Trainline, the online rail ticket retailer has warned about “headwinds”, such as the expansion of London’s contactless zone and economic uncertainties that are affecting travel abroad.
The shares of the London-listed firm fell by up to 8% on Tuesday, before recovering to a slight fall of 4%. This was despite the company reporting a record profit for the year ending 28 February.
Trainline has 18 million customers, and makes most of its money by earning commissions on the sale of rail and coach tickets. The company has also benefited from a growing preference among travellers for digital tickets as opposed to their paper counterparts.
On Wednesday, the company announced that the expansion Transport for London’s (TfL), contactless travel zone may impact sales growth. TfL has expanded its zone since February to include 47 commuter station in the south east, such as Sevenoaks or Bletchley. This means that passengers won’t need separate tickets.
Trainline stated that the company was “facing headwinds” as a result of Google’s continued changes to their search engine results, and recent macroeconomic uncertainty which could impact foreign travel.
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In addition, the government’s actions pose a serious threat to the company in its primary UK market. plans to create an online train ticket retailer Great British Railways is a public company that has its own dedicated body.
In recent years, Trainline has seen rapid growth as customers use it to search for tickets on a rail system that is operated by multiple private companies.
Labour hopes to streamline the buying of tickets by different rail operators. A single retailer will be created and made available at once. GBR has been establishedThis is not anticipated until the end of 2026.
Trainline shares are down by more than one third in this year alone, as investors fear that a new competitor could threaten the company’s dominance on the market.
Trainline, along with other independent retailers, said that on Wednesday they were “taking a more assertive stance” in their efforts to get the government to live up to its promise to create a future retail marketplace that is fair, competitive and open.
Trainline reported an operating profit of £86m for the last financial year, 56% higher than a year earlier, and brought in record sales. The company recorded £5.9bn from selling tickets, 12% higher than a year earlier, which was mostly driven by fast sales growth and expansion in European countries.
It is also expecting a slower revenue growth between 0% to 3%.
