3 May 2024
THIS
ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Trainline plc
Results
for the twelve months ended 29 February 2024
Strong
growth from Europe's most downloaded rail app
FY2024 financial
summary:
£m unless otherwise
stated:
|
FY2024
|
FY2023
|
%
YoY
|
|
|
|
|
Net ticket
sales1
|
5,295
|
4,323
|
+22%
|
Revenue
|
397
|
327
|
+21%
|
Adjusted
EBITDA2
|
122
|
86
|
+42%
|
Operating profit
|
56
|
28
|
+101%
|
Adjusted basic earnings per share
(pence)3
|
12.3p
|
7.7p
|
+59%
|
Basic earnings per share
(pence)3
|
7.3p
|
4.5p
|
+61%
|
Operating free cash
flow
|
91
|
8
|
n.m.
|
Financial highlights:
· Net ticket sales
up 22% year on year (YoY) to £5.3 billion at top end of previous
guidance range, driving growth in revenue of
21% to £397 million, above previous
guidance range
· Adjusted EBITDA
up 42% to £122 million, 2.3% of net ticket sales; operating profit
up 101% to £56 million, driven by volume growth and operating
leverage
· Basic earnings
per share of 7.3p up 61%; adjusted basic earnings per share of
12.3p, up 59%
· Operating free
cashflow up from £8 million to £91 million; leverage ratio down
from 1.2x to 0.5x adj. EBITDA
Strategic highlights:
· Strong growth in
mobile app downloads, now Europe's most downloaded rail
app4
· Helping shift
the UK rail market to digital tickets:
o Eticket
penetration of industry ticket sales increased to 47% from 43% in
FY20235
o Grown
on-the-day bookings to 66% of UK Consumer transactions, while
Trainline's share of commuter travel segment increasing to 23% from
10% pre-COVID
· International
Consumer net ticket sales surpassed £1 billion, driven by European
markets with most widespread carrier competition:
o Combined
growth across Spain and Italy of 43%6
o Domestic
ticket sales in Spain more than doubled for two consecutive
years7
o Consumer
awareness in Spain and Italy has more than doubled since brand
campaigns launched in both markets 18 and 24 months ago
respectively8
o Enhancing
customer engagement through our Mobile App - International Consumer
app share of transactions now 62%, including Italy now at
73%
Group guidance for
FY2025:
· Net ticket
sales YoY growth of between +8% and +12%
· Revenue YoY growth of
between +7% and +11%
· Adjusted EBITDA of
between 2.4% and 2.5% of net ticket sales
New share buyback programme
announced:
· In line with
Trainline's stated capital allocation framework, we have announced
a new £75 million buyback programme to commence upon completion of
existing programme
· £38 million of shares
repurchased under existing £50 million programme as at the end of
April 2024
Jody Ford, CEO of Trainline
said:
"New entrant
carrier competition is revolutionising rail in Europe as more
customers benefit from greater choice, lower prices and the
opportunity to choose greener travel. We are becoming the
aggregator of choice in the UK and internationally and are
delivering strong growth, particularly in those markets
liberalising fastest such as Spain.
"With four
carrier brands competing across its high-speed rail network, we
have doubled domestic ticket sales in Spain for the second year
running and significantly grown our market share on
the top routes. With new entrant carrier competition set to ramp up
in Italy, France and the UK in the coming years, the opportunity
grows to create a golden age of rail travel."
Presentation of results
There will be a live webcast
presentation of the results to analysts and investors at 09:00am
BST today (3 May 2024). Please register to participate at the
Company's investor website:
https://www.trainlinegroup.com/investors/results-reports-presentations/full-year-webcast-fy2024/
The person responsible for
arranging the release of this announcement on behalf of Trainline
is Martin McIntyre, Company Secretary.
Enquiries
For investor enquiries, Andrew
Gillian investors@trainline.com
For media enquiries, Hollie
Conway
press@trainline.com
Brunswick Group
Simone Selzer
trainline@brunswickgroup.com
/ +44 207 404 5959
Footnotes:
1. Please
refer to the Alternative Performance Measures note for definition
of net ticket sales. Net ticket sales in FY2024 included an extra
day of trading given 2024 was a leap year.
2.
Adjusted EBITDA (earnings before interest, tax, depreciation and
amortisation) excludes share-based payment charges and exceptional
items.
3. Please
refer to Note 6 for definitions of adjusted basic earnings per
share, basic earnings per share and diluted earnings per
share.
4. Based
on number of app downloads in Europe, as of Feb 2024.
5. Eticket
penetration is % of UK industry net ticket sales fulfilled using a
barcode read eticket and is a subset of online
penetration.
6.
Geographical split of growth in net ticket sales within
International Consumer based upon carrier location.
7. Spanish
domestic sales reflects sales to customers with a Spanish IP
address.
8.
Prompted brand awareness measured by YouGov via a monthly national
representative survey of two thousand respondents in each
market.
Forward looking statements and other
important information
This document is for informational
purposes only and does not constitute an offer or invitation for
the sale or purchase of securities or any businesses or assets
described in it, nor should any recipients construe the information
contained in this document as legal, tax, regulatory, or financial
or accounting advice and are urged to consult with their own
advisers in relation to such matters. Nothing herein shall be
taken as constituting investment advice and it is not intended to
provide, and must not be taken as, the basis of any decision and
should not be considered as a recommendation to acquire any
securities of Trainline.
This document contains forward
looking statements, which are statements that are not historical
facts and that reflect Trainline's beliefs and expectations with
respect to future events and financial and operational performance.
These forward looking statements involve known and unknown risks,
uncertainties, assumptions, estimates and other factors, which may
be beyond the control of Trainline and which may cause actual
results or performance to differ materially from those expressed or
implied from such forward-looking statements. Nothing
contained within this document is or should be relied upon as a
warranty, promise or representation, express or implied, as to the
future performance of Trainline or its business. Any historical
information contained in this statistical information is not
indicative of future performance. The information contained in this
document speaks only as at the date of this document and Trainline
expressly disclaims any obligations or undertaking to release any
update of, or revisions to, any forward-looking statements in this
document.
FY2024 PERFORMANCE REVIEW
Group Overview
Group net ticket sales increased to £5.3 billion,
22% higher YoY, at the top end of our previously stated guidance
range of 17 to 22%. The drivers of net ticket sales growth are
provided for each business unit below.
Increased net ticket sales helped Group revenue grow
21% to £397 million, above Trainline's previously guided range of
between 15% to 20%. Gross profit also grew by 21% to £305
million.
FY2024 Segmental
performance
|
FY2024
|
FY2023
|
%
YoY
|
|
|
|
|
Net ticket sales (£m)
|
|
|
|
UK Consumer
|
3,469
|
2,811
|
+23%
|
International Consumer
|
1,041
|
915
|
+14%
|
Trainline Solutions
|
785
|
597
|
+31%
|
Total Group
|
5,295
|
4,323
|
+22%
|
|
|
|
|
Revenue (£m)
|
|
|
|
UK Consumer
|
209
|
172
|
+21%
|
International Consumer
|
53
|
45
|
+17%
|
Trainline Solutions
|
135
|
110
|
+23%
|
Total Group
|
397
|
327
|
+21%
|
|
|
|
|
Gross profit (£m)
|
|
|
|
UK Consumer
|
145
|
122
|
+19%
|
International Consumer
|
36
|
30
|
+19%
|
Trainline Solutions
|
124
|
100
|
+24%
|
Total Group
|
305
|
252
|
+21%
|
|
|
|
|
|
FY2024
|
FY2023
|
YoY
|
Adjusted EBITDA (£m)
|
|
|
|
UK Consumer
|
86
|
71
|
14
|
International Consumer
|
(17)
|
(22)
|
5
|
Trainline Solutions
|
53
|
37
|
16
|
Total Group
|
122
|
86
|
36
|
Adjusted EBITDA increased £36 million or 42% YoY to
£122 million, outpacing net ticket sales and revenue growth, given
the benefit of operating leverage in both marketing and people
related costs. Adjusted EBITDA was 2.31% of net ticket sales,
exceeding our previously stated guidance range of 2.15% to 2.25%,
which primarily reflected better than expected revenue growth and
cost discipline.
Marketing costs of £67 million grew 4% as we
acquired more customers and continued to invest in our brand. This
was partly offset by our decision announced in May 2023 to pause
brand marketing in France until carrier competition becomes more
widespread.
People-related and other administrative costs
increased 14% to £116 million. This included the full year impact
from increasing our headcount in FY2023, as well as higher systems
costs associated with processing more transactions, partly offset
by AWS and other platform efficiency cost savings.
UK Consumer
Net ticket sales were £3.5
billion, 23% higher YoY. This reflected continued rail market
recovery, as well as the industry experiencing fewer strikes than
in the prior year (25 strike days9 in FY2024 vs 30 in
FY2023), which were also less severe in their impact
(estimated gross ticket sales10
impact per strike day of c.£4 million in FY2024 vs £5-6 million in
FY2023).
Net ticket sales growth also
reflected more people switching to digital tickets - with industry
eticket penetration at 47% of ticket sales
in FY2024, up from 43% in FY20235 - while long-distance
and leisure travel remained strong.
Revenue grew 21% YoY to £209
million. This was slightly slower than net
ticket sales given faster growth in commuter and on-the-day travel,
which generate relatively lower rates of revenue than
longer-distance travel, partly offset by our increased focus on
non-commission revenue generation.
Gross profit grew 19% to £145 million. Adjusted
EBITDA of £86 million was £14 million higher.
International Consumer
Net ticket sales were £1.0
billion, 14% higher YoY. Growth was led by Spain and Italy -
markets where carrier competition is most widespread - with
combined net ticket sales6 up 43% YoY as Trainline
positions itself as the aggregator of choice. Combined net ticket
sales across France and Germany grew 3% YoY, reflecting Trainline's
decision to pause brand marketing in France until the arrival of
more widespread carrier competition. Germany remains a small part
of the portfolio today and unattractive from an investment
perspective until we see improved commercial terms and the arrival
of carrier competition.
Growth was led by Trainline's
mobile App, which now makes up 62% of transactions in International
Consumer (FY2023: 54%), while Web sales growth was tempered by
changes to the presentation of search engine results, as outlined
in Trainline's Half Year results in November.
Revenue was £53 million, growing
17% YoY. Revenue growth
outpaced net ticket sales, driven by higher non-commission revenues
and further growth in foreign travel sales. Foreign travel sales
generate higher revenue as a percentage of net ticket sales than
domestic travel.
Gross profit increased 19% to £36
million. Adjusted EBITDA loss reduced to -£17 million (vs -£22
million last year). Adjusted EBITDA on a pre-internal transaction
fee basis11 was -£1 million (vs -£9 million last year),
in line with previously stated guidance that it would approach
breakeven in FY2024.
Trainline Solutions
Net ticket sales were
£785 million, 31% higher than prior year, with a strong performance from IT
Carrier Solutions and business travel in the UK industry continuing
to recover from a lower base.
Revenue increased by
23% YoY to
£135 million.
Most of the revenue related to an internal transaction fee paid by
UK Consumer and International Consumer11.
Gross profit was £124 million, 24% higher YoY.
Adjusted EBITDA was £53 million, £16
million higher YoY.
Operating profit
The Group reported operating profit of £56
million, up £28 million or 101%. Operating profit
included:
· Depreciation and
amortisation charges of £42 million, in line with prior year
(FY2023: £41 million)
· Share-based
payment charges of £23 million, reflecting the costs of our
all-employee share incentive plan (FY2023: £17 million)
· Exceptional
items of £2 million in relation to business restructuring costs (no
exceptional items in FY2023)
Profit after tax
Profit after tax was £34 million, up £13
million or 60% YoY. Profit after tax reflected operating profit of
£56 million, net finance charges of £7 million, and a
tax charge of £14 million. The effective tax rate of 29% was above
the UK corporation tax rate primarily due to losses in overseas
entities that are not recognised for deferred tax.
Earnings per share
(EPS)
Adjusted basic earnings per share was 12.3
pence vs 7.7 pence in FY2023. Adjusted basic earnings per
share adjusts for exceptional one-off items in the period, any
gains on the repurchase of convertible bonds, amortisation of
acquired intangibles, and share-based payment charges, together
with the tax impact of these items.
Basic earnings per share was 7.3 pence vs 4.5
pence in FY2023.
Operating free cash flow and net
debt
Operating free cash flow was £91
million, up £83 million YoY. Operating free cashflow included
adjusted EBITDA of £122 million and a working capital inflow of £10
million, reflecting Trainline's negative working capital cycle.
This was partly offset by capital expenditure of £41 million,
reflecting ongoing investment in product and technology.
