TIDMTRN
RNS Number : 1983M
Trainline PLC
07 May 2020
7 May 2020
Trainline plc
Results for the year ended 29 February 2020
A strong financial performance ahead of expectations and
delivery against strategic priorities; actions taken to navigate
COVID-19 downturn and position business for long term growth
FY 2020 summary financial highlights:
GBPm unless otherwise stated: FY 2020 FY 2019 Variance
------------------------------- -------- -------- ---------
Net ticket sales 3,727 3,194 +17%
Revenue 261 210 +24%
Adjusted EBITDA(1) 85 53 +62%
Operating profit 2 11 (78)%
Adjusted basic earnings per
share(2) 8.1p 2.4p +5.6p
Basic earnings per share (17.7)p (3.3)p (14.4)p
Operating free cashflow(3) 59 42 +39%
Net debt / Adj. EBITDA(4) 0.8x 3.7x
FY 2020 results summary:
-- Net ticket sales up 17% to GBP3.7 billion in line with
guidance, reflecting increased mobile demand from greater eticket
adoption in UK and strong customer acquisition in International
-- Revenue increased 24% to GBP261 million at top end of
guidance, benefiting from net ticket sales growth, revenue
optimisation and the launch of new ancillary revenue streams
-- Adjusted EBITDA up 62% to GBP85 million driven by volume
growth and the operating leverage achieved across our cost base
-- Operating profit of GBP2 million and loss after of tax of
GBP81 million, primarily driven by exceptional costs relating to
the IPO
-- Operating free cashflow of GBP59 million driven by strong
adjusted EBITDA performance and reduced capital expenditure
-- Leverage reduced to 0.8x adjusted EBITDA, benefiting from
primary proceeds from the IPO and strong cashflow generation
-- Good progress against strategic priorities:
o Enhancing customer experience: Strong conversion growth in
both UK Consumer and International; launched SplitSave in app, a
split-ticketing feature
o Building demand: Monthly visits up 19% to c.90 million; share
of mobile transactions up 10% points to 76%
o Optimising revenue: Take-rate increased c.40bps in UK Consumer
and c.110bps in International, driven by new ancillary revenues
o Growing Trainline for Business (T4B): First clients now live
on Global API platform; retained both franchises that have come up
for renewal for our white label retailing service since IPO, the
West Coast franchise and East Midlands
Notes:
(1) Adjusted EBITDA excludes share based payment charges and exceptional items
(2) 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
(3) Operating free cash flow is cash generated from operating
activities adding back cash exceptional items, excluding non-cash
impairments, and deducting purchase of property, plant and
equipment excluding those acquired through business combinations or
trade and asset purchases
(4) Net debt/EBITDA is gross debt less cash and cash equivalents divided by LTM adjusted EBITDA
Impact of COVID-19 and outlook for FY 2021:
-- Significant impact on trading in Q1 FY2021 to date as a
result of COVID-19 lockdown, with UK and European passenger volumes
currently down >95%
-- Confident Trainline can navigate even an extended downturn if
necessary given significant liquidity headroom and mitigating
actions taken, whilst maintaining investment in the Group's
strategic priorities to drive long term growth
-- As previously disclosed, c.GBP150 million liquidity headroom
expected as at end of May, with monthly cash outflow from operating
costs and capex reduced to c.GBP8-9 million
-- Group will update on guidance for FY 2021 once visibility improves
Clare Gilmartin, CEO of Trainline said:
"We are pleased to have delivered a strong performance over this
past year, in particular to have exceeded expectations set at IPO
for FY20 Revenue growth and EBITDA. We have also made significant
progress against our strategic priorities.
"In recent weeks we have seen disruption to our business due to
COVID-19, and are grateful to our frontline staff in particular for
helping our customers over this period. We remain confident that
the long-term growth opportunity for our business remains
unchanged, and are committed to our long term growth plans."
Presentation of results
There will be a live webcast presentation and conference call of
the results to analysts and investors at 9:00 AM GMT today (7(th)
May 2020). Please register to participate at the Company's investor
website:
https://investors.thetrainline.com/investors/results-reports-and-presentations/fy-2020-results
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: 1949117
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.
IMPACT OF COVID-19 AND OUR RESPONSE
The COVID-19 pandemic has significantly impacted the rail and
coach industries across our markets. Since the end of February
2020, governments in the UK and the rest of Europe have introduced
far-reaching social distancing measures and lockdowns to curb the
spread of the COVID-19, while rail and coach operators have
significantly reduced service timetables. These measures have
resulted in a clear slowdown in all the markets in which we
operate. Industry passenger volumes in the UK were down more than
95% year on year in April 2020, with similar demand shocks across
each of our International markets.
During the pandemic, we have prioritised the safety and
wellbeing of our people and supporting our customers in making
changes to their travel plans and processing refunds. We have
managed unprecedented levels of inbound customer service requests
and improved our customer self-serve functionality - introducing
simple, automated change and refund processes in our app and
website - while also working with the rail industry to relax refund
terms and conditions.
Given the significant fall in industry passenger numbers, we
have taken quick and decisive measures to reduce operating costs
and cash outflows. Our mitigating actions include pausing marketing
and other discretionary spend, introducing a recruitment freeze,
and deferring FY 2020 bonus payments and pay reviews for staff.
In addition, our CEO has voluntarily taken a 50% salary
reduction for the foreseeable future, while the Board of Directors
and Management Team have taken a 20% reduction in their Board fees
and salaries respectively. The Executive Directors and Management
Team will defer their annual bonus for FY 2020 and we have
furloughed certain teams under the Government's Coronavirus Job
Retention Scheme (CJRS).
We are maintaining 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
for our customers.
As a result of the actions we have taken across the Group,
Trainline's cash outflow from operating costs and capital
expenditure has reduced to c.GBP8-9 million per month.
OUTLOOK FOR FY 2021
Significant uncertainty remains around when COVID-19 related
restrictions will be lifted in our markets as well as what the
macroeconomic recovery will look like thereafter. Until visibility
improves, we will not provide specific guidance for FY 2021.
However, we remain confident that we can operate through an
extended downturn period if required. We expect Trainline's
liquidity headroom to be c.GBP150 million at the end of May 2020.
By this time, the Group expects to have fully completed the working
capital outflow arising from settling pre-existing bookings to
train and coach operators as well as processing refunds to
customers.
Given the expected monthly cash outflow from operating costs and
capital expenditure of c.GBP8-9 million (see above), the Group has
sufficient liquidity to operate for the foreseeable future even
with no revenue generation or further cost mitigation.
Longer term, we continue to see the same structural tailwinds
for the business, while in the shorter term, we expect COVID-19 to
encourage a faster shift to digital ticketing as train users are
less willing to use ticket machines or queue at the station.
Similarly, ongoing social distancing requirements will increase the
need for clear and accurate, on-the-go travel information. We also
expect customers to be very value conscious and SplitSave will be
an important feature for customers looking for the cheapest rail
fares available. Against that backdrop, we remain resolutely
focused on supporting our customers through these difficult
times.
FY 2020 PERFORMANCE REVIEW
Group Overview:
Net ticket sales increased 17% to GBP3.7 billion in line with
guidance expectations (of high-teens percentage rate growth).
Revenue increased 24% to GBP261 million, at the top end of already
improved guidance expectations of growth in the low to mid-20%
range.
Gross profit increased 29% to GBP201 million and adjusted EBITDA
grew 62% to GBP85 million, driven by strong volume growth,
improving operating leverage, and ticket fulfilment cost savings in
the UK from an increased use of etickets.
