TIDMTRN
RNS Number : 3090E
Trainline PLC
05 November 2020
5 November 2020
Trainline plc
Results for the six months ended 31 August 2020
While conditions remain challenging, Trainline is well
positioned to return to growth when the market recovers
H1 FY2021 summary financial highlights:
GBPm unless otherwise stated: H1 2021 H1 2020 Variance
-------------------------------- -------- -------- ---------
Net ticket sales 358 1,844 (81)%
Revenue 31 129 (76)%
Adjusted EBITDA(1) (16) 42 (58)
Operating loss (43) (8) (35)
Adjusted basic (loss)/earnings
per share (pence) (6.2)p 3.6p (9.8)p
Basic loss per share (pence) (8.1)p (20.3)p +12.2p
Operating free cash flow (80) 60 (140)
Net debt (166) (59) (107)
Results summary:
-- Significant impact on rail passenger numbers from COVID-19
lockdowns and virus containment measures across the UK and
Continental Europe
-- H1 Group net ticket sales of GBP358 million was 19% of the
equivalent prior year period and revenue of GBP31 million was
24%
-- Quick and decisive steps taken to mitigate impact of
COVID-19, scaling back monthly cash burn to c.GBP5 million(3) to
deliver Group adjusted EBITDA loss of GBP16 million and liquidity
headroom of GBP162 million(4)
-- Encouraging performance in Q2, with Trainline recovering as
trading conditions improved, reflecting an accelerated shift to
online and digital ticketing:
o International led the recovery, returning to growth in the top
3 domestic markets
o UK Consumer net ticket sales recovering faster than the market
at 30% vs prior year period vs. industry passenger volume at
24%(2)
o New customer rebounded strong - new app customers in UK
exceeding 80% of pre-COVID levels; International surpassing
pre-COVID levels
-- Maintained investment in product and technology throughout
the pandemic, developing innovative new products and features to
position Trainline for recovery
-- Basic loss per share of -8.1p, up 12.2p reflecting
exceptional one-off IPO costs in the prior year
Outlook:
-- Trading conditions remain challenging, particularly following
the re-tightening of COVID-19 restrictions and lockdown measures
across our markets in recent weeks
-- The Group remains confident it can navigate an extended
downturn if necessary, given our significant liquidity headroom of
GBP162 million and proven ability to take mitigating actions to
scale back monthly cash outflows where necessary
Clare Gilmartin, CEO of Trainline said:
"COVID-19 continues to cause significant disruption to the rail
and coach industry as regional and national lockdowns are put in
place across Europe. However, we have taken quick and decisive
steps to scale back our cash outflows and ensure we have sufficient
long-term liquidity.
"Looking ahead, our position as the digital innovator in the
industry means we are well placed to recover quickly when lockdowns
lift and market conditions improve, as demonstrated in the second
quarter.
"We see no change to the long-term structural tailwinds for
Trainline. Rail is a large market with significant government
investment planned over the next decade, growing environmental
awareness of its benefits compared to air or car, and considerable
runway for train tickets to shift online and to mobile."
Notes:
(1) Adjusted EBITDA excludes share based payment charges and exceptional items
(2) Industry passenger volumes as reported by the UK Government
Department for Transport (simple daily average)
(3) Cash burn is adjusted EBITDA less tangible and intangible
asset additions, less interest paid and less lease liabilities
paid, averaged over Jun-Aug 2020
(4) Liquidity headroom is cash and cash equivalents plus the
undrawn, unencumbered balance on the Group's Revolving Credit
Facility
Presentation of results
There will be a live webcast presentation and conference call of
the results to analysts and investors at 8:30 AM GMT today (5(th)
November 2020). Please register to participate at the Company's
investor website: https://edge.media-server.com/mmc/p/z4xyiyfc
If participants want to ask a question over the phone or are
unable to connect via the web, they can dial into the telephone
conference call using the details below.
1. Call the appropriate participant dial-in number listed
below.
2. Enter the Event Plus Passcode stated below and leave any
information requested after the tone. You will be joined
automatically to the conference.
Event Plus Passcode: 1959589
Location Purpose Phone Type Phone Number
United Kingdom, London Participant Local +44 (0) 2071 928338
============ =========== ===================
United States, New
York Participant Local +16467413167
============ =========== ===================
Enquiries
For investor enquiries, Andrew Gillian investors@trainline.com
For media enquiries, Victoria Biggs press@trainline.com / +44 7850 205490
Brunswick Group
Simone Selzer trainline@brunswickgroup.com / +44 207 404
5959
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.
THE IMPACT OF COVID-19 in H1
The COVID-19 pandemic has significantly impacted rail and coach
passenger numbers across all of our markets. Since the end of
February 2020, Governments in the UK and the rest of Europe have
introduced lockdowns, social distancing and other containment
measures to curb the spread of COVID-19, and rail and coach
operators reduced their service timetables in response. This
resulted in a significant slowdown in all of the markets in which
we operate, particularly in the first quarter of our financial
year, when UK industry passenger volumes fell to c.5% of the
equivalent prior year period throughout April and May, with similar
declines observed across our international markets.
In light of the drop in industry passenger numbers, we took
quick and decisive measures to reduce operating costs and cash
outflows. Our mitigating actions included pausing marketing and
other discretionary spend, a recruitment freeze, pausing of annual
pay reviews and Executive and Board voluntary reductions in their
respective salaries and fees. We also furloughed certain teams most
directly impacted by the drop in demand, under the Government's
Coronavirus Job Retention Scheme (CJRS).
At the same time we made the conscious decision to maintain our
investment in our Tech and Product teams to drive the Group's
strategic priorities to enable long term growth and create value
for our customers and shareholders, including the development of
innovative new products and services.
From the second quarter of the financial year, the industry
began to see some improvement in passenger volumes. The improvement
began first in international markets, reflecting an earlier
relaxation of government lockdowns and social distancing measures,
followed by the UK some weeks later.
As passenger volume returned, net ticket sales for our consumer
business began to recover quickly as well. Our International
business led the recovery, with net ticket sales across the top
three European domestic markets returning to growth within the
quarter, followed by our UK Consumer business, which recovered
faster than the wider industry.
The strong recovery of Trainline's UK Consumer and International
business reflected a step-up in online and digital ticketing, in
part driven by a greater reluctance from customers to use ticket
machines or queue at stations, government guidance to book in
advance, and an increased need for clear and accurate, on-the-go
travel information to reassure customers they can travel
safely.
With the industry on the first step of the path to recovery and
a greater propensity of customers to book online and use digital
tickets, Trainline began phasing back its operations to reflect the
increase in demand in the second quarter. It brought back most
furloughed colleagues and dialed up marketing activity commensurate
with the improvement in demand in each of its respective markets.
This helped drive a strong rebound in new customers - with new app
customers in the UK recovering to >80% of pre-COVID levels and
International surpassing pre-COVID levels. At the same time, the
Group maintained tight control of cash burn, which averaged c.GBP5
million per month over the quarter.
OUTLOOK FOR H2 FY2021
In the third quarter of our financial year, there has been a
resurgence in COVID-19 cases across our markets. This has been met
with a re-tightening of restrictions and lockdown measures,
impacting passenger volumes and hampering the industry
recovery.