Net debt was £64 million at the
end of February 2024, down from £100 million in February 2023. The
Group's leverage ratio was 0.5x adj. EBITDA (Feb-23: 1.2x; Feb-22:
2.3x). The reduction in net debt primarily reflected the generation
of positive operating free cash flow in FY2024, partly offset by
£28 million of share repurchases as at the end of February
2024.
Capital allocation framework and
share buyback programme
This year, we communicated our
capital allocation framework, which is as follows:
· Trainline's primary use of capital is to invest behind its
strategic priorities - including enhancing the customer experience
and building demand for rail travel - to drive organic growth and
deliver attractive and sustainable rates of return.
· The
Group may supplement that with inorganic investment, should it help
accelerate delivery of the Group's strategic growth
priorities.
· Trainline will also continue to manage debt leverage,
including retaining a prudent and appropriate level of liquidity
headroom should unforeseen circumstances arise.
· Any
surplus capital thereafter may be returned to shareholders,
including through the repurchase of Trainline's shares.
At the same time as communicating
the above framework, Trainline announced the launch of a share
buyback programme of up to £50 million, to be conducted over the
subsequent 12 months. As at the end of April 2024, the
Company had bought back £38 million of its own shares under the
programme.
Trainline has today announced a
new share buyback programme of up to £75 million. The new programme
will commence upon completion of the existing programme and is to
run over the subsequent 12 month period.
Trainline attained shareholder
approval during FY2024 for a capital reduction of the Company's
share premium account. This provided the Company with additional
distributable reserves to make further distributions, as and when
considered appropriate by the Board.
Outlook and market
guidance
We continue to enjoy significant growth
opportunities, including increasing eticket penetration in the UK
and new entrant carrier competition increasing the need for a
market aggregator for European rail.
Following a positive start to the year, in FY2025
Trainline expects to generate:
· Net ticket
sales YoY growth of between +8% and +12%
· Revenue YoY growth of
between +7% and +11%
· Adjusted EBITDA of
between 2.4% and 2.5% of net ticket sales
Our growth expectations are despite
headwinds from ongoing industrial action in the UK, as well as
Transport for London (TFL's) planned expansion of their contactless
travel zone to a further 53 stations in FY2025.
FY2024 PROGRESS AGAINST OUR
STRATEGIC PRIORITIES
To achieve our mission to make rail and coach
travel easier for customers in all our markets, we invest behind
four strategic priorities for long-term growth: enhancing the
customer experience, building demand, increasing customer lifetime
value, and growing Trainline Solutions. In FY2024, we
continued to make good progress against these long-term strategic
growth priorities.
UK Consumer
Enhancing the customer
experience
The UK rail market recovered to an estimated
£10.6 billion in passenger revenues in FY2024, up from £8.9bn in
the prior year. We aim to continue growing the market by unlocking
value and removing friction for customers through our 4.9* rated
mobile App12. We have launched an improved price
prediction feature, leveraging predictive analytics to communicate
to customers when advance fare rises will happen and how many
tickets are likely to be left at the prevailing price. We improved
our Ticket Alerts functionality, which flags to customers when
tickets become available for their chosen route at the cheapest
price. Our SplitSave proposition is now better than ever and the
number of routes where SplitSave is available is now above 80%,
with an advertised average saving of £13 per trip. Finally,
with growing carrier competition to incumbent carriers from open
access operators like Lumo, we have enhanced our fare presentation
so customers can easily compare times and fares.
Our investment in customer experience is
helping shift more people to digital channels. Industry sales
through online channels grew to 55%, up from 53% in the prior year.
Within that, industry eticket sales increased to 47% in FY2024, up
from 43% in FY20235.
However, there remains considerable headroom for growth.
Tickets bought offline represented around £3 billion of total
ticket sales in FY2024, most of which are estimated to be
short-distance and commute journeys. Trainline has therefore
continued to prime its mobile App to better serve those customers,
including the recent launch of Best Price Guarantee, refunding the
difference if a customer finds the same on-the-day ticket cheaper
elsewhere. We also continued to scale digital season tickets, with
our digital season customers exhibiting more than double the
retention levels of our overall customer base in the UK. This has
helped Trainline to grow its share of commuter segment to 23%, from
10% pre-COVID.
Building demand
We continued to build demand for our products and
services, helping drive up active customers by 13% YoY. Under
our "great journeys start with Trainline" brand campaign, we
continue to tell customers how they can save 35% on average when
booking a journey through Trainline. This included a new
"Spliticus" campaign, highlighting to customers how they can save
£13 per trip through SplitSave. The messaging also highlighted the
convenience of digital ticketing, including digital season tickets,
focusing on regions where digital season tickets have been
enabled.
Separately, our viral "Trainline Wrapped" campaign
gave every customer a personalised view of their sustainability
journey, along with a clear and measurable understanding of the
impact of their travel choices on the environment. This served to
highlight the environmental benefits of rail travel, reflecting our
core purpose to encourage greener travel choices.
Increasing customer lifetime
value
As we continue growing our
customer base, we are also increasing the frequency with which
those customers transact with us. Monthly active customer
transaction frequency has increased to 2.8x a month, from 2.4x in
FY2022 and 2.6x in FY2023. This reflects our focus on commute and
short-distance travel, with on-the-day bookings now making up 66%
of all of UK Consumer's transactions (58% in FY2022; 62% in
FY2023). In addition, our 4.9*
rated Mobile App12 now
represents 91% of our overall transactions in the UK, with new App
customers transacting c.1.5 times more often than Web
customers.
Having significantly scaled net ticket sales
over the past few years, we are nurturing ancillary revenue streams
to drive faster revenue growth. We are leveraging partnerships with
the likes of Booking.com (hotels), Just Park (parking), and Karhoo
(taxis). In addition, we launched a new Flexcover insurance product
that allows customers to cancel plans for any reason and get fully
refunded. Finally, we are beginning to enhance native advert
placements within our sales channels to optimise advertising
revenues.
Growing Trainline
Solutions
We have taken further steps to support our
travel partners, leveraging the strength of our
platform.
For B2B travel, we recently integrated our
business booking tool within the Consumer App, which will allow
customers to book business travel in the same seamless way they
already do for leisure and commuter travel. The integrated tool
allows customers to easily switch between their personal and
business accounts, while keeping their bookings
separate.
We are actively engaging in several new tender
processes from carriers for online retailing solutions. This
follows the UK Government's cancellation of plans in December 2023
to create its own centralised retail app and website, originally
intended to replace the rail carriers' online retailing channels.
In addition, we recently added more customer experience features
for white label carrier partners, including push notifications and
bike reservations.
Within Platform One, we are harnessing
advanced machine learning within the platform to deliver
data-driven features and enhanced personalisation. This year, we
set up an internal AI Labs team to develop our own proprietary AI
Models. Building on Trainline's unique data opportunity, the aim is
to use generative AI to solve more complex problems, in turn
creating smarter and more personalised experiences across the whole
user journey. We are taking a privacy-first approach, experimenting
with in-production large language models (LLMs) within our own
domain, rather than feeding our proprietary data into external
LLMs.
International Consumer
The c.€55 billion UK and European rail market
provides significant headroom for Trainline's future growth. While
we operate across more than 40 countries (including the UK),
we have refined our international investment plan to
accelerate growth in the rail markets where we have the strongest
customer proposition today:
· Domestic markets
with more widespread carrier competition, primarily Spain and
Italy. These rail markets together are worth c.€6 billion. Carrier
competition significantly increases value and choice for customers;
by positioning Trainline as the aggregator of choice, we are well
placed to scale our international business over the medium
term.
· Foreign travel,
representing global customers from the US, UK and the rest of the
world, as well as some intra-EU cross border travel. It is worth
over €4 billion, and is typically higher margin business for
Trainline, generating a double-digit percentage revenue
take-rate (revenue generated as a percentage of net
ticket sales).
We are making strong progress in our priority
markets, which now make up three of our top 10 routes globally
(Barcelona-Madrid, London-Paris, Rome-Milan). This reflects the
strong progress we are making in positioning ourselves as the
aggregator of choice.
Enhancing the customer
experience
We have continued to launch new features to
remove friction and unlock value for customers when booking rail
travel. We recently overhauled our fare presentation within our
mobile App, providing clear and simple information about each
carrier and carriage class respectively. This helps customers
compare choices, particularly on routes with more than one carrier.
We also launched best price guarantee in Italy, Spain and France,
where we promise to refund the difference if a customer finds the
same ticket cheaper elsewhere. In Italy, we now find and
automatically apply carrier promo codes for customers . We
have also made it easier for foreign travel customers to upgrade to
first class within the booking flow.
Building demand
We made strong headway growing consumer
awareness in Italy and Spain, with consumer awareness more than
doubling since we launched brand campaigns in both respective
markets6. In Italy, prompted brand awareness has
increased from 19% to 40% in 24 months, following the launch of our
first nationwide brand campaign in spring 2022. In Spain, prompted
brand awareness has increased from 8% to 21% in 18 months,
following the launch of our Spanish brand campaign in summer 2022.
This has helped drive strong growth in app downloads in Europe, and
in Italy we became the second most downloaded travel app after
Booking.com.
Web sales growth slowed during the year, with
the impact most pronounced in foreign travel. There was more
competition from carriers within keyword auctions following a
relatively benign period last year. In addition, there were
changes in the presentation of search engine results, with Google
now including trains within its travel module, as discussed at our
Half Year results. We have somewhat mitigated this impact over the
last six months by scaling our presence in the travel module to
more than 3,000 routes across our core markets in
Europe.
Increasing customer lifetime
value
As we strengthen our position as aggregator of
choice in markets with carrier competition, we are deepening our
relationship with our customers. A key example has been our success
in encouraging more customers to download and use our mobile App,
given its superior user experience and transaction frequency
benefits. 62% of all customer transactions within International
Consumer came through our App in FY2024.
This is particularly the case in Italy. Our
App share of overall transactions increased to 73%, up from 62% a
year ago and 51% two years ago. Given App customers transact almost
three times more often than Web customers in Italy, this has helped
increase overall transaction frequency. On average, our
monthly active customers now transact 2.2 times per month (FY2023
2.1x, FY2022: 1.9x).
While positioning ourselves as the aggregator,
we are placing greater focus on monetisation. This includes growing
foreign travel sales, which generate a double-digit revenue take
rate, and introducing ancillary products into the booking flow,
including hotels in partnership with Booking.com. This has helped
grow the underlying revenue we generate from ticket sales from 6.4%
to 6.6%.
Spain case study
We increasingly believe we occupy a
unique position that we can leverage to become the aggregator of
choice in Europe, given our:
· Clear remit to aggregate carriers across multiple
geographies
· Scale and expertise to invest in new markets
· Scalable tech platform optimised for rail travel
Spain has quickly become the most
competitive high speed carrier market in Europe. Given the
transformation of its rail market, it serves as a useful template
for what increased carrier competition might look like in other
European markets, such as Italy and France. Honing our aggregation playbook in Spain is giving us a head
start for when other rail markets liberalise.
Since 2021, Spain has gone from
having one long-distance carrier, the national incumbent Renfe, to
four carrier brands nationwide. Carrier competition in Spain is
benefiting customers, who now enjoy significantly more choice and
lower prices. Renfe Avlo and Iryo both operate on six high speed
routes, while Ouigo operates on three13. On the three
high speed routes where all four carrier brands compete
(Madrid-Barcelona, Madrid-Valencia, Madrid-Alicante), average fares
have reduced by 50% vs 2019, precipitating a 70% increase in
passenger numbers.
However, greater market
fragmentation also means greater complexity for customers,
particularly as the different carriers do not provide competitor
inventory on their respective retailing channels. This therefore
strengthens the need for a market aggregator, where customers can
book the best value and most convenient rail ticket for their
specific journey.
Trainline has quickly positioned
itself as the market aggregator for high-speed rail, both in terms
of marketing - more than doubling brand awareness in 18
months6 - and product innovation, deeply integrating
with the different carrier APIs while localising features within
the App for the Spanish market. In addition, we have launched
TopCombo, a new product proposition that allows customers to
seamlessly stitch together different carriers for multi-leg and
return journeys. This helps customers optimise the booking for
price and convenience, while also increasing the opportunity for
new entrant carriers to grow market share.
By positioning ourselves as the
market aggregator, Trainline has grown significantly on liberalised
routes, taking material share. By the end of 2023, Trainline's
share of the top five high speed routes had increased to 8-13%,
compared to c1% share across Spain in 2019.
Given our focus on aggregated
routes, Spanish domestic net ticket sales have doubled for two
consecutive years7. It has also driven a more engaged
customer base, with repeat customers making up 44% of domestic
sales, up from 34% last year.
Today, Spain is the only market in
Europe where four carrier brands compete on the same long-distance
routes. However, that is set to change, first in Italy and
thereafter in France.
