Trainline (TRN) 320p 

Loss to date: 1.6%

Since we flagged the stock’s appeal in February last year, shares in online ticketing platform Trainline (TRN) have been up the mountain, peaking at 435p for a paper gain of 36%, and come all the way back down again, leaving us marginally out of pocket.

This is despite the firm raising its guidance twice, in September and October, thanks to strong growth in the first half and a positive start to the second half.

The company also said it was increasingly benefiting from operating leverage as it scaled up operations.

WHAT HAS HAPPENEND SINCE WE LAST SAID BUY?

There were persitent rumours last year the government might bring in its own online retail site for rail tickets, and in January this year the DFT (Department for Transport) outlined its plans to bring together all the individual train operators on one website under the yet-to-be-formed Great British Railways.

GBR will have the power to reform fares and the ticketing system without an operators’ agreement, as well as ‘simplifying fares and modernising ticketing’ including the rollout of Pay As You Go allowing passengers to travel more flexibly.

The new state-backed system, which in theory is non-profit, will work alongside but in direct competition with Trainline when it comes to fruition.

WHAT SHOULD INVESTORS DO NOW?

While Trainline has a dominant market share in the UK, and we thought it would be able to ride out future competition, it looks like the market disagrees and several analysts have cut their view on the stock.

The government insists there is room for third-party ticket retailers, but competition is never good for profits.

The only saving grace is that getting GBR up and running will take time, but for us this is the end of the line and we would sell the shares.

‹ Previous2025-02-27Next ›