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Annual Report
and Accounts
2020/21
Building the world’s
number one rail and
coach platform
Contents
Strategic Report
Chair’s statement
At a glance
CEO’s statement
Market overview
Business model
Creating value for our stakeholders
Our technology
Strategy
Key performance indicators
CFO’s financial highlights
Principal risks and uncertainties
Viability statement
Our people and culture
Stakeholder engagement & s.172 statement
Governance
Chair’s governance statement
Our Board of Directors
Report of the Nomination Committee
Report of the Audit and Risk Committee
Directors’ remuneration report
Directors’ report
Statement of Directors’ responsibilities
Financial Statements
Independent auditor’s report
Consolidated income statement
2
4
6
8
14
16
17
18
26
28
32
39
40
46
52
56
60
62
66
79
83
86
95
Consolidated statement of other comprehensive income 96
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated cash flow statement
Notes to the Group Financial Statements
Parent statement of financial position
Parent statement of changes in equity
Notes to the Parent Financial Statements
Alternative performance measures
97
98
99
100
136
137
138
140
Trainline is
the world’s
leading
independent
rail and
coach travel
platform
Our purpose is to make rail
and coach travel easier and
more accessible, thereby
encouraging people to
make more environmentally
sustainable travel choices
investors.thetrainline.com
Visit our investor site for more
information on Trainline
Trainline
Annual Report and
Accounts 2020/21
1
Overview
We believe that as a
generation, we have to make
more environmentally friendly
travel choices, and rail in
particular can be a positive
alternative to air and car.
Through our customer-
centric, scalable platform,
we are committed to driving
responsible and sustainable
business growth, by:
Making rail and coach travel
easier, championing a much
greener way to travel
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Leveraging scale, data and
technology to offer a superior
customer experience
Offering our carrier partners
global distribution at a lower
cost to serve
Financial Statements
2
Trainline
Annual Report and
Accounts 2020/21
Chair’s statement
We are well-positioned
to drive long-term growth and
create value for our customers
and shareholders
Brian McBride
Chair
The past year has been unprecedented.
COVID-19 caused significant disruption
to the rail and coach industry with
regional and national lockdowns across
Europe for most of the year.
To mitigate the impact of the disruption
we took quick and decisive steps to
scale back our cash outflows and
secured financing to provide additional
liquidity, protecting the business in an
extended COVID-19 downturn scenario
while giving greater flexibility to invest
in future growth opportunities.
I am grateful that, thanks to our strong
culture and commitment to our
stakeholders, the wellbeing of our
people and supporting our customers
have been prioritised by Trainline
throughout the year.
Board changes
I am delighted to welcome Jody Ford
into his role as CEO from 1 March 2021.
I have been impressed by his clear
leadership and his focus on improving
our product and the customer
experience since joining the Board.
I look forward to continuing to work
with Jody to achieve our long-term
growth plan.
We have also welcomed Jennifer
Duvalier, as Senior Independent
Non-executive Director and Andy
Phillipps, as Non-executive Director,
to the Board during the year. Jennifer
and Andy both have a proven record
in high-growth, global technology
businesses and I know their knowledge
and experience will be invaluable to
Trainline.
I would also like to thank Clare for her
leadership during her time as our CEO
and wish her every success for the
future.
Financial and strategic performance
The Board is keenly focused on the
Group's financial and strategic
performance. Whilst we took early
steps to preserve cash and liquidity,
including raising £150 million through
an issuance of convertible bonds, we
have also ensured that the future
success of the Group has remained
central to decision-making.
We have continued to invest in our
product and technology to deliver our
strategic priorities of enhancing the
customer experience, building demand
and growing Trainline Partner Solutions
(formerly T4B). You can read more
about progress on our strategy during
the year and our future priorities on
pages 18 and 19.
Looking ahead
While it continues to be a challenging
time for the wider industry, the
structural tailwinds for Trainline endure
and by maintaining our investment in
the Group’s strategic priorities during
FY 2021 we are well-positioned to drive
long-term growth and create value for
our customers and shareholders.
With increased awareness of the
environmental benefits of rail travel,
growing investment in the industry,
an acceleration in migration to online
tickets and even more digitisation and
liberalisation trends in European rail,
we have never been more confident in
the huge opportunity ahead for
Trainline.
Finally, I would like to convey my thanks
to all of the Trainline team. The past
year has been challenging for everyone
and I am proud of the resilience and
dedication shown in continuing to
prioritise the needs of our customers
through the pandemic whilst remaining
focused on delivering our strategic
goals.
Brian McBride
Chair
6 May 2021
Highlights 2021
Strategic highlights
Maintained investment
in strategic priorities
Enhancing user
experience
Driving industry
penetration of etickets in
the UK to 30% from 21%
in the year and launched
a host of innovative new
products, including in-app
railcards in UK and Récup'
Retard in France
Building demand
Strong rebound in new
app customers in Q2 when
lockdowns temporarily
lifted: UK Consumer
>80% and International
surpassing pre-COVID-19
levels
Grow Trainline
Partner Solutions
19 clients signed to our
global API, 16 of which
are new clients in FY 2021
Trainline
Annual Report and
Accounts 2020/21
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Detail on performance against our
strategic objectives can be found
on pages 18 and 19.
Information on key performance
indicators is available on page 26.