Two long-distance carriers currently
compete in the c.€4 billion domestic Italian market. However, this
is due to increase to four over the next couple of years. New
entrant carrier Longitude Arenaways is set to arrive in late-2025,
with plans already submitted to run one international and six
domestic intercity routes. SNCF's low cost carrier brand Ouigo is
set to follow from 2026.
In the c.€9 billion domestic French
market, carrier competition is expected to build over time.
Today carrier competition is limited, but on routes where there are
new entrants, we see strong demand for market aggregation.
Paris-Lyon is the most notable example, where SNCF, Ouigo and
Trenitalia have competed since late 2021. Trainline's net ticket
sales grew 42% this year on the route, similar to the combined
growth rate of Spain and Italy. Renfe are due to launch a service
between Paris-Lyon in H2 FY2025, increasing the number of carrier
brands on that route to four.
Carrier competition is set to arrive
on London-Paris, potentially as early as 2025, with Evolyn
announcing plans to launch a competitor service to Eurostar.
Similarly, Virgin Trains and other operators are reported to be
planning to launch their own service too. Thereafter, new entrant
carriers Le Train and Kevin Speed are planning to launch services
across France from 2026 and 2028 respectively.
As has been the case in Spain,
increasing the number of carrier brands running services across
Italy and France should significantly increase the competitive
dynamic of their rail markets, in turn catalysing the need for a
market aggregator like Trainline.
ENVIRONMENTAL
SUSTAINABILITY
Our purpose at Trainline is to
empower a greener way to travel. Transport is the largest GHG
emitting sector in the UK, with the energy sector having reduced
its emissions over recent years. Rail offers travellers a greener
alternative, generating 87% less CO2 emissions per passenger/KM
than flying and 67% less than driving14.
We launched new features on our
Mobile App and on Web to encourage modal shift, including "Your
sustainability story", which informs and educates customers on
their emission savings vs other forms of transport. At the end of
the year, "Your Year on Trains" gave every customer a personalised
view of their sustainability journey, along with a clear and
measurable understanding of the impact of their travel choices on
the environment.
Last year, we launched the 'I Came
By Train' campaign, which aims to grow the public's awareness of
the relative benefits of train travel and inspire pride in those
that take positive action. Having gained strong early momentum with
industry and government stakeholders, this year we followed up with
a new consumer campaign that celebrates all the heroes who travel
by train. The campaign also analysed 250,000 UK rail routes
to create the 'Reasonable by Rail' database, which shows when
trains beat planes or cars for speed and savings. This data has
been made available to government and industry stakeholders and is
also used to power Trainline's Super Routes feature.
Trainline became one of the first
100 UK-based companies to have our net zero targets officially
verified by the Science Based Targets initiative (SBTi), the global
body enabling businesses to set ambitious emissions reduction
targets in line with climate science. The Company's verified
target commitments can be found on Trainline's Group
website.
LEGAL, REGULATORY & POLICY
DEVELOPMENTS
We have seen encouraging legal, regulatory and
policy developments in the UK and Europe
recently.
In December 2023, the UK
Government Department for Transport (DfT) withdrew proposals to
create a new Great British Railways ticket retailing website and
app. The proposals were originally outlined by the DfT in May
2021, as part of the Williams-Shapps Plan for UK Rail white paper.
The UK Government's broader plans for rail set out in the draft
Rail Reform Bill of February 2024 are undergoing parliamentary
scrutiny, however they are unlikely to become legislation before
the upcoming General Election. In April 2024, the Labour
party launched their rail policy at an event held at Trainline's
London offices. Labour outlined plans to bring
private rail operators back under public ownership over
time and create a centralised body, Great British Railways.
However, they have confirmed to Trainline that
they have no plans to revive the current Government's
previous proposal for a national retailing website
and app. They also announced plans to accelerate the roll out
of key customer innovations, including automated Delay Repay and
digital season tickets.
In January 2024, the European
Commission formally accepted commitments from Renfe to enhance
competition in online ticket sales by agreeing to provide content,
feature and fare parity to third party retailers with its own
online retail channels. The Commitments follow a decision by the
European Commission last year to launch a formal investigation into
whether the carrier had abused its market dominant
position.
In March 2024, the European
Commission opened proceedings against Alphabet to assess compliance
under the new Digital Markets Act, specifically investigating
whether its display of Google services within search results may
lead to self-preferencing. The Commission stated it is
concerned that Alphabet's current compliance measures may not
ensure that third-party services featuring on Google's search
results page are treated in a fair and non-discriminatory manner in
comparison with Google's own services. This is an important step to
ensure accountability for large companies like Google and secure
long term market stability and contestability across
Europe.
Footnotes:
9. Strike
days include planned strike days that were cancelled only shortly
beforehand, therefore still resulted in significant industry
disruption.
10. Gross ticket sales
are gross value of ticket sales to customers. Please refer to
the Alternative Performance Measures note for definition of net
ticket sales.
11. In September 2022,
Trainline announced revisions to its segmentation reporting. This
included the introduction of an internal fee per transaction
payable by UK Consumer and International Consumer businesses to
Trainline Solutions in order to access Platform One. The
transaction fee is reflected as contra revenue to UK Consumer and
International Consumer within segmental reporting. This charge is
eliminated on consolidation of the Group's results and does not
form part of total Group revenues.
12. iOS rating as at
22/04/24.
13. Carriers that have
launched services on Spanish high-speed rail routes as at
29th February 2024.
14. Emissions per
passenger/km as per
https://www.gov.uk/government/publications/greenhouse-gas-reporting-conversion-factors-2021
Consolidated income
statement
For the year ended 29 February
2024
|
Notes
|
2024
|
2023
|
|
|
|
£'000
|
|
£'000
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
Net ticket
sales1
|
|
|
5,295,072
|
|
4,323,298
|
Revenue
|
|
|
396,718
|
|
327,147
|
Cost of sales
|
|
|
(91,433)
|
|
(74,923)
|
Gross profit
|
|
|
305,285
|
|
252,224
|
|
|
|
|
|
|
Administrative expenses
|
|
|
(249,706)
|
|
(224,585)
|
|
|
|
|
|
|
Adjusted
EBITDA1
|
|
|
122,133
|
|
86,098
|
Depreciation and
amortisation
|
7,8
|
|
(41,662)
|
|
(41,167)
|
Share-based payment
charges
|
|
|
(22,629)
|
|
(17,292)
|
Exceptional items
|
3
|
|
(2,263)
|
|
-
|
|
|
|
|
|
|
Operating profit
|
|
|
55,579
|
|
27,639
|
|
|
|
|
|
|
Finance income
|
4
|
|
2,745
|
|
4,721
|
Finance costs
|
4
|
|
(10,209)
|
|
(10,270)
|
Net finance costs
|
4
|
|
(7,464)
|
|
(5,549)
|
|
|
|
|
|
|
Profit before tax
|
|
|
48,115
|
|
22,090
|
|
|
|
|
|
|
Income tax expense
|
5
|
|
(14,129)
|
|
(873)
|
|
|
|
|
|
|
Profit after tax
|
|
|
33,986
|
|
21,217
|
|
|
|
|
|
|
Earnings per share
(pence)
|
|
|
|
|
|
Basic earnings per ordinary
share
|
6
|
|
7.28p
|
|
4.53p
|
Diluted earnings per ordinary
share
|
6
|
|
7.09p
|
|
4.48p
|
1 Non-GAAP measure -
see alternative performance measures section on page 45.
Consolidated statement of
comprehensive income
For the year ended 29 February
2024
|
|
|
|
|
|
Notes
|
2024
|
2023
|
|
|
|
£'000
|
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit after tax
|
|
|
33,986
|
|
21,217
|
|
|
|
|
|
|
Items that may be reclassified to
the income statement:
|
|
|
|
|
|
|
|
|
|
|
|
Re-measurements of defined benefit
liability
|
|
|
17
|
|
16
|
Foreign exchange
movement
|
|
|
(1,096)
|
|
1,873
|
Other comprehensive (loss)/income,
net of tax
|
|
|
(1,079)
|
|
1,889
|
|
|
|
|
|
|
Total comprehensive
income
|
|
|
32,907
|
|
23,106
|
Consolidated balance
sheet
At 29 February 2024
|
Notes
|
2024
|
2023
|
|
|
|
£'000
|
|
£'000
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Intangible assets
|
7
|
|
70,350
|
|
66,827
|
Goodwill
|
7
|
|
418,527
|
|
420,710
|
Property, plant and
equipment
|
8
|
|
17,948
|
|
21,189
|
Deferred tax asset
|
5
|
|
24,853
|
|
26,950
|
|
|
|
531,678
|
|
535,676
|
Current assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
91,085
|
|
57,337
|
Trade and other
receivables
|
|
|
59,170
|
|
60,158
|
|
|
|
150,255
|
|
117,495
|
Current liabilities
|
|
|
|
|
|
Trade and other
payables
|
|
|
(212,766)
|
|
(200,202)
|
Loan and borrowings
|
9
|
|
(5,833)
|
|
(4,891)
|
Current tax payable
|
5
|
|
(3,201)
|
|
(7,642)
|
|
|
|
(221,800)
|
|
(212,735)
|
|
|
|
|
|
|
Net current liabilities
|
|
|
(71,545)
|
|
(95,240)
|
|
|
|
|
|
|
Total assets less current
liabilities
|
|
|
460,133
|
|
440,436
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
Loan and borrowings
|
9
|
|
(147,280)
|
|
(149,014)
|
Provisions
|
|
|
(837)
|
|
(778)
|
|
|
|
(148,117)
|
|
(149,792)
|
|
|
|
|
|
|
Net assets
|
|
|
312,016
|
|
290,644
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Share capital
|
10
|
|
4,710
|
|
4,807
|
Share premium
|
10
|
|
-
|
|
1,198,703
|
Foreign exchange
reserve
|
10
|
|
2,232
|
|
3,328
|
Other reserves
|
10
|
|
(1,112,724)
|
|
(1,128,978)
|
Retained earnings
|
10
|
|
1,417,798
|
|
212,784
|
Total equity
|
|
|
312,016
|
|
290,644
|
Consolidated statement of changes in
equity
For the year ended 29 February
2024
|
Notes
|
Share
capital
|
Share
premium
|
Other
reserves
|
Foreign
exchange reserve
|
Retained
earnings
|
Total
equity
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
Balance as at 1 March
2023
|
|
4,807
|
1,198,703
|
(1,128,978)
|
3,328
|
212,784
|
290,644
|
Profit after tax
|
|
-
|
-
|
-
|
-
|
33,986
|
33,986
|
Other comprehensive
(loss)/income
|
|
-
|
-
|
-
|
(1,096)
|
17
|
(1,079)
|
Acquisition of Treasury
Shares
|
|
-
|
-
|
(7,500)
|
-
|
-
|
(7,500)
|
Share-based payment
charges1
|
|
-
|
-
|
23,823
|
-
|
-
|
23,823
|
Purchase of own shares for
cancellation
|
10
|
(97)
|
-
|
97
|
-
|
(27,858)
|
(27,858)
|
Capital Reduction
|
10
|
-
|
(1,198,703)
|
-
|
-
|
1,198,703
|
-
|
Transfer between
reserves1
|
10
|
-
|
-
|
(166)
|
-
|
166
|
-
|
Balance as at 29 February
2024
|
|
4,710
|
-
|
(1,112,724)
|
2,232
|
1,417,798
|
312,016
|
|
|
For the year ended 28 February
2023
|
Notes
|
Share
capital
|
Share
premium
|
Other
reserves
|
Foreign
exchange reserve
|
Retained
earnings
|
Total
equity
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
Balance as at 1 March
2022
|
|
4,807
|
1,198,703
|
(1,136,661)
|
1,455
|
191,189
|
259,493
|
Profit after tax
|
|
-
|
-
|
-
|
-
|
21,217
|
21,217
|
Other comprehensive
income
|
|
-
|
-
|
-
|
1,873
|
16
|
1,889
|
Acquisition of Treasury
Shares
|
|
-
|
-
|
(7,947)
|
-
|
-
|
(7,947)
|
Share-based payment
charges1
|
|
-
|
-
|
15,992
|
-
|
-
|
15,992
|
Transfer between
reserves1
|
10
|
-
|
-
|
(362)
|
-
|
362
|
-
|
Balance as at 28 February
2023
|
|
4,807
|
1,198,703
|
(1,128,978)
|
3,328
|
212,784
|
290,644
|
|
|
1 Share-based payment
charges noted here are net of tax, share issues and N.I charge.
Transfer between reserves relates to the difference between the
share price at grant date of the exercised shares and the actual
cost of the treasury shares purchased to fulfil the share-based
payment.
