FTSE 250-listed Trainline’s (TRN) FY26 trading update met previously upgraded expectations. So why did shares in the rail ticketing platform fall 3.3% to 187p on Thursday?
Well, investors remain skittish about the long-term impact of UK rail nationalisation, and the looming departure of CEO Jody Ford.
Poor sentiment towards the rail and coach travel platform reflects uncertainty over the pending Great British Railways tender process. Ongoing digital pay-as-you-go trials also weigh on the stock.
Trainline also needs to recruit a successor to Ford, who is planning to leave after more than six years at the firm.
Double-digit growth
Revenue for the year to February 2026 rose 2% to £453 million. That was at the upper end of guidance and supported by the continued growth of hotel and insurance sales.
Trainline also guided for a double-digit increase in EBITDA with ‘strong cash generation’.
‘In the UK, we focused on deepening and strengthening engagement across our 18 million customers, supported by the expansion of our digital railcard base,’ commented Ford.
‘This helped mitigate the impact of rail operators promoting features on their own online channels that we are not permitted to offer.’
He said Trainline is benefiting from new carrier competition in Europe, including in South-East France. ‘Foreign travel to the continent bounced back in H2, highlighting our growing ability to capture new AI traffic’, he added.
Revenue at risk
Trainline’s results were robust given the headwinds the business navigated last year.
These included a series of tragic rail accidents in Spain that dampened consumer demand in the Iberian nation.
Trainline also faced continued pressure in the UK from Project Oval, the initiative that allows train operators to sell tickets directly through their own platforms.
The company’s UK Consumer ticket sales increased by 6% to £4.1 billion amid strength in leisure travel sales and commuter market recovery. However, Trainline expects the full impact of Project Oval to put roughly £150 million of UK Consumer ticket sales at risk.
Its been an uncomfortable ride for investors in Trainline since its 2019 IPO at 350p.
Shares in the company are down over 60% on a five-year view. The board believes the stock is undervalued with the cash generative firm halfway through a £150 million buyback.
But there could be further bumps along the track given new rail sector governance and regulatory shifts, so the shares are for risk-tolerant investors only.
Read the press release here: https://www.trainlinegroup.com/investors/regulatory-news/
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