Full steam ahead for Trainline as it raises its end of year guidance
London listed ticketing app Trainline has seen its shares rocket after the firm raised its pre-tax profit guidance.
Total revenue inched up 2 per cent year by year to £23m from £229m in the first half of the year.
Free cash flow hit £79m, while basic earnings per share increased by 54 per cent to 11.6 pence.
Profit before tax jumped increased by 14 per cent to £93m, causing the ticket app to raise its original full year guidance to 10 to 13 per cent from 6 to 9 per cent.
Shares in the FTSE 250 listed firm rose 5.19 per cent to 267.6 pence in early morning trading. However the stock has failed to keep pace with growth, falling by nearly 10 per cent over the past six months, as Labour plough forward with nationalising the UK railway.
Ticket sales chug along
Total net ticket sales increased by 8 per cent year on year to £3.2bn from £3bn, tracking toward the upper end of full year expectations of growth between 6 and 9 per cent.
UK ticket sales rose by 2 per cent to £594m, reflecting the continued strength in leisure travel sales and market recovery from increased commuter travel and reduced industrial action.
But, growth was partially offset by the first phase of the TfL’s expansion of its contactless payment network, with the group expecting it to put £150m of ticket sales at risk.
Revenue was flat at £107m, reflecting a reduction in commission rates from April.
International ticket sales also increased by 2 per cent to £594m, as the group focused on increasing its marketing investment in Europe to attract customers and fend off competitors.
Revenue from the international segment totalled £34m, as foreign travel sales, which typically generate higher revenue than domestic sales, saw a slide.
But sales were up across South-East France and Spain, accounting for 22 per cent of all international sales, which the company said reflected its increased investment in these areas.
Its Trainline solutions arm, which provides technology for other rail companies, was the fastest growing business with sales surpassing £1bn.
Future of UK railways
The group also continued to scale its digital railcard customer base, actively upselling to new customers, growing 12 per cent year on year to 2.5m users.
Trainline also launched a fresh buyback programme at the end of September of up to £150m, following the completion of its previous £75m programme, with £15m shares already repurchased.
The Government is also expected to publish its response from an industry consultation on the Railways Bill on Tuesday afternoon.
The consultation is part of the government’s wider rail nationalisation programme, in which it plans to establish a new passenger watch dog, reform both fare prices and the online retail of tickets and streamline regulatory processes.
It is expected to discuss the next steps to establish Great British Railways (GBR), an arms-length body which will be responsible for rail services and infrastructure, including the Department of Transport plans to create a rival state ticketing app.
Investment bank Panmure Liberum, which held the company at a buy valuation, said this was the reason for the stock’s rise, with the group predicting the government will commit to ensuring the market remains competitive upon the launch of GBR.