Consolidated statement of cash
flow
For the year ended 29 February
2024
|
Notes
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
Cash flows from operating
activities
|
|
|
|
|
|
Profit before tax
|
|
|
48,115
|
|
22,090
|
Adjustments for:
|
|
|
|
|
|
Depreciation and
amortisation
|
7, 8
|
|
41,662
|
|
41,167
|
Net finance
costs1
|
4
|
|
7,464
|
|
5,549
|
Share-based payment
charges
|
|
|
22,629
|
|
17,292
|
|
|
|
119,870
|
|
86,098
|
Changes in working
capital:
|
|
|
|
|
|
Trade and other
receivables
|
|
|
970
|
|
(13,986)
|
Trade and other
payables
|
|
|
8,945
|
|
(29,097)
|
Cash generated from operating
activities
|
|
|
129,785
|
|
43,015
|
Taxes paid
|
|
|
(10,677)
|
|
(4,135)
|
Interest
received2
|
|
|
2,621
|
|
726
|
Net cash generated from operating
activities
|
|
|
121,729
|
|
39,606
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
Payments for intangible
assets
|
|
|
(37,030)
|
|
(32,811)
|
Payments for acquisition of
subsidiary entities, net of cash acquired
|
|
|
(866)
|
|
-
|
Payments for property, plant and
equipment
|
|
|
(2,853)
|
|
(2,408)
|
Net cash flow from investing
activities
|
|
|
(40,749)
|
|
(35,219)
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
Purchase of treasury
shares
|
|
|
(7,500)
|
|
(7,947)
|
Purchase of own shares for
cancellation
|
|
|
(27,858)
|
|
-
|
Proceeds from revolving credit
facility
|
|
|
90,000
|
|
105,000
|
Repayment of revolving credit
facility and other borrowings
|
|
(90,000)
|
|
(70,000)
|
Issue costs and fees
|
|
|
(58)
|
|
(3,251)
|
Buyback of convertible
bonds
|
|
|
-
|
|
(28,189)
|
Payments of lease
liabilities
|
|
|
(4,013)
|
|
(4,501)
|
Payment of interest on lease
liabilities
|
|
|
(215)
|
|
(440)
|
Interest paid
|
|
|
(5,925)
|
|
(6,410)
|
Net cash flow from financing
activities
|
|
|
(45,569)
|
|
(15,738)
|
|
|
|
|
|
|
Net increase/(decrease) in cash
and cash equivalents
|
|
|
35,411
|
|
(11,351)
|
Cash and cash equivalents at
beginning of the year
|
|
|
57,337
|
|
68,496
|
Effect of exchange rate changes on
cash
|
|
|
(1,663)
|
|
192
|
Closing cash and cash
equivalents
|
|
|
91,085
|
|
57,337
|
|
|
|
|
|
|
|
1Including gain on
convertible bond buyback as disclosed in Notes 4 and 9 for
FY2023.
2In the comparative
period presented in the statement of cash flows we have
reclassified the interest received amounts from Financing to
Operating which more appropriately reflects their nature. The
amounts were immaterial in all periods presented.
Notes
(Forming part of the Financial Statements)
1. Significant
accounting policies
a)
General information
Trainline plc (the "Company") and
subsidiaries controlled by the Company (together, the "Group") are
the leading independent rail and coach travel platform selling rail
and coach tickets worldwide. The Company is publicly listed on the
London Stock Exchange ("LSE") and is incorporated and domiciled in
the United Kingdom. The Company's registered address is 120
Holborn, London EC1N 2TD.
The Group Financial Statements for
the year ended 29 February 2024 were approved by the Directors on 3
May 2024.
The Group Financial Statements of
Trainline plc have been prepared in accordance with UK-adopted
International Accounting Standards and with the requirements of the
Companies Act 2006 as applicable to companies reporting under those
standards.
The accounting policies set out in
the sections below have, unless otherwise stated, been applied
consistently to all periods presented within the Financial
Statements and have been applied consistently by all
subsidiaries.
b)
Basis of consolidation
The Group Financial Statements
consolidate those of the Company and its subsidiaries (together
referred to as the "Group").
The Financial Statements presented
herein is for the year from 1 March 2023 to 29 February
2024.
(i) Subsidiaries
Subsidiaries are entities
controlled by the Group. The Group controls an entity when it is
exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through
its power over the entity. The Financial Statements of subsidiaries
are included in the Consolidated Financial Statements from the date
on which control commences until the date on which control ceases.
Control is achieved when the Group (i) has power over the investee;
(ii) is exposed, or has rights to variable returns from its
involvement with the investee; and (iii) has the ability to use its
power to affect the returns.
(ii) Transactions eliminated on
consolidation
Intra-group balances and
transactions, and any unrealised income and expenses arising from
intra-group transactions, are eliminated.
c)
Basis of measurement
The Group and Parent Company
Financial Statements are prepared on the historical cost basis
except for the following:
• Financial
instruments at fair value through the income statement are measured
at fair value.
Notes (continued)
1. Significant
accounting policies (continued)
d)
Functional and presentation currency
The Financial Statements are
presented in pound sterling (£GBP), which is the functional
currency of the Parent Company. All amounts have been rounded to
the nearest thousand, unless otherwise indicated.
e)
Going concern
The Consolidated Financial
Statements have been prepared on a going concern basis, which
assumes that the Group will be able to meet its liabilities as they
fall due over at least the next 12 months from the date of the
approval of these Financial Statements (the 'going concern
assessment period') including consideration of the covenants
associated with the Group's revolving credit facility at the next
covenant test dates on 31 August 2024 and 28 February 2025, being
the two relevant dates in this period.
The UK Corporate Governance Code
requires the Board to assess and report on the prospects of the
Group and whether the business is a going concern. The Directors
have undertaken a rigorous assessment of going concern and
liquidity, taking into account financial forecasts and any key
uncertainties and sensitivities.
Positive adjusted EBITDA of £122.1
million was earned in the period (FY2023: £86.1 million) and net
debt at 29 February 2024 was £63.9 million (FY2023: £100.4 million)
resulting in a reduction in Net debt/adjusted EBITDA leverage ratio
from 1.17 at 28 February 2023 to 0.52 at 29 February 2024. As at 29
February 2024 the Group was in a net current liability position of
£71.5 million driven by the negative working capital cycle whereby
ticket sales amounts are received before amounts due are paid by
carriers (FY2023: £95.2 million net current liability position).
The Group has in place bank guarantees of £183.4 million (FY2023:
£72.2 million) that can be utilised to settle trade creditor
balances. Bank guarantees are issued by lenders under the Group's
revolving credit facility and therefore reduce the Group's
remaining available facility. Despite the net current liability
position, the Group has access to £81.6 million additional funds
under its revolving credit facility (FY2023: £192.8 million). As
such the Group has sufficient liquidity to cover the net current
liability position. The existing revolving credit facility has an
initial maturity date of November 2025 however the facility offers
optionality of two 1-year extensions after the initial maturity
date.
The Directors performed a detailed
going concern review using Board approved forecasts (the 'base
case') as well as considering two severe but plausible downside
scenarios in isolation, without any mitigations, and their
potential impact on the Group's forecast. The severe but plausible
downside scenarios modelled were: (1) a 15% reduction in forecast
Group adjusted EBITDA caused by a circa 9% reduction in UK revenue,
or a circa 12% increase in Group marketing and other administrative
expenses; and (2) a 1% increase above the forecast SONIA interest
rate benchmark.
In the base case and both severe
but plausible downside scenarios the Group is able to continue in
operation and meet its liabilities as they fall due, with
significant excess liquidity. This includes complying with the net
debt to adjusted EBITDA and the interest coverage covenant
requirements at the 31 August 2024 and 28 February 2025 test
dates.
Following the assessment described
above, the Directors are confident that the Group has adequate
resources to continue to meet its liabilities as they fall due and
to remain in operation for the going concern assessment period. The
Board has therefore continued to adopt the going concern basis in
preparing the Consolidated Financial Statements.
Notes (continued)
1. Significant
accounting policies (continued)
f)
Cost of sales
Cost of sales include costs in
relation to the provision of rail tickets, industry system costs,
ancillary services, settlement and fulfilment costs and are
recognised as incurred (at the point of sale).
g)
Foreign currency transactions
Transactions in foreign currencies
are translated to the respective functional currencies of Group
companies at exchange rates applicable on the dates of the
transactions.
Monetary assets and liabilities
denominated in foreign currencies are translated to the functional
currency exchange rate at the reporting date. Non-monetary assets
and liabilities that are measured at fair value in a foreign
currency are translated to the functional currency at the exchange
rate when the fair value was determined. Foreign currency
differences arising on translation are generally recognised in the
income statement. Non-monetary items that are measured based on
historical cost in foreign currency are not
re-translated.
For the purpose of presenting the
Consolidated Financial Statements, the assets and liabilities of
entities with a functional currency other than sterling are
expressed in sterling using exchange rates prevailing at the
reporting period date. Income and expense items and cash flows are
translated at the average exchange rates for each month and
exchange differences arising are recognised directly in other
comprehensive income.
h)
Use of judgements and estimates
In preparing these Financial
Statements, management has made judgements, estimates and
assumptions that affect the application of the accounting policies
and the reported amounts of assets, liabilities, income and
expenses.
Estimates and underlying
assumptions are reviewed on an ongoing basis. Actual results may
differ from these estimates. Revision to estimates are recognised
prospectively.
Notes (continued)
1. Significant
accounting policies (continued)
Key Source of Estimation
Uncertainty
The following estimate is deemed
significant as it has been identified by Management as one which is
subject to a high degree of estimation uncertainty:
· Note
7 - Goodwill impairment test: key assumptions underlying
recoverable amounts
The Group tests goodwill for
impairment annually by comparing the carrying amount against the
recoverable amount. The recoverable amount is the higher of the
fair value less costs of disposal and value in use. There is
inherent estimation uncertainty in estimating the future cash flows
and the time period over which they will occur. There is also
estimation uncertainty in arriving at an appropriate discount rate
to apply to the cash flows as well as an appropriate terminal
growth rate. Each of these assumptions have an impact on the
overall value of cash flows expected and therefore the headroom
between the cash flows and carrying values of the cash generating
units. An unfavourable change in any of these
assumptions could result in a significant change in
headroom. As such each of these constitute estimates in the assessment
of the recoverable amount of goodwill in respect of both the UK
consumer and International consumer cash-generating units ("CGUs").
Details of the impact of reasonably possible changes to the future
cash flows and timing of these are evaluated in Note 7 to the
Financial Statements.
Critical Accounting
Judgements
Critical accounting judgements are
those that the Group has made in the process of applying the
Group's accounting policies and that have the most significant
effect on the amounts recognised in the Financial
Statements:
· Note
7 - Capitalisation of internal software development
costs
The Group capitalises internal
costs directly attributable to the development of intangible
assets. We consider this a critical judgement given the application
of IAS 38 involves the assessment of several different criteria
that can be subjective and/or complex in determining whether
the costs meet the threshold for capitalisation. During the year
the Group has capitalised internal development costs amounting to
£37.5 million (FY2023: £32.2 million). While the Group makes
judgements in determining the basis for recognition of these
internally developed assets, these judgements are formed in the
context of robust systems and controls.
i) New
standards and interpretations adopted
A number of new standards are
effective from 1 March 2023, but they do not have a material effect
on the Group's Financial Statements.
The following adopted IFRSs have
been issued but have not been applied by the Group in these
consolidated Financial Statements. Their adoption is not
expected to have material effect on the Financial Statements unless
otherwise indicated:
· Definition of Accounting Estimates - Amendments to IAS 8
(effective date 1 January 2023);
Notes (continued)
1. Significant
accounting policies (continued)
· Disclosure of Accounting Policies - Amendments to IAS 1 and
IFRS Practice Statement 2 (effective date 1 January
2023);
· Deferred tax related to assets and liabilities arising from a
single transaction - Amendments to IAS 12 (effective date 1 January
2023);
· International Tax Reform - Pillar Two Model Rules -
Amendments to IAS 12 (effective date 1 January 2023);
· IFRS
17 Insurance Contracts (effective date 1 January 2023).
2.
Operating segments
In accordance with IFRS 8 the
Group determines and presents its operating segments based on
internal information that is provided to the Board, being the
Group's Chief Operating Decision Maker ("CODM").
The Group's three operating and
reporting segments are summarised as follows:
· UK
Consumer - Travel apps and websites for individual travellers for
journeys within the UK
· International Consumer - Travel apps and websites for
individual travellers for journeys outside the UK including
journeys between the UK and outside the UK, and
· Trainline Solutions1
- Travel portal platforms for Trainline's own
branded business units, in addition to external corporates, travel
management companies and white label ecommerce platforms for Train
Operating Companies. This segment operates Platform One Solutions
and recharges a cost to the UK and International Consumer
segments.
