Trainline shares accelerate on rosier earnings outlook

Trainline has seen shares surge higher after it boosted its earnings outlook despite a hit from the Government’s move to expand “tap-in and tap-out” contactless payment across more UK stations.

The online ticketing platform notched up an 8% rise in UK net consumer ticket sales to £2.1 billion in the six months to the end of August, thanks to a bounce back in demand for leisure travel and commuting, and as year-earlier trading was impacted by strike action.

But it said it took a hit from the first phase of the Department for Transport’s rollout of the contactless payment network to more stations, allowing passengers to tap-in and tap-out with bank cards and pay the guaranteed best fare available at that time of day.

Consumer revenues were flat at £107 million, it added.

In spite of this, London-listed Trainline – which also has operations across Europe – said it now expects full-year underlying earnings at the top end of its previous guidance, for between growth of 6% and 9%.

Shares in the FTSE 250 firm soared as much as 13% on Thursday morning trading, as it also cheered investors with plans to bolster returns with up to another £150 million in share buybacks.

Jody Ford, chief executive of Trainline, said: “Trainline has delivered a robust performance in the first half and today announces improved guidance for the full-year alongside an enhanced £150 million share buyback programme.”

He added: “Rail liberalisation in Europe continues to demonstrate the value Trainline brings as the pre-eminent domestic aggregator, most recently in south-east France where increased carrier competition between Paris, Lyon and Marseille has driven second quarter sales growth of 34%.”

In the update ahead of interim results in November, Trainline said overall group revenues lifted 2% to £235 million in the first half, as net ticket sales rose 8%.

The firm said it was keeping guidance unchanged for full-year group-wide growth of 0% to 3% for revenues and 6% to 9% for net ticket sales.

Russ Mould, investment director at AJ Bell, said: “The shares had been weak this year amid concerns about new competitive threats in the UK, but the trading update is a reminder that Trainline is a bigger beast.

“France is acting like a rocket for the company’s sales growth and that is helping to offset pockets of weakness elsewhere.

“The overall tone is upbeat and that’s exactly what the market needed to hear to get the share price moving higher again.”