The Group remains confident it can navigate an extended downturn
if necessary, given its significant liquidity headroom of GBP162
million (as at the end of August) and proven ability to take
mitigating actions to scale back monthly cash outflows, while
remaining resolutely focused on helping our customers and
positioning the business for recovery.
The Group recently revisited its financial forecasts given the
current and ongoing COVID-19 restrictions, overlaying onto the base
case three possible downside scenarios. The base case and all
downside scenarios continue to show cash and liquidity headroom,
however in the most severe downside scenario there is a risk of
covenant breach relating to the Group's Revolving Credit Facility
(note the financial covenant has been waived until August 2021).
While a covenant breach is not considered likely, given the
uncertainty of the current operating environment it should be
considered a possible risk (see also note 1a).
While COVID-19 continues to disrupt near-term trading, we are
well placed to recover quickly when lockdowns lift and market
conditions improve, as the business demonstrated in the second
quarter.
In addition, we see no change to our long-term structural
tailwinds:
-- Rail is a large and growing market, with significant
investment in high speed rail planned over the next decade;
-- Growing environmental awareness of the benefits of rail vs. air and car;
-- Online and digital migration remains under-penetrated with
c60% of tickets purchased at the station pre-COVID. COVID-19 will
accelerate that shift online;
-- Liberalisation and fragmentation of European rail markets as
a result of the EU's Fourth Railway Package, which from December
2020 opens domestic commercial passenger services to competition,
creating a greater market fit for aggregators like Trainline.
PROGRESS AGAINST OUR STRATEGIC PRIORITIES IN H1 2021
To achieve our mission to make rail and coach travel easier for
customers worldwide, we invest behind four strategic priorities for
long-term growth: Enhancing the customer experience, building
demand, optimising revenues, and growing Trainline for Business
(T4B).
While COVID-19 has had an obvious impact on trading conditions,
we have maintained our investment in our long-term strategic growth
priorities, which we expect to position us well to return to growth
as operating conditions recover.
Enhancing the customer experience
We have continued to invest in enhancing the customer experience
over the first half of the year:
-- The leading alternative to queuing at the station
o Ongoing investment in our intuitive online ticket booking
experience, available through our 4.9-star rated app
o Further roll-out of eticket availability and improved
experience. Industry eticket penetration stepped up in the first
half, and in September was 29% (21% in FY2020) of all tickets
o We continue to see a significant growth runway for eticket
penetration over the medium-term, particularly with customers now
having a greater preference for contactless travel given the
backdrop of COVID-19, as well as the expectation that more rail
journeys in the UK will become eticket-enabled in the near
future
-- Access to the cheapest train tickets
o In H1 we launched digital railcards, which give customers up
to a third off travel in a seamless in-app solution
o Further improvements to SplitSave, our split-ticketing feature
that gives customers access to cheaper fares on more than
two-thirds of all UK rail journeys
-- Helpful on-the-go travel information
o We launched a new 'Crowd Alerts' feature that helps customers
to identify busy trains
o Our mobile app offers customers live times, journey planning,
disruption alerts and platform prediction, giving useful insight
and reassurance while travelling
-- Improved self-serve functionality
o Given the unprecedented levels of inbound customer service
requests in the period, we improved our simple, automated change
and refund processes in our app and website, with 99% of all
refunds now self-served
o In September, we launched Delay Repay notifications in France,
notifying customers when they are entitled to compensation as a
result of a delayed train
Looking ahead, we will continue to invest behind our strong
innovation roadmap and expect to launch a pipeline of exciting new
products and features over the next year.
Building demand
Given the impact on demand from COVID-19, in the first quarter
we took the mitigating action to effectively pause our marketing
activity. We resumed our marketing activity in Q2 as travel
restrictions lifted and as we saw passenger demand recovering in
each of our respective markets.
In the second quarter we leaned into the customer acquisition
opportunity, benefiting from the current reduction in bidding
competition for paid marketing channels. W e drove a strong rebound
in new customers - with new app customers in the UK recovering to
>80% of pre-COVID levels and International surpassing pre-COVID
levels - while our cost per customer acquisition reduced by c.30%
in the UK and >50% in International. Likewise, customer
engagement recovered well, with monthly active users surpassing 20
million, reaching around three-quarters of pre-COVID levels.
In addition, we continued to shift more customers to our mobile
app, with app share of transactions in the UK rising to 81%, from
73% in H1 FY2020.
Growing Trainline for Business
UK Trainline for Business (T4B) consists of our booking service
for business to business (B2B) and the white label retailing
services we provide to train operating companies.
While demand in the UK for business travel remains low, we have
increased our attention on addressing the long-term international
growth opportunity. In the first half we continued to add new
clients to our Global API service, which provides our B2B partners
the ability to offer European rail options to their customers
through a single connection. Momentum is building with 15 new
clients signed up so far, seven of which are already live and
integrated, and we have a strong pipeline of potential new clients
as well. The Global API is increasingly providing us a platform to
enter new markets and scale the B2B business internationally.
For our white label business, in H1 we built and delivered many
new products and features to our carrier partners, primarily
solving for issues arising due to COVID-19. This included new
digital flexible ticketing solutions, as well as providing access
to our enhanced automated change and refund functionality.
H1 FY2021 PERFORMANCE REVIEW
Group Overview:
The impact from COVID-19 on passenger volumes in the first half
resulted in Trainline's Group net ticket sales decreasing to GBP358
million, equivalent to 19% of the same period in the prior
year.
H1 Net ticket sales:
Six months ended 31 August 2020
Q1 2021 % of Q2 2021 % of H1 2021 % of
PY PY PY
--------------- -------- ----- -------- ----- -------- -----
UK Consumer 64 13% 154 30% 218 22%
UK T4B 3 1% 21 7% 23 4%
-------- ----- -------- ----- -------- -----
Total UK 67 8% 174 22% 241 15%
International 12 10% 105 74% 117 45%
-------- ----- -------- ----- -------- -----
Total Group 79 9% 280 30% 358 19%
-------- ----- -------- ----- -------- -----
Government measures to curb the spread of COVID-19 resulted in a
significant slowdown in all the markets in which Trainline
operates. The impact was particularly marked in the first quarter
of the financial year, when industry passenger volumes in the UK
fell to c.5% of the equivalent prior year period throughout April
and May, with similar declines across International markets.
Trainline also processed a significantly higher number of refund
requests (more than 2 million across H1 in the UK alone). As a
result, Group net ticket sales in Q1 declined to GBP79 million,
equivalent to 9% of the prior year.
In the second quarter, Group net ticket sales increased to
GBP280 million - equivalent to 30% of the prior year - as operating
conditions began to recover. This followed the initial relaxation
of government lockdowns and social distancing measures, first in
International markets and then some weeks later in the UK, as well
as an acceleration in the shift of ticket volumes to online and
digital channels. Group net ticket sales improved through the
quarter, in August reaching 42% of the prior year.
Group revenue decreased to GBP31 million in the first half, 24%
of the revenue in the prior year. Gross profit for the half
decreased from GBP99 million to GBP22 million and we reported an
adjusted EBITDA loss of GBP16 million, against an adjusted EBITDA
profit in H1 last year of GBP42 million.