1 The Group's
technology platform, UK Trainline Solutions and International
Trainline Solutions are collectively referred to as 'Trainline
Solutions'
No single customer accounted for
10% or more of the Group's sales. In general, the transfer pricing
policy implemented by the Group is market-based.
The CODM reviews discrete
information by segment disaggregated to adjusted EBITDA to better
assess performance and to assist in resource-allocation decisions.
The CODM monitors:
· the
three operating segments results at the level of net ticket sales,
revenue, gross profit and adjusted EBITDA as shown in this
disclosure; and
· no
results at a profit before/after tax level or in relation to the
statement of financial position are reported to the CODM at a lower
level than the consolidated Group.
Notes (continued)
2. Operating
segments (continued)
Segmental analysis for the year
ended 29 February 2024:
|
UK
Consumer
£'000
|
International Consumer
£'000
|
Trainline Solutions
£'000
|
Total
Group
£'000
|
Net ticket sales
|
3,469,170
|
1,040,500
|
785,402
|
5,295,072
|
Revenue
|
208,802
|
53,156
|
134,760
|
396,718
|
Cost of sales
|
(63,472)
|
(17,364)
|
(10,597)
|
(91,433)
|
Gross profit
|
145,330
|
35,792
|
124,163
|
305,285
|
Marketing costs
|
(26,237)
|
(40,574)
|
(621)
|
(67,432)
|
Other administrative
expenses
|
(33,477)
|
(11,901)
|
(70,342)
|
(115,720)
|
Adjusted EBITDA
|
85,616
|
(16,683)
|
53,200
|
122,133
|
Depreciation and
amortisation
|
|
|
(41,662)
|
Exceptional Items
|
|
|
(2,263)
|
Share-based payment
charges
|
|
|
(22,629)
|
|
|
|
|
|
Operating profit
|
|
|
|
55,579
|
Net finance costs
|
|
|
|
(7,464)
|
Profit before tax
|
|
|
|
48,115
|
Income tax expense
|
|
|
|
(14,129)
|
Profit after tax
|
|
|
|
33,986
|
Notes (continued)
2. Operating segments
(continued)
Segmental analysis for the year
ended 28 February 2023:
|
UK
Consumer
£'000
|
International
Consumer
£'000
|
Trainline
Solutions
£'000
|
Total
Group
£'000
|
Net ticket sales
|
2,811,299
|
914,506
|
597,493
|
4,323,298
|
Revenue
|
172,066
|
45,387
|
109,694
|
327,147
|
|
|
|
|
|
Cost of sales
|
(50,211)
|
(15,318)
|
(9,394)
|
(74,923)
|
Gross profit
|
121,855
|
30,069
|
100,300
|
252,224
|
Marketing costs
|
(21,871)
|
(42,517)
|
(459)
|
(64,847)
|
Other administrative
expenses
|
(28,729)
|
(9,415)
|
(63,135)
|
(101,279)
|
Adjusted EBITDA
|
71,255
|
(21,863)
|
36,706
|
86,098
|
Depreciation and
amortisation
|
|
|
(41,167)
|
Share-based payment
charges
|
|
|
(17,292)
|
|
|
|
|
|
Operating profit
|
|
|
|
27,639
|
Net finance costs
|
|
|
|
(5,549)
|
Profit before tax
|
|
|
|
22,090
|
Income tax expense
|
|
|
|
(873)
|
Profit after tax
|
|
|
|
21,217
|
3.
Exceptional Items
Exceptional items are costs or
credits that, by virtue of their nature and incidence, have been
disclosed separately in order to improve a reader's understanding
of the Financial Statements. Exceptional items are one-off in
nature or are not considered to be part of the Group's underlying
trading performance.
|
2024
|
2023
|
|
£'000
|
|
£'000
|
Restructuring Costs
|
|
2,263
|
|
-
|
Exceptional items
|
|
2,263
|
|
-
|
|
|
|
|
|
|
Restructuring Costs
Restructuring costs related to
projects being undertaken to improve operating efficiency. The
projects were completed by the end of FY2024. These costs relate to
consultancy fees and people costs in relation to the project and
are non-recurring and incremental in nature.
Notes (continued)
4. Net
finance costs
Net finance costs comprise bank
interest income and interest expense on borrowings and lease
liabilities, as well as foreign exchange gains/(losses) and
gains/(losses) on the buyback of convertible bonds.
On 26 July 2022, the Group entered
into a £325.0 million revolving credit facility (refer to Note 9
for further disclosure).
Accounting policy
Interest income and expense is
recognised as it accrues in the income statement, using the
effective interest method. Foreign exchange gains and losses are
recognised in the income statement in accordance with the policy
for foreign currency transactions set out in Note 1g. Convertible
bonds bought back and cancelled are derecognised from non-current
liabilities as set out in Note 9, with any gains and losses arising
recognised in finance income and finance costs.
|
|
2024
|
2023
|
|
|
|
£'000
|
|
£'000
|
|
|
|
|
|
|
Bank interest income
|
|
|
2,745
|
|
730
|
Gain on convertible bond
buyback
|
|
|
-
|
|
3,987
|
Net foreign exchange
gain
|
|
|
-
|
|
4
|
Finance income
|
|
|
2,745
|
|
4,721
|
|
|
|
|
|
|
Interest and fees on bank
loans
|
|
|
(7,080)
|
|
(8,856)
|
Net foreign exchange
loss
|
|
|
(1,839)
|
|
-
|
Interest and fees on convertible
bonds
|
|
|
(830)
|
|
(886)
|
Interest on lease
liability
|
|
|
(429)
|
|
(528)
|
Other interest
|
|
|
(31)
|
|
-
|
|
|
|
|
|
|
Finance costs
|
|
|
(10,209)
|
|
(10,270)
|
Net finance costs recognised in
the income statement
|
|
|
(7,464)
|
|
(5,549)
|
5.
Taxation
This note analyses the tax expense
for this financial year, which includes both current and deferred
tax. It also details tax accounting policies and presents a
reconciliation between profit before tax in the income statement
multiplied by the rate of corporation tax and the tax credit for
the year.
The deferred tax section provides
information on expected future tax charges and sets out the assets
and liabilities held across the Group.
Accounting
policy
Income tax expense comprises
current and deferred tax. It is recognised in the income statement
except to the extent that it relates to a business combination, or
items recognised directly in equity or in other comprehensive
income.
Notes (continued)
5. Taxation
(continued)
(i) Current
tax
Current tax comprises the expected
tax payable or receivable on the taxable income or loss for the
period and any adjustment to tax payable or receivable in respect
of previous years. It is measured using tax rates enacted or
substantively enacted at the reporting date.
(ii) Deferred
tax
Deferred tax is recognised in
respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes. Deferred tax is not recognised
for:
• temporary differences on the
initial recognition of assets or liabilities in a transaction that
is not a business combination and that affects neither accounting
nor taxable profit or loss;
• temporary differences related to
investments in subsidiaries, to the extent that the Group can
control the timing of the reversal of the temporary differences and
it is probable that they will not reverse in the foreseeable
future; and
• taxable temporary differences
arising on the initial recognition of goodwill.
Deferred tax assets are recognised
for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable
profits will be available against which they can be used before
their expiry. Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
Amounts will be recognised first
to the extent that taxable temporary differences exist and it is
considered probable that they will reverse and give rise to future
taxable profits against which losses or other assets may be
utilised before their expiry. Assets will then be recognised
to the extent that forecasts or other evidence support the
availability of future profits against which assets may be
realised.
Deferred tax is measured at the
tax rates that are expected to be applied to temporary differences
when they reverse, using tax rates enacted or substantively enacted
at the reporting date. The measurement of deferred tax reflects the
tax consequences that would follow from the manner in which the
Group expects, at the reporting date, to recover or settle the
carrying amount of its assets and liabilities. Deferred tax assets
and liabilities are offset only if certain criteria are
met.
The IASB amended the scope of IAS
12 to clarify that the standard applies to income taxes arising
from tax law enacted or substantively enacted to implement the
Pillar Two model rules published by the OECD, including tax law
that implements qualified domestic minimum top up taxes described
in those rules. The Group is not currently in scope of the Pillar
Two model rules. Notably, if the Group were in scope, the Parent
Company would not be expected to be required to pay a top-up tax
where profits from subsidiaries are taxed at an effective tax rate
greater than 15%.
Notes (continued)
5. Taxation
(continued)
Amounts recognised in the income statement
|
2024
|
2023
|
|
£'000
|
£'000
|
Current tax charge
|
|
|
|
|
|
Current year corporation
tax
|
|
|
10,855
|
|
13,843
|
Adjustment in respect of prior
years
|
|
|
(2,749)
|
|
670
|
Total current tax
charge
|
|
|
8,106
|
|
14,513
|
|
|
|
|
|
|
Deferred tax
charge/(credit)
|
|
|
|
|
|
Current year
|
|
|
2,734
|
|
(9,302)
|
Adjustment in respect of prior
years
|
|
|
3,199
|
|
(1,709)
|
Effect of tax rate change on
deferred tax
|
|
|
90
|
|
(2,629)
|
Total deferred tax
charge/(credit)
|
|
|
6,023
|
|
(13,640)
|
Tax charge
|
|
|
14,129
|
|
873
|
UK corporation tax was calculated
at 24.5% (FY2023: 19%) of the taxable profit for the year. Taxation
for territories outside of the UK was calculated at the rates
prevailing in the respective jurisdictions. The total tax charge of
£14.1 million (FY2023: charge of £0.9 million) is made up of a
current corporation tax charge of £8.1 million (FY2023: charge of
£14.5 million) arising in the UK, and a deferred tax charge of £6.0
million (FY2023: credit of £13.6 million).
The Group made claims under the
Super Deduction Capital Allowances regime giving rise to a prior
period current and deferred tax adjustment. Also included in the
adjustments in respect of prior period is a release of deferred tax
asset relating to share based employee incentives that have vested
or did not settle and are no longer carried forward as an
asset.
Included in the current year
deferred tax charge is predominantly the unwind of the deferred tax
credit following the utilisation of UK tax losses.
|
2024
|
2023
|
|
£'000
|
£'000
|
Profit before tax
|
|
48,115
|
|
22,090
|
Tax on profit at standard UK rate
of 24.5% (FY2023:
19%)
|
|
11,788
|
|
4,197
|
Effect of:
|
|
|
|
|
Expenses not deductible/income not
deductible
|
|
527
|
|
(251)
|
Amounts not recognised1
|
|
1,033
|
|
482
|
Effect of changes in tax
rates
|
|
89
|
|
(2,629)
|
Adjustment in respect of prior
years
|
|
449
|
|
(1,039)
|
Share Options
|
|
410
|
|
-
|
Other
|
|
(167)
|
|
113
|
Total tax charge
|
|
14,129
|
|
873
|
Effective tax rate
|
|
29%
|
|
4%
|
1 Primarily relates to
unrecognised losses which are either not expected to be recoverable
or utilised in the short-term and therefore not recognised as
deferred tax assets.
Notes (continued)
5.
Taxation (continued)
The consolidated tax rate for
FY2024 was 24.5% which is in line with the UK corporation tax rate
of 25% (FY2023: 19%).
Tax (creditor)/debtor per the
consolidated balance sheet:
|
2024
|
2023
|
|
£'000
|
£'000
|
Current tax
payable
|
|
|
(3,201)
|
|
(7,642)
|
|
|
|
|
|
|
Deferred tax asset/(liability) as
at 29 February 2024:
|
Acquired
intangible assets
|
Tangible
assets and other
|
|
Share-
based payments
|
|
Losses
carried forward
|
|
Total
|
|
£'000
|
|
£'000
|
|
£'000
|
|
£'000
|
|
£'000
|
|
|
|
|
|
|
|
|
|
|
At 1 March 2023
|
(2,673)
|
|
(3,974)
|
|
5,275
|
|
28,322
|
|
26,950
|
Adjustment in respect of prior
years
|
21
|
|
(3,723)
|
|
503
|
|
-
|
|
(3,199)
|
Adjustments posted through
equity
|
-
|
|
34
|
|
3,892
|
|
-
|
|
3,926
|
Credit/(charge) to consolidated
income statement
|
1,497
|
|
3,752
|
|
2,834
|
|
(10,907)
|
|
(2,824)
|
At 29 February 2024
|
(1,155)
|
|
(3,911)
|
|
12,504
|
|
17,415
|
|
24,853
|
Deferred tax asset/(liability) as
at 28 February 2023:
|
Acquired
intangible assets
|
Tangible
assets and other
|
|
Share-
based payments
|
|
Losses
carried forward
|
|
Total
|
|
£'000
|
|
£'000
|
|
£'000
|
|
£'000
|
|
£'000
|
|
|
|
|
|
|
|
|
|
|
At 1 March 2022
|
(3,655)
|
|
(3,378)
|
|
1,237
|
|
18,361
|
|
12,565
|
Adjustment in respect of prior
years
|
-
|
|
(2,190)
|
|
-
|
|
6,528
|
|
4,338
|
Adjustments posted through
equity
|
-
|
|
(34)
|
|
779
|
|
-
|
|
745
|
Credit/(charge) to consolidated
income statement
|
982
|
|
1,628
|
|
3,259
|
|
3,433
|
|
9,302
|
At 28 February 2023
|
(2,673)
|
|
(3,974)
|
|
5,275
|
|
28,322
|
|
26,950
|
Notes (continued)
6.
