Trainline PLC (LSE:TRN) shares fell 8% after the digital ticketing company published its final results but analysts were mostly positive in their reviews.
Investors, who have been worried about how the company's UK business will be affected by the government's Great British Rail plans, were further spooked by the company saying that the expansion of Transport for London’s contactless travel zone could impact sales growth.
But UBS, Peel Hunt and Shore Capital all reiterated 'buy' ratings, highlighting strong growth in net ticket sales of £5.9 billion and revenue of £442 million, both up 12% at constant exchange rates, and adjusted EBITDA up 30% to £159 million, slightly ahead of consensus expectations.
UBS said what was notable was that Trainline’s UK Consumer and Solutions segments both grew earnings more than expected while International Consumer fell less than predicted.
Despite the solid performance, guidance for the new financial year suggests slower ticket sales of 6-9% revenue growth of 0-3%, due to a planned commission rate cut. The market was expecting 8.5% ticket growth and 3.4% revenue.
However, EBITDA is expected to grow in line with net ticket sales, which puts margins on net ticket sales at the top of existing guidance of 2.6-2.7%.
Shore Cap analysts said this is driven by "ongoing opex benefits offsetting more softer trends in [net ticket sales] and revenue growth".
As a result, they have reduced their revenue forecasts 2%, but increased adjusted EBITDA margin to 2.69%, with the net result of an adjusted EBITDA forecast of £171 million, around a 1% upgrade.