As U.S. tourists drive a strong start to the year, a train company raises its guidance.
Trainline (LON:TRNT) stock went up more than 20% when the market opened on Wednesday. This was because the company raised its guidance after a sharp rise in tourism in the spring.
The company, which specialises in selling train tickets online in Europe, said that net ticket sales were up 16 percent in the four months leading up to June compared to the same time period before the pandemic. It cited “a faster than expected recovery in rail passenger volume across Europe, including a notable resurgence of inbound customers from the U.S.,” as well as the benefit of Trainline’s increasing its investment in its international business.
Trainline said it now expects sales for the year ending in February 2023 to be up between 18 and 27% from where they were before Covid, and overall revenue to go up between 22% and 31%.
It expects, though, that its EBITDA margin will be only about 2%.
In May, the company said it expected net ticket sales of about 4 billion pounds ($4.8 billion) this year, which would bring in between 280 and 310 million pounds in revenue.
Europe has mostly eased its restrictions on mobility because the COVID-19 virus has changed into less dangerous strains. This is a big plus for the rail industry. But labour disputes are quickly becoming a new problem in a number of countries, including big markets like the U.K. and France. Train drivers in the UK are on strike for the first time on a national level in more than 20 years. In France, a strike by workers at rail operator SNCF is going to cause a lot of trouble in the next few days.
By 3:20 AM ET (0720 GMT), Trainline shares were up 20.6% and at their highest point since November 2021.