Earnings per share
This note sets out the accounting
policy that applies to the calculation of earnings per share, and
how the Group has calculated the shares to be included in basic and
diluted earnings per share ("EPS") calculations.
Accounting policy
The Group calculates earnings per
share in accordance with the requirements of IAS 33 Earnings Per
Share.
Four types of earnings per share
are reported:
(i) Basic
earnings per share
Earnings attributable to ordinary
equity holders of the Group for the period, divided by the weighted
average number of ordinary shares outstanding during the period,
adjusted for treasury shares held.
(ii) Diluted
earnings per share
Earnings attributable to ordinary
equity holders of the Group for the period, divided by the weighted
average number of shares outstanding used in the basic earnings per
share calculation adjusted for the effects of all dilutive
'potential ordinary shares'.
(iii) Adjusted
basic earnings per share
Earnings attributable to ordinary
equity holders of the Group for the period, adjusted to remove the
impact of exceptional items, gain on convertible bonds buyback,
share-based payment charges, amortisation of acquired intangibles
and the tax impact of these items; divided by the weighted average
number of ordinary shares outstanding during the period, adjusted
for treasury shares held.
(iv) Adjusted
diluted earnings per share
Earnings attributable to ordinary
equity holders of the Group for the period, adjusted to remove the
impact of exceptional items, gain on convertible bond buyback,
share-based payment charges, amortisation of intangibles and the
tax impact of these items; divided by the weighted average number
of shares outstanding used in the basic earnings per share
calculation adjusted for the effects of all dilutive 'potential
ordinary shares'.
|
At 29
February 2024
|
|
At 28
February 2023
|
Weighted average number of
ordinary shares:
|
|
|
|
Ordinary shares
|
477,817,773
|
|
480,680,508
|
Treasury shares
|
(10,697,997)
|
|
(11,834,556)
|
Weighted number of ordinary
shares
|
467,119,776
|
|
468,845,952
|
Dilutive impact of share options
outstanding
|
12,034,501
|
|
4,216,223
|
Weighted number of dilutive
shares
|
479,154,277
|
|
473,062,175
|
|
|
|
|
|
|
|
|
|
Notes (continued)
6. Earnings per share
(continued)
|
2024
|
|
2023
|
|
£'000
|
|
£'000
|
Profit after tax
|
33,986
|
|
21,217
|
Earnings attributable to equity
holders
|
33,986
|
|
21,217
|
Adjusted
earnings1
|
57,311
|
|
36,271
|
|
|
|
|
|
2024
|
|
2023
|
|
pence
|
|
pence
|
Profit per share
|
|
|
|
Basic
|
7.28p
|
|
4.53p
|
Diluted
|
7.09p
|
|
4.48p
|
Adjusted profit per
share
|
|
|
|
Basic
|
12.27p
|
|
7.74p
|
Diluted
|
11.96p
|
|
7.67p
|
1 Refer to the
alternative performance measures section for the calculation of
adjusted earnings.
7.
Intangible assets and goodwill
The consolidated balance sheet
contains a significant goodwill carrying value which arose when the
Group acquired subsidiaries and paid a higher amount than the fair
value of the acquired net assets. Goodwill is not amortised but is
subject to an annual impairment review. Impairment reviews of
goodwill make use of estimates.
Other intangible assets
predominantly arise on acquisition of subsidiaries or are
internally developed. These intangible assets are amortised and
tested for impairment when an indicator of impairment
exists.
Accounting policy
(i)
Goodwill
Goodwill is initially measured at
cost, being the excess of the aggregate of the consideration
transferred and the amount recognised for non-controlling
interests, and any previous interest held, over the net
identifiable assets acquired and liabilities assumed. If the fair
value of the net assets acquired is in excess of the aggregate
consideration transferred, the Group reassesses whether it has
correctly identified all of the assets acquired and all of the
liabilities assumed and reviews the procedures used to measure the
amounts to be recognised at the acquisition date. If the
reassessment still results in an excess of the fair value of net
assets acquired over the aggregate consideration transferred, then
the gain is recognised in the income statement. After initial
recognition, goodwill is measured at cost less any accumulated
impairment losses.
Notes (continued)
7. Intangible assets and
goodwill (continued)
For the purpose of impairment
testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Group's cash-generating
units that are expected to benefit from the combination,
irrespective of whether other assets or liabilities of the acquired
business are assigned to those units.
(ii) Software
development costs
Expenditure on research activities
is recognised in the income statement as incurred.
External and internal development
expenditure is capitalised only if the expenditure can be measured
reliably, the product or process is technically, and commercially
feasible, future economic benefits are probable, and the Group
intends to and has sufficient resources to complete development and
to use or sell the asset. Otherwise, it is recognised in the income
statement as incurred. Subsequent to initial recognition,
development expenditure is measured at cost less accumulated
amortisation and any accumulated impairment losses. Internal
development expenditure is managed by the development team and the
amount capitalised is monitored through time charged to
projects.
(iii) Brand and
customer lists
Brand and customer lists that are
acquired by the Group have finite useful lives and are measured at
cost less accumulated amortisation and any accumulated impairment
losses.
(iv) Subsequent
expenditure
Subsequent expenditure is
capitalised only when it increases the future economic benefits
embodied in the asset to which it relates. All other expenditure,
including expenditure on internally generated goodwill and brands,
is recognised in the income statement as incurred.
(v)
Amortisation
Amortisation is calculated to
write off the cost of intangible assets less their estimated
residual values using the straight-line method over their estimated
useful lives and is recognised in administrative expenses in the
income statement. Goodwill is not amortised.
The estimated useful lives are as
follows:
Software development
3-5
years
Brand valuation
10 years
Customer
lists
5-7 years
Amortisation methods, useful lives
and residual values are reviewed at each reporting date and
adjusted if appropriate.
Notes (continued)
7. Intangible assets
and goodwill (continued)
Intangible assets and goodwill as
at 29 February 2024:
|
Software
development1
|
|
Brand
|
|
Customer
|
|
|
|
Total
|
|
|
valuation3
|
|
Lists
|
|
Goodwill
|
|
|
£'000
|
|
£'000
|
|
£'000
|
|
£'000
|
|
£'000
|
Cost:
|
|
|
|
|
|
|
|
|
|
At 1 March 2023
|
161,528
|
|
51,738
|
|
92,701
|
|
445,905
|
|
751,872
|
Additions
|
37,532
|
|
-
|
|
1,309
|
|
-
|
|
38,841
|
Disposals
|
(11,689)
|
|
-
|
|
-
|
|
-
|
|
(11,689)
|
Exchange
differences2
|
-
|
|
-
|
|
-
|
|
(2,183)
|
|
(2,183)
|
At 29 February 2024
|
187,371
|
|
51,738
|
|
94,010
|
|
443,722
|
|
776,841
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation and
impairment:
|
|
|
|
|
|
|
|
|
|
At 1 March 2023
|
(105,307)
|
|
(41,134)
|
|
(92,699)
|
|
(25,195)
|
|
(264,335)
|
Amortisation
|
(29,330)
|
|
(5,167)
|
|
(821)
|
|
-
|
|
(35,318)
|
Disposals
|
11,689
|
|
-
|
|
-
|
|
-
|
|
11,689
|
At 29 February 2024
|
(122,948)
|
|
(46,301)
|
|
(93,520)
|
|
(25,195)
|
|
(287,964)
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts:
|
|
|
|
|
|
|
|
|
|
At
29 February 2024
|
64,423
|
|
5,437
|
|
490
|
|
418,527
|
|
488,877
|
1 Total software
development includes £13.3 million of assets which represent work
in progress and which are not yet depreciating (FY2023: £11.1
million).
2 Revaluation at the
balance sheet date.
3 At FY2024, the
remaining useful economic life was one year for brand valuation
assets.
Intangible assets and goodwill as
at 28 February 2023:
|
Software
development1
|
|
Brand
|
|
Customer
|
|
|
|
Total
|
|
|
valuation3
|
|
lists
|
|
Goodwill
|
|
|
£'000
|
|
£'000
|
|
£'000
|
|
£'000
|
|
£'000
|
Cost:
|
|
|
|
|
|
|
|
|
|
At 1 March 2022
|
147,410
|
|
51,738
|
|
92,690
|
|
442,555
|
|
734,393
|
Additions
|
32,174
|
|
-
|
|
11
|
|
-
|
|
32,185
|
Disposals
|
(18,056)
|
|
-
|
|
-
|
|
-
|
|
(18,056)
|
Exchange
differences2
|
-
|
|
-
|
|
-
|
|
3,350
|
|
3,350
|
At 28 February 2023
|
161,528
|
|
51,738
|
|
92,701
|
|
445,905
|
|
751,872
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation and
impairment:
|
|
|
|
|
|
|
|
|
|
At 1 March 2022
|
(93,488)
|
|
(35,967)
|
|
(92,589)
|
|
(25,195)
|
|
(247,239)
|
Amortisation
|
(29,840)
|
|
(5,167)
|
|
(110)
|
|
-
|
|
(35,117)
|
Disposals
|
18,021
|
|
-
|
|
-
|
|
-
|
|
18,021
|
At 28 February 2023
|
(105,307)
|
|
(41,134)
|
|
(92,699)
|
|
(25,195)
|
|
(264,335)
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts:
|
|
|
|
|
|
|
|
|
|
At 28 February 2023
|
56,221
|
|
10,604
|
|
2
|
|
420,710
|
|
487,537
|
Notes (continued)
7. Intangible assets
and goodwill (continued)
1 Total software
development includes £11.1m of assets which represent work in
progress and which are not yet depreciating.
2 Revaluation at the balance sheet date.
3 At FY2023, the
remaining useful economic life was two years for brand valuation
assets.
Of the amortisation charge for the
year, £6.0 million (FY2023: £5.3 million)
related to the amortisation of intangible assets which were
recognised on the Group's acquisition of Trainline.com Limited and
Trainline SAS, while £29.3 million (FY2023: £29.8 million) related
to internally developed and purchased intangible assets recognised
at historical cost.
Disposals in the year of £11.7
million (FY2023: £18.1 million) include £11.7 million (FY2023:
£18.1 million) of fully amortised internally developed software
assets which were no longer in use.
Goodwill impairment testing
The Group tests goodwill annually
for impairment by reviewing the carrying amount against the
recoverable amount of the investment. The recoverable amount is the
higher of fair value less costs of disposal and value in use.
However, in line with IAS 36 Impairment of Assets, fair value less
costs of disposal is only determined where value in use would
result in impairment.
Goodwill acquired in a business
combination is allocated on acquisition to the cash-generating
units ("CGUs") that are expected to benefit from that business
combination. The Group has carrying value of goodwill totalling
£418.5 million (FY2023: £420.7 million) which were initially
recognised upon acquisition of the following of Trainline.com
Limited and Trainline SAS (formerly Capitaine Train
SAS).
CGU's are allocated on a more
granular level than the operating segments. Impairment reviews were
conducted on these revised CGUs as summarised
below:
CGUs
|
|
|
2024
|
|
2023
|
|
|
|
£'000
|
|
£'000
|
UK Consumer
|
|
|
351,271
|
|
351,271
|
International Consumer
|
|
|
67,256
|
|
69,439
|
UK Trainline Partner
Solutions
|
|
|
-
|
|
-
|
International Trainline Partner
Solutions
|
|
|
-
|
|
-
|
Total goodwill
|
|
|
418,527
|
|
420,710
|
For all CGUs the recoverable
amount was determined by measuring their value-in-use
("VIU").
Notes (continued)
7. Intangible assets and goodwill (continued)
Assumptions
The key value in use assumptions
for the goodwill impairment assessment were:
|
2024
|
2023
|
2024
|
2023
|
|
UK
Consumer
|
UK
Consumer
|
International
Consumer
|
International
Consumer
|
Pre-tax discount
rate1
|
12.3%
|
10.9%
|
12.1%
|
13.2%
|
Terminal growth
rate2
|
2.5%
|
2.5%
|
2.5%
|
2.5%
|
Number of years forecasted before
terminal growth rate applied
|
5
|
5
|
5
|
5
|
1 The pre-tax discount rate is based upon the weighted average
cost of capital reflecting specific principal risks and
uncertainties. The discount rate takes into account the risk-free
rate of return, the market risk premium and beta factor.
