Trainline hits out at tube strikes and fare freeze as growth stalls
Trainline has hit out at tube strikes and the government’s freeze on rail fares, as the train ticketing platform saw sales growth grind to a halt.
The FTSE 250 firm posted flat ticket sales in the six months to August, at £2.1bn, blaming “the impact of the regulated fare freeze, additional disruptions from hot weather and TfL strikes, as well as ongoing headwinds”.
The government has frozen all standard rail fares across England until March, in a move it said would save passengers £600m.
Trainline also hit out at the government’s move to tighten refund rules, which the group said slowed the number of refund transactions and dragged its underlying UK revenue down by five per cent to £102m.
The train ticketing platform missed out on the refund fees it would have made if refunds had not been made harder for passengers to claim, it said.
The group said its four per cent dip in international ticket sales to £579m was due to one-off factors like January’s “tragic” rail disaster in Spain, which caused consumers to stay away from train travel.
Record heat, train strikes across Europe and the Iran war all combined to create a “softness in foreign travel demand,” Trainline said.
Trainline boss disembarks
Chief executive Jody Ford, who will quit the business later this month, said the platform delivered a “robust” performance as it capitalised on a “backdrop of resilient underlying demand for UK rail travel”.
“The industry is moving through an important period of change and Trainline is well positioned, with real scale in the UK and across Europe, deep customer loyalty, and over three million customers now holding a digital railcard in our app.
“I hand over to Ian Brown a company strongly positioned for its next chapter, with significant multi-year growth opportunities ahead.”
The group launched a £100m share buyback on Friday, following the end of Trainline’s previous £150m scheme.
Duncan Ferris, an analyst at Freetrade, said: “Trainline’s newest numbers might not scream full steam ahead, but they may steady the journey after a bumpy few weeks for shareholders.
“What might offer investors some cheer is a newly announced 12-month share buyback programme, covering as much as £100m. Coupled with steady, if unspectacular, performance and unaltered guidance, this may offer shareholders reassurance that the business is still chugging along despite regulatory issues.”
Last month, the UK’s consumer watchdog announced an investigation into Trainline and Virgin Atlantic over so-called ‘drip pricing’ practices.
The Competition and Markets Authority (CMA) is cracking down on ticketing platforms which add hidden fees to transactions which do not appear in the original ticket price.
Trainline said it “is proactively engaged with the CMA in relation to its ongoing investigation on fees presentation.”