H1 FY2021 Segmental performance:
H1 2021 H1 2020 % of PY
---------------------------- -------- -------- --------
Net ticket sales (GBPm)
UK Consumer 218 986 22%
UK T4B 23 599 4%
-------- -------- --------
Total UK 241 1,585 15%
International 117 259 45%
Total Group 358 1,844 19%
-------- -------- --------
Revenue (GBPm)
UK Consumer 19 86 22%
UK T4B 6 30 22%
-------- -------- --------
Total UK 25 115 22%
International 6 14 41%
Total Group 31 129 24%
-------- -------- --------
Gross profit (GBPm)
UK Consumer 14 69 20%
UK T4B 5 21 23%
-------- -------- --------
Total UK 18 90 21%
International 3 9 38%
-------- -------- --------
Total Group 22 99 22%
-------- -------- --------
UK contribution 7 70 10%
International contribution (2) (8) 28%
Central admin expenses (21) (21) 102%
-------- -------- --------
Adjusted EBITDA (GBPm) (16) 42 n/a
-------- -------- --------
UK Consumer
Net ticket sales for UK Consumer decreased to GBP218 million,
22% of the prior year. First quarter net ticket sales reduced to
GBP64 million, 13% of the prior year. In Q2 net ticket sales
increased to GBP154 million, 30% of the prior year, compared to Q2
industry passenger volumes at 24%. This reflected an accelerated
shift to online and digital ticketing, as well as a significant
step up in new customers to Trainline in the second quarter, with
new app customer recovering to more than 80% of pre-COVID
levels.
UK Consumer revenue in H1 declined to GBP19 million, 22% of the
prior year, driven by the decline in net ticket sales. Revenue
take-rate (the rate of revenue generated from net ticket sales) was
impacted by a lower mix of customers from overseas, who as a cohort
generate higher revenue per transaction, offset by distorting
effects in the period, primarily a significant ly higher number of
refunds.
Cost of sales reduced to GBP5 million, 31% of the prior year,
given reduced transaction volumes in the first half but also an
investment in customer service to process the unprecedented level
of refunds. Gross profit decreased to GBP14 million, 20% of the
prior year.
UK Trainline for Business (UK T4B)
UK T4B net ticket sales declined to GBP23 million, 4% of the
prior year. Net ticket sales in Q1 declined to GBP3 million, 1% of
the prior year. Net ticket sales in Q2 improved to GBP21 million,
7% of the prior year. While trends improved over the second
quarter, demand for business travel remained subdued and the White
Label business continued to be impacted by season ticket
refunds.
Revenue declined to GBP6 million, 22% of the prior year, given
materially lower net ticket sales, offset in part by a higher
proportion of fixed fee income for our White Label business. As
with UK Consumer, UK T4B's revenue take-rate was distorted by a
significant ly higher level of refunds processed in the period.
Cost of sales was GBP2 million, 19% of the prior year given
lower transaction volume. Gross profit declined to GBP5 million,
23% of the prior year.
International
International net ticket sales decreased to GBP117 million, 45%
of the prior year. In the first quarter net ticket sales were GBP12
million, 10% of the prior year. In the second quarter net ticket
sales increased to GBP105 million, 74% of the prior year, with net
ticket sales across the top three European domestic markets
returning to growth within the quarter . In addition, there was a
significant step up in new customers to Trainline in the second
quarter, with new app customers surpassing pre-COVID levels. The
faster recovery of our International business relative to the UK
primarily reflected an earlier relaxation of lockdown and social
distancing restrictions in those markets.
Revenue decreased to GBP6 million, 41% of the prior year, given
the reduction in net ticket sales. As with the UK, International
take-rate was impacted by a lower mix of customers from overseas,
who as a cohort generate higher revenue per transaction than
domestic travellers.
Cost of sales decreased to GBP2 million, 48% of the prior year,
given the reduction in transaction volumes. Gross profit reduced to
GBP3 million, 38% of the prior year.
Adjusted EBITDA
The Group reported an adjusted EBITDA loss for the first half of
GBP16 million, within the guided range of a GBP14-19 million loss
as set out in the Group's trading update published on 17th
September 2020. This compared to adjusted EBITDA in H1 FY2020 of
GBP42 million, with the reduction driven by the significant impact
on trading from COVID-19, partly offset by a reduction in operating
costs.
Operating loss
The Group reported an operating loss for the half year of GBP43
million (H1 FY2020: operating loss GBP8m). The operating loss
included a depreciation and amortisation charge of GBP20 million.
This was GBP3 million lower year-on-year, driven by a reduction in
the amortisation of acquired intangibles, partly offset by a higher
amortisation charge relating to capital investment in our product
pipeline. The operating loss also included a GBP6 million
share-based payment charge for the period.
Loss after tax
Loss after tax for H1 FY2021 was GBP39 million versus an GBP89
million loss in the first half of last year, when the Group
incurred significant exceptional costs in relation to the IPO in
June 2019.
The tax credit in the first half was GBP6 million, primarily
reflecting the reporting loss in the period as well as a deferred
tax credit in relation to the unwind of deferred tax liabilities on
intangibles acquired in past acquisitions.
Earnings per share (EPS)
Adjusted basic loss per share was 6.2 pence in H1 FY2021, a 9.8
pence reduction on last year. Adjusted basic earnings per share
adjusts for the exceptional one-off costs in the period,
amortisation of acquired intangibles and share based payment
charges, together with the tax impact of these items.
Basic loss per share was 8.1 pence, an improvement of 12.2 pence
versus the prior year, predominantly driven by exceptional one-off
costs and finance charges incurred last year in relation to the
IPO.
Operating free cash flow and net debt
Operating free cash flow (FCF) was negative GBP80 million in the
first half, primarily driven by the impact of COVID-19 on trading
and the outflow of working capital in Q1. Alongside the GBP16
million adjusted EBITDA loss in the period, net working capital
reduced by GBP49 million, with a GBP90 million reduction in the
first quarter partially offset by a GBP41 million increase in Q2 as
trading conditions improved. Capital expenditure in the period was
GBP14 million, only slightly below the prior year (H1 FY2020: GBP15
million) as we maintained our investment in Product and Technology
teams to drive long-term growth.
Net debt increased to GBP166 million at the end of August, from
GBP71 million at the end of February, primarily as a result of the
negative operating free cash flow in the half. As the business
recovers, the working capital outflow will reverse and reduce the
net debt position.
As announced in April 2020, given the disruption to Trainline's
operating environment as a result of the COVID-19 pandemic,
Trainline's financial covenant on its Revolving Credit Facility has
been waived until August 2021. The financial covenant, tested
semi-annually, requires that net debt not surpass 3.75x adjusted
EBITDA for the trailing twelve months.
Responsibility Statement of the Directors in Respect of the
Half-Yearly Financial Report
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by
the EU;
-- the interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency
Rules, being an indication of important events that have occurred
during the first six months of the financial year and their impact
on the condensed set of financial statements; and a description of
the principal risks and uncertainties for the remaining six months
of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency
Rules, being related party transactions that have taken place in
the first six months of the current financial year and that have
materially affected the financial position or performance of the
entity during that period; and any changes in the related party
transactions described in the last annual report that could do
so.