Segmental performance:
FY 2020 FY 2019 Variance
---------------------------- -------- -------- ---------
Net ticket sales (GBPm)
UK Consumer 2,046 1,648 +24%
UK T4B 1,191 1,198 (1)%
-------- -------- ---------
Total UK 3,237 2,846 +14%
International 490 349 +41%
Total Group 3,727 3,194 +17%
-------- -------- ---------
Revenue (GBPm)
UK Consumer 178 137 +30%
UK T4B 57 58 (3)%
-------- -------- ---------
Total UK 235 195 +20%
International 26 14 +79%
Total Group 261 210 +24%
-------- -------- ---------
Gross profit (GBPm)
UK Consumer 144 107 +34%
UK T4B 40 41 (1)%
-------- -------- ---------
Total UK 184 148 +25%
International 17 8 +120%
-------- -------- ---------
Total Group 201 155 +29%
-------- -------- ---------
UK contribution 144 112 +29%
International contribution (14) (18) +23%
Central admin expenses (45) (41) (8)%
-------- -------- ---------
Adjusted EBITDA (GBPm)
(1) 85 53 +62%
-------- -------- ---------
Notes:
(1) Adjusted EBITDA excludes share based payment charges and exceptional items
UK Consumer
Net ticket sales for UK Consumer increased 24% to GBP2,046
million, supported by an increased mix of app customers, greater
eticket availability and increased conversion rates. The UK
business also benefited in the fourth quarter from the successful
launch of SplitSave, a new split-ticketing mobile app feature
offering the lowest fares available, as well as some switching to
UK Consumer following a change in operator and branding of the West
Coast mainline franchise. Together these factors helped accelerate
our growth in market share in the fourth quarter.
Revenue increased 30% to GBP178 million, driven by the growth in
net ticket sales and a c.40 basis point increase in revenue
take-rate. Our take-rate improvement resulted from the full year
effect of new ancillary revenue streams, including our
multi-currency service, insurance and advertising, in addition to
the continuing optimisation of fees.
Cost of sales grew 15% to GBP34 million, primarily due to
increased volumes but partially offset by lower fulfilment costs
per transaction of etickets versus paper tickets. As a result,
gross profit increased 34% to GBP144 million, growing faster than
revenue, with gross margin expanding from 78% to 81%.
UK Trainline for Business (UK T4B)
UK T4B net ticket sales declined 1% year on year to GBP1,191
million. White label ticket sales were impacted by a change in
operator and branding for the West Coast mainline franchise in the
fourth quarter, albeit partly offset by higher related ticket sales
through UK Consumer. B2B ticket sales were impacted by the loss of
the Egencia B2B contract in March 2019, as previously disclosed, as
well as by a slowdown in discretionary travel spend by large
corporations in the second half of the year resulting from Brexit
uncertainty.
Revenue declined 3% to GBP57 million given lower net ticket
sales and some margin pressure as we secured and extended major
partnerships for the long term.
Cost of sales reduced 6% given lower volume and the benefit from
reduced fulfilment costs per transaction resulting in an improved
gross margin from 70% to 71%. Gross profit declined 1% to GBP40
million.
International
International net ticket sales increased by 41% to GBP490
million, with new customer acquisition continuing to underpin
growth, along with growth in conversion. This was partly offset by
the impact of widespread national strike action in France in Q4,
which had an estimated 8% points impact on our growth for the full
year. Outside of France our International business continued to
perform strongly in the fourth quarter.
Revenue increased 79% to GBP26 million, supported by rapid
growth in net ticket sales and the launch of new revenue services
in our international markets, driving revenue take-rate up by c.110
basis points.
Cost of sales grew 31% to GBP9 million driven by higher net
ticket sales. Gross profit grew 120% to GBP17 million, with gross
margin increasing from 54% to 67%, driven by the take-rate
expansion.
Adjusted EBITDA
Group adjusted EBITDA increased by 62% to GBP85 million. This
increase was primarily due to volume growth and operating leverage,
with revenue and gross profit scaling faster than operating
expenses as the business continues to realise the benefits of
scale.
The Group continues to tightly manage direct and central
operating costs, albeit with some additional marketing investment
to support the growth of Trainline's International business. In
addition, there was a one-off benefit from the implementation of
IFRS 16 Leases as there was no rental expense in the FY 2020
adjusted EBITDA figure but there was GBP3 million rental expense in
the FY 2019 comparative.
Operating profit
The Group reported an operating profit for the year of GBP2
million, GBP8 million lower than prior year given GBP21 million of
exceptional fees and charges relating to the IPO in June, as
previously disclosed in our H1 results announcement. Excluding
these one-off costs, operating profit would have been GBP24
million, up GBP13 million year on year.
Operating profit included a depreciation and amortisation charge
of GBP51 million, up GBP12 million year on year, driven by the
increased capital investment relating to the new Single Global
Platform and a step up in investment behind our product
roadmap.
Operating profit also included a share-based payment charge of
GBP11 million, up GBP7 million on the prior year. GBP7 million of
this related to post IPO employee incentive schemes and GBP4
million related to the final true up charge in relation to pre IPO
employee incentive schemes.
Loss after tax
Loss after tax for FY 2020 was GBP81 million, GBP67 million
lower than the prior year driven by one-off, exceptional items
incurred as a result of the IPO. In addition to items described
above within operating profit, as previously disclosed in our H1
results announcement, the Group recorded a one-off GBP70 million
charge to finance costs related to share based payments and other
share related costs and the write off of previously capitalised
financing costs (pre IPO financing), neither of which impacted the
Group's cashflow. The share-based payment charge resulted from the
crystallisation of the Group's pre IPO share based payment
arrangements for employees and management and reflects the final
fair value accounting movement in relation to pre IPO employee
incentive schemes.
Excluding the GBP92 million of one-off exceptional items
relating to the IPO, profit after tax would have been GBP11
million, GBP25 million higher than the prior year.
Net finance costs excluding exceptional IPO-related charges were
GBP12 million, a reduction of GBP12 million year-on-year,
reflecting the new capital structure put in place in June 2019
following the IPO.
The FY 2020 tax charge was GBP1 million, with our corporation
tax largely offset by a deferred tax credit in relation to the
unwind of deferred tax liabilities on intangibles acquired in past
acquisitions. Over time, the corporation tax charge is expected to
increase as profits increase and the deferred tax benefit is
expected to reduce as the relating assets become fully
amortised.
Earnings per share (EPS)
Adjusted basic EPS was 8.1 pence, a 5.6 pence increase on last
year. Adjusted basic earnings per share adjusts for the exceptional
one-off costs in the period (primarily IPO-related fees and
expenses), amortisation of acquired intangibles and share based
payment charges, together with the tax impact of these items.
Basic loss per share was 17.7 pence, an increase of 14.4 pence
on the prior year, predominantly driven by the exceptional costs
and finance charges linked to the IPO in the period.
Operating free cashflow and net debt
Operating free cash flow was GBP59 million, up 39% or GBP16
million year on year.
The increase was predominantly driven by growth in adjusted
EBITDA of GBP33 million and a reduction in capital expenditure of
GBP5 million as we approach completion of the global re-platforming
project. Operating free cash flow growth was partly offset by a
reduction in the benefit from working capital movements, GBP21
million lower year-on-year, relating to the timing of our payments
to rail carriers.
Net debt reduced to GBP71 million from GBP194 million in the
previous year, meaning net debt to adjusted EBITDA was 0.8x at 29
February 2020, down from 3.7x a year ago. This reflects the benefit
to net debt from proceeds of the IPO and strong free cash flow
generation.