2
The terminal growth rate reflects the expected natural price and
inflation growth into perpetuity of the business, taking into
account the current market and sector risks.
There has been no impairment
charge for any CGU during the year (FY2023: nil).
As noted above, the key
assumptions that form part of the value in use assessment are the
pre-tax discount rate, the terminal growth rate, the number of
years forecasted before terminal growth rate is applied and the
underlying cash forecasts. The pre-tax discount rate was determined
based upon the weighted average cost of capital reflecting specific
principal risks and uncertainties. The discount rate takes into
account the risk-free rate of return, the market risk premium and
beta factor reflecting the average beta for the Group and
comparator companies which are used in deriving the cost of equity.
Further to this, the terminal growth rate was determined based on
the past inflation rate and has been utilised to reflect the
long-term natural price growth and inflation.
For the purpose of the goodwill
impairment work, the Group prepares cash flow forecasts using
five-year projections which are extrapolated from the Board
approved three-year plan. The forecasts have been used in the VIU
calculation along with risk-adjusted discount rates. Cash flows
beyond the five-year period are extrapolated using a terminal
growth rate, for the purpose of goodwill impairment testing. The
forecasts reflect management's expectations and best estimates in
determining EBITDA for each CGU. Management's expectations and best
estimates are determined based on a detailed top down and bottom up
forecasting process which incorporates consideration of the Group's
strategy, expectations in respect of market size and market share
while also taking account of risks and uncertainties in the market.
The core assumptions in the cash
flow forecasts used in the impairment testing were: UK:
continues to grow sales, driven by ongoing investment in the
Trainline platform, the digitisation of ticketing and supported by
modal shift tailwinds; and International: strong continued sales
growth at a higher level than the Group as a whole driven by
investment in marketing and continued development in the user
experience. Where costs or assets in the forecast are not reported
to the CODM at a CGU level, as disclosed in Note 2, a reasonable
and consistent allocation basis is applied for the purposes of
impairment testing.
Notes (continued)
7. Intangible assets and goodwill (continued)
Trading assumptions are based on
estimates of market size, estimates of market share and long-term
economic forecasts.
As the International CGU is
currently loss making, the cash flows are more sensitive to a
change in assumptions in the initial five-year forecast period than
the UK Consumer CGU.
Sensitivity analysis
The Group has conducted
sensitivity analysis for reasonably possible changes to key
assumptions on each CGU's value in use. This included either
increasing the discount rates, reducing the terminal growth rate,
or reducing the anticipated future cash flows through changes to
revenue or costs in each of the years through to the terminal year.
The sensitivity assumptions applied to the value in use
calculations are set out in the table below.
|
2024
|
2023
|
2024
|
2023
|
|
UK
Consumer
|
UK
Consumer
|
International
Consumer
|
International
Consumer
|
Increase in discount
rate
|
1pt
|
1pt
|
1pt
|
1pt
|
Reduction in long-term growth rate
applied in terminal year
|
0.5pt
|
0.5pt
|
0.5pt
|
0.5pt
|
Decrease in Adjusted EBITDA
forecast in each year
|
15%
|
15%
|
15%1
|
20%
|
|
None of the individual reasonably
possible scenarios listed above resulted in an impairment charge to
any of the CGUs.
1 In FY2024 the sensitivity of 15% was considered more
appropriate than 20%. If the sensitivity was 20% in line with prior
year, this would not result in an impairment charge to any of the
CGUs.
Notes (continued)
8.
Property, plant and equipment
This note details the physical
assets used by the Group in running its business.
Accounting policy
Items of property, plant and
equipment ("PPE") are measured at cost less accumulated
depreciation and any accumulated impairment losses. Any gain
or loss on disposal of an item of property, plant and equipment is
recognised in the income statement. Depreciation is calculated to
write off the cost of items of property, plant and equipment less
their estimated residual values using the straight-line method over
their estimated useful lives and is generally recognised in the
income statement. The estimated useful lives of property, plant and
equipment are as follows:
Plant and equipment
3-7 years
Leasehold improvements
3-10
years/remaining lease length if shorter
Right-of-use
assets
Lease
length
The Group tests the carrying value
of assets including right-of-use ("ROU") assets for impairment if
there is an indicator of impairment. PPE is included in the
carrying value of the Group's CGUs and have been included in the
CGU impairment assessments (see Note 7). There were no additional
indicators of specific impairment identified during the year
relating to PPE (FY2023: no indicators).
|
Plant
and equipment
|
|
Leasehold improvements
|
|
Right-of-use assets
|
|
Total
|
|
£'000
|
|
£'000
|
|
£'000
|
|
£'000
|
Cost:
|
|
|
|
|
|
|
|
At 1 March 2023
|
7,729
|
|
6,835
|
|
27,875
|
|
42,439
|
Additions
|
1,866
|
|
-
|
|
1,255
|
|
3,121
|
Disposals
|
(364)
|
|
(1)
|
|
(297)
|
|
(662)
|
At 29 February 2024
|
9,231
|
|
6,834
|
|
28,833
|
|
44,898
|
|
|
|
|
|
|
|
|
Accumulated depreciation and
impairment:
|
|
|
|
|
|
|
|
At 1 March 2023
|
(4,443)
|
|
(3,358)
|
|
(13,449)
|
|
(21,250)
|
Depreciation
|
(1,421)
|
|
(835)
|
|
(4,088)
|
|
(6,344)
|
Disposals
|
364
|
|
-
|
|
280
|
|
644
|
At 29 February 2024
|
(5,500)
|
|
(4,193)
|
|
(17,257)
|
|
(26,950)
|
|
|
|
|
|
|
|
|
Carrying amounts:
|
|
|
|
|
|
|
|
At 29 February 2024
|
3,731
|
|
2,641
|
|
11,576
|
|
17,948
|
Property, plant and equipment as
at 29 February 2024:
Notes (continued)
8. Property, plant and
equipment (continued)
Property, plant and equipment as
at 28 February 2023:
|
Plant
and equipment
|
|
Leasehold improvements
|
|
Right-of-use assets
|
|
Total
|
|
£'000
|
|
£'000
|
|
£'000
|
|
£'000
|
Cost:
|
|
|
|
|
|
|
|
At 1 March 2022
|
7,379
|
|
6,984
|
|
27,461
|
|
41,824
|
Additions
|
2,089
|
|
-
|
|
522
|
|
2,611
|
Disposals
|
(1,739)
|
|
(149)
|
|
(108)
|
|
(1,996)
|
At 28 February 2023
|
7,729
|
|
6,835
|
|
27,875
|
|
42,439
|
|
|
|
|
|
|
|
|
Accumulated depreciation and
impairment:
|
|
|
|
|
|
|
|
At 1 March 2022
|
(4,810)
|
|
(2,515)
|
|
(9,622)
|
|
(16,947)
|
Depreciation
|
(1,301)
|
|
(843)
|
|
(3,906)
|
|
(6,050)
|
Disposals
|
1,668
|
|
-
|
|
79
|
|
1,747
|
At 28 February 2023
|
(4,443)
|
|
(3,358)
|
|
(13,449)
|
|
(21,250)
|
|
|
|
|
|
|
|
|
Carrying amounts:
|
|
|
|
|
|
|
|
At 28 February 2023
|
3,286
|
|
3,477
|
|
14,426
|
|
21,189
|
9. Loans
and borrowings
This note details a breakdown of
the various loans and borrowings of the Group. It also provides the
terms and repayment dates of each of these.
Accounting policy
Borrowings are recognised
initially at fair value less attributable transaction costs
incurred. Subsequent to initial recognition, interest-bearing
borrowings are stated at amortised cost using the effective
interest method. At the date borrowings are repaid any attributable
transaction costs are released as finance costs.
|
2024
|
2023
|
|
|
£'000
|
|
£'000
|
Non-current liabilities
|
|
|
|
|
Revolving credit
facility1
|
|
58,292
|
|
57,385
|
Convertible
bonds2
|
|
81,652
|
|
81,105
|
Lease liabilities
|
|
7,336
|
|
10,524
|
Total non-current
liabilities
|
|
147,280
|
|
149,014
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accrued interest on secured bank
loans
|
|
841
|
|
368
|
Lease liabilities
|
|
4,992
|
|
4,523
|
Total current
liabilities
|
|
5,833
|
|
4,891
|
Notes (continued)
9. Loans
and borrowings (continued)
1Included within the revolving credit facility is the
principal amount of £60.0 million (FY2023: £60.0 million) and
directly attributable transaction costs of £1.7 million (FY2023:
£2.6 million).
2Included within the convertible bonds is the principal amount
of £82.7 million (FY2023: £82.7 million) and directly
attributable transaction costs of £1.0 million (FY2023: £1.6
million). The fair value of this convertible bond, as determined by
the price on the Frankfurt Stock Exchange at 29 February 2024 is
£74.7 million (FY2023: £68.7 million). The carrying value is £81.7
million. During FY2023 the Group bought back and cancelled £32.1
million (face value) of its own convertible bonds for £28.1
million, resulting in a gain of £4.0 million presented on the
income statement within finance income.
Terms and repayment schedule as at
29 February 2024
Agreement
|
Interest rate
|
Year of maturity
|
Face
value
|
|
Carrying
amount
|
|
|
|
£'000
|
|
£'000
|
Revolving credit
facility
|
SONIA
+ 1.25%-2.5%
|
20252
|
60,000
|
|
58,292
|
Convertible bonds
|
1.00%
|
2026
|
82,700
|
|
81,652
|
Lease liabilities
|
Various1
|
Various
|
12,328
|
|
12,328
|
Total borrowings
|
|
|
155,028
|
|
152,272
|
|
|
|
|
|
|
|
|
1 The average interest rate of lease liabilities is
4.16%
2 Not including two 1-year extension clause
The following are the remaining
contractual maturities of financial liabilities at the reporting
date. The amounts are gross and undiscounted, and include estimated
future interest payments, so will not necessarily reconcile to
amounts disclosed on the statement of financial
position.
|
Total
contractual cash flows
|
|
Less
than 1 year
|
|
Between
1 and 2 years1
|
|
Between
2 and 5 years
|
|
Over 5
years
|
|
£'000
|
|
£'000
|
|
£'000
|
|
£'000
|
|
£'000
|
Revolving credit
facility
|
65,874
|
|
3,579
|
|
62,295
|
|
-
|
|
-
|
Convertible bonds
|
84,250
|
|
827
|
|
83,423
|
|
-
|
|
-
|
Lease liabilities
|
12,836
|
|
5,278
|
|
4,479
|
|
2,608
|
|
471
|
Total cash flows
|
162,960
|
|
9,684
|
|
150,197
|
|
2,608
|
|
471
|
1 Not including two 1-year extension clause per the revolving
credit facility
Revolving credit facility
On 26 July 2022, the Group entered
into a £325.0 million revolving credit facility with an initial
maturity date of 30 November 2025, with the option to extend for a
further two, one-year periods to 30 November 2027.
Notes (continued)
9. Loans
and borrowings (continued)
The facility in place during the
year allows draw downs in cash or non-cash to cover bank
guarantees. At 29 February 2024 the cash drawn amount is £60.0
million (FY2023: £60.0 million), the non-cash bank guarantee drawn
amount is £183.4 million (FY2023: £72.2 million) and the undrawn
amount on the facility is £81.6 million (FY2023: £192.8
million).
The facility in place during the
year was secured by a fixed and floating charge over certain assets
of the Group. Interest payable on the £325.0 million facility was
at a margin of 1.20% to 1.50% above SONIA.
The Group was subject to bank
covenants, all of which have been met during the year. In relation
to the £325.0 million facility entered into on 26 July 2022: (1)
net debt to adjusted EBITDA must be no more than 3.00:1; and (2)
adjusted EBITDA to net finance charges must be no less than
4.00:1.
Convertible bonds
On 7 January 2021, Trainline plc
announced the launch of an offering of £150.0 million of senior
convertible bonds due in 2026. Settlement and delivery of
convertible bonds took place on 14 January 2021.
The total bond offering of £150.0
million covers a five-year term beginning on 14 January 2021 with a
1% per annum coupon payable semi-annually in arrears in equal
instalments. The initial conversion price was set at £6.6671
representing a premium of 50% above share price on 7 January 2021
(£4.4447).
The bonds were accounted for as a
liability of £150.0 million upon issuance. Directly allocable fees
were offset against the liability and will be unwound over the
lifetime of the instrument. The bond was accounted for as a
liability as certain terms and conditions attached to the bonds
meant Trainline plc has an unavoidable obligation to settle in
cash. Subsequent to this, bonds are measured at amortised
cost.