For and on behalf of the Board:
Shaun McCabe
Chief Financial Officer
5 November 2020
Consolidated Income Statement
Six months ended Six months ended Year ended
31 August 31 August 29 February
Note 2020 2019 2020
GBP'000 GBP'000 GBP'000
Continuing operations
Net ticket sales(1) 1c 358,134 1,844,374 3,726,780
------------------------------- ----- ------------------- ----------------- -------------
Revenue 2 30,951 129,010 260,753
Cost of sales 2 (9,040) (30,054) (59,602)
------------------------------- ----- ------------------- ----------------- -------------
Gross profit 21,911 98,956 201,151
------------------------------- ----- ------------------- ----------------- -------------
Administrative expenses (64,443) (106,889) (198,890)
Adjusted EBITDA(1) 1c (16,304) 41,939 85,201
Depreciation and amortisation (20,274) (23,644) (50,907)
Share based payment charges (5,517) (5,131) (10,631)
Exceptional items 3 (437) (21,097) (21,402)
------------------------------- ----- ------------------- ----------------- -------------
Operating (loss) / profit (42,532) (7,933) 2,261
------------------------------- ----- ------------------- ----------------- -------------
Finance income 4 1,492 347 692
Finance costs 4 (3,614) (79,914) (83,184)
------------------------------- ----- ------------------- ----------------- -------------
Net finance costs (2,122) (79,567) (82,492)
Loss before tax (44,654) (87,500) (80,231)
------------------------------- ----- ------------------- ----------------- -------------
Income tax credit/(expense) 5 6,008 (1,594) (707)
Loss after tax (38,646) (89,094) (80,938)
------------------------------- ----- ------------------- ----------------- -------------
Earnings per share (pence)
Basic 6 (8.09)p (20.32)p (17.67)p
Diluted(2) 6 (8.09)p (20.32)p (17.67)p
---------------------------- -------- --------- ---------
(1) Non-GAAP measure - see note 1c
(2) As the Group has incurred a loss in H1 2021, H1 2020 and FY
2020 the impact of its potential dilutive ordinary shares have been
excluded as they would be anti-dilutive.
The notes on pages 18 to 33 form part of the Interim Financial
Statements.
Consolidated Statement of Other Comprehensive Income
Six months Six months
ended ended Year ended
31 August 31 August 2019 29 February 2020
2020
GBP'000 GBP'000 GBP'000
Loss after tax (38,646) (89,094) (80,938)
----------- ---------------- -------------------
Items that may be reclassified to the income
statement:
Re-measurements of defined benefit liability - - 18
Foreign exchange movement 2,635 (1,581) (214)
---------------- -------------------
Other comprehensive income, net of tax 2,635 (1,581) (196)
----------- ---------------- -------------------
Total comprehensive loss (36,011) (90,675) (81,134)
=========== ================ ===================
The notes on pages 18 to 33 form part of the Interim Financial
Statements.
Consolidated Statement of Financial Position
At At At
31 August 31 August 29 February
2020 2019 2020
Note Restated*
GBP'000 GBP'000
Non-current assets
Intangible assets 88,651 106,425 93,555
Goodwill 447,320 443,271 443,357
Property, plant and equipment 25,868 20,992 20,184
Derivative assets - 64 6
Deferred tax asset 5 1,219 - -
563,058 570,752 557,102
------------ ------------ -------------
Current assets
Cash and cash equivalents 88,715 165,254 92,120
Trade and other receivables 29,442 54,813 52,078
Inventories 44 34 26
118,201 220,101 144,224
------------ ------------ -------------
Current liabilities
Trade and other payables (94,584) (203,407) (165,735)
Current tax payable - (4,430) (552)
Loans and borrowings 7 (3,655) (2,999) (2,698)
------------ ------------ -------------
(98,239) (210,836) (168,985)
------------ ------------ -------------
Net current assets/ (liabilities) 19,962 9,265 (24,761)
============ ============ =============
Total assets less current liabilities 583,020 580,017 532,341
============ ============ =============
Non-current liabilities
Loans and borrowings 7 (245,773) (215,283) (154,402)
Provisions (696) (1,551) (681)
Deferred tax liability 5 - (5,564) (4,345)
(246,469) (222,398) (159,428)
------------ ------------ -------------
Net assets 336,551 357,619 372,913
============ ============ =============
Equity
Share capital* 8 4,807 4,807 4,807
Share premium 8 1,198,703 1,198,703 1,198,703
Preference shares 8 - 50 50
Foreign exchange reserve 8 4,607 605 1,972
Other reserves 8 (1,126,056) (1,131,508) (1,125,755)
Retained earnings* 8 254,490 284,962 293,136
------------ ------------
336,551 357,619 372,913
============ ============ =============
*Share capital and retained earnings as at 31 August 2019 have
been restated, refer to note 8- capital and reserves.
The notes on pages 18 to 33 form part of the Interim Financial
Statements.
Consolidated Statement of Changes in Equity
For the six months ended 31 August 2020:
Share Share Preference Foreign Other Retained Total equity
Capital Premium shares exchange reserves earnings
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 March
2020 4,807 1,198,703 50 1,972 (1,125,755) 293,136 372,913
Loss after
tax - - - - - (38,646) (38,646)
OCI* - - - 2,635 - - 2,635
Preference
share
redemption - - (50) - - - (50)
Acquisition
of treasury
shares - - - - (4,123) - (4,123)
Share based
payments - - - - 3,822 - 3,822
------------- ------------- ------------- ------------- ------------- ------------- -------------
At 31 August
2020 4,807 1,198,703 - 4,607 (1,126,056) 254,490 336,551
------------- ------------- ------------- ------------- ------------- ------------- -------------
For the six months ended 31 August 2019 and year ended 29
February 2020:
Share Share Preference Foreign Other Retained Total equity
Capital Premium shares exchange reserves earnings
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 28
February
2019 422,555 1,055,683 50 2,186 (1,144,010) (99,875) 236,589
IFRS 16
adjustment - - - - - 1,223 1,223
------------- ------------- ------------- ------------- ------------- ------------- -------------
Adjusted 1
March 2019 422,555 1,055,683 50 2,186 (1,144,010) (98,652) 237,812
Loss after
tax - - - - - (89,094) (89,094)
OCI* - - - (1,581) - - (1,581)
Interest on
CPECs - - - - - (3,166) (3,166)
Shares
issued on
listing net
of fees 31,526 75,817 - - - - 107,343
Issue of
shares 59 148 - - - - 207
Share issue
to
extinguish
liabilities 26,541 67,055 - - - - 93,596
Disposal of
treasury
shares - - - - 10,895 - 10,895
Share
capital
reduction** (475,874) - - - - 475,874 -
Share based
payments - - - - 1,607 - 1,607
At 31 August
2019 4,807 1,198,703 50 605 (1,131,508) 284,962 357,619
------------- ------------- ------------- ------------- ------------- ------------- -------------
Profit after
tax - - - - - 8,156 8,156
OCI* - - - 1,367 - 18 1,385
Share based
payments - - - - 5,753 - 5,753
------------- ------------- ------------- ------------- ------------- ------------- -------------
At 29
February
2020 4,807 1,198,703 50 1,972 (1,125,755) 293,136 372,913
------------- ------------- ------------- ------------- ------------- ------------- -------------
*Other Comprehensive Income
** Share capital and retained earnings as at 31 August 2019 have
been restated, refer to note 8.
The notes on pages 18 to 33 form part of the Interim Financial
Statements.
