Trainline lines up £50m share buyback as sales accelerate

Trainline shares soared on Tuesday after the group revealed a £50million share buyback following better-than-anticipated growth in the first half.

The digital railcard platform’s net ticket sales increased by 23 per cent to £2.65billion for the six months ending August, while turnover rose by nearly a fifth to £197million.

Ticket purchases jumped to over £1.7billion in the firm’s UK consumer division as more customers booked online and on the day of travel.

It further benefited from passenger volumes regularly nearing pre-pandemic levels amid an absence of Covid-related restrictions and commuters travelling with greater frequency to the office.

This was despite workers from the RMT and Aslef unions staging strikes on multiple days as part of a long-running dispute over pay and conditions, costing the group around £5million to £6million in lost sales per day.

Outside Britain, ticket demand soared by approximately a quarter to £559million on the back of solid performances in Spain and Italy.

In recent years, trading in Italy has been supported by new advertising campaigns, while the company’s expansion in Spain has been spearheaded by the liberalisation of the country’s high-speed rail system.

Digital sales slowed overseas partly due to higher competition in keyword auctions, although demand continued to rise significantly on the company’s mobile app.

Jody Ford, chief executive of Trainline, said: ‘Given our continued growth and the strength and maturity of our business, we are today launching a share buyback programme to begin returning capital to shareholders.’

Trainline has maintained its guidance for both net ticket sales and turnover to expand by 13 to 22 per cent for the 2024 financial year. 

Meanwhile, adjusted core earnings are expected to total between 2.15 per cent and 2.25 per cent of net ticket sales.

Following the update, Trainline shares jumped 12.4 per cent, or 30.6p, to £2.78 on Thursday morning, making them the biggest riser by far on the FTSE 250 Index.

However, their value has still fallen by about 24 per cent over the past year.

Russ Mould, investment director at AJ Bell, said: ‘There remain limited barriers to entry in this market, but Trainline’s brand is becoming increasingly entrenched, which should provide it with a measure of protection from any prospective rivals.

‘The company continues to focus on innovative features like flagging cost savings through splitting your journey into multiple tickets that cost less in total than one ticket for the whole route.’