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Trainline jumps after 'strong growth' forecast

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·2 min read
FILE PHOTO: Trainline logo is displayed behind small toy figures and stock graph in this illustration picture
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LONDON (Reuters) - British rail ticketing company Trainline forecast "strong growth" this year, with revenue rising above pre-pandemic levels to 280-310 million pounds, and core earnings of 70-75 million pounds, both ahead of market expectations.

Shares in Trainline, which saw sales collapse in 2020 when COVID-19 impacted travel, jumped 13% to a six-month high of 313 pence on Thursday.

Chief Executive Jody Ford said the positive outlook reflected a focus on supporting the rail industry's recovery, as well as making rail travel easier and better value.

Analysts at Peel Hunt said guidance for the year to end-February 2023 was, at the midpoint, 8% ahead of its revenue estimates and 7% ahead of its core earnings forecasts.

"After two years of very difficult times for Trainline (including the pandemic and the regulatory overhang), this is the first time that it feels it is back on the front foot again," they said.

Ford said Trainline was benefiting from new patterns of hybrid working in its core British market, with commuters buying fewer season tickets and instead using its app to buy singles, returns and other flexible ticket options.

The company was also investing in international markets, where there was a "huge amount of headroom" with new competition between operators on high-speed routes in France, Italy and Spain.

Trainline suffered a blow a year ago when the British government published a new rail plan, which included proposals for a central ticket retailer.

Ford said he anticipated there would be a procurement exercise to build and operate the new app, and after engaging in the preliminary stages, Trainline was ready to participate in the next stages.

The company reported adjusted earnings of 39 million pounds ($48 million) for the year through February, compared with a 25-million-pound loss in the prior year.

($1 = 0.8086 pounds)

(Reporting by Paul Sandle; Editing by Bernadette Baum)