During FY2023, the Group bought
back and cancelled £32.1 million (face
value) of its own convertible bonds for £28.1 million, resulting in
a gain of £4.0 million presented on the income statement within
finance income. There was no such transaction in FY2024. As at the
balance sheet date, the Group had convertible bonds with a
principal amount of £82.7 million in issuance (FY2023: £82.7
million).
Notes (continued)
10. Capital and reserves
Share
capital
Share capital represents the
number of shares in issue at their nominal value.
Ordinary shares in the Group are
issued, allotted and fully paid up. The holders of ordinary shares
are entitled to receive dividends as declared from time to time and
are entitled to one vote per share at meetings of the
Company.
Shareholding at 29 February 2024
|
Number
|
|
£'000
|
Ordinary shares -
£0.01
|
471,032,086
|
|
4,710
|
Shareholding at 28 February 2023
|
Number
|
|
£'000
|
Ordinary shares -
£0.01
|
480,680,508
|
|
4,807
|
In September 2023, the Company
commenced a share buyback programme to purchase its own ordinary
shares. The total number of shares bought back in FY2024 was
9,648,422 shares with a nominal value of £96,484 (FY2023: nil)
representing 2% (FY2023: 0%) of the ordinary shares in issue
(excluding shares held in treasury). All shares bought back in
FY2024 were cancelled.
The shares were acquired on the
open market at a total consideration (excluding costs) of £27.7
million (FY2023: £nil). The maximum and minimum prices paid were
£3.36 (FY2023: £nil) and £2.32 (FY2023: £nil) per share
respectively. The average price paid was £2.87 (FY2023: £nil).
Costs incurred on the purchase of own shares in relation to stamp
duty and broker expenses were £166,878 (FY2023: £nil).
Share
premium
Share premium represents the
amount over the nominal value which was received by the Group upon
the sale of the ordinary shares. Upon the date of listing the
nominal value of shares was £1.00 (subsequently reduced to £0.01 in
FY2020) but the initial offering price was £3.50.
Share premium is stated net of any
direct costs relating to the issue of shares.
On 19 December 2023, the High
Court of Justice approved the cancellation of the amount standing
to the credit of the Company's share premium account in full. The
cancellation resulted in a corresponding increase in the Group's
distributable reserves.
Retained
earnings
Retained earnings represents the
profit the Group makes that is not distributed as dividends. No
dividends have been paid outside the Group in any year.
Foreign
exchange
The foreign exchange reserve
represents the net difference on the translation of the statement
of financial position and income statements of foreign operations
from functional currency into reporting currency over the period
such operations have been owned by the Group.
Notes (continued)
10. Capital and reserves (continued)
Other
reserves
|
Merger
reserve
|
Treasury
reserve
|
Share-based payment
reserve
|
Capital Redemption
Reserve
|
Total other
reserves
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
At 1 March 2022
|
(1,122,218)
|
(21,731)
|
7,288
|
-
|
(1,136,661)
|
Addition of treasury
shares
|
-
|
(7,947)
|
-
|
-
|
(7,947)
|
Allocation of treasury shares to
fulfil share-based payment
|
-
|
2,950
|
(2,902)
|
-
|
48
|
Share-based payment
charge
|
-
|
-
|
15,165
|
-
|
15,165
|
Deferred tax on share-based
payment
|
-
|
-
|
779
|
-
|
779
|
Transfer to retained
earnings1
|
-
|
-
|
(362)
|
-
|
(362)
|
At 28 February 2023
|
(1,122,218)
|
(26,728)
|
19,968
|
-
|
(1,128,978)
|
Addition of treasury
shares
|
-
|
(7,500)
|
-
|
-
|
(7,500)
|
Allocation of treasury shares to
fulfil share-based payment
|
-
|
4,466
|
(4,444)
|
-
|
22
|
Share-based payment
charge
|
-
|
-
|
19,909
|
-
|
19,909
|
Deferred tax on share-based
payment
|
-
|
-
|
3,892
|
-
|
3,892
|
Purchase of own share for
cancellation
|
-
|
-
|
-
|
97
|
97
|
Transfer to retained
earnings1
|
-
|
-
|
(166)
|
-
|
(166)
|
At 29 February 2024
|
(1,122,218)
|
(29,762)
|
39,159
|
97
|
(1,112,724)
|
1 Transfer to retained
earnings relates to the difference between the share price at grant
date of the exercised shares and the actual cost of the treasury
shares purchased to fulfil the share-based payment.
Merger
reserve
Prior to the initial public
offering ("IPO") the ordinary shares of the pre-IPO top company,
Victoria Investments S.C.A., were acquired by Trainline plc. As the
ultimate shareholders and their relating rights did not change as
part of this transaction, this was treated as a common control
transaction under IFRS. The balance of the merger reserve
represents the difference between the nominal value of the reserves
from the Victoria Investments S.C.A. Group and the value of
reserves in Trainline plc prior to the
restructure.
Treasury
reserve
Treasury shares reflect the value
of shares held by the Group's Employee Benefit Trusts ("EBT"). At
29 February 2024 the Group's EBT held 11.5 million shares (FY2023:
10.9 million) which have a historical cost of £29.8 million
(FY2023: £26.7 million).
Share-based payment
reserve
The share-based payment reserve is
built up of charges in relation to equity-settled share-based
payment arrangements which have been recognised within the profit
and loss account.
Capital redemption
reserve
The capital redemption reserve
represents the nominal value of shares bought back and
cancelled.
Notes (continued)
11. Related parties
During the year, the Group entered
into transactions in the ordinary course of business with related
parties.
Transactions with key management personnel of the
Group
Key management personnel are
defined as the Board of Directors, including Non-Executive
Directors.
During the period key management
personnel have received the following compensation: short-term
employee benefits £3,593,819 (FY2023: £2,185,741); post-employment
benefits £58,111 (FY2023: £60,462); and ongoing share-based payment
schemes £3,033,999 (FY2023: £2,414,357). No other long-term
benefits or termination benefits were paid (FY2023: £nil).
The highest paid director received: short term
employee benefits £1,980,067 (FY2023: £1,207,038); post-employment
benefits £35,304 (FY2023: £33,054); and ongoing share-based payment
schemes £2,172,523 (FY2023: £1,713,900). There were no
directors to whom retirement benefits were accruing under defined
contribution schemes (FY2023: one).
At 29 February 2024 key management personnel held 449,625 shares in
Trainline plc (FY2023: 361,413
shares).
12. Capital commitments
This note details any capital
commitments in contracts that the Group has entered which have not
been recognised as liabilities on the balance sheet.
The Group's capital commitments at
29 February 2024 are £nil (FY2023: £nil).
13. Post balance sheet events
There have been no material post
balance sheet events between 29 February 2024 and the date of the
approval of these Financial Statements.
Alternative performance measures
When assessing and discussing
financial performance, certain alternative performance measures
("APMs") of historical or future financial performance, financial
position or cash flows are used which are not defined or specified
under IFRS. APMs are used to improve the comparability of
information between reporting periods and operating
segments.
APMs should be considered in
addition to, not as a substitute for, or as superior to, measures
reported in accordance with IFRS.
APMs are not uniformly defined by
all companies. Accordingly, the APMs used may not be comparable
with similarly titled measures and disclosures made by other
companies. These measures are used on a supplemental basis as they
are considered to be indicators of the underlying performance and
success of the Group.
Net ticket sales[1]
Net ticket sales represent the
gross value of ticket sales to customers, less the value of refunds
issued, during the accounting period via B2C or Trainline solutions
channels. The Group acts as an agent or technology provider in
these transactions. Net ticket sales do not represent the Group's
revenue.
Management believe net ticket
sales are a meaningful measure of the Group's operating performance
and size of operations as this reflects the value of transactions
powered by the Group's platform. The rate of growth in net ticket
sales may differ to the rate of growth in revenue due to the mix of
commission rates and service fees.
Adjusted EBITDA
The Group believe that adjusted
EBITDA is a meaningful measure of the Group's operating performance
and debt servicing ability without regard to amortisation and
depreciation methods as well as share-based payment charges which
can differ significantly.
Adjusted EBITDA is calculated as
profit after tax before net financing income/(expense), tax,
depreciation and amortisation, exceptional items and share-based
payment charges. Exceptional items are excluded as management
believe their nature could distort trends in the Group's underlying
earnings. This is because they are often one off in nature or not
related to underlying trade. Share-based payment charges are also
excluded as they can fluctuate significantly year on
year.
Alternative performance measures - (continued)
A
reconciliation of operating profit to adjusted EBITDA is as
follows:
|
Notes
|
2024
|
|
2023
|
|
|
£'000
|
|
£'000
|
Operating profit
|
|
55,579
|
|
27,639
|
Adjusting items:
|
|
|
|
|
Depreciation and
amortisation
|
7, 8
|
41,662
|
|
41,167
|
Share-based payment
charges
|
|
22,629
|
|
17,292
|
Exceptional items
|
3
|
2,263
|
|
-
|
Adjusted EBITDA
|
|
122,133
|
|
86,098
|
Adjusted earnings
Adjusted earnings are a measure
used by the Group to monitor the underlying performance of the
business, excluding certain non-cash and exceptional
costs.
Adjusted earnings is calculated as
profit after tax with share-based payment charged in administrative
expenses, exceptional items, gains on convertible bond buyback and
amortisation of acquired intangibles added back, together with the
tax impact of these adjustments also added back.
Exceptional items are excluded as
management believe their nature could distort trends in the Group's
underlying earnings. Share-based payment charges are also excluded
as they can fluctuate significantly year on year and are a non-cash
charge to the business. Amortisation of acquired intangibles is a
non-cash accounting adjustment relating to previous acquisitions
and is not linked to the ongoing trade of the Group.
Similarly, gains on convertible bond buyback are
added back as they are one-off in nature and don't relate to the
underlying trade.
A reconciliation from the profit
after tax to adjusted earnings it as follows:
|
Notes
|
2024
|
|
2023
|
|
|
£'000
|
|
£'000
|
Profit after tax
|
|
33,986
|
|
21,217
|
Earnings attributable to equity holders
|
|
33,986
|
|
21,217
|
Adjusting items:
|
|
|
|
|
Exceptional items
|
3
|
2,263
|
|
-
|
Gain on convertible bond
buyback
|
4
|
-
|
|
(3,987)
|
Amortisation of acquired
intangibles1
|
7
|
5,988
|
|
5,277
|
Share-based payment
charges
|
|
22,629
|
|
17,292
|
Tax impact of the above
adjustments
|
|
(7,555)
|
|
(3,528)
|
Adjusted earnings
|
|
57,311
|
|
36,271
|
|
|
|
|
|
1 This consists of the
amortisation of brand valuation of £5.2 million (FY2023: £5.2
million), customer valuation of £0.8 million (FY2023: £0.1
million) and software development of £nil (FY2023:
£nil).
Alternative performance measures (continued)
Net
debt
Net debt is a measure used by the
Group to measure the overall debt position after taking into
account cash held by the Group. Net debt
represents aggregate amount of loans and borrowings as disclosed in
Note 9 (excluding accrued interest on
secured bank loans) and associated directly attributable
transaction costs after taking into account cash held by the
Group.
The calculation of net debt is as
follows:
|
Notes
|
2024
|
|
2023
|
|
|
£'000
|
|
£'000
|
Loan and
borrowings1
|
9
|
(155,028)
|
|
(157,747)
|
Cash and cash
equivalents
|
|
91,085
|
|
57,337
|
Net debt
|
|
(63,943)
|
|
(100,410)
|
1 This amount is the
aggregate amount of loans and borrowings as disclosed in Note 9
amounting to £152.3 million (FY2023: £153.5 million) and the
capitalised finance charges amounting to £2.7 million (FY2023: £4.2
million).
Operating free cash flow
The Group use operating free cash
flow as a supplementary measure of liquidity. Liquidity has been
removed as an APM in FY2024 because the Group is no longer subject
to a minimum liquidity requirement under the revolving credit
facility signed 26 July 2022.
The Group defines operating free
cash flow as cash generated from operating activities adding back
cash exceptional items, and deducting cash flow in relation to
purchase of property, plant and equipment and intangible assets,
excluding those acquired through business combinations or trade and
asset purchases.
The calculation of operating free
cash flow is as follows:
|
|
2024
|
|
2023
|
|
|
£'000
|
|
£'000
|
Cash generated from operating
activities
|
|
129,785
|
|
43,015
|
Cash exceptional items
|
|
2,263
|
|
-
|
Purchase of property, plant and
equipment and intangible assets
|
|
(40,749)
|
|
(35,219)
|
Operating free cash flow
|
|
91,299
|
|
7,796
|