Trainline Shares Fall as London Contactless Zone and Government Plans Threaten Growth

Trainline, the UK-based online rail ticketing retailer, reported a significant drop in its share value on Wednesday, with shares tumbling as much as 8% before stabilising to a 4% loss. This comes despite the company reporting a robust operating profit of £86 million for the financial year ending 28 February, a 56% increase compared to the previous year. The firm generated record sales of £5.9 billion, marking a 12% rise year-on-year, driven by the increasing adoption of digital tickets and its growing presence in European markets.

The company’s concerns stem from several critical factors. The expansion of Transport for London’s (TfL) contactless payment zone, which began earlier this year, poses a potential threat to revenue growth. The inclusion of 47 additional commuter stations, such as Sevenoaks and Bletchley, eliminates the need for separate train tickets within these areas. Trainline has warned that this move could significantly impact its sales growth moving forward.

Economic uncertainty has created further challenges, particularly in terms of foreign travel. The company highlighted this as another key factor affecting its future outlook. Also, changes to Google’s search engine results continue to impact its visibility, creating additional headwinds for the business.

A major point of concern for Trainline is the government’s plans to launch a public body – Great British Railways (GBR) – which will include an official online train ticket retailer. The Labour Party, seeking to streamline ticket purchasing by unifying it under a single platform, intends to roll out this initiative after GBR’s establishment, which is expected in late 2026. Market fears that this state-backed rival will erode Trainline’s dominance have already weighed heavily on its performance, and shares have fallen by more than a third this year.

Despite its solid financial performance, the company has forecast slower growth for the coming year. Trainline predicts net ticket sales to grow by only 6% to 9% and estimates revenue growth to slow to between 0% and 3%. The uncertainty surrounding these emerging threats has prompted the company and other independent retailers to push back, urging the government to maintain a competitive landscape for ticketing platforms.

Though Trainline continues to benefit from the digitalisation of rail ticketing and heightened consumer preference for convenience, its long-term position in the rapidly evolving market faces considerable risks from structural changes in the industry and wider economic challenges.