Consolidated Statement of Cash Flow
Six months Six months
ended ended Year ended
31 August 31 August 29 February
Note 2020 2019 2020
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss before tax (44,654) (87,500) (80,231)
--------------------------------------- ----- ----------- ----------- --------------
Adjustment for:
Depreciation and amortisation 20,274 23,644 50,907
Net finance costs 4 2,122 79,567 82,492
Share based payment in admin
expenses 5,517 5,131 10,631
----------- ----------- --------------
(16,741) 20,842 63,799
Changes in:
Trade and other receivables 22,746 (8,751) (7,805)
Trade and other payables (71,663) 45,447 9,372
Inventories (18) (9) (1)
--------------------------------------- ----- ----------- ----------- --------------
Cash (used in)/ generated from
operating activities (65,676) 57,529 65,365
--------------------------------------- ----- ----------- ----------- --------------
Taxes paid 23 (931) (5,198)
--------------------------------------- ----- ----------- ----------- --------------
Net cash (used in) / generated
from operating activities (65,653) 56,598 60,167
--------------------------------------- ----- ----------- ----------- --------------
Cash flows from investing activities
Purchase of tangible and intangible
assets (14,637) (14,560) (28,358)
--------------------------------------- ----- ----------- ----------- --------------
Net cash flow used in investing
activities (14,637) (14,560) (28,358)
--------------------------------------- ----- ----------- ----------- --------------
Cash flows from financing activities
Proceeds from IPO share issue - 107,343 107,343
Sale of treasury shares - 9,994 10,514
Purchase of treasury shares (4,123) - -
Issue of shares - 207 207
Repayment of pre IPO borrowings - (276,763) (276,763)
Proceeds from Revolving Credit
Facility ("RCF") 85,000 206,941 206,941
Repayment of RCF and other borrowings - - (60,223)
Issue costs relating borrowings - (6,400) (6,832)
Payments of lease liabilities (1,129) (1,091) (2,247)
Payment of interest on lease
liabilities (388) (445) (828)
Interest paid (2,238) (7,518) (9,711)
Interest on CPECs - (3,166) (3,166)
--------------------------------------- ----- ----------- ----------- --------------
Net cash flows generated by /
(used in) financing activities 77,122 29,102 (34,765)
--------------------------------------- ----- ----------- ----------- --------------
Net (decrease)/ increase in cash
and cash equivalents (3,168) 71,140 (2,956)
Cash and cash equivalents at
beginning of the period 92,120 94,477 94,477
Effect of exchange rate changes
on cash (237) (363) 599
------------------------------------ -------- -------- --------
Closing cash and cash equivalents 88,715 165,254 92,120
------------------------------------ -------- -------- --------
The notes on pages 18 to 33 form part of the Interim Financial
Statements.
Notes
(Forming part of the Interim Financial Statements)
1. 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 England and Wales. The
Company's registered address is 120 Holborn, London EC1N 2TD.
The Interim Financial Statements for the six months ended 31
August 2020 were approved by the Directors on 5 November 2020. The
Interim Financial statements have been reviewed, not audited. The
auditor's review report is on page 34.
a) Basis of preparation
The Interim Financial Statements have been prepared in
accordance with IAS 34 Interim Financial Reporting as endorsed by
the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
The annual financial statements of the Group are prepared in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the EU.
Consistent accounting policies have been applied to all periods
presented.
The Interim Financial Statements have been prepared on a going
concern basis. In adopting this basis of preparation, the Directors
have considered the Group's forecast cashflows, liquidity,
borrowing facilities and covenant requirements. These have been
considered in light of the expected operational activities and
principal risks and uncertainties of the Group.
The spread of COVID-19 has had a profound impact on the demand
for rail and coach travel across all markets Trainline operates in.
Though steps have been taken to reduce cost and protect the
business and a partial recovery has been seen since the initial
lockdown restrictions across the UK and Europe, trade remains
heavily impacted by national lockdowns, localised travel
restrictions and a temporarily reduced public demand for travel.
This has had a significant impact on profitability which is evident
in the results presented for the six months ended 31 August
2020.
Despite the impact on profitability the Group reinforces and
maintains the strong cash and liquidity position that it reported
at the year ended 29 February 2020. Cash at 31 August 2020 was
GBP89 million (YE20: GBP92 million) and liquidity, being cash plus
available undrawn borrowing facilities, was GBP162 million (YE20:
GBP181 million). No further draw downs on the Revolving Credit
Facility have been made since the GBP85 million in March 2020 as
disclosed in the Annual Report.
In considering the going concern basis of preparation, the
Directors have considered the current financial forecasts for the
business. These forecasts assume a one month national lockdown in
November with recovery assumed to begin from December and month on
month increases thereafter. By June 2021 revenue is expected to
recover to June 2019 levels. Cost reduction exercises have been
actioned and included in the forecast to partly offset the impact
of COVID-19 on profitability and cashflow. After reviewing the
forecast and the expected cash, liquidity and profitability the
Directors concluded they have an expectation that the Group has
sufficient resources to continue for the foreseeable future and at
least 12 months from the signing of these Interim Financial
Statements.
Due to the high level of uncertainty created by COVID-19, there
remains a risk that further lockdowns or restrictions on travel
could be put in place. It is hard to predict the outcome and timing
of any future restrictions and also the timing and speed of
recovery within the rail and coach
Notes (continued)
General information (continued)
sector across Trainline's various markets. Given this
uncertainty, downside scenarios have been modelled. These downside
scenarios included; a one month extension to the November full
national lockdown in December; a prolonged downturn of trade with
no meaningful recovery from September trading levels until March
2021 resulting in profitability for March and April 2021 being half
of that in the base case; and a further 6 week national lockdown in
the first quarter of calendar year 2021.
All downside scenarios show sufficient cash and liquidity
reserves to continue operationally for at least 12 months from the
date of these Interim Financial Statements. However, all scenarios
would have a negative impact on future profitability. The Group's
covenants under the Revolving Credit Facility requires the ratio of
net debt over adjusted EBITDA to be 3.75X or less at 31 August
2021. In the first two sensitivity scenarios, the Group's covenant
test is forecast to be met, though headroom is limited. The third
sensitivity, which reflects management's most severe but plausible
downside scenario, results in a breach of the Group's covenant
test. In the event that the severe but plausible downside scenario
occurred the Group would approach its lending syndicate to discuss
possible remediation options including; an extension of the
existing covenant waiver to cover the period ended 31 August 2021
or a renegotiation of the covenant requirements linked to the
Revolving Credit Facility. The Group remains confident that its
lenders would continue to support the business in such an
event.
As at 5 November 2020 the Group has not sought to obtain a
further covenant waiver or renegotiated the underlying covenant
requirement with the lending syndicate as currently a breach is not
considered the most likely outcome. As such this creates a material
uncertainty on the Group's ability to continue as a Going Concern
due to the possibility of a covenant breach if the most severe by
plausible scenario should come to pass.
