- Market share gains
- Attractive international growth
It was no surprise that Trainline’s (TRN) revenues and net ticket sales shot ahead of the previous financial year’s pandemic-hit comparatives. The ticketing platform’s notable growth against 2019 numbers had also been trailed by management in a pre-close update back in March. But the market was very pleased indeed by the unveiling of the board’s bullish outlook for the 2024 financial year, as the company takes advantage of a much-improved travel landscape, sending shares up 15 per cent.
Management guided in these results for growth in the range of 13 to 22 per cent for both revenues and net ticket sales in 2024, against the FactSet consensus forecast for sales growth at the low end of 13 per cent. The outlook is supported by market share progress – the company said it has doubled its UK commuter market share compare with pre-pandemic.
Net ticket sales, which came in at over £4.3bn, were driven upwards by solid performances across both the UK consumer and international consumer divisions. UK sales were up by 37 per cent to £2.8bn and international sales by 95 per cent to £915mn against its 2020 financial year. Sales at technology platform trainline solutions were down against pre-pandemic levels due to a more sluggish business travel recovery, but still almost doubled year on year to £597mn.
International consumer growth is particularly intriguing. Market liberalisation in Europe is benefiting Trainline, exemplified by the fourfold increase in net ticket sales in Spain against the pre-pandemic period. Management expects the division to approach breakeven in 2024.
Peel Hunt analysts argued that “the uncertainty of (Network Rail successor) Great British Railways, strikes and commission rates have weighed on the share price for too long”. We are inclined to agree, but with the shares valued at a consensus rating of 24 times forward earnings, we stay where we are. Hold.
Last IC view: Hold, 335p, 3 Nov 2022
| TRAINLINE (TRN) | ||||
| ORD PRICE: | 272p | MARKET VALUE: | £1.31bn | |
| TOUCH: | 270-273p | 12-MONTH HIGH: | 417p | LOW: 227p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 60 | |
| NET ASSET VALUE: | 60p* | NET DEBT: | 33% | |
| Year to 28 Feb | Turnover (£mn) | Pre-tax profit (£mn) | Earnings per share (p) | Dividend per share (p) |
| 2019** | 210 | -13.7 | -3.28 | nil |
| 2020 | 261 | -80.2 | -17.7 | nil |
| 2021 | 67.1 | -107 | -19.1 | nil |
| 2022 | 189 | -15.5 | -2.49 | nil |
| 2023 | 327 | 22.1 | 4.53 | nil |
| % change | +74 | - | - | - |
| Ex-div: | - | |||
| Payment: | - | |||
| *Includes intangible assets of £488mn, or 101p a share **Restated, pre-IPO | ||||
