Trainline results: Can bumper European bookings help weather UK strikes?
Trainline investors will be looking ahead with anticipation to Thursday’s trading update, to see whether the ticketing business can continue this year’s stellar performance.
Despite shares being down 10 per cent, the firm has cashed in on booming post-pandemic demand for travel.
May’s annual results saw the company report record ticket sales of £4.3bn, up 72 per cent year-on-year and 16 per cent higher than before the pandemic.
European demand has simultaneously prompted a surge in revenues, with Spain and Italy a key success, benefiting from fourfold and threefold rises in ticket sales respectively.
But it has not been a year free from turbulence, with industrial action plaguing the UK’s rail networks and no end currently in sight.
Trainline reported in March that rail walkouts had left a £6m hole in its profits, in a strong indication of the ongoing impact of Britain’s rail chaos on the company’s bottom line.
The FTSE-250 listed firm noted in the same announcement that annual ticket sales had fallen short of market expectations, despite the record performance.
In a note earlier in the year, Deutsche Bank analysts warned that Trainline’s UK outlook remained “clouded by strike action” and the situation has hardly changed since.
September has already seen fresh walkouts from members of the ASLEF and RMT unions and both the government and unions have been highly critical of the other sides’ refusal to come to the negotiating table.
However, European demand continues to help Trainline weather the UK’s strike storm and will be crucial in determining whether it can keep up momentum amid the external pressures.
However, Deutsche also noted Trainline’s international unit has been “gaining market share in a buoyant market, benefiting from the introduction of competition on some key lines” and said it had scope to be “highly profitable within five years.”
Analysts have also given punchy forecasts for the firm since.
In August, Broker Shore Capital forecast 20 per cent earnings growth over the next few years and bsaid it believes the company will benefit from growing carrier competition across Europe.
That outlook is long-term, but Thursday will give investors some clarity over whether 2023 will be seen as a resounding success, or a year hampered by disruption.