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 (RCF) has been waived until August
2021. The financial covenant, tested semi-annually, requires that
net debt not surpass 3.75x EBITDA for the trailing twelve
months.
PROGRESS AGAINST OUR STRATEGIC PRIORITIES IN FY 2020
To achieve our mission to make rail and coach travel easier for
customers worldwide, we have continued to make progress against our
four strategic priorities: Enhancing the customer experience,
building demand, optimising revenues, and growing Trainline for
Business (T4B).
Enhancing our user experience
During the last year we continued to invest in our leading
technology and customer experience.
We have completed the build of our new, micro-service based
global tech platform and have migrated across all our carriers and
the majority of our customer base. We have paused the migration of
the remaining customers given the current disruption from COVID-19
and will resume once we see we see the recovery begin. Our new
platform allows us to quickly roll out new products and features
across geographies and we will continue to innovate to drive
customer experience improvements. We are already seeing good
progress, evidenced by the conversion rate for our consumer
business growing more than 20%, and our iOS app rating now at 4.9
stars in the UK and International.
We are passionate about helping our customers find the best
price for their journey and, in this spirit, we launched SplitSave,
a new app feature that finds clever combinations of train tickets
('split tickets') to help our UK customers make significant savings
on their journeys. Feedback has been overwhelmingly positive and we
will continue to iterate and improve the product. Prior to the
COVID-19 pandemic, SplitSave was driving greater engagement and
increased net ticket sales with many customers leveraging the cost
savings to trade up to higher value tickets (e.g. switching to more
popular train times).
We continued to focus on and improve the eticket experience in
the UK, helping grow their popularity and usage. Industry
penetration grew to 21% (from 14% at the IPO in June 2019), with
more than 70% of etickets purchased through Trainline. With eticket
availability estimated to be 71%, we continue to see a significant
growth runway for eticket penetration over the medium-term and
particularly in a post-COVID world where customers are likely to be
less willing to use ticket machines at the station
We have increased the number of rail and coach carrier partners
from 220 at the time of our IPO to more than 270, notably adding
the Swiss carrier SBB as well as a number of coach carriers.
Through the breadth of our partnerships, depth of our individual
connections and our unique cross carrier journey planner, we now
offer customers the best route options for their journeys in and
across 45 countries.
Looking ahead, we will continue investing behind our strong
innovation pipeline. We have a number of exciting new products and
features due to launch over the next year or so, including digital
railcards, and reliability ratings to show customers how often any
given train is on time or not.
Building demand
As well as focusing on our customer experience, we have
accelerated demand growth in all markets whilst maintaining a low
cost per new customer.
We grew acquisition and engagement, launching of hundreds of
thousands of new content pages in a further 10 languages for search
engine optimisation, rolling-out of our own proprietary bidding
engine to optimise pay-per-click advertising, using our
cross-platform data to target higher lifetime value app users, and
migrating web customers to app through scaled A/B testing across
our web flows. As a result, monthly visits to our platform grew 19%
to 90 million.
We focused significant effort in driving app growth, where
customers benefit from many more features, resulting in downloads
growing 49% year on year, over half of which came from
International, and app share of transactions increasing by 10
percentage points to 76% of UK Consumer transactions.
Given the considerable impact of COVID-19 on underlying demand,
we have put marketing activity on pause. We will resume our
marketing activity once travel restrictions lift and the economic
recovery gets underway in our markets.
Optimising revenues
The launch and growth of new revenue streams over the past year
have allowed us to both enhance the customer experience whilst also
delivering strong growth in our take rate for both our UK and
International business. Notable examples include multi-currency
payment options, International service fees, tiered refund fees and
trip insurance across App and Web.
The Group will continue to optimise revenues and we are
developing a number of new ancillary revenue streams including
improvements to the advertising model we launched this year.
Growing Trainline for Business
We have made good progress positioning Trainline for Business
(T4B) for future growth. T4B consists of our booking service for
business to business (B2B) and the white label retailing services
we provide to train operating companies.
For B2B clients we launched our Global API service, allowing our
B2B partners to offer European rail options to their customers
through a single connection, giving us a platform to enter new
markets and scale the B2B business internationally. We have made
good early progress, with our first clients now live on the
platform, and have a strong pipeline of potential clients. In
addition, we launched etickets for B2B clients, so business
travellers can benefit from the same convenient eticket experience
as leisure travellers.
For white label clients we launched smart enabled season tickets
and sustained our high retention rate, retaining both franchises up
for tender since our IPO - East Midlands Railway and West Coast
Mainline.
Consolidated income statement
Notes 2020 2019
GBP'000 GBP'000
Continuing operations
Net ticket sales(1) 3,726,780 3,194,168
------------------------------- ------ ---------- ----------
Revenue 2 260,753 209,504
Cost of sales 2 (59,602) (54,059)
------------------------------- ------ ---------- ----------
Gross profit 201,151 155,445
------------------------------- ------ ---------- ----------
Administrative expenses (198,890) (144,932)
Adjusted EBITDA(1) 85,201 52,628
Depreciation and amortisation 7,8 (50,907) (38,942)
Share based payment charges (10,631) (3,309)
Exceptional items 3 (21,402) 136
------------------------------- ------ ---------- ----------
Operating profit 2,261 10,513
------------------------------- ------ ---------- ----------
Finance income 4 692 1,100
Finance costs 4 (83,184) (25,275)
------------------------------- ------ ---------- ----------
Net finance costs 4 (82,492) (24,175)
------------------------------- ------ ---------- ----------
Loss before tax (80,231) (13,662)
------------------------------- ------ ---------- ----------
Income tax expense 5 (707) (8)
Loss after tax (80,938) (13,670)
------------------------------- ------ ---------- ----------
Earnings per share (pence)
Basic 6 (17.67)p (3.28)p
Diluted (2) 6 (17.67)p (3.28)p
------------------------------- ------ ---------- ----------
(1) Non-GAAP measure - see alternative performance measures
section on page 42.
(2) As the Group has incurred a loss in FY'20 and FY'19 the
impact of its potential dilutive ordinary shares have been excluded
as they would be anti-dilutive.
Refer to note 1i for the application of new accounting
policies.
Consolidated statement of other comprehensive income
Notes 2020 2019
GBP'000 GBP'000
Loss after tax (80,938) (13,670)
--------- ---------
Other comprehensive income:
Re-measurements of defined benefit liability 18 30
Foreign exchange movement * (214) 506
--------- ---------
Other comprehensive (loss)/income, net of tax (196) 536
--------- ---------
Total comprehensive loss (81,134) (13,134)
========= =========
* May subsequently be reclassified to the income statement in a
future period.
