrial action in the UK during the year. Nonetheless, Chief Executive Jody Ford said the figure was a record for the group.
Revenue surged by 74% to GBP327 million from GBP189 million the previous year on the back of the strong ticket sales growth.
UK Consumer revenue grew 58% against the previous year. Trainline said this reflected the continued recovery in underlying passenger volume and a significant step up in industry e-ticket usage, despite the impact of the rail strikes.
International Consumer revenue more than tripled, driven by strong growth on routes where new carrier competition has emerged and by the resurgence of global inbound travel, the company explained.
Trainline noted that International Consumer now is a EUR1 billion net ticket sales business for the company.
For AJ Bell Investment Director Russ Mould, strikes were the "key problem" for Trainline.
"Its 'I Came by Train' campaign is all very well if the locomotives are running yet 'Help, My Train Has Been Cancelled' feels like a more appropriate contemporary slogan for the masses. Herein lies a key problem for Trainline. Strikes on the rail network are out of its control so it's stuffed if trains are not running. The alternative is to push bus and coach ticket sales," he said.
"Trainline's business proposition is centred upon convenience for the customer – highlighting the cheapest tickets for each journey and hoping that's enough to get people to pay the extra booking fee that isn't applicable when you book through a train operator's website.
"In one way, disruption to parts of the transport network gives Trainline an opportunity to highlight alternative ways to reach certain destinations. However, most people can't be bothered with the hassle and simply won't travel on strike days, so Trainline needs to hope acceptable pay deals are reached in the rail industry soon and it can get back to its long-term growth plan."
Trainline said adjusted earnings before interest, tax, depreciation and amortisation are expected in-line with market expectation for the year ended February 28. It also is expected to be in line with company guidance, which anticipates adjusted Ebitda at 1.9% to 2.1% of guided net ticket sales.
Adjusted Ebitda in financial 2022 was GBP39 million. Trainline's guidance for financial 2023 implies adjusted Ebitda of GBP82 million to GBP91 million.
Trainline will publish its full-year results on May 4.
Analysts at UBS said: "With the trading update largely in line with expectations and commentary indicating EBITDA is expected to be in line with market expectations we don't expect any material changes to consensus estimates."
Shares in Trainline closed 0.2% lower at 251.29 pence on Wednesday in London. Over the past 12-months, the stock is up 26%.
By Heather Rydings, Alliance News senior economics reporter
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