Independent train and coach travel platform Trainline (TRN) delivered an impressive set of results for the year to February and predicted bookings and revenues would be above their pre-pandemic levels this year.
Given what feels like a dearth of good news from companies so far this reporting season, investors jumped on board sending the shares up 10% to 306p.
STRONG RECOVERY
For the year to the end of February, the company registered net ticket sales of £2.52 billion, an increase of 222% on the previous year as rail and coach travel rebounded.
From those sales the firm generated revenues of £189 million compared with £67 million the previous year, while operating free cash flow swung from minus £146 million to a positive figure of £166 million.
Thanks to the strong recovery in trading, EBITDA (earnings before interest, taxes, depreciation and amortization) turned positive to the tune of £39 million.
Moreover, the firm was able to reduce its net debt from £241 million to £90 million, considerably improving its financial position.
The company made good strategic progress too, increasing the ‘lifetime value’ of regular users by around 40% and converting more than 25% of what it refers to as ‘time-checkers’ into actual customers compared with pre-Covid numbers.
It also made good progress in Europe where its aim is to become the number one marketplace for ticket sales, increasing sales on key French routes and delivering record new app users.
CONFIDENT OUTLOOK
Assuming there are no further major disruptions to rail travel from new government restrictions, Trainline is predicting lift-off in ticket sales, revenues and earnings this financial year.
The company is targeting net ticket sales of between £3.8 billion and £4.2 billion, an increase of between 50% and 66%, with the bottom of the range above the full year to February 2020.
Revenues are expected to grow in line with ticket sales to reach between £280 million and £310 million, also above pre-Covid levels, and EBITDA is expected to almost double to as much as £75 million.
Chief executive Jody Ford commented: ‘Our strong performance and positive outlook for next year reflects our relentless focus on supporting the rail industry's recovery, making greener rail travel easier and better value for customers.’
With consensus forecasts for all three measures currently at or below the bottom of the firm’s new ranges, analysts will be sharpening their pencils ready to upgrade their numbers.
Ciaran Donnelly at Liberum maintained his 400p price target, arguing the shares should continue to re-rate on today’s news.
‘We see Trainline as a long-term winner in a structurally growing market as train ticket sales continue to transition online, and the company benefits from the post-Covid recovery in rail volumes’, said Donnelly.
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