Trainline, the online rail ticket vendor, has indicated that it is facing “challenges,” among them the extension of London’s contactless travel zone and economic instability impacting international travel.
On Wednesday, shares of the London-based company plunged by as much as 8% before recovering slightly to a decline of 4%, despite announcing significant profit increases for the year ending on February 28.
With 18 million customers, Trainline primarily generates revenue through commissions on the sale of coach and rail tickets, benefitting from the rising trend of travelers opting for digital tickets over traditional paper ones.
Nonetheless, the firm announced that the recent expansion of Transport for London’s (TfL) contactless travel zone could hinder its sales growth. In February, TfL began incorporating 47 additional commuter stations in the southeast, such as Sevenoaks and Bletchley, allowing passengers to travel without needing separate tickets.
Trainline reported that it is encountering “headwinds” related to ongoing changes in Google’s search engine algorithms and “recent macroeconomic uncertainties” that may influence foreign travel.
The company also faces considerable competition in its primary UK market, with government initiatives to establish an online train ticket provider as part of the new public entity, Great British Railways (GBR).
In recent years, Trainline has seen rapid growth as travelers have used its platform to locate tickets across a rail network managed by various private companies that often share routes.
To simplify the ticket purchasing process across different rail operators, the Labour Party aims to establish a single retailer, which will be available once GBR is formed, though this is not anticipated until late 2026.
Trainline’s stock has dropped more than one-third this year amid concerns about potential competition weakening the company’s strong market position.
On Wednesday, Trainline stated that it and other independent sellers are increasingly pushing the government to fulfill its pledge to create a fair, open, and competitive retail market.
The company reported an operating profit of £86 million for the last financial year, a 56% increase from the previous year, alongside record sales. Trainline generated £5.9 billion from ticket sales, a 12% rise compared to the prior year, primarily driven by rapid sales growth and expansion in European markets.
However, it is projecting a slower growth rate for net ticket sales in the upcoming year, estimating an increase of only 6% to 9%, while also anticipating a revenue growth slowdown between 0% and 3%.