Financial Statements
4
Trainline
Annual Report and
Accounts 2020/21
At a glance
We are the world’s
leading independent
rail and coach travel
platform selling rail
and coach tickets to
millions of travellers
worldwide, enabling
them to seamlessly
search, book and
manage their journeys
all in one place via our
highly rated website
and mobile app.
We partner with more than
270 rail and coach companies
across 45 countries, in Europe
and Asia. Our broad range
of carrier partners means
we cover ~80% of rail
and ~60% of coach routes
in Europe.
By bringing together major carriers
onto one platform, we provide our
customers with a complete set of travel
options and offer unique, AI-driven
information to help our customers
stay one step ahead. For our carrier
partners, Trainline offers access to
a huge pool of customers at
relatively low cost.
Within Trainline Partner Solutions, our
global API connects our clients with
one-stop-shop access to our supply
base, across the UK and EU.
Where are we?
Countrieswhere
Trainline has carrier
partnerships
Trainline
Annual Report and
Accounts 2020/21
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4.9/5
star app rating
83%
175+
of our transactions
are through our app
countries where our
customers come from
45
countries travelled
in and across by
Trainline customers
270+
rail and coach companies
30m+
cumulative
app downloads
10
currencies and multiple
payment methods
including Apple Pay,
Google Pay, PayPal,
SOFORT and iDEAL
>600
people in our Trainline
team and more than
40 nationalities,
including 300+
travel tech specialists
and engineers
Financial Statements
6
Trainline
Annual Report and
Accounts 2020/21
CEO’s statement
I'm excited to be leading a tech
company with so much growth
potential and a clear purpose:
to empower people to make
greener travel choices.
Jody Ford
Chief Executive Officer
I would like to start by thanking Clare
for her huge contribution as CEO over
the past seven years and for ensuring
a smooth CEO transition. Having now
picked up the baton, I'm excited to be
leading a tech company with so much
growth potential and a clear purpose to
empower people to make greener
travel choices.
At Trainline, we focus on continuous
innovation to make rail and coach travel
easier for millions of people, which in
turn encourages them to make travel
choices that are better for the
environment.
For our customers, we provide a
simple, consistent, friction-free
experience for booking and managing
travel by bringing all carriers together
in one app and providing smart,
real-time travel information.
For carriers, we offer access to a much
larger customer pool, at a lower cost to
serve than alternative routes to market.
It is estimated that Trainline will
contribute c.£2.8 billion in gross value
added to the rail industry over the next
six years.
Mitigating the impact of COVID-19
As COVID-19 spread across Europe, our
first priority was to look after our
people. We quickly transitioned our
teams in all three offices to remote
working and have worked hard
throughout the year to support their
health and wellbeing.
We also focused on our customers who
were experiencing unprecedented
disruption to their travel plans. We
launched simple automated processes
in our app and website to help them
secure refunds and make changes to
their journeys as easily as possible. We
also launched our Crowd Alerts feature,
helping those who had to travel to do
so more safely.
To protect our business from the
impact COVID-19 has had on trading,
we took swift steps to conserve cash,
significantly reducing cash burn to
c. £5 million per month and raising
£150 million through an issuance of
convertible bonds. As a result, we
exited FY 2021 with £260 million of
liquidity headroom.
Well positioned for recovery
following COVID-19
I am confident that our business will
come back strongly as people start to
travel again, as it did last summer
when government restrictions were
temporarily eased. We saw more
customers booking rail travel online as
they sought to avoid queues in stations
and at ticket machines, and chose the
safer, contactless travel experience
provided by digital tickets in our app.
I believe we will continue to see a
market transition to online and digital
ticketing, which we are well positioned
to lead given our unwavering focus on
our strategic priorities.
Strong momentum in our
strategic priorities
Having maintained our investment in
product and tech through the year,
we made good progress against our
strategic priorities:
Enhancing our customer experience
We continued to optimise our eticket
experience, helping increase UK
industry eticket penetration from 21%
to 30%. This not only benefits Trainline,
with UK Consumer representing c.70%
of industry eticket sales, but also the
wider industry. It is estimated that
widespread use of barcode ticketing
could enable £260 million p.a. of
industry cost savings.
In addition, we continued to improve
our mobile app, adding new features
like in-app railcards, making it easier
and more convenient to save up to a
third off rail travel, and Récup’ Retard
in France to significantly improve our
customers' delay compensation claim
experience.
Trainline
Annual Report and
Accounts 2020/21
7
rail and coach continues to grow as
governments face stretching targets to
bring transport emissions down. For
example, the German government
recently pledged to double rail
passenger numbers by 2030, while the
UK government has committed £48
billion ‘to maximise the shift to rail from
more polluting forms of transport’.
The force of legislative liberalisation in
the European rail industry continues.
Since December 2020 the EU’s Fourth
Railway Package has opened up
domestic passenger services to
commercial competition, leading to a
more fragmented supply landscape.
Subsequently we are already seeing
the launch of new European rail brands,
such as Avlo and Ouigo in Spain. As
we’ve seen in markets like Italy, greater
competition increases the value and
choice for consumers in rail and further
enhances the role of Trainline as a
third-party aggregator.
I firmly believe that these structural
tailwinds represent significant and
long-term growth opportunities for
Trainline and I am hugely excited about
the journey ahead.
Changes to our management team
We continue to evolve our management
team based on the needs of our
organisation and broader strategy with
the addition of Dave Price as Chief
Product Officer, to lead the Product,
Design and Research teams as well as
Champa Magesh to lead Trainline
Partner Solutions as previously
mentioned. We have also appointed
Mun Valiji as our Chief Information
Security Officer to ensure a continued
focus on providing protection for our
customers. Finally we have also recently
welcomed Lisa Hillier as our new Chief
People Officer.