Based on the above, the Directors believe it remains appropriate
to prepare the financial statements on a going concern basis. The
Directors recognise that the above circumstances, particularly the
severe but plausible downside scenario, reflect a material
uncertainty that may cast significant doubt on the Group's ability
to continue as a going concern. If these circumstances occurred, it
could result in the Group being unable to realise the value of
assets or meet the value of liabilities through the normal course
of business. The Interim Financial Statements do not include any
adjustments that would result from the basis of preparation being
inappropriate.
b) Basis of measurement
The Interim Financial Statements have been prepared on the
historical cost basis except for the following:
-- Derivative financial instruments are measured at fair value
-- Financial instruments at fair value through the income statement are measured at fair value
Notes (continued)
General information (continued)
c) Non-GAAP Measures
When discussing and assessing performance of the Group,
Management use certain measures which are not defined under IFRS,
referred to as 'Non-GAAP measures'. These measures are used on a
supplemental basis as they are considered to be indicators of the
underlying performance and success of the Group.
The Non-GAAP measures used within this Financial Information
are:
(i) Net Ticket Sales
Net ticket sales represent the gross value of ticket sales to
customers, less the value of refunds issued, during the accounting
period. The Group acts as an agent 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.
(ii) 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 which can
differ significantly.
Adjusted EBITDA is calculated as profit/(loss) 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.
(iii) 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 loss after tax with
share-based payment charged in administrative expenses and finance
costs, exceptional costs 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.
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 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.
Notes (continued)
General information (continued)
(iv) 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 is calculated as total gross debt less cash and cash
equivalents.
d) Use of judgements and estimates
In preparing the Interim 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. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revision to estimates is recognised prospectively.
-- Carrying value of goodwill
An impairment review is performed at least annually (or when an
indicator of impairment is identified) of goodwill balances held by
the Group on a 'value in use' basis, which requires judgement in
estimating the future cash flows, the time period over which they
will occur, and in arriving at an appropriate discount rate to
apply to the cashflows as well as an appropriate long term growth
rate. Each of these judgements has an impact on the overall value
of cashflows expected and therefore the headroom between the
cashflows and carrying values of the cash generating units.
As part of the impairment review for the year ended 29 February
2020, the expected outcome of COVID-19 had been taken into account
in the forecasting, most notably this included forecasting
significantly lower sales during FY21. Sensitivities were applied
to the calculation. At 29 February 2020 and 31 August 2020, no
impairment provision is required. However, as noted in the basis of
preparation, there is increased uncertainty as a result of the
COVID-19 pandemic and therefore this is a significant estimate and
should any significant adverse change arise in the key assumptions
on the international CGU, this may result in an impairment.
Notes (continued)
General information (continued)
-- Useful life of intangible assets, including related deferred tax liabilities.
Intangible assets that are developed or acquired by the Group
have finite useful lives and are measured at cost less accumulated
amortisation and any accumulated impairment losses. The estimated
useful lives which are used to calculate amortisation are based on
length of time these assets are expected to generate income and be
of benefit to the Group. Judgement is required when estimating the
length of the useful life of assets, particularly in relation to
software assets which can often have varying expected useful lives
dependent on the type of asset and speed of technological
development.
The useful lives of intangible assets, including related
deferred tax liabilities, are not considered a significant estimate
as it is not considered likely to lead to a material adjustment in
the next financial year.
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, who is considered to be the Group's Chief Operating
Decision Maker ("CODM").
The Group has three operating and reportable segments which are
considered:
-- UK Consumer* - Travel apps and websites for individual
travellers for journeys within the UK
-- UK T4B* (Trainline for Business) - Branded travel portal
platforms for Corporates and travel management companies and white
label ecommerce platforms for Train Operating Companies within the
UK
-- International - Travel apps and websites for individual
travellers for journeys outside the UK.
*UK Consumer and UK T4B are collectively referred to as the
"UK"
The Group's global operating model means that investments in
platform technology and central overheads are leveraged across the
business, and it is not possible to meaningfully measure full
income statement and statement of financial position results by
operating segment. No single customer accounted for 10 percent or
more of the Group's sales. During FY2021, we completed the
migration of the international business to the Single Global
Platform. As a result, certain costs that were previously allocated
to the International segment are now allocated to central
administrative expenses to align with how these costs are allocated
in the UK segment.
The CODM monitors:
- The three operating segments results at the level of net
ticket sales, revenue and gross margin.
- Results split by UK and International at the level of net
ticket sales, revenue, gross margin, and contribution (as shown in
the below disclosure).
- 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)
Operating Segments (continued)
Segmental Analysis for the six months ended 31 August 2020:
UK Consumer UK T4B Total UK International Total Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ --------- --------- --------------
Net Ticket
Sales 217,571 23,263 240,834 117,300 358,134
------------ --------- --------- -------------- ------------
Revenue 18,916 6,394 25,310 5,641 30,951
Cost of sales (5,247) (1,622) (6,869) (2,171) (9,040)
------------ --------- --------- -------------- ------------
Gross Margin 13,669 4,772 18,441 3,470 21,911
Directly allocable
administrative
expenses (11,237) (5,625) (16,862)
--------- -------------- ------------
Contribution 7,204 (2,155) 5,049
Central administrative
expenses (21,353)
------------------------- ------------ --------- --------- -------------- ------------
Adjusted EBITDA (16,304)
Depreciation and Amortisation (20,274)
Share based payment charges (5,517)
Exceptional items (437)
--------------------------------------- --------- --------- -------------- ------------
Operating (loss)/profit (42,532)
------------
Net finance
costs (2,122)
------------
Loss before
tax (44,654)
------------
Income tax
credit 6,008
Loss after
tax (38,646)
------------------------- ------------ --------- --------- --------------
Segmental Analysis for the six months ended 31 August 2019:
UK Consumer UK T4B Total UK International Total Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ --------- ---------- --------------
Net Ticket
Sales 985,740 599,420 1,585,160 259,214 1,844,374
------------ --------- ---------- -------------- ------------
Revenue 85,686 29,649 115,335 13,675 129,010
Cost of sales (17,009) (8,566) (25,575) (4,479) (30,054)
------------ --------- ---------- -------------- ------------
Gross Margin 68,677 21,083 89,760 9,196 98,956
Directly allocable
administrative
expenses (19,269) (16,763) (36,031)
---------- -------------- ------------
Contribution 70,491 (7,567) 62,924
Central administrative
expenses (20,985)
------------------------- ------------ --------- ---------- -------------- ------------
Adjusted EBITDA 41,939
Depreciation and Amortisation (23,644)
Share based payment charges (5,131)
Exceptional items (21,097)
--------------------------------------- --------- ---------- -------------- ------------
Operating profit/(loss) (7,933)
------------
Net finance
costs (79,567)
------------
Loss before
tax (87,500)
------------
Income tax
expense (1,594)
Loss after
tax (89,094)
------------------------- ------------ --------- ---------- --------------
Notes (continued)
Operating Segments (continued)
Segmental Analysis for the year ended 29 February 2020:
UK Consumer UK T4B Total UK International Total Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ---------- ---------- --------------
Net Ticket
Sales 2,046,178 1,190,549 3,236,727 490,053 3,726,780
------------ ---------- ---------- -------------- ------------
Revenue 177,993 56,790 234,783 25,970 260,753
Cost of sales (34,306) (16,629) (50,935) (8,667) (59,602)
------------ ---------- ---------- -------------- ------------
Gross Margin 143,687 40,161 183,848 17,303 201,151
Directly allocable
administrative
expenses (40,039) (31,185) (71,224)
---------- -------------- ------------
Contribution 143,809 (13,882) 129,927
Central administrative
expenses (44,726)
------------------------- ------------ ---------- ---------- -------------- ------------
Adjusted EBITDA 85,201
Depreciation and Amortisation (50,907)
Share based payment charges (10,631)
Exceptional items (21,402)
--------------------------------------- ---------- ---------- -------------- ------------
Operating profit/(loss) 2,261
------------
Net finance
costs (82,492)
------------
Loss before
tax (80,231)
------------
Income tax
expense (707)
Loss after
tax (80,938)
------------------------- ------------ ---------- ---------- --------------
Notes (continued)
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 trade.
