Expansion of the train line provides the second upgrade of guidance in two months
- FTSE 250 company benefits from scale as international ticket sales rise
Shares of Trainline rose sharply on Monday after the ticket booking platform upgraded full-year guidance for the second time in less than two months.
The FTSE 250-listed group raised expectations last month after a better-than-expected first half and enjoyed a strong start to the second half of the financial year.
Trainline told shareholders on Monday that the group is “increasingly benefiting from operating leverage as the business scales.”
Trainline’s expansion into continental markets such as Spain has helped boost sales
In addition to efforts to expand its offering of trains and coaches outside Britain, Trainline’s performance has improved this year with fewer strike days.
Italy and Spain have been the main drivers of international net ticket sales, which grew by 6 percent to £583 million in the first half, boosting total net ticket sales by 15 percent to £2 billion.
Trainline told shareholders it now expects full-year net ticket sales growth to be 12 to 14 percent, compared to previous expectations of growth ‘at the higher end’ of 8 to 12 percent.
It expects sales growth of 11 to 13 percent, up from 7 to 11 percent.
Adjusted profit before nasties is expected to be 2.6 percent of net ticket sales – an adjustment from previous expectations that this figure would be ‘above 2.5 percent’.
The group will add further color to its first half performance when it publishes interim results next week.
Trainline shares rose 11.6 percent to 376p, taking 2024 gains to 19.2 percent.
The shares remain roughly 32 percent below their February 2020 high of 547p.
In response to the upgrade, Shore Capital analysts reiterated Trainline’s buy rating with a price target of 465p – 38 percent above the group’s closing price on Friday.
The analysts said: ‘We welcome the update this morning and continue to see Trainline as a dominant player within the UK rail network, which will benefit from increasing consumer demand for digitalisation.
“In addition, we believe that the international opportunities that are developing have not been included in the current (valuation).”
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