Strikes might not hurt Trainline as much as expected – here’s why
Trainline will report its half-year results on Thursday, with the impact of ongoing rail strikes firmly on the mind of investors.
The ticketing app’s share price has veered off track this year as industrial action across the UK’s rail network has crimped demand for rail travel.
The Rail and Maritime and Transport Union (RMT) voted last week to continue walkouts for the next six months, cooling hopes that a resolution may be on the horizon.
Shares in the FTSE 250 firm have fallen nearly 10 per cent since January and have been further weighed down by government proposals to launch a rival, commission-free ticket service.
But the outlook for Thursday is decidedly upbeat as resurgent leisure demand sweeps across European rail. International ticket sales have soared this year and prompted Trainline to unveil a £50m share buyback scheme in September.
The company netted £2.6bn in revenue in the six months to August, driven by stellar performances in its key European markets, Spain and Italy.
The revival of overseas rail travel is expected to largely offset the impact of industrial action in the UK helping the firm speed ahead of rivals Seatfrog and Rail Online.
Delays in the roll-out of the government’s Great British Railways (GBR) project have similarly quelled fears of a rival ticket service, while the closure of UK ticket offices has lined up Trainline for bumper profits, much to the fury of rail unions.
Dominic Richardson, rail partner at law firm Gowling WLG, said: “The effect of strikes and rail ticket price inflation over the past year has impacted on the total passenger numbers travelling by rail, making the competition ever more fierce.”
“But with plans to expand within Europe, the company will be confident it can deliver the technology and the services needed to continue driving high growth.”
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Trainline is set to speed ahead again in terms of ticket purchases, helped by its growing international sales, which have been offsetting the effect of rail strikes in the UK.”
“Although the impact of strikes is still expected to show up in these numbers, the underlying trends in terms of demand look positive for the company.”
She added: “For now, customers seem willing to pay the extra surcharge to buy via its app or online, in return for the high level of flexibility and service the company offers.”