Six months Six months
ended 31 ended 31 Year ended
August August 29 February
2020 2019 2020
GBP'000 GBP'000 GBP'000
IPO transaction costs - 21,097 21,402
Restructuring costs 437 - -
Net exceptional costs / (credits) 437 21,097 21,402
=========== =========== ==============
IPO transaction costs
Fees and costs, including one off bonuses, in relation to the
IPO process.
Restructuring costs
Restructuring costs incurred were part of a strategic
reorganisation to improve operating efficiency.
Notes (continued)
4. Net finance costs
Net financing costs comprise bank interest income, interest
expense on borrowings and lease liabilities, as well as foreign
exchange gains/losses, fair value movements on the Group's interest
rate cap and fair value remeasurements in relation to share based
payments and put/call option liabilities.
Six months Six months Year ended
ended 31 ended 31 29 February
August 2020 August 2019 2020
GBP'000 GBP'000 GBP'000
Bank interest income 14 347 692
Foreign exchange gain 1,478 - -
Finance Income 1,492 347 692
------------- ------------- -------------
Interest on bank loans (3,223) (8,565) (10,900)
Foreign exchange loss - (73) (558)
Loss on interest rate swap (6) (396) (454)
Interest on lease liability (385) (436) (828)
Exceptional finance costs*
Write off of capitalised finance
costs - (8,466) (8,466)
Fair value change on share
based payments - (49,705) (49,705)
Fair value change on put/call
option - (12,273) (12,273)
Finance costs (3,614) (79,914) (83,184)
------------- ------------- -------------
Net finance costs recognised
in the income statement (2,122) (79,567) (82,492)
============= ============= =============
*Exceptional finance costs - these costs are one-offs which
occurred at the date of IPO relating to the final fair value
movement on the pre IPO share based payment arrangements and the
write off of previously capitalised financing costs due to the IPO
refinancing. The put/call option relates to non-employee share
related costs. All of these expenses are non-cash charges.
Notes (continued)
5. Taxation
Six months Six months
ended 31 ended 31 Year Ended
August August 29 February
2020 2019 2020
GBP'000 GBP'000 GBP'000
Current tax (credit)/charge (352) 4,112 4,200
----------- ----------- --------------
Deferred tax credit (5,656) (2,518) (3,493)
----------- ----------- --------------
Tax (credit)/charge (6,008) 1,594 707
----------- ----------- --------------
Effective tax rate - % 13.45% (1.82)% (1)%
=========== =========== ==============
UK corporation tax was calculated at 19% (H1 2020 & FY 2020:
19%) of the taxable profit for the period. Taxation for territories
outside of the UK was calculated at the rates prevailing in the
respective jurisdictions. The income tax expense was recognised
based on the best estimate of the annual income tax rate expected
for each jurisdiction for the full financial year applied to profit
before tax for the interim period.
The total tax credit of GBP6.0 million (H1 2020: GBP1.6 million
charge; FY 2020: GBP0.7 million charge) is made up of a current
corporation tax credit of GBP0.4 million (H1 2020: GBP4.1 million
charge; FY 2020: GBP4.2 million charge) arising in the UK, and a
deferred tax credit of GBP5.7 million (H1 2020: GBP2.5 million
credit, FY 2020: GBP3.5 million credit). The deferred tax credit in
H1 2021 primarily relates to the trading losses arising as a result
of the impact of COVID-19 that can be used to offset against the
tax charge for the group in FY 2020, or offset against future
profits. The deferred tax credit in H1 2021, H1 2020 and FY 2020 is
also resulting from the unwind of deferred tax liabilities arising
on acquired intangibles and deferred tax on equity settled share
based payment charges. The release of deferred tax assets and
liabilities is an accounting unwind and does not impact the
corporation tax payable in cash by the Group.
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.
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.
(ii) Diluted earnings per share
Earnings attributable to ordinary equity holders of the Group,
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,
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.
(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,
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'.
Notes (continued)
Earnings per share (continued)
At 31 August At 31 August At 29 February
2020 2019 2020
Weighted average number of
ordinary shares:
Ordinary shares 480,680,508 443,518,543 462,099,526
Treasury shares (3,241,163) (5,103,596) (4,108,486)
------------- ------------- ---------------
Weighted number of ordinary
shares* 477,439,345 438,414,947 457,991,040
*As the Group has incurred a loss in H1 2021, H1 2020 and FY
2020, the impact of its potential dilutive ordinary shares have
been excluded as they would be anti-dilutive.
At 31 August At 31 August At 29 February
2020 2019 2020
GBP'000 GBP'000 GBP'000
Loss after tax (38,646) (89,094) (80,938)
Earnings attributable to
equity holders (38,646) (89,094) (80,938)
------------- ------------- ---------------
Exceptional items 437 21,097 21,402
Exceptional finance costs - 70,444 70,444
Amortisation of acquired
intangibles 4,712 11,693 23,634
Share based payment charges 5,517 5,131 10,631
Tax impact of the above adjustments (1,602) (3,468) (8,286)
------------- ------------- ---------------
Adjusted earnings (29,582) 15,803 36,887
------------- ------------- ---------------
(Loss)/earnings per share
(pence)
------------- ------------- ---------------
Basic (8.09)p (20.32)p (17.67)p
Diluted (8.09)p (20.32)p (17.67)p
------------- ------------- ---------------
Adjusted earnings per share
(pence)
-------- ------ ------
Basic (6.20)p 3.60p 8.05p
Diluted (6.20)p 3.56p 8.05p
-------- ------ ------
Notes (continued)
7. Loans and borrowings
This note details a breakdown of the various loans and
borrowings of the Group.
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 an
exceptional finance cost.
At At At
31 August 31 August 29 February
2020 2019 2020
GBP'000 GBP'000 GBP'000
Non-current liabilities
Revolving credit facility(1) 226,743 200,697 141,057
Other term debt 405 526 388
Lease liabilities 18,625 14,060 12,957
245,773 215,283 154,402
============ =========== =============
Current liabilities
Accrued interest on secured
bank loans 524 799 309
Lease liabilities 3,131 2,200 2,389
3,655 2,999 2,698
============ =========== =============
1. Included within the revolving credit facility is the
principal amount of GBP231.9 million (H1 2020: GBP206.9 million, FY
2020: GBP146.9 million) and directly attributable transaction costs
of GBP5.2 million (H1 2020: GBP6.2 million, FY 2020: GBP5.8
million).
The revolving credit facility became effective on 26 June 2019,
the total facility amount is GBP350.0 million. The facility allows
draw downs in cash or non-cash to cover bank guarantees. At 31
August 2020 the cash drawn amount is GBP231.9 million, the non-cash
bank guarantee drawn amount is GBP44.5 million and the undrawn
amount on the facility is GBP73.6 million.
