Trainline, an online ticket retailer, has warned of challenges ahead, including the expansion of London’s contactless travel zone and economic uncertainties that might hinder foreign travel.
During early trading on Wednesday, shares of the London-listed company dropped by as much as 8%, even though it reported a significant profit increase up to February 28th.
With 18 million customers, Trainline is seeing benefits from the growing trend of digital tickets, which are a modern alternative to paper tickets for travelers.
However, the company noted that the growth of transportation sales might be impacted by the ongoing expansion of Transport for London (TfL)’s contactless travel zone.
In February, TfL expanded its area to include 47 new commuting stations in the southeast, such as Sevenoaks and Bletchley, enabling passengers to travel without needing individual tickets.
Trainline also expressed concerns about “headwinds” related to changes in Google’s search results and various economic uncertainties that could affect international travel.
Additionally, the company faces competition from a proposed new online ticket retailer as part of the UK’s plans for a dedicated public institution, Great British Railways (GBR).
Trainline has rapidly gained traction in recent years as travelers increasingly use it to find tickets across rail systems operated by several private companies, often competing on the same routes.
The Labour Party aims to simplify the ticket purchasing process by creating new retailers available when GBR is established, expected sometime after mid-2026.
Concerns about new competitors have caused Trainline’s share value to decline over a third this year, reflecting fears that it might lose its leading market position.
On Wednesday, Trainline stated that IT and other independent retailers are becoming more proactive with the government to push for a fair and competitive retail market.
The latest drop in Trainline’s stock occurs as the company reported an operating profit of £86 million for the last fiscal year, a 56% increase from the year before, alongside record sales.
Ticket sales amounted to £5.9 billion, which is a 12% rise compared to the previous year, largely driven by rapid growth in European markets.
Looking ahead, while online ticket sales growth is expected to be low at 6% to 9% next year, revenue is anticipated to increase by a modest 0% to 3%.