Consolidated statement of financial position
Notes 2020 2019
GBP'000 GBP'000
Non-current assets
Intangible assets 7 93,555 114,770
Goodwill 7 443,357 443,271
Property, plant and equipment 8 20,184 5,462
Derivative assets 6 460
557,102 563,963
------------ ------------
Current assets
Inventories 26 25
Trade and other receivables 52,078 47,196
Cash and cash equivalents 92,120 94,477
144,224 141,698
------------ ------------
Current liabilities
Trade and other payables (165,735) (161,684)
Current tax payable (552) (1,093)
Loan and borrowings 9 (2,698) (2,815)
(168,985) (165,592)
------------ ------------
Net current liabilities (24,761) (23,894)
============ ============
Total assets less current
liabilities 532,341 540,069
============ ============
Non-current liabilities
Loan and borrowings 9 (154,402) (266,438)
Other non-current liabilities - (19,561)
Share based payment liabilities - (8,033)
Provisions (681) (1,566)
Deferred tax liability 5 (4,345) (7,882)
(159,428) (303,480)
------------ ------------
Net assets 372,913 236,589
============ ============
Equity
Share capital 10 4,807 422,555
Share premium 10 1,198,703 1,055,683
Preference shares 10 50 50
Foreign exchange reserve 10 1,972 2,186
Other reserves 10 (1,125,755) (1,144,010)
Retained earnings 293,136 (99,875)
------------
Total equity 372,913 236,589
============ ============
Consolidated statement of changes in equity
For the year ended 29 February 2020:
Share Share Preference Other Foreign Retained Total equity
capital premium shares reserves exchange earnings
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as
at 28
February
2019 422,555 1,055,683 50 (1,144,010) 2,186 (99,875) 236,589
IFRS 16
adjustment - - - - - 1,223 1,223
------------- ------------- ------------- ------------- ------------- ------------- -------------
Adjusted 1
March 2019 422,555 1,055,683 50 (1,144,010) 2,186 (98,652) 237,812
Loss after
tax - - - - - (80,938) (80,938)
OCI* - - - - (214) 18 (196)
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 - - - 7,360 - - 7,360
Balance as
at 29
February
2020 4,807 1,198,703 50 (1,125,755) 1,972 293,136 372,913
============= ============= ============= ============= ============= ============= =============
For the year ended 28 February 2019:
Share Share Preference Other Foreign Retained Total equity
capital premium shares reserves exchange earnings
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as
at 1 March
2018** 422,555 1,055,683 50 (1,143,601) 1,680 (87,144) 249,223
Loss after
tax - - - - - (13,670) (13,670)
OCI* - - - - 506 30 536
Other
movements - - - (409) - 909 500
Balance as
at 28
February
2019 422,555 1,055,683 50 (1,144,010) 2,186 (99,875) 236,589
============= ============= ============= ============= ============= ============= =============
*Other comprehensive income
** The Group has restated the balance as at 1 March 2018 to
reflect the Group restructure as described in note 1j.
Consolidated statement of cash flow
Notes 2020 2019
GBP'000 GBP'000
Cash flows from operating activities
Loss before tax (80,231) (13,662)
-------------------------------------- ------ ---------- -----------
Adjustment for non-cash items:
Depreciation and amortisation 7,8 50,907 38,942
Net finance costs 4 82,492 24,175
Share based payment charges 10,631 3,309
63,799 52,764
Changes in working capital
Inventories (1) 19
Trade and other receivables (7,805) (13,604)
Trade and other payables 9,372 35,982
Cash generated from operating
activities 65,365 75,161
-------------------------------------- ------ ---------- -----------
Taxes paid (5,198) (2,986)
-------------------------------------- ------ ---------- -----------
Net cash from operating activities 60,167 72,175
-------------------------------------- ------ ---------- -----------
Cash flows from investing activities
Purchase of property, plant and
equipment and intangible assets (28,358) (32,562)
Net cash flow used in investing
activities (28,358) (32,562)
-------------------------------------- ------ ---------- -----------
Cash flows from financing activities
Proceeds from IPO share issue 107,343 -
Sale of treasury shares at IPO 10,514 -
Issue of shares 207 -
Repayment of pre IPO borrowings (276,763) -
Proceeds from Revolving Credit 206,941 -
Facility
Repayment of Revolving Credit (60,223) -
Facility and other borrowings
Issue costs relating to loans
and borrowings (6,832) (925)
Payments of lease liabilities (2,247) -
Payment of interest on lease (828) -
liabilities
Interest paid (9,711) (11,385)
Interest on CPEC (3,166) -
Redemption of other non-current
liabilities - (2,003)
Net cash flows used in financing
activities (34,765) (14,313)
-------------------------------------- ------ ---------- -----------
Net (decrease)/increase in cash
and cash equivalents (2,956) 25,300
Cash and cash equivalents at
beginning of the year 94,477 69,678
Effect of foreign exchange on
cash 599 (501)
-------------------------------------- ------ ---------- -----------
Closing cash and cash equivalents 92,120 94,477
-------------------------------------- ------ ---------- -----------
Refer to note 1i for the application of new accounting
policies.
Notes
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 England and Wales. The
Company's registered address is 120 Holborn, London EC1N 2TD.
The Financial Statements for the year ended 29 February 2020
were approved by the Directors on 7 May 2020.
The Consolidated Financial Statements have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union.
The comparative figures for the financial year ended 28 February
2019 are not the Company's statutory accounts for that financial
year. As disclosed in note 1j, the Company is a newly formed
entity. Accordingly, no statutory accounts for the Company have
previously been delivered to the registrar and no previous audit
report has been made in respect of the Company.
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 2019 to 29 February 2020.
Accounting policies have been applied to all periods presented
except for the adoption of IFRS 16 Leases on 1 March 2019, the
impact of which has been disclosed in note 1i.
(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.
(ii) Transactions eliminated on consolidation
Intra-Group balances and transactions, and any unrealised income
and expenses arising from intra-Group transactions, are
eliminated.
Notes - significant accounting policies (continued)
c) Basis of measurement
The Financial Statements are prepared on the historical cost
basis except for the following:
-- Non-current assets are stated at the lower of previous
carrying amount and fair value less costs to sell
-- Derivative financial instruments are measured at fair value
-- Financial instruments at fair value through the income statement are measured at fair value
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.
d) Functional and presentation currency
The Financial Statements are presented in pound sterling. All
amounts have been rounded to the nearest thousand, unless otherwise
indicated.
e) Going concern
Notwithstanding the Group's net current liabilities, 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 for at least 12 months from the
date of signing these Financial Statements.
The Governance Code requires the Board to assess and report on
the prospects of the Group and whether the business is a going
concern. In considering this requirement, the Directors have taken
into account the Group's forecast cash flows, liquidity, borrowing
facilities and relating covenant requirements and the expected
operational activities of the Group. All of these forecasts
included the waiving of the financial covenant in respect of the
Groups GBP350 million Revolving Credit Facility until August 2021
as announced by the Group on 29 April 2020 and the expected impact
of COVID-19 on the Group's performance.
Though the scenario is considered to be very unlikely, as part
of the going concern assessment the Group prepared a cash flow
forecast which considered the Group's ongoing cash outflows and
assumed no revenue inflows. The analysis confirmed the Group's
current liquidity position would enable the Group to operate with
no cash inflows for a period of at least 12 months from the date of
signing these Financial Statements.
Having due regard to these matters and after making appropriate
enquiries, the Directors have a reasonable expectation that the
Group and the Company have adequate resources to remain in
operation until at least 12 months after the approval of these
Financial Statements. The Board have therefore continued to adopt
the going concern basis in preparing the Consolidated Financial
Statements, which assumes that the Group will be able to meet its
liabilities as they fall due for at least 12 months from the date
of signing these Financial Statements.
Notes - significant accounting policies (continued)
f) Revenue and cost of sales
(i) Revenue
Consumer
Commission revenue earned from carriers on net ticket sales and
service charges billed to customers. Each sales or refund
transaction represents a separate performance obligation and the
related revenue is recognised at the time of the sale or refund.
The Group acts as an agent in these transactions, as it does not
control the services prior to transferring them to its
customers.
T4B
Revenue earned from branded travel portal platforms is
recognised in three key elements represented by bespoke feature
builds, monthly maintenance and contribution earned per transaction
processed, each of these elements represent a separate performance
obligation. Revenue is recognised over time for maintenance and
connections to existing features and point in time for bespoke
builds and contributions earned per transaction.