People and culture
One area I’ve been particularly
impressed with so far at Trainline is our
people and the culture. It is Trainline’s
pioneering team working tirelessly
every day to improve the customer
experience that makes us the world’s
leading independent rail and coach
travel platform.
Jody Ford
Chief Executive Officer
6 May 2021
We have also invested in an enhanced
‘new commuter’ experience in the UK,
including secure barcode ticket
technology that lays the foundations
for the future roll-out of Flexi tickets.
Building demand
Given the impact of government
lockdowns on passenger volumes, we
scaled back marketing activity for most
of FY 2021. However, we did lean in
when lockdowns temporarily eased in
the second quarter benefiting from the
reduction in bidding competition for
paid marketing channels. We drove a
strong rebound in new customers,
with new app customers in the UK
recovering to more than 80% of
pre-COVID-19 levels and International
customers surpassing pre-COVID-19
levels.
Looking ahead, we expect to lean in
again as lockdowns ease and, in doing
so, help stimulate the rail industry’s
recovery as every £1 of our advertising
spend yields an estimated incremental
£11 of earnings for the rail industry.
Growing Trainline Partner Solutions
We rebranded UK T4B to Trainline
Partner Solutions and hired Champa
Magesh to lead the business unit as we
seek to make the full breadth of our
solutions available to a global audience.
While business travel remained muted
our Global Distribution and Business
Solutions business made good
progress, including scaling the global
API platform, which provides our
Distributions Solutions partners the
ability to offer European rail options to
their customers through our single
connection. 19 clients are now signed
up with a strong pipeline in place.
At the same time, our Carrier IT
Solutions business continues to
support our white label carrier partners
through the pandemic and help them
prepare for industry recovery as
lockdowns ease.
Long-term structural tailwinds endure
Looking longer term, and past
COVID-19, the structural tailwinds for
our business endure, in particular the
transition to online and digital ticketing
which, though accelerating through
COVID-19, continues to be a significant
opportunity.
We operate in a large and expanding
market, set to benefit from significant
investment in capacity expansion
across Europe, particularly in
high-speed rail. Awareness of the
environmental benefits of switching to
Our response to COVID-19
Keeping our
customers
safe
Crowd Alerts
In response to COVID-19 and in order
to help our customers stay safe when
they travel, we launched Crowd Alerts
in the UK, a feature in our app which
helps customers to see how busy their
train is likely to be before they travel
and to submit reports to help others.
Powered by crowd-sourced travel
reports from other passengers,
Crowd Alerts aims to give customers
information about how busy their
train is, helping them better plan and
stay socially distanced on their
journey.
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Our response to COVID-19
Helping our
customers
and wider
community
Using our reach
As a result of government restrictions
on travel due to COVID-19, we weren’t
always able to connect our customers
to their friends and family. Instead,
we used our website and app to share
important public health messaging,
such as Stay Home, Save Lives, and
helped connect our customers with
local and national charities fighting
the impact of COVID-19.
We gave free advertising slots to
charities throughout the UK across
our app, website and social media
accounts to support those groups and
organisations who may not have the
ability to widely champion their great
work.
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Trainline
Annual Report and
Accounts 2020/21
Market overview
Trainline operates in a large market with multiple structural
tailwinds, including: a shift towards greater rail industry
complexity and fragmentation in our core European
geographies; growing environmental awareness and
government commitments to net zero targets; and a
significant runway for online and digital migration.
Greater environmental awareness
of different modes of travel
Over recent years, governments across
the world have pledged to reduce
transport emissions, in particular
UK and European governments are
targeting net zero emissions by 2050.
The onset of COVID-19 during 2020 has
seen heightened emphasis on such
commitments, including the Green
New Deal and Decarbonisation and
Economic Strategy Bill in the UK, with
the government expected to invest a
record £48 billion by 2024 to 'maximise
the shift of users to rail'. In Europe, the
EU Commission’s stated objective is
net zero greenhouse gas emissions by
2050, and the German government is
to increase investment into rail by 59%
and double rail passengers by 2030.
In comparison to air and road
transport, rail is a relatively low carbon
form of transport, generating less than
1/20 of the CO2 emissions of air travel
and less than 1/7 of the CO2 emissions
compared with car travel. Rail is
also a very efficient way of moving
people into city centres and over long
distances, reducing road congestion
and pollution. In 2018, greenhouse
gas emissions from rail (passenger
and freight) made up just 1.4% of the
UK’s domestic transport emissions,
while 10% of passenger miles travelled
in Great Britain were by rail.
With greater environmental awareness
of travellers, it is estimated that
over time road travel will become
increasingly less attractive, with
congestion, slowing road speeds in
urban areas, growing taxation on
certain fuel types and congestion
charge zones in major cities (already
including London, Stockholm, Milan
and Gothenburg) set to increase.
Ever-increasing awareness of the
environmental impacts of air travel
has also shown that behaviours are
beginning to change – a recent UBS
survey found that 21% of people
had reduced the number of flights
they had taken over 2018/19.
600,000t
By shifting 150 million journeys
from car to rail, Trainline's customers
save 600,000 tonnes of emissions
over the next three years.
As a generation, we believe we have to make
more environmentally friendly travel choices.
