- Ticket sales and revenue forecasts raised
- Operational gearing leads to higher margin
- Shares hit new three-month high
Investors in online travel booking platform Trainline (TRN) enjoyed an uplift in the firm’s valuation after it raised its outlook for the year to next February for a second time thanks to increased economies of scale.
The shares accelerated 37p or 11% to a new three-month high of 374p, topping the FTSE 250 mid-cap leader board.
STRONG FIRST-HALF TRADING
For the six months to the end of August, Trainline reported a 14% increase in net ticket sales to a record £3 billion and a 17% increase in group revenue to £229 million.
With no commensurate increase in costs, EBITDA (earnings before interest, tax, depreciation and amortisation) rose 44% to £82 million representing a margin on sales of around 36% against 29% a year earlier.
Operating free cash flow rose to £100 million, while leverage halved to 0.2 times EBITDA from 0.4 times the previous year.
SECOND UPGRADE TO FORECASTS
In September, the company said growth in full-year net ticket sales would be at the top end of its forecast range of 8% to 12% and revenue growth would be at the top of its 7% to 11% forecast.
Today, thanks to the benefits of operational leverage as it scales up, it raised its outlook for full-year ticket sales growth to between 12% and 14% and for revenue growth to between 11% and 13%.
At the same time, EBITDA is expected to reach 2.6% of net ticket sales against previous guidance of ‘above 2.5%’ issued in September.