(ii) Cost of Sales
Costs of sales include costs in relation to the provision of
rail tickets, ancillary services, settlement and fulfilment costs
and are recognised at the point of sale.
Notes - significant accounting policies (continued)
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 at 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. Actual results may differ from
these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revision to estimates is recognised prospectively.
The areas of judgement which have the most significant effect on
the amounts recognised in the Financial Statements are:
-- Share based payments
Judgement is required to assess whether share based payment
arrangements are cash or equity settled. IFRS 2 Share Based
Payments requires that the Group's share based payment arrangements
are initially measured and recorded as a liability or equity at the
fair value of the equity instrument. For cash settled arrangements
the fair value is remeasured at each balance sheet date with any
changes recognised in finance costs. Equity settled arrangements
are not revalued to fair value at each balance sheet date. When
calculating the fair value of these arrangements a number of
assumptions are applied in arriving at the fair value, including
the expected financial results of the Group, the outcome of certain
market-based performance measures and staff attrition rates.
Management do not consider any of the estimates made in these
Financial Statements are likely to lead to a material adjustment in
the next financial year, as such none are deemed significant
estimates, however there are a number of other estimates which
involve estimation uncertainty as described below:
Notes - significant accounting policies (continued)
-- Note 7 - Goodwill impairment test: key assumptions underlying recoverable amounts;
An impairment review is performed annually 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. As part of the impairment review for the year ended 29
February 2020 the expected outcome of COVID-19 has been taken into
account in the forecasting. Each of these assumptions have an
impact on the overall value of cashflows expected and therefore the
headroom between the cashflows and carrying values of the cash
generating units.
-- Note 7 - 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.
i) New standards and interpretations adopted
IFRS 16 Leases
IFRS 16 Leases was adopted on 1 March 2019 and has an impact on
the consolidated income statement and Consolidated Statement of
Financial position for the year ended 29 February 2020.
IFRS 16 Leases replaces the former standard IAS 17 Leases. IFRS
16 Leases requires lessees to recognise leases on the Group's
statement of financial position, unless the lease term is 12 months
or less or the underlying asset has a low value. Under the new
standard, leases held by the Group will be accounted for as
'right-of-use' assets and the distinction between operating and
finance leases under IAS 17 no longer exists. In practice this
results in a right-of-use asset and liability being recognised on
the statement of financial position and a finance cost and
depreciation charge are recognised through the consolidated income
statement as the lease liability unwinds.
The Group has applied the modified retrospective approach to
restatement. Under this approach former periods are not restated,
and the revised treatment is applied in the current period. At 1
March 2019 a right-of-use asset and equal liability was recognised
for all of the Group's leases. Going forward the asset will be
depreciated evenly over the remaining asset life and the liability
will be unwound in line with the Group's underlying borrowing rate
at 1 March 2019. The Group has used a practical expedient for the
use of a single discount rate for the portfolio of leases as they
are deemed to be reasonably similar in nature.
Within administrative expenses there will be no property rental
expense from 1 March 2019 and instead a depreciation charge will be
recognised. A finance charge is recognised in finance costs to
reflect the perceived cost of financing the asset. In FY'20 the
rental expense is GBPnil (FY'19: GBP2.5 million), depreciation of
leased assets is GBP2.7 million (FY'19: GBPnil) and the finance
cost for leased assets is GBP0.8million (FY'19: GBPnil).
Notes - significant accounting policies (continued)
At 1 March 2019 a right-of-use asset of GBP17.7 million was
recognised, which represented the future lease payments discounted
to present value at 1 March 2019. The relating lease liability was
GBP17.7 million. At 29 February 2020 the right-of-use assets
totalled GBP15.0 million and the lease liability equalled GBP15.3
million. Within the cash flow statements the actual lease payments
made have been reclassified from 1 March 2019 from operating
activities to financing activities.
Total operating lease commitments were GBP21.6 million at 28
February 2019. The impact of discounting was GBP3.9 million,
resulting in the GBP17.7 million lease liability being recognised
at 1 March 2019.
A number of other new standards are also effective from 1 March
2019, but they do not have a material effect on the Group's
Financial Statements.
j) Summary of impact of Group restructure and initial public offering
On 26 June 2019 the Group listed its shares on the London Stock
Exchange in an Initial Public Offering ('IPO'). The restructure has
impacted a number of the current period balances.
The Group restructure has been accounted for as a reverse
acquisition under IFRS 3 Business Combinations. The steps to
restructure the Group had the effect of the newly formed entity
Trainline plc ('plc') legally acquiring the former parent company
of the pre IPO Group Victoria Investments S.C.A. ('SCA'). As part
of this transaction the shareholders in SCA exchanged their SCA
shares and CPECs for shares in plc.
By applying reverse acquisition accounting under IFRS 3 Business
Combinations, the Group is presented as if plc has always owned the
pre IPO Group at the point of the share for share exchange. The
year ended 28 February 2019, prior to the restructure, is presented
with the previously reported SCA results.
2. Operating segments
In accordance with IFRS 8 Operating Segments the Group
determines and presents its operating segments based on internal
information that is provided to the Board, who is 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; and
-- 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.
Notes- operating segments (continued)
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
this disclosure); and
- No results at a profit before/after tax or in relation to the
statement of financial position are reported to the CODM at a lower
level than the consolidated Group.
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 profit 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 2,261
------------
Net finance
costs (82,492)
------------
Loss before
tax (80,231)
------------
Tax (707)
Loss after
tax (80,938)
------------------------ ------------ ---------- ---------- --------------
Notes- operating segments (continued)
Segmental analysis for the year ended 28 February 2019:
UK consumer UK T4B Total UK International Total Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ---------- ---------- --------------
Net ticket
sales 1,647,648 1,198,006 2,845,654 348,514 3,194,168
------------ ---------- ---------- -------------- ------------
Revenue 136,660 58,366 195,026 14,478 209,504
Cost of sales (29,703) (17,749) (47,452) (6,607) (54,059)
------------ ---------- ---------- -------------- ------------
Gross profit 106,957 40,617 147,574 7,871 155,445
Directly allocable
administrative
expenses (35,678) (25,884) (61,562)
---------- -------------- ------------
Contribution 111,896 (18,013) 93,883
Central administrative
expenses (41,255)
------------------------ ------------ ---------- ---------- -------------- ------------
Adjusted EBITDA 52,628
Depreciation and amortisation (38,942)
Share based payment charges (3,309)
Exceptional items 136
-------------------------------------- ---------- ---------- -------------- ------------
Operating profit 10,513
------------
Net finance
costs (24,175)
------------
Loss before
tax (13,662)
------------
Tax (8)
Loss after
tax (13,670)
------------------------ ------------ ---------- ---------- --------------
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.
IPO transaction costs
Fees and costs, including one off bonuses, in relation to the
IPO process.
Restructuring costs
Restructuring costs incurred as part of a strategic/management
reorganisation.
Recoveries
One-off credits received or receivable for an indemnity claim
and VAT on historic acquisition costs.
2020 2019
GBP'000 GBP'000
IPO transaction costs 21,402 -
Restructuring costs - 1,532
Recoveries - (1,668)
Net exceptional costs/(credits) 21,402 (136)
-------- --------
Notes (continued)
4. Finance income and 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.
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. The interest rate cap held by the Group is a
derivative asset and is revalued to fair value at each period end,
any fair value movement is booked through net finance costs.