Our purpose at Trainline is to make rail and coach
travel easier, thereby helping customers make
more environmentally sustainable travel choices.
Trainline
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Accounts 2020/21
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A large and expanding market
Pre-COVID-19, the global rail and
coach market was estimated to
be worth over €225 billion per
annum. Europe represents over €70
billion of this total, giving Trainline
significant headroom to grow across
existing and future geographies.
In the last 20 years, before COVID-19,
rail journeys increased by 97%, faster
than any other mode of transport,
in the UK. In 2018/19 there was a
record 1.8 billion rail journeys and rail
passenger revenue reached its highest
ever level of £10 billion, in the UK.
UK government support for rail has
increased in line with passenger
journeys since the mid-1980s. The
government has pledged to invest
£48 billion in the railway between
2019 and 2024, to support continued
growth, improve efficiency, reliability
and infrastructure, and to maximise
the transition of travellers away from
more polluting modes of transport.
In Europe, high-speed rail kilometres
are forecast to grow three-fold by
2030, with the most significant high-
speed network expansion planned
in France, Germany, Spain and Italy.
Total investment across continental
Europe planned over the next ten
years totals £176 billion, in line with
government commitments to net
zero greenhouse gas emissions and
the European Green Deal initiatives.
Market worth over
€225bn
UK trips per person
per year for car
678
602
11%
2002
2018
Triple the length of existing high-
speed rail network in EU by 2035
x3
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Runway for migration to online
and mobile
There remains a significant growth
opportunity for online and mobile
ticketing. Pre-COVID-19, across
Europe, only c.40% of rail and coach
tickets were purchased online, in
comparison to 86% of flights.
In the UK, industry penetration of
mobile ticketing has grown to 30% in
the last year, up from 21%, with eticket
availability at c.75% of journeys. The
opportunity for Trainline to share
a more seamless, online ticketing
experience with customers, supported
by a consumer need for ever greater
convenience, flexibility and best value
ticketing, remains. Our expectation
is that both online sales and etickets
will continue to grow across our
markets, furthered by the acceleration
to online caused by COVID-19.
Online sales penetration
in Europe
86%
40%
Rail
Air (LCC)
UK trips per person
per year for rail
eticket availability and
penetration in UK
22
75%
13
69%
30%
2002
2018
Penetration Availability
Financial Statements
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Trainline
Annual Report and
Accounts 2020/21
Market overview continued
Key examples of market liberalisation
in Europe to date, include:
• France – The French government
formally began to open up some
long-distance and regional
domestic passenger railway
services in December 2019. New
entrant carrier Thello plans to
launch a service in 2021, followed
by Renfe and Railcoop in 2022.
• Italy – Since opening to
competition in 2012, NTV Italo
trains entered the Italian high-
speed rail market. They now
operate across 25 stations and
Italo now has a ~30% share of the
high-speed rail market in Italy.
• Germany – c.30% of the annual
volume of rail kilometres has
been put out to public tender
already, with a variety of private
companies operating long-
distance and regional rail
connections, including Flixtrain
and Transdev.
• Spain – New entrants Avlo and
Ouigo España due to start
operations in Summer 2021,
to be followed by Ilsa, a new
high-speed operator, in early
2022. The capacity utilisation of
Spain’s high-speed rail lines is
around 40%, clearly leaving room
for service growth by several
operators.
• Austria, Sweden – Incremental
demand for rail in these countries
has been generated as a result of
newer market entrants, Westbahn
and MTR Express.
Supply complexity
and fragmentation
Trainline operates in an increasingly
complex and fragmented rail market,
where we partner with and support
Train Operating Companies,
governments and the wider
rail industry.
There are approximately 400 rail
carriers and more than 140 coach
companies in the UK and continental
Europe. With ongoing liberalisation
in the European rail sector and
investment in rail and greener modes
of transport, we expect these numbers
to continue to increase.
UK
In the UK, passenger rail services
are delivered by 33 rail operators
including (i) those let as franchises to
private operators by the Department
for Transport, Transport Scotland
and Transport for Wales; and (ii)
those run by private operators
under an Open Access model (where
track access rights are bought from
Network Rail for specific routes).
Due to COVID-19, all operators under
the franchising model have been put
on emergency contracts (known as
'ERMAs'). Under these contracts all
revenue risk falls on the government.
This is a temporary measure with
operators moving onto new National
Rail contracts from mid-2021, as
lockdown restrictions ease.
The UK railway is also going through
a period of industry reform, led
by the Department for Transport,
underpinned by a common agenda
to make rail travel easier and more
accessible for all travellers, and to
encourage a shift to rail from other,
more polluting, modes of transport.
Changes in the UK rail industry will
have some implications for operators.
We still expect, however, that once
industry reform has finished there
will still be a similar number of train
companies to what we have now,
tendered out by government to private
companies on a competitive basis.
Tailwinds for UK rail remain strong.
£48 billion is being invested into
new trains and track enhancements,
building a modern network for
passengers. This, alongside planned
COVID-19 recovery initiatives should
support the long-term growth profile
of the UK’s railways.
Europe
Liberalisation and supply
fragmentation of the rail and coach
markets continues to unfold across
continental Europe, promoted by
a series of European Commission
directives aimed at encouraging
competition across Europe’s railways
and facilitating efficient transport
systems that operate effectively across
borders. The Fourth Railway Package
is one such directive, mandating
competition in every EU rail market,
a process which started in 2019
and aims to be finalised by 2023.
