Trainline upgrades forecast for second month in a row

Trainline has increased its full-year guidance for a second time in two months after making more cash from ticket sales than it had previously expected.
The online ticket seller said it expected net sales to grow by between 12 per cent and 14 per cent for the year to the end of February 2025, up from its previous forecast of 8 per cent to 12 per cent.
The FTSE 250 company, which raised its annual guidance in September, said it was increasing its full-year forecast again thanks to a “strong start” to the second half of the year.
It lifted its forecast for annual revenue growth to between 11 per cent and 13 per cent, up from previous expectations of 7 per cent to 11 per cent growth. The upgrade to guidance comes in advance of the group’s half-year results on November 7.
The increase to full-year expectations sent shares in Trainline up 31p, or 9.2 per cent, to 368p by Monday’s close.
Trainline, which was founded by Virgin Group in 1997, was acquired by KKR, the private equity firm, in 2015 for £450 million. It is now one of the relatively few technology companies remaining on the London Stock Exchange, where it was listed in 2019 at 350p a share. The shares hit a nadir of 164p in 2022, during a year blighted by rail strikes. The stock has since recovered in value as the company improved sales and grew in Europe.
Yet there have been some investor nerves in recent months about possible Labour government plans to nationalise Britain’s railways, which shareholders fear could hurt Trainline’s revenues.
The online ticket seller reported “strong growth” in the first half of the year, with the group “increasingly benefiting from operating leverage as it scales”.
Trainline said it recorded net ticket sales of £3 billion during the six months to the end of August, up 14 per cent from the same period last year, as more people bought digital tickets. A decline in the number of strike days also helped to boost Trainline’s sales in the first half of the year.
Revenues for the six months to the end of August rose to £229 million, 17 per cent higher than the same period a year earlier.
Shares in the company have climbed by 8 per cent since the beginning of the year after sales rose. Trainline has also benefited from the expansion of its business overseas, with international consumer revenues climbing to £583 million in the first half of the year, a 4 per cent increase from the same period last year.
About two thirds of Trainline’s business is with the UK public and the rest is split between selling tickets for journeys in mainland Europe — Spain and Italy are growing fast because of an increasing amount of competition between different train companies — and to corporate customers. The company has staff in London, Paris and Edinburgh and sells train and coach tickets in more than 40 countries, covering 270 operators.
Katie Cousins, an analyst at Shore Capital, said the broker continued to see Trainline as “a dominant player within the UK rail network, set to benefit from the increasing digitalisation demand from consumers”.
She said the group’s momentum from the first half appeared to have continued into the second half of the financial year.