2020 2019
GBP'000 GBP'000
Bank interest income 692 290
Fair value movements on share
based payment liabilities - 810
Finance income 692 1,100
--------- ---------
Interest on bank loans (10,900) (22,050)
Interest on other long-term
liabilities - (1,083)
Foreign exchange loss (558) (270)
Loss on interest rate swap (454) (1,081)
Fair value movements on put/call
option liability - (791)
Interest on lease liability (828) -
Exceptional finance costs*
Derecognition of previously (8,466) -
capitalised finance costs
Fair value change on share (49,705) -
based payments
Fair value change on put/call (12,273) -
option
Finance costs (83,184) (25,275)
--------- ---------
Net finance costs recognised
in the income statement (82,492) (24,175)
========= =========
*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.
Excluding exceptional finance costs the net finance cost in
FY'20 would be GBP12.0 million.
Notes (continued)
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 expense 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.
(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. 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.
Notes- taxation (continued)
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.
Amounts recognised in the income statement
2020 2019
GBP'000 GBP'000
Current tax charge/(credit)
Current year 7,178 4,509
Adjustment in respect of prior
years (2,978) 487
4,200 4,996
---------- -----------
Deferred tax (credit)/charge
Current year (5,601) (4,526)
Adjustment in respect of prior
years 2,108 (433)
Effect of change in tax rates - (29)
(3,493) (4,988)
---------- -----------
Tax charge 707 8
========== ===========
Corporation tax was calculated at 19% (FY'19: 26%*) 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 GBP0.7 million (FY'19:
GBP8k) is made up of a current corporation tax charge of GBP4.2
million (FY'19: GBP5.0 million) arising in the UK, and a deferred
tax credit of GBP3.5 million (FY'19: GBP5.0 million) resulting from
the unwind of deferred tax liabilities arising on acquired
intangibles. The release of deferred tax liabilities is primarily
an accounting unwind and does not impact the corporation tax
payable in cash by the Group.
2020 2019
GBP'000 GBP'000
Loss before tax (80,231) (13,662)
========= =========
Loss multiplied by standard
rate of corporation tax of
19% ( FY'19 : 26%*) (15,244) (3,553)
Non-taxable expenses/(income) 15,460 (2,510)
Amounts not recognised** 1,627 3,102
Rate difference on deferred
tax - (29)
Adjustment in respect of prior
years (870) 53
Other (266) 155
Difference in overseas tax
rates - 2,790
---------
Total tax charge 707 8
--------- ---------
Effective tax rate (1)% (0.1) %
========= =========
* The FY'19 tax reconciliation is reconciled to the Victoria
Investments SCA tax rate of 26.01%. Following the IPO, Trainline
plc became the Group's parent Company preparing the consolidated
tax reconciliation at the UK tax rate of 19% for FY'20.
**Primarily relates to unrecognised losses which are not
expected to be recoverable and therefore not recognised as deferred
tax assets.
Notes- taxation (continued)
The effective tax rate is lower than the UK corporation tax rate
of 19% due to the Group making an accounting loss but a tax
adjusted profit. The effective tax rate in FY'20 reflects the
significant adjustments transitioning from a private company to a
UK listed plc, including the IPO exceptional costs and the costs
associated with the Group's share based incentive plans which were
not fully deductible. From FY22 we expect our tax rate on our
profits before specific items to be around the UK rate of
corporation tax (19%), as the majority of our business occurs in
the UK.
On 17 March 2020 the UK Government substantively enacted the
corporation tax rate of 19% from 1 April 2020 which replaces the
previously substantively enacted tax rate of 17%. As the enactment
is after the financial year end our deferred tax for FY'20 is
calculated at 17%. Had the rate been substantively enacted before
the year end, the impact of the rate change to 19% is GBP0.5
million.
Deferred tax liability as at 29 February 2020:
Acquired Tangible Share based
intangible assets and payments
assets other Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 March 2019 9,712 (1,830) - 7,882
Adjustment in respect
of prior years - 2,108 2,108
Adjustments posted
through equity - 209 (253) (44)
Current year (credit)/charge
to consolidated income
statement (4,414) 21 (1,208) (5,601)
------------
At 29 February 2020 5,298 508 (1,461) 4,345
============ =============== ============ ===========
Deferred tax liability as at 28 February 2019:
Acquired Tangible Share based
intangible assets and payments
assets other Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 March 2018 14,515 (1,645) - 12,870
Adjustment in respect
of prior years 1 (434) - (433)
Adjustments posted -
through equity - - -
Current year (credit)/charge
to consolidated income
statement (4,804) 249 - (4,555)
------------
At 28 February 2019 9,712 (1,830) - 7,882
============ =============== ============ ===========
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.
(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- earnings per share (continued)
2020 2019
Weighted average number of
ordinary shares:
Ordinary shares 462,099,526 422,555,384
Treasury shares (4,108,486) (6,226,286)
------------ ------------
Weighted number of ordinary
shares* 457,991,040 416,329,098
*As the Group has incurred a loss in FY'20 and FY'19, the impact
of its potential dilutive ordinary shares have been excluded as
they would be anti-dilutive.
** Refer to the alternative performance measures section for the
calculation of adjusted earnings.
2020 2019
GBP'000 GBP'000
Loss after tax (80,938) (13,670)
Earnings attributable to
equity holders (80,938) (13,670)
--------- ---------
Adjusted earnings** 36,887 10,078
2020 2019
pence pence
(Loss)/earnings per share
--------- ---------
Basic (17.67)p (3.28)p
Diluted* (17.67)p (3.28)p
--------- ---------
Adjusted earnings per share
--------- ---------
Basic 8.05p 2.42p
Diluted* 8.05p 2.42p
--------- ---------
7. Intangible assets and goodwill
The consolidated statement of financial position 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 annual impairment reviews. Impairment reviews of
goodwill make use of estimates (see note 1h).
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.
Notes - intangible assets and goodwill (continued)
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 re-assesses
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 re-assessment 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. 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 valuation
Brand and customer valuations 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 the
income statement. Goodwill is not amortised.
Notes - intangible assets and goodwill (continued)
The estimated useful lives are as follows:
Software development 3 - 5 years
Brand valuation 10 years
Customer lists/T4B contracts 5 - 7 years
Amortisation methods, useful lives and residual values are
reviewed at each reporting date and adjusted if appropriate.
Intangible assets and goodwill as at 29 February 2020:
Software
development Brand Customer
valuation valuation Goodwill Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost:
At 1 March
2019 83,262 51,738 92,690 443,271 670,961
Additions* 25,359 - - - 25,359
Effects of
foreign exchange
rate changes - - - 86 86
At 29 February
2020 108,621 51,738 92,690 443,357 696,406
------------- ---------- ---------- --------- ----------
Accumulated
amortisation:
At 1 March
2019 (22,545) (20,452) (69,923) - (112,920)
Amortisation (23,636) (5,181) (17,757) - (46,574)
At 29 February
2020 (46,181) (25,633) (87,680) - (159,494)
------------- ---------- ---------- --------- ----------
Carrying amounts:
------------- ---------- ---------- --------- ----------
At 29 February
2020 62,440 26,105 5,010 443,357 536,912
============= ========== ========== ========= ==========
*Total additions of GBP25.4 million include GBP1.0 million in
relation to trade and asset acquisitions.