Such directives have helped to
create an environment supportive
of further competition and market
volume growth, expanding
opportunities for independent
retailers to enter the rail markets
in other geographies. Many of the
~400 rail carriers currently operating
across Europe are themselves new
entrants, within the last 15 years.
Trainline
Annual Report and
Accounts 2020/21
11
Regulatory and political environment
After several years of negotiations,
the UK and European Union finally
agreed the basis of their future
relationship. Trainline has remained
actively engaged with British and
other EU national governments,
institutions and carrier partners to
stay abreast of policy and regulations
that may affect Trainline and the wider
environment in which we operate.
Alongside scenario-planning and
risk management, work undertaken
by Trainline over the last years has
meant that the impact of Brexit on
the business, staff, customers and
partners is low. We remain committed
to ensuring we continue to comply with
all relevant policies and legislation.
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Continued liberalisation in
Europe provides additional
opportunity for Trainline as
an independent aggregator
of ticket types, journey
combination and fares,
to simplify the experience
of rail customers.
400+
rail carriers in Europe
33
rail operators in the UK
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In the last few years, some of the
major carriers in Europe have also
announced plans to provide services
beyond their own domestic markets.
Such competition should ultimately
provide more choice, convenience
and quality for customers, as well
as more competitive fares.
Liberalisation of European markets,
combined with increasing and
fragmenting supply across national,
long-distance, cross-border,
domestic and regional levels is
expected to increase competition
between carriers, thereby providing
greater opportunity for Trainline to
consolidate and simplify rail travel
for its customers. As an independent
aggregator of ticket types, journey
combinations and fares, Trainline
is able to provide a transparent
and extensive offering to travellers
across Europe, through our intuitive,
highly-rated, digital experience.
For domestic carrier partners seeking
to grow and for carrier partners
entering new markets, we offer a
world-class technology platform
and access to a global customer
base at a lower cost to serve.
In response to COVID-19, the EU and
its member states introduced tax relief
for businesses and sectoral support
for travel trade associations and EU
carriers, measures that Trainline
supports in giving reassurance to
the industry and to customers.
12
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How we are
empowering
people to make
greener travel
choices
Trainline is expected to save
600,000 tonnes of CO2 over
the next three years by
moving customers to more
sustainable travel modes.
Trainline
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In the UK and across Europe, governments are targeting
net zero emissions by 2050. In December 2020, the EU
announced a 55% reduction target for CO2 emissions by
2030 and the UK announced a reduction target of
at least 78% by 2035.
Transport is the largest contributor
to UK domestic greenhouse gas
emissions, contributing 28% of UK
domestic emissions in 2018, and the
main source of these emissions is the
use of petrol and diesel in road
transport. Similarly, in Europe,
transport accounts for more than a
fifth of greenhouse gas emissions,
almost 72% of which come from road
transport.
Rail offers travellers a greener
alternative to flying or driving,
generating less than 1/20 of the
CO2 emissions of air travel and
approximately 1/7 of the CO2 emissions
compared with car travel, per
passenger1. It can move millions of
people quickly and cleanly, for leisure
or business, across countries and
continents. We believe we have a role
to play in supporting the rail industry,
businesses and governments in
meeting their emissions targets, as
we build back from the impact of
COVID-19.
Our purpose: to empower people to
make greener travel choices
At Trainline, our purpose is anchored in
environmental sustainability. Through
our technology and data, we make rail
and coach travel easier, empowering
people to make travel choices that are
better for the environment. Our
customers are almost twice as likely to
increase train travel in comparison
with non-Trainline customers, having
switched most often from car, and
Trainline customers are expected to
save 600k tonnes of CO2 over the next
three years by moving customers to
more sustainable travel modes. This is
equivalent to the CO2 absorbed by
9 million trees over the same period.
1 European Environment Agency Study (2014)
However, we know there is more we
can do to encourage a shift to rail from
less sustainable transport modes based
on research we undertook in four of
our key markets, specifically about
environmental sustainability and the
role Trainline can play. Our customers
told us we have a role in enabling
them to make easier and better
environmentally sustainable travel
choices with useful and relevant
information and tools. 41.5% of German
passengers now consider their carbon
footprint before making a travel
decision.
Our aim is to harness data, so
everyone can understand their own
environmental impact and manage it
To answer the needs of our customers
and increase our support of the rail
industry and governments, this year
we plan to provide accessible and
transparent green data on our platform
for our UK customers, with other
markets to follow. This data will inform
customers about the environmental
impact of their journey and how the
CO2 emissions of their chosen journey
compare to the same journey by road.
We are supporting our teams in
making greener travel choices
In addition to our sustainable travel
policy, available in our employee
handbook and which asks our teams to
travel by the most environmentally
sustainable mode of transport for the
distance they are travelling, we have a
cycle scheme to encourage our people
to use a greener mode of transport for
the ‘last mile’ of their journey to and
from work. The scheme enables our
people to save at least 25% on a
brand-new bike and accessories.
Additionally, we have made headway
against reducing the impact of our own
operations and product in use. We
offset our operational emissions from
the last financial year, including the
impact of our people working from
home as well as scope 1, 2, waste, water
and business travel, with a donation to
the Neema Forestry programme which
preserves 170,000 hectares of forest in
the Tsavo National Park in Kenya whilst
developing a local sustainable
economy.
