Trainline shares surge following continued recovery in rail journeys

Trainline Shares topped the FTSE 350 charts on Thursday with a 13 percent increase as the ticket company reported returning profits last year after a rebound in rail traffic.

The company posted a profit of £21.2m for the 12 months ending February, following a loss of £11.9m in 2021 as coronavirus restrictions hit rail travel demand.

Easing of travel restrictions helped the company’s business performance surpass pre-pandemic levels, as did increasing overseas travel and competition from carriers on European rail routes.

Revenue rose by almost three quarters to £327m, while net ticket sales soared amid tremendous growth across all markets.

UK consumer business turnover skyrocketed by £1bn, despite successive rail strikes by the Rail, Maritime and Transport (RMT) union costing the company £5 to £6m in lost sales per day.

At the same time, purchases increased 125 percent in the international consumer division, partly due to higher marketing spend, and doubled in the business-to-business segment.

Trainline achieved exceptionally strong results in Italy, thanks to the launch of new advertising campaigns, and in Spain, where ticket sales have quadrupled in the last three years.

The London-based company attributed the expansion in the latter country to the recent liberalization of Spain’s high-speed rail network, the second longest in the world after China.

Last year, the group sold about 200 million train tickets across Europe, said CEO Jody Ford.

Russ Mould, director of investment at AJ Bell, said: “Expanding in Europe is a solid move, especially given that many of these areas benefit from better-invested rail infrastructure and cheaper ticket prices, helping more people take the train.”

For the current fiscal year, Trainline expects ticket purchases and revenue to be 13 to 22 percent higher.

However, trade could be significantly affected in the near term by further union action across France, which has been plagued by strikes since early March over President Emmanuel Marcon’s pension reforms.

In the UK, drivers working for a dozen train operators are planning round-the-clock work stoppages for this Friday, May 31, and also for June 3, with the latter date coinciding with the FA Cup final and Epsom Derby.

RMT members will also strike on May 13, the same day as the Eurovision Song Contest final in Liverpool.

In addition, the UK government’s proposed Great British Railways body, which would set ticket prices, poses a potentially major commercial threat to Trainline’s business model.

Shares of Trainline were up 13 percent at 270 pence late Thursday afternoon, though they remain about 48 percent below levels two years ago.