Intangible assets and goodwill as at 28 February 2019:
Software
development Brand Customer
valuation valuation Goodwill Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost:
At 1 March
2018 50,852 51,738 92,690 443,271 638,551
Additions 32,410 - - - 32,410
At 28 February
2019 83,262 51,738 92,690 443,271 670,961
------------- ---------- ---------- --------- ----------
Accumulated
amortisation:
At 1 March
2018 (8,118) (15,285) (52,214) - (75,617)
Amortisation (14,427) (5,167) (17,709) - (37,303)
At 28 February
2019 (22,545) (20,452) (69,923) - (112,920)
------------- ---------- ---------- --------- ----------
Carrying amounts:
------------- ---------- ---------- --------- ----------
At 28 February
2019 60,717 31,286 22,767 443,271 558,041
============= ========== ========== ========= ==========
Additions in the year includes GBPnil (FY'19 GBPnil) of directly
attributable borrowing costs.
Notes - intangible assets and goodwill (continued)
Of the amortisation charge for the year GBP22.9 million (FY'19:
GBP24.3 million) related to the amortisation of intangible assets
which were recognised on the Group's acquisition of Trainline.com
Limited and Trainline SAS, while GBP23.7 million (FY'19: GBP13.0
million) related to internally developed and purchased intangible
assets recognised at historical cost.
Goodwill Impairment
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 to dispose and value-in-use. However, in line with IAS 36
Impairment of Assets, fair value less costs to dispose is only
determined where value in use would result in an impairment.
Goodwill acquired in a business combination is allocated on
acquisition to the CGUs that are expected to benefit from that
business combination.
The Group has goodwill balances totalling GBP443.4 million which
comprise:
i. GBP336.4 million from the FY'16 acquisition of
Trainline.com
ii. GBP107.0 million from the FY'17 acquisition of Trainline SAS
(formerly Captaine Train SAS)
The majority of goodwill arising from the acquisition of
Trainline.com was attributed to UK Consumer with a small proportion
allocated to International. The goodwill related to the Captaine
Train SAS acquisition was mostly attributed to the International
CGU, with the remainder allocated to UK Consumer. The carrying
amount of goodwill has been allocated as follows:
CGU 2020 2019
GBP'000 GBP'000
UK Consumer 351,271 351,271
UK T4B - -
International 92,086 92,000
Total goodwill 443,357 443,271
======== ========
For the year ended 29 February 2020 no impairment charge has
arisen. For all CGUs the recoverable amount was determined by
measuring their value-in-use ("VIU").
Assumptions
The key value in use assumptions were:
2020 2019 2020 2019 2020 2019
UK Consumer UK Consumer UK T4B UK T4B International International
Pre-tax discount
rate 10.7% (**) 14.5% N/A N/A 16.7% 18.5%
Terminal growth
rate (*) 2% 2% N/A N/A 2% 2%
Number of years
forecasted before
terminal growth
rate applied 5 5 N/A N/A 5 5
*Terminal growth rate is based on long-term inflationary rates
in the region of operation
**The UK Consumer pre-tax discount rate has decreased year on
year due to a reduction in risk associated with the CGU.
Notes - intangible assets and goodwill (continued)
There were no impairments in the years ended 29 February 2020 or
28 February 2019.
The Group prepares cash flow forecasts based on the most recent
financial budgets and 5-year projections approved by the Board. The
forecasts have been used in the VIU calculation along with
risk-adjusted discount rates. After this, a long-term growth rate
is applied. The forecasts reflect management's expectations and
best estimates for each CGU.
For the impairment review for the year ended 29 February 2020
cash flow forecasts have been updated to include an estimate of the
impact of the COVID-19 pandemic, most notably this included
forecasting significantly lower sales during FY'21. Sensitivities
have been applied to the calculation after this update.
As the international CGU is currently loss making, the
impairment calculation is more sensitive to a change in cashflow in
the initial 5-year forecast period than the UK Consumer CGU. To
reflect the higher level of uncertainty in the International
forecasts a premium has been applied to the discount rate.
Sensitivity analysis
The group has conducted a sensitivity analysis 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 VIU calculations are set out in the table below.
These are considered to be reasonably possible, but not likely.
2020 2019 2020 2019 2020 2019
UK Consumer UK Consumer UK T4B UK T4B International International
Increase in 1pts 1pts N/A N/A 1pts 1pts
discount rate
Reduction in 0.5pts 0.5pts N/A N/A 0.5pts 0.5pts
long-term growth
rate applied
in terminal
year
Decrease in
Adjusted EBITDA
forecast in
each year 10% 10% N/A N/A 20% 20%
None of the individual reasonably possible scenarios listed
above resulted in an impairment in any of the CGU's.
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 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 assets for impairment if there is an indicator of
impairment. There were no indicators of impairment for any of the
Group's assets during the year (FY'19 no indicators).
Plant and Leasehold Right-of-use Total
equipment improvements assets
GBP'000 GBP'000 GBP'000 GBP'000
Cost:
At 28 February 2019 6,967 4,448 - 11,415
Recognition of right-of-use
asset on initial application
of IFRS 16 - - 17,692 17,692
----------- -------------- ------------- ---------
Adjusted balance at
1 March 2019 6,967 4,448 17,692 29,107
Additions 1,365 - - 1,365
Disposals (54) - - (54)
-------------
At 29 February 2020 8,278 4,448 17,692 30,418
----------- -------------- ------------- ---------
Accumulated depreciation
and impairment:
At 1 March 2019 (4,952) (1,001) - (5,953)
Depreciation (1,175) (444) (2,714) (4,333)
Disposals 52 - - 52
-------------
At 29 February 2020 (6,075) (1,445) (2,714) (10,234)
----------- -------------- ------------- ---------
Carrying amounts:
-------------
At 29 February 2020 2,203 3,003 14,978 20,184
=========== ============== ============= =========
Property, plant and equipment as at 29 February 2020
Notes - property, plant and equipment (continued)
Property, plant and equipment as at 28 February 2019:
Plant and Leasehold Right-of-use Total
equipment improvements assets
GBP'000 GBP'000 GBP'000
Cost:
At 1 March 2018 5,969 4,389 - 10,358
Additions 998 59 - 1,057
-------------
At 28 February 2019 6,967 4,448 - 11,415
----------- -------------- ------------- --------
Accumulated depreciation
and impairment:
At 1 March 2018 (3,757) (557) - (4,314)
Depreciation (1,195) (444) - (1,639)
-------------
At 28 February 2019 (4,952) (1,001) - (5,953)
----------- -------------- ------------- --------
Carrying amounts:
-------------
At 28 February 2019 2,015 3,447 - 5,462
=========== ============== ============= ========
Additions in the year includes GBPnil (FY'19 GBPnil) of directly
attributable borrowing costs.
Notes (continued)
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. At the date of the Initial Public Offering
('IPO') the Group re-paid its existing debt and became party to a
new Revolving Credit Facility, part drawn in cash and part drawn in
bank guarantees.
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.
2020 2019
GBP'000 GBP'000
Non-current liabilities
Secured bank loan(1) - 198,954
Revolving Credit Facility(2) 141,057 -
Unsecured PIK loan and accrued
interest (3) - 66,874
Other term debt 388 610
Lease liabilities 12,957 -
-------- --------
Total non-current liabilities 154,402 266,438
======== ========
Current liabilities
Accrued interest 309 2,815
Lease liabilities 2,389 -
-------- --------
Total current liabilities 2,698 2,815
======== ========
1. Included within the secured bank loan is the principal amount
of GBPnil (FY'19: GBP205 million) and directly attributable
transaction costs of GBPnil (2018: GBP6.1 million).
2. Included within the Revolving Credit Facility is the
principal amount of GBP146.9 million (FY'19: GBPnil) and directly
attributable transaction costs of GBP5.8 million (FY'19:
GBPnil).
