Trainline’s future in focus as Labour plots rail reform
Trainline investors have been concerned the new Labour government wide-reaching rail reforms could hit the bottom line.
The outlook for Trainline will be in focus next week as the online ticket platform reports its half-year results amid major changes in the UK rail sector.
The new Labour government has pledged to reform Britain’s struggling railways by bringing operator’s under state ownership and launching an arms-length body, Great British Railways (GBR), to oversee the network.
Trainline investors have been concerned that GBR’s introduction could mean the revival of plans initially proposed under the Conservative administration to bring in a rival national ticket app and website.
There has, however, been no mention of such a revival, leading analysts at Hargreaves Lansdown to conclude the reforms will have little effect on Trainline’s “high margin operating model any time soon.”
Recent agreements with unions, following two-years worth of industrial action, also suggest Labour may have a good chance of putting an end to troublesome rail strikes.
Trainline shares are down 4.34 per cent this year to date, but have risen around 20 per cent over the last 12 months.
Profit more than doubled in its annual results as strong demand in its European segment, particularly Spain and Italy, drove growth. New ticket sales rose by nearly a quarter to £5.3bn, up from £4.3bn the prior year.
Trainline claimed at the time it had become Europe’s most downloaded rail app over the period.
“Investors want to see if strong demand for e-tickets in Europe is continuing for Trainline, and whether a buoyant summer for travel translates into higher sales,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.
“For the full year, growth was the fastest for Spanish domestic travel, as greater competition in the rail market resulted in travellers shopping for the best priced routes.”
She added: “Trainline will also be mindful of rivals, like Seatfrog and Rail Online, who are angling to leap into its market share, so there is no room for complacency.’’
