Trainline stock falls 13% as investors eye state-backed competition despite sales growth

Shares of Trainline PLC dropped sharply Thursday, falling more than 13% even as the rail ticketing platform reported higher sales and announced a new share buyback programme, with investors wary of a looming state-backed rival.

The FTSE 250 index, in contrast, slipped just 0.2%.

Trainline reported net ticket sales of £5.91 billion for the financial year ending February 28, a 12% increase from £5.30 billion in the previous year.

The company’s revenue rose by 11% to £442 million, up from £397 million.

Growth was seen across all segments, with UK Consumer, International Consumer, and Trainline Solutions divisions each posting a 12% revenue increase at constant currency.

The company expects adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) as a percentage of net ticket sales to be slightly ahead of its prior guidance of 2.6% for financial 2025.

For financial 2026, the company maintained its guidance at 2.6% to 2.7%.

Investor concerns over the establishment of GBR weighs on sentiment

Despite Trainline’s positive performance, investor concerns over the UK government’s plan to establish Great British Rail (GBR) weighed on sentiment.

GBR, envisioned as an arms-length governing body, would replace the current train operator retail websites with a single public sector retail platform, directly competing with Trainline.

This would enable consumers to search for and purchase the best tickets through a single app, regardless of the route, undermining a key benefit Trainline users currently enjoy.

Trainline emphasized that the service is unlikely to launch before 2027 and vowed to push for fair competition between the new platform and its own app.

“The government is unequivocal in its commitment to a fair, open and competitive market, recognising the central role independent retailers play,” Trainline said.

As part of the industry consultation, the government is engaging with Trainline and other independent retailers to assess various safeguards typically observed in regulated markets. This is to ensure [the new app] is not treated favourably versus other retailers, which is in line with competition law principles.

Trainline CEO Jody Ford expressed confidence in the company’s ability to thrive in a competitive market.

“With record net ticket sales for the third year in a row, we saw growth in consumer sales in the UK of 13% and in Spain of 41%, while international B2B sales through our Global API increased by about 60%,’ said Chief Executive Officer Jody Ford.

There is still so much to be achieved in the UK and Europe with the critical foundation being open, fair and competitive markets. Rail is set to surge across Europe and Trainline will be at the centre of it.

New share buyback program

In a bid to boost shareholder returns, Trainline announced a new £75 million share buyback program following the completion of its current £75 million buyback, which has seen £69 million in shares repurchased since June last year.

The new program will be conducted in two tranches of £37.5 million each, with Morgan Stanley managing the first and Deutsche Numis handling the second.

Investors will closely watch Trainline’s performance in the coming months as the company navigates regulatory challenges and aims to solidify its foothold in the European rail market.

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