Trainline expansion drives second guidance upgrade in two months

Trainline shares sharply rose on Monday after the ticket booking platform upgraded full-year guidance for the second time in less than two months.

The FTSE 250-listed group upped guidance last month after a better-than-expected first half and has enjoyed a strong start to the second half of its financial year.

Trainline told shareholders on Monday the group is ‘increasingly benefiting from operating leverage as it scales’.

In addition to efforts to expand its offering to include trains and coaches outside of the UK, Trainline’s performance this year has been bolstered by fewer strike days.

Italy and Spain have been key drivers of international net ticket sales, which grew 6 per cent to £583million in the first half to help total net ticket sales swell 15 per cent to £2billion.

Trainline told shareholders it now expects to report full-year net ticket sales growth of 12 to 14 per cent, up from previous guidance of growth ‘at the top end’ of 8 to 12 per cent.

It expects revenue growth of 11 to 13 per cent, up from 7 to 11 per cent.

Adjusted earnings before nasties are forecast to come in at 2.6 per cent of net ticket sales – an adjustment from previous guidance that the figure would ‘exceed 2.5 per cent’.

The group will provide further colour on first half performance when it publishes interim results next week. 

Trainline shares rose 11.6  per cent to 376p, bringing 2024 gains to 19.2 per cent. 

Shares remain roughly 32 per cent short of their February 2020 high of 547p. 

In response the upgrade, analysts at Shore Capital reiterated Trainline’s buy rating with a target price of 465p – 38 per cent above the group’s closing price on Friday.

The analysts said: ‘We are pleased to see the update this morning and continue to see Trainline as a dominant player within the UK rail network, set to benefit from the increasing digitalisation demand from consumers.

‘Beyond this, we believe the international opportunity, which is building, is not factored into the current [valuation]’.

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