Great Western Coffee Shop

Trainline rail ticket firm in ^500m stock market flotation

Trainline, the online rail booking system, is to float on the London Stock Market in a deal expected to value the business at about ^500m.

The company's private equity owners, which bought the business in 2006 for about ^160m, want to list in February.

Trainline started life in 1997 as a division of Virgin Rail, selling tickets through a call centre.

The value of ticket sales last year was ^978.1m, and Trainline said its apps have been downloaded 7.4 million times.

Private equity owners Exponent, Harbourvest and Northwestern Mutual Life Assurance will sell off part of their stakes in the business.

As part of the flotation they want to raise about ^75m to pay off existing debt and settle bank costs and fees.

Clare Gilmartin, chief executive of Trainline, said: "We are witnessing continued strong growth in rail and, having experienced first-hand the transformative effect of online and mobile in other e-commerce markets, I am hugely excited by the opportunity that the fast-developing online rail market offers."

The owners of Trainline attempted to sell the business in 2012 for around ^400m, with private equity firm KKR widely reported as a possible bidder.

While use of the railways continues to grow, the way passengers buy tickets and the format of these tickets is changing, and is set to change further. Passengers are buying more tickets from retailers that aren^t a train company. There is also increased demand, which is beginning to be realised, for smarter and more flexible ticketing. We welcome industry^s effort to respond to these changes. For the future, it is essential that the regulation and industry arrangements and practices for ticket selling keep up with this change and, in particular, enable the market to offer passengers value for money, choice and quality that suits their different needs. Our initial consideration of the retail market for ticket selling suggests that the arrangements and practices protect passengers; provide convenience and flexibility to passengers by facilitating the benefits of an integrated, national network; enable retailers to collaborate to improve their service; and provide clarity to new entrants, thus encouraging new parties to sell tickets. However, there may also be some issues with the current approach. The cost of regulation and industry arrangements to facilitate an integrated, national network don^t fully reflect those retailers who make use of and benefit from the integrated nature of the network; they may inhibit innovation at the expense of improved services to customers; they may constrain retailers^ commercial flexibility in how they sell tickets; and they may create a conflict of interest among retailers. We welcome stakeholders^ views to help us assess what^s relevant and material. We intend to follow-up with a second consultation in early spring 2015, with potential recommendations to capture the opportunities and address the issues, where necessary.

The following document from ATOC should answer your questions:

RAIL INDUSTRY COMMISSION RATES (http://www.atoctravelagents.org/clientfiles/File/RAIL%20INDUSTRY%20COMMISSION%20RATES%20TO%2031%20MAR%202016.pdf) (.pdf file)

TA: Travel Agents
TMC: Travel Management Companies
TSA: Ticketing and Settlement Agreement (http://www.atoc.org/clientfiles/files/RSPDocuments/TSA%20V9_4%20-%20Main%20Agreement%20%28Volume%201%29.pdf) (.pdf file)
RSP: Rail Settlement Plan (http://www.atoc.org/about-atoc/rail-settlement-plan/)

If the Group is unable to charge some or all of the booking and other fees that it charges to the customers of its Consumer business, or if such fees are subject to reduction or mandated caps, the Group may not be able to generate profit at current levels or at all, which could have a material adverse effect on its business, financial condition and results of operations.

I asked the question once of a Director of why we don't trumpet the fact we don't charge unlike the trainline.. The response is that a TOC's marketing budget doesn't justify the cost that TTL pay for all their advertising.

However, I think the advertising labels that have appeared in the coaches are supposed to help advertise no booking fees.

I suspect that there may be some 'agreement' between the TrainLine (who run the TOCs ticketing sections of their websites) & the TOCs about the TOCs not blatently advertising no booking fees. But I could be surprised and be wrong. Otherwise, why haven't they done so? It's a no-brainer.

CrossCountry, a trainline customer, are quite blatant in their 'no booking fees' advertising. Such a strapline appears on all their advertisements for their online booking service.

I suspect that there may be some 'agreement' between the TrainLine (who run the TOCs ticketing sections of their websites) & the TOCs about the TOCs not blatently advertising no booking fees. But I could be surprised and be wrong. Otherwise, why haven't they done so? It's a no-brainer.

But surely it is in all customers interests for them to advertise that they do not charge a booking fee.

From the BBC (http://www.bbc.co.uk/news/business-30726532):

The American private equity fund KKR has bought the British train ticket website thetrainline.com, derailing its planned float on the London stock market.

The Labour Party is preparing to launch a direct rival to Trainline as part of its nationalisation plans in a move that could 'decimate' the rail ticket-selling giant's business.

The Mail on Sunday can reveal that if Labour gets into power it would create a 'one-stop shop' for rail passengers to buy tickets online without booking fees.

It would create major competition for third-party ticket sellers such as Trainline, which floated on the London Stock Exchange in the summer and has grown into one of Britain's largest technology companies with a £2.2 billion valuation.

From the Daily Mail (https://www.dailymail.co.uk/money/news/article-7741553/Labour-plotting-ticket-rival-Trainline-Corbyns-one-stop-shop-decimate-UK-tech-titan.html)

Why create a new company.  The existing TOCs offer a service equal to Trainline without fees

My very thoughts but the opposition's stated aims of re-nationalizing the railways might stop all that.

My very thoughts but the opposition's stated aims of re-nationalizing the railways might stop all that.

I have to wonder if we might find our trains run by DfT OLR Holdings Limited (https://www.gov.uk/government/organisations/dft-olr-holdings-limited) rather than First from 1st April 2020 should we have a Labour government replace the current one.

Seems to be part of a wider policy as part of the magic money tree.....

https://www.bbc.co.uk/news/business-50621621

Whose magic money all parties seem to have found them. 

Indeed, though some are bigger than others.

I think you can stop wondering....it's more likely than that.

From the BBC (http://www.bbc.co.uk/news/business-30726532):

Trainline boss has her pay cut in half as travel restrictions cause a plunge in rail journeys and stations to empty
* Clare Gilmartin scooped a fortune of over £50million following Trainline's IPO
* Rail journeys are about 95 per cent lower compared to this time last year
* Trainline says since it went public, ticket sales and profits have gone up

The head of rail ticket firm Trainline Claire Gilmartin has agreed to have her salary reduced by 50 per cent as the government lockdown causes passenger rail numbers to plummet across the UK.

Those on the board of directors and management meanwhile will have their take-home pay drop by 20 per cent, while bonuses for the executive directors and management team have been postponed.

The company has been severely impacted by the coronavirus pandemic, which has forced governments to introduce controls on travelling and social distancing.

etc