3. The unsecured PIK loan was fully repaid during FY'20.
Terms and repayment schedule
Agreement Interest Year of maturity Face value Carrying
rate amount
GBP'000 GBP'000
Revolving Credit
Facility 1.64% 2024 146,941 141,057
Lease liabilities 5.01% Various 17,798 15,346
Other term debt 0.0% 2022 388 388
Total borrowings 165,127 156,791
=========== =========
Notes- loans and borrowings (continued)
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 Less than 1 year Between 1 and 2 Between 2 and 5 Over 5 years
cash flows years years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revolving Credit
Facility 146,941 - - 146,941 -
Other term debt 388 180 180 28 -
Lease liabilities 17,798 3,135 2,922 8,767 2,974
Total cash flows 165,127 3,315 3,102 155,736 2,974
=================== ================= =================== ==================== =============
Revolving Credit Facility
The new 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
29 February 2020 the cash drawn amount is GBP146.9 million, the
non-cash bank guarantee drawn amount is GBP113.8 million and the
undrawn amount on the facility is GBP89.3 million.
The Group's new 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, all of
which have been met during the year.
Notes- (continued)
10. Capital and reserves
Share capital
Share capital represents the number of shares in issue at their
nominal value. In the current year the share capital of the former
Group has been replaced with the newly issued listed shares
following the IPO.
Ordinary shares in the Group post IPO 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.
Following a reduction in capital the nominal value of ordinary
shares was reduced from GBP1.00 to GBP0.01 each. The reduction of
capital had no effect on the net asset position of the Group.
Shareholding at 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 represent 50,000 redeemable preference shares
of GBP1.00 each, redeemable at the option of the Group.
Retained earnings
Retained earnings represents the profit the Group makes that is
not distributed as dividends. No dividends have been paid 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- 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 2018 - (2,486) - (2,486)
Group restructure (1,121,809) (19,306) - (1,141,115)
Other movements (409) - - (409)
At 28 February 2019 (1,122,218) (21,792) - (1,144,010)
--------------- ----------------- ------------- ---------------------
Disposal of treasury shares - 10,895 - 10,895
SBP* charge - - 7,360 7,360
At 29 February 2020 (1,122,218) (10,897) 7,360 (1,125,755)
--------------- ----------------- ------------- ---------------------
*SBP - Share based payment
Merger reserve
Prior to the 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 (note 1j). The balance of the merger reserve
represents the difference between the nominal value of the reserves
in 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 Trust ('EBT'). At 29 February 2020 the Group's EBT
held 3.1 million shares which have a historical cost of 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.
Notes (continued)
11. Related parties
During the year, the Group entered into transactions in the
ordinary course of business with related parties.
Transactions with the controlling shareholder
During the year fees of GBP5.4 million were paid to KKR and Co.
Inc and its subsidiaries (FY'19 GBP1.5 million). None of these fees
are expected to reoccur going forward.
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 GBP5,192,600
(FY'19: GBP2,050,335); post employment benefits GBP127,160 (FY'19:
GBP32,550); and ongoing share based payment schemes GBP311,811
(FY'19: GBP732,199). No other long term benefits or termination
benefits were paid (FY'19: GBPNil). The highest paid director
received: short term employee benefits GBP3,580,555 (FY'19:
GBP596,131); post-employment benefits GBP37,438 (FY'19: GBP32,550);
and ongoing share based payment schemes GBP80,266 (FY'19
GBP732,199). There were 2 directors to whom retirement benefits are
accruing under defined contribution schemes (FY'19: 2).
The IPO triggered the crystallisation of previous share based
payment schemes with key management personnel. GBP12.9 million of
the exceptional finance charge related to cash settled share based
payment schemes with key management personnel. GBP64.6 million
crystallised on equity settled share based payment schemes in
relation to key management personnel, for which there is no cash,
income statement or statement of financial position impact.
All amounts relating to equity and cash schemes were settled as
a combination of cash from the IPO funds flow and shares in
Trainline plc and do not represent a cash outflow from the trading
business of the Group.
At 29 February 2020 key management personnel held 11,185,560
shares in Trainline plc.
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 statement of financial position.
The Group's capital commitments at 29 February 2020 are GBPnil
(FY'19: GBPnil).
Notes (continued)
13. Post balance sheet events
On 30 January 2020, the spread of the novel Coronavirus
(COVID-19) was declared a public health emergency by the World
Health Organisation. Though the impact of COVID-19 did not
materially impact the Group in the year ended 29 February 2020 it
has not been considered a non-adjusting post balance sheet event,
in line with IAS10 on the basis that it occurred during the
financial year.
As a result, the forecasts used for impairment analysis
reflected the expected impact of COVID-19 on the Group at the
balance sheet date together with further sensitivities reflecting
the Directors' views at the date of approval of the Financial
Statements of the impact of COVID-19. The going concern assessment
and viability statement have been updated to reflect the Directors
assessment of the impact of COVID-19 at the date of approval of the
Financial Statements. This has been reflected in the respective
disclosures.
Subsequent to the year end, the Group drew down an additional
GBP85 million of its Revolving Credit Facility and reduced the
portion of the Facility utilised through bank guarantees. Following
these changes, the remaining headroom on the Revolving Credit
Facility was GBP90.2 million.
On 29 April 2020, the Group announced that its loan syndicate
had waived the financial covenant in respect of its GBP350 million
Revolving Credit Facility until August 2021 to support the business
through the COVID-19 pandemic and the related impact on
trading.
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
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.
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.
As a result of the transition to IFRS 16 Leases as described in
note 1i, the year ending 29 February 2020 no longer includes the
operating lease charge, which has been replaced with right-of-use
asset depreciation and lease liability interest, both of which are
excluded from adjusted EBITDA.
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 - adjusted EBITDA
(continued)
A reconciliation of operating profit to adjusted EBITDA is as
follows:
Notes 2020 2019
GBP'000 GBP'000
Operating profit 2,261 10,513
Adjusting items:
Depreciation and amortisation 7,8 50,907 38,942
Share based payment charges 10,631 3,309
Exceptional items 3 21,402 (136)
Adjusted EBITDA 85,201 52,628
======== ========
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.
A reconciliation from the loss after tax to adjusted earnings it
as follows:
Notes 2020 2019
GBP'000 GBP'000
Loss after tax (80,938) (13,670)
Earnings attributable to equity
holders (80,938) (13,670)
--------- ---------
Adjusting items:
Exceptional items 3 21,402 (136)
Exceptional finance costs 4 70,444 -
Amortisation of acquired intangibles 23,634 24,316
Share based payment charges 10,631 3,309
Ongoing share related charges
in finance costs - 1,064
Tax impact of the above adjustments (8,286) (4,805)
--------- ---------
Adjusted earnings 36,887 10,078
--------- ---------
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.
The calculation of net debt is as follows:
Notes 2020 2019
GBP'000 GBP'000
Loan and borrowings 9 (162,900) (269,253)
Other non-current borrowings - (19,561)
Cash and cash equivalents 92,120 94,477
Net debt (70,780) (194,337)
---------- ----------
Operating free cash flow
The Group use operating free cash flow as a supplementary
measure of liquidity.
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:
2020 2019
GBP'000 GBP'000
Cash generated from operating
activities 65,365 75,161
Exceptional items 20,928 (136)
Purchase of property, plant and
equipment and intangible assets (27,405) (32,562)
Operating free cash flow 58,888 42,463
--------- ---------
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.
END
FR DDGDUDSGDGGL
(END) Dow Jones Newswires
May 07, 2020 02:00 ET (06:00 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
