Trainline moving in right direction with record sales

A resurgence in passenger numbers and a reduction in industrial action across the railway network has helped Trainline to upgrade its profit forecast for the year.
The online ticket-seller partially attributed its improved outlook to an increase in the number of passengers comfortable using digital tickets on their smartphones.
The news sent shares in Trainline up 25½p, or more than 8 per cent, to 325¾p, valuing the group at about £1.45 billion. That represents something of a rally following a downward drift since the spring.
The shares were floated at 350p in 2019, two decades after the company was originally founded by Virgin Group, subsequently passing through a number of pairs of hands.
The stock went above 500p before Covid-19 pretty much shut the railways. They topped that peak in 2021, during one of the false dawns that the coronavirus was in abeyance.
Since the pandemic receded the business has had to grapple with large numbers of former commuters working from home and a long-running series of strikes by train workers demanding pay rises.
Trainline reported that revenues in the six months to the end of August grew 16 per cent to £229 million on record total ticket sales of more than £3 billion, up 14 per cent year on year.
Trainline had previously guided that it believed its revenues would increase by between 7 per cent and 11 per cent and that ticket volumes would be increasing by between 8 per cent and 12 per cent.
With a run rate in the first half nearly double what had been hoped, the company indicated it was reasonably confident that the outcome for the full year would be at the top of those ranges.
More crucially it said that profitability would be far better than hoped. It had previously said it reckoned that its operating earnings would come in at between 2.4 per cent and 2.5 per cent of ticket sales. It now says it believes operating earnings are “now expected to exceed the previously stated guidance range” on ticket sales, which are also trending higher than expected.
On its own projections, the company is on course to have operating earnings of about £150 million, more than 22 per cent higher than the £122 million it did last year.
About two thirds of Trainline’s business is with the UK public and the rest is split between selling tickets to passengers in mainland Europe — Spain and Italy are growing fast because of an increasing amount of competition between different train companies — and corporate customers.
Of its performance in the UK, the company said: “This reflected more people switching to digital tickets [and] reduced impact from strike action versus the prior year.”
“Acting as a big tailwind is a structural shift in the UK for people to use digital tickets rather than paper ones,” Russ Mould, an investment director at share-trading platform AJ Bell, said.
“As more people become accustomed to scanning their phone to get through station barriers, the bigger the opportunity for Trainline to position itself as the go-to place for buying these types of tickets.
“A second tailwind is increased carrier competition in mainland Europe, primarily in Spain and Italy. Trainline has been able to position itself as an easy way to navigate the increasingly complex travel system and get good deals.”