The Group's revolving credit facility is secured by a fixed and
floating charge over certain assets of the Group. Interest is
payable on a margin of 1.0% to 2.0% above LIBOR. The Group is
subject to certain bank covenants under the new facility, however
financial covenants have been waived by the Group's loan syndicate
until August 2021 to support the business through the COVID-19
pandemic and the related impact on trading.
Notes (continued)
8. Capital and reserves
Share Capital
Share Capital represents the number of shares in issue at their
nominal value.
Ordinary shares in the Group have a nominal value of GBP0.01 and
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.
Share capital and retained earnings as at 31 August 2019 have
been restated to include the share capital reduction on 30 July
2019.
Shareholding at 31 August 2020, 31 August 2019 and 29 February
2020
Number GBP'000
Ordinary shares - GBP0.01 480,680,508 4,807
480,680,508 4,807
============ ========
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 were GBP1.00
but the initial offering price was GBP3.50.
Share premium is stated net of any direct costs relating to the
issue of shares.
Preference shares
Preference shares represented 50,000 redeemable preference
shares of GBP1.00 each, redeemable at the option of the Group. The
preference shares were redeemed in full on 20 August 2020.
Retained Earnings
Retained earnings represents the profit the Group makes that is
not distributed as dividends. No dividends have been paid in any
period.
Foreign Exchange
The foreign exchange reserve represents the net difference on
the translation of the balance sheets 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)
Capital and reserves (continued)
Other Reserves
Merger reserve Treasury reserve SBP* reserve Total other reserves
GBP'000 GBP'000 GBP'000 GBP'000
At 1 March 2019 (1,122,218) (21,792) - (1,144,010)
Disposal of treasury shares - 10,895 - 10,895
SBP* charge - - 1,607 1,607
At 31 August 2019 (1,122,218) (10,897) 1,607 (1,131,508)
--------------- ----------------- ------------- ---------------------
SBP* charge - - 5,753 5,753
--------------- ----------------- ------------- ---------------------
At 29 February 2020 (1,122,218) (10,897) 7,360 (1,125,755)
--------------- ----------------- ------------- ---------------------
Addition of treasury shares - (4,123) - (4,123)
Allocation of treasury shares to fulfil
share based payments - 6,860 (6,860) -
SBP* charge - - 3,822 3,822
At 31 August 2020 (1,122,218) (8,160) 4,322 (1,126,056)
--------------- ----------------- ------------- ---------------------
*SBP - Share based payment
Merger reserve
The balance of the merger reserve represents the difference
between the nominal value of the reserves in the Victoria
Investments S.C.A. Group (the previous ultimate parent company) and
the value of reserves in Trainline Plc prior to the initial public
offering.
Treasury reserve
Treasury shares reflect the value of shares held by the Group's
Employee Benefit Trust ('EBT'). At 31 August 2020 the Group's EBT
held 2.1 million shares (H1 2020: 3.1 million, FY 2020: 3.1
million) which have a historical cost of GBP8.2 million (H1 2020:
GBP10.9 million, FY 2020: GBP10.9 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.
9. Related parties
During the period, 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, including ongoing long term share scheme
incentives, GBP1,000,465 (H1 FY 2020 GBP4,052,000, FY 2020
GBP5,631,571).
At 31 August 2020 Key Management Personnel held 10,385,560
shares (H1 FY 2020 14,701,387, FY 2020 11,185,560) in Trainline
plc.
Notes (continued)
10. Principal risks and uncertainties
The principal risks and uncertainties that the Group faces for
the rest of the financial year are consistent with those previous
reported and are summarised below:
-- Market shock/economic disruption: Trainline is exposed to
market risks including foreign currency rates, general market
sentiment and the risk of global market shocks, such as a pandemic.
Significant market events could damage Trainline's competitiveness,
creditworthiness and the spending power of our customers,
ultimately impacting our financial results and the success of our
product proposition.
-- Prolonged COVID-19: Trainline has been exposed to and
affected by the impact of COVID-19, notably as a result of lockdown
measures taken by most governments, particularly in the UK and
Europe. Restrictions on domestic travel, including commuting, and
cross border travel into and around Europe, has impacted
Trainline's operations. Trainline has seen a downturn in traffic on
all platforms, on ticket purchases and on ancillary revenue in all
markets. As well as closure of our offices in London, Paris and
Edinburgh, the onset of COVID-19 saw a significant increase in the
number of customers contacting Trainline to refund or exchange
tickets in all markets. Should COVID-19 continue, Trainline will
need to ensure that we are well-positioned to manage the impact on
our operations.
-- IT security and cybercrime: A major breach in systems as a
result of identity fraud, theft, hacking, phishing or an
information security incident could adversely impact our business
operations and reputation and expose the Group to litigation or
other regulatory action.
-- People: Our business depends on hiring and retaining first
class talent in the highly competitive tech industry. Inability to
attract and retain critical skills and capabilities could hinder
our ability to deliver on our strategic objectives.
-- Competitive landscape: Failure to ensure our technology and
user experience meets our customers' needs and remains ahead of
competitor products would have an adverse impact on our future
results.
-- Compliance: Non-compliance by Trainline with legislation,
licences and other regulatory requirements could affect Trainline's
reputation and operational and financial success, and result in
financial or other legal penalties, an inability to retail rail and
coach tickets and loss of revenue. Examples of such legislation,
regulations and licences include anti-bribery and corruption, tax
legislation and licenses with our carrier partners in the UK,
across Europe and beyond, and the legal and governance requirements
of Trainline operating as a public limited company.
-- General supply: Our business is dependent on performing and
operationally safe rail and coach operators and systems. A
significant and prolonged disruption to traveller services or
systems, due to bad weather, industrial action or a pandemic such
as COVID-19, for example, would have an adverse impact on our
future results. We also rely on our carriers for our rail and coach
products and relevant information.
-- Regulatory and political environment: Changes to government
policy or regulations, whether in the UK or across Europe, such as
Brexit, could affect the Group's operations or financial prospects.
Similarly, activity by state-owned carriers, affected by government
activity in their respective jurisdictions, could negatively affect
Trainline's operations in the short to medium term.
Independent Review Report to Trainline Plc
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 August 2020 which comprises the Consolidated
Income Statement, Consolidated Statement of Other Comprehensive
Income, Consolidated Statement of Financial Position, Consolidated
Statement of Changes in Equity, Consolidated Statement of Cash Flow
and the related explanatory notes.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules ("the DTR") of the United
Kingdom's Financial Services Authority ("the UK FCA").
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting," as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
August 2020 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the DTR of the UK FCA.
Material uncertainty related to going concern
We draw attention to note 1a to the Half-Yearly Financial Report
which indicates that the Group's ability to continue as a going
concern is dependent on, in a severe but plausible downside
scenario, the lender not calling in the amounts owed to it in the
event of a covenant breach. These events and conditions, along with
the other matters explained in note 1a, constitute a material
uncertainty that may cast significant doubt on the group's ability
to continue as a going concern.
Our opinion is not modified in respect of this matter.
Sarah Styant
For and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London
E14 5GL
5 November 2020
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR BIBLTMTJMBLM
(END) Dow Jones Newswires
November 05, 2020 02:00 ET (07:00 GMT)
Grafico Azioni Trainline (LSE:TRN)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Trainline (LSE:TRN)
Storico
Da Apr 2023 a Apr 2024