Defining our path to net zero
As part of our journey to become a
more sustainable business, we are
committed to reporting against the
Taskforce for Climate-Related Financial
Disclosures ('TCFD') framework and
are making progress against its
recommended disclosures, see page
81. We are working with climate
consultants to agree our net zero
ambitions, science-based goals and
long-term strategy for action, and we
will be publishing these later in the
year. Our Board is working closely
with our Leadership team to ensure
consideration of climate-related issues
when reviewing strategy, plans and
budgets as well as to monitor and
oversee progress against our net zero
goals and plans once agreed.
Trainline has a clear purpose and role
to play in empowering and encouraging
more people to travel by rail as a more
environmentally sustainable transport
mode. We look forward to updating all
our stakeholders as we continue on our
journey to become a more sustainable
business.
Financial Statements
14
Trainline
Annual Report and
Accounts 2020/21
Business model
As the leading independent rail and coach travel platform,
Trainline enjoys significant network effects.
Through our agile and scalable platform, our customer insights and data and
our industry relationships, we have created a simple and intuitive customer
experience in our app and website. As a result our B2C and B2B businesses
have large and sustained customer bases.
Deep network of carrier
and industry partners
We have connected over 270 carrier
partners to date, across the UK, Europe
and beyond, bringing together the
majority of rail and coach operators
onto one platform, covering all of the
UK rail network and ~80% of the
European network. This breadth allows
us to offer all the ticket options,
inventories, timetables and features to
our customers, whenever and wherever
they may be travelling.
We have developed strong
relationships with our industry and
government partners across the
markets we operate in, to support the
growth of and improvements to rail
travel and champion access to rail as
a greener way to travel. This allows
us to keep abreast of legislative
developments and ensures we are up
to date with new carrier features and
requests. Our carrier partners also
benefit from a huge pool of global
customers at low cost.
Bespoke features
and personalisation
Using our product and technology
expertise, we work continuously to
enhance our customer proposition and
make rail and coach travel easier. Our
large B2C customer base has given us
the opportunity to understand how our
customers travel and the insight to
develop proprietary data features, and
provide relevant, high-quality features
and services our customers need,
including multi-currency payment
options and travel insurance.
Powerful data assets
Having significantly invested in our
platform and inventory, we have scaled
to serving customers in over 45
countries, with around 90 million
visits to our platform each week
(pre-COVID-19). This scale has enabled
us to amass significant data and in
turn, develop a clearer and deeper
understanding of customer needs
across the markets we serve. This
network effect allows us to keep
developing the most useful features
for our customers and providing a
personalised experience, geared
towards helping our customers find the
best fares, at the best times, via the
best routes, with the best delay and
disruption information, and through
our new Crowd Alerts feature, to travel
as safely as possible.
Highly scalable
marketing playbook
We have invested in world-class
branding and marketing capability –
successfully building brand awareness
and scale in the UK – and developed our
own marketing playbook, which we are
now using across our key markets to
drive demand in an efficient way.
Central to our playbook is extensive
use of proprietary data and digital
technology. This includes advanced
customer segmentation tools to
efficiently target and re-target
high-value customer cohorts, and
sophisticated SEO strategies, designed
to drive engagement and increased
frequency of purchase. In addition,
our playbook focuses on app marketing
and messaging to persuade existing
and potential new customers to
download our Group’s mobile app, as
we know app customers are more
engaged and make significantly more
purchases each year than web
customers.
Revenue model
Trainline is paid commission by rail and
coach operators on ticket sales and
generates revenue from booking fees
and ancillary services such as
advertising and travel insurance,
through our multi-currency platform.
In addition we operate through three
business segments under Trainline
Partner Solutions: Trainline Carrier IT
Solutions (including our white label
services), Trainline Distribution
Solutions (distribution of our global
API) and Trainline Business Solutions
(for our corporate and SME partners).
Highly-rated
customer experience
Through our 4.9/5 star rated app and
website, we provide a friction-free
self-serve experience for our
customers, with all options in one
place. Alongside Crowd Alerts, etickets,
smart departure boards, platform and
delay information in 12 languages, our
customers can pay in 10 different
currencies and a variety of payment
methods. We use smart tools and
unique AI-driven travel information to
help our customers on the go, ensuring
they can quickly self-serve throughout
their journey, from planning and
booking to travelling and post sales.
Smart business solutions
Trainline Carrier IT Solutions, a division
of Trainline Partner Solutions, offers
carrier partners access to the newest
and most cutting-edge Trainline
technology at a fraction of the cost of
building a stand-alone platform.
We also provide rail booking solutions
for thousands of small and medium
enterprises (‘SME’s), large corporate
entities, public sector partners, travel
management companies and charities,
across the UK and Europe.
Trainline Partner Solutions accounts
allow companies to manage their
corporate rail travel in a single place.
This includes our new global API where
Distribution Solutions partners get
access to our worldwide rail content
and local features through a single
connection.
Trainline
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Accounts 2020/21
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By connecting 270+ rail and coach carriers...
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With our proprietary,
agile technology...
Our carrier partners
benefit from a global
pool of customers,
at lower cost.
Bespoke features &
personalisation
Powerful
data assets
Digital ticketing
Highly scalable
marketing playbook
People
For more info on our
Tech see page 40
Tech
For more info on our
People, see page 17
Leadership
For more info on our
Leadership, see page 56
We create a simple,
seamless experience
for our customers.
