Trainline experienced a slowdown in sales during the first half of the year, citing challenges including a freeze on rail fares, transport strikes, and extreme weather. The company reported that ticket sales in the UK remained flat at £2.1 billion for the six months ending August, while underlying revenue decreased by 5% to £102 million.
This stagnation in sales is largely attributed to the government's decision to freeze all standard rail fares in England until March, a measure intended to save passengers an estimated £600 million. Additional disruptions from hot weather and Transport for London (TfL) strikes also contributed to the stalled sales.
Trainline, which generates revenue through booking fees, faces broader challenges to its business model. Rail operators like LNER are increasingly prioritizing sales through their own platforms. The expansion of London's tap-in, tap-out system through Project Oval and the upcoming launch of the government's Great British Railways app, which aims to allow fee-free booking, present further competitive threats.
While tighter rules on refund requests, requiring them to be made by the end of the day, helped to mitigate some disruption, they also slowed transactions and reduced refund fee revenue for Trainline.
Internationally, Trainline's ticket sales declined by 4% year-on-year to £579 million. Consumer sentiment in Spain was particularly affected by rail accidents earlier in the year.
Jody Ford, the outgoing chief executive, stated that despite the challenging backdrop, Trainline delivered a robust first half with resilient underlying demand for UK rail travel. He expressed confidence in Trainline's positioning amidst a period of significant industry change, highlighting its scale in the UK and Europe.
Separately, the Competition and Markets Authority (CMA) has launched an investigation into Trainline concerning allegations that the company failed to display fees upfront. Trainline has stated it is proactively engaging with the regulator to comply with requirements.
Trainline's share price has fallen by one-third over the past 12 months. The company recently announced a £100 million share buyback program, which saw its shares rise by 3.2%. Analysts noted that while the buyback might offer some reassurance to shareholders, the sales figures were not strong enough to entirely overshadow the ongoing CMA investigation into potential drip pricing practices.