For travellers
• 4.9/5 star rated app; all travel options and
best prices, in one place, instantaneously
• Smart departure boards, platform prediction,
real-time delay and disruption information
• 12 languages, 10 currencies and a variety of
payment methods plus useful ancillaries
including insurance
• Bespoke personalisation and data-rich
features
For businesses
• Trainline Partner Solutions provides retailing
capabilities for carriers, businesses and travel
sellers
• Trainline Carrier IT Solutions: carriers
powered by Trainline's cutting-edge tech
• Trainline Business Solutions: for companies of
all sizes
• Trainline Distribution Solutions: access to all
rail carriers in one place, through one simple
connection
For more information on our global API, see page 24
Financial Statements
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Trainline
Annual Report and
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Creating value for our stakeholders
At Trainline, we empower people to make greener travel
choices, driving a modal shift that benefits the world at large.
To realise our goal we continue to build the world's number one rail and coach
platform so we can leverage our technology, content and reach to put rail at the
heart of more journeys globally and make train travel easier for our customers.
For all our customers and stakeholders, we aim to provide choice, value and ease.
Choice
All rail and coach journeys
Value
The best price for every journey
Ease
The simplest experience from
start to finish
For our customers
For our customers globally, we aim to be the ultimate rail and coach travel companion.
• All the carriers
• All the fares
• All the railcards
• All the real-time information
• Train and coach
• All carriers, fares and railcards
in one place
• Money-saving features, for
example: SplitSave, Price
Prediction, Ticket Alerts and
our Best Fare Finder
• Digital tickets
• Simple intuitive user interface
• Real-time information –
departure times and platforms
• Automated refund capability
• Personalisation
For our business partners
We continue to aim to be the leading
distributor of global rail content,
providing unrivalled reach and access
for our corporate partners at lower
cost, including through one simple
connection – our global API.
• Cost control features: travel policy,
MI questions, on-account payment
• Self-serve: sign up,
onboarding, reporting
• All the fares plus corporate rates
For our carrier partners
Trainline aims to continue to be a leading tech platform enabling digital
innovation in the rail industry. Our tailored retailing solutions meet the needs
of our carrier partners, lowering the cost of serving customers by making
complex technology simple.
Through bespoke development and our white label retailing service,
we offer our scalable and secure platform, and our innovative
features for use by our carrier partners.
For the rail industry
We provide cutting-edge rail technology and digital innovation that
encourages more people to travel by train versus other less sustainable
modes of transport, at a lower cost to the industry. Having significantly
invested in our global technology platform, we provide our carrier partners
and the rail industry more broadly with access to travellers all over the world.
For more information on our
global API, see page 24
• One-stop shop (front end and back
end retailing needs)
• Customer first and innovative
features
• Always up-to-date technology
• Dedicated customer team
• Scalable and secure platform
• Trainline expects to contribute
c.£2.8 billion of additional value to
rail industry over next six years
• We enable industry cost saving of
up to ~£260 million per annum
• Every £1 of Trainline advertising
spend yields an estimated
incremental £11 of ticket sales for
the industry
Trainline
Annual Report and
Accounts 2020/21
17
Our technology
At Trainline, we pride ourselves on our proprietary, modern,
scalable tech platform created and maintained by our 300+
bright product and tech minds.
Our ability to bring together teams comprising developers, designers,
infrastructure and data scientists to create a world-class experience for our
customers and carrier partners is what defines us and allows us to continually
innovate and maintain our superior customer experience.
300+
releases a week
135bn
search results per
year pre COVID-19
>500
microservices
270+
rail and coach carriers
connected
~3 TB
data processed a day,
pre COVID-19
300+
tech experts and
product makers
Reliable, scalable, secure
• 100% cloud
• 300+ engineers
• 300+ releases per week
• >500 microservices, increasing
speed of development, flexibility
and scalability
Customer-centric
e-commerce
• Simple ‘1 click’ UX: hides
industry complexity
• Proprietary multi-carrier/modal
journey planner
• Multi-product basket
Deep
inventory connections
• >270 carriers
• Rail and coach
• Pre and post-sales
• Real-time data
• Add-on travel services:
insurance, etc.
Personalised AI data
products
• ~3 TB data processed per day
pre COVID-19
• 135 billion search results pre
COVID-19
• 1 billion train movements per year
• Bespoke AI-driven features
• Personalised UX and CRM
Security, payments,
fulfilment, fraud
safeguards
• PCI-DSS Level 1 (Merchant &
Service Provider) since 2013
• Cyber Essentials certification
since 2017
• Active member of the BSIMM
community. Partnership with
NCSC & NCA
• Internal standards aligned with
ISO27001 certification & NIST
framework
• 3DS version 2 implemented
• Payment Services Directive II
Secure Customer Authentication
ready
• Industry-leading fraud to sales
ratio
• Industry-leading bank
acceptance rates
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Financial Statements
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Trainline
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Strategy
Our purpose at Trainline
is to make rail and coach
travel easier, thereby
helping customers make
more environmentally
sustainable travel choices.
Our strategic growth priorities:
Providing a smart, seamless and friction-free experience for our
customers is at the heart of our business.
Through customer insight and research, including
personalisation, data and machine learning, we invest in
designing features that enhance the journeys of our customers
at every stage of their journey, from planning and booking
through to post sales.
We have created a platform, with the aim of consolidating rail
and coach inventory for all carriers globally, providing one
convenient online experience for our customers. In doing so, our
ambition is to help customers make more environmentally
sustainable travel choices.
We remain committed to delivering the best possible customer
experience through a pipeline of new, innovative products and
features, for deployment to all our customers globally.
Our key focus is to create the best possible product market fit in
each market and strengthen demand by deploying our
marketing playbook.
To date, we have built a strong and highly-rated app experience
and a strong brand, notably in the UK. Our addressable
customer base remains large and the headroom for Trainline to
grow across our core markets remains significant.
We continue to deploy our marketing playbook in order to drive
customer acquisition, customer loyalty, repeat purchases and
the frequency with which our customers engage and transact
with us.
By growing demand, we are encouraging more customers to
choose more environmentally sustainable modes of transport.
By growing our customer base and net ticket sales, we are
increasing opportunities to provide other services to our
customers such as travel insurance, multi-currency payments
and through targeted advertising. These in turn generate
additional revenue opportunities for Trainline.
We measure the revenue we generate as revenue take-rate –
calculated as revenue divided by net ticket sales.
To date, Trainline Partner Solutions, (previously Trainline for
Business) has primarily focused on opportunities in the UK.
Our Distribution Solutions offering, as well as Carrier IT
Solutions and Business Solutions for companies of all sizes, offer
further and significant growth headroom for Trainline. We
remain focused on increasing demand from our existing
accounts, winning new accounts and over time, scaling Trainline
Partner Solutions internationally.
Enhance the
customer
experience
Build
demand
Optimise
revenues
Grow
Trainline
Partner
Solutions
Trainline
Annual Report and
Accounts 2020/21
19
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Key measures
Progress in FY 2021
Priorities for 2021/22
• App rating
• Conversion rate growth
• eticket penetration
• 4.9/5 star rated app
• Higher adoption of etickets in the UK with eticket
penetration up to 30%, of which 70% through
Trainline
• Enhanced ‘new commuter’ experience, powered by
our proprietary data and AI
• Investing in our strong pipeline of new
innovation
• Evolving our offering for the returning
commuter market
• Adding new supply in European markets
and adapting product roadmap to meet
specific local market needs
• Optimising the core proposition to drive
value
• New app customers
• App share of transactions
• Demand remained subdued for most of the year.
• Ramping marketing activity back up as
operating conditions recover
However when conditions saw some recovery in Q2
new app customers rebounded to 80% of pre-
COVID-19 levels in UK and >100% of pre-COVID-19
levels in International. With further COVID-19
related lockdowns in the second half, demand fell
back across all of our markets. While timing of
recovery remains uncertain for our International
business, there are positive signs of recovery for UK
Consumer as lockdowns in the UK gradually lift
• UK Consumer app share of transactions up 7% pts
to 83%
• Take-rate in UK Consumer
• Significant distorting effects from COVID-19 on
• Optimising revenues where feasible, in
and International
take-rates
the context of COVID-19 recovery
• For the UK, manage take-rate headwind
from growth in fee-free on-the-day
ticket sales
• Growing International take-rate over
time to be similar to the UK take-rate
• Growth of our global API
• B2B win/retention rate
• Supporting our Carrier IT
Solutions clients through
COVID-19
• Introduced Trainline Partners Solutions as business
• Growing the new Trainline Partner
segment leading solutions for businesses and
carrier partners
• Continued to add new clients to our global API, part
of Distribution Solutions, with 19 clients now live
and integrated
• Innovation for Carrier IT Solutions customers for
where issues arisen due to COVID-19, including new
digital flexible ticketing solutions plus enhanced
change and refund technology
Solutions business
• More client wins through Carrier IT and
Distribution Solutions
• Enhanced platform for UK Carrier IT
Solutions clients
Financial Statements
20
Trainline
Annual Report and
Accounts 2020/21
Strategy in action
Enhance
the UK
customer
experience
UK Railcards
In the UK, we’ve taken
railcards fully digital.
At Trainline, we are driven by making
rail and coach travel easier, through a
seamless customer experience in our
app and helping our customers find the
best value journey for their needs and
by providing all options in one place.
This year, we launched our in-app
railcards product feature in the UK,
allowing our customers to buy, store
and use their railcards alongside their
tickets in our app.
In the UK, railcards offer travellers a
discount on train tickets, as well as
discounts and deals for days out when
travelling by rail. Our new railcards
feature means that our customers can
easily apply their railcard discount to
ticket purchases, without the hassle of
keeping and renewing a paper version.
We will continue to invest in our in-app
railcard feature, including building
similar capabilities in other markets in
Europe.
We currently offer the following
railcards in the UK:
• Network Railcard
• 16-25 Railcard
• 26-30 Railcard
• Family & Friends Railcard
• Senior Railcard
• Two Together Railcard
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Recup’ Retard / Delay Repay
Railcards
Recup’ Retard / Delay Repay
Railcards
Recup’ Retard / Delay Repay
Railcards
Recup’ Retard / Delay Repay
Recup’ Retard / Delay Repay
Railcards
Railcards
Recup’ Retard / Delay Repay
Railcards
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Strategy in action
Enhance the
international
customer
experience
Récup’ Retard
Improving our customers'
experience is at the heart
of what we do at Trainline.
Through our customer research, we
found ~20% of French rail travellers
were not aware that compensation
is available to them if their train is
delayed, and that over 60% of French
rail travellers aren't aware of the
amount or conditions under which they
can request this compensation. We
wanted our customers to know that
even when things don’t quite go
according to plan, we are there for
them.
This year, we launched a new app
feature called Récup' Retard for our
French customers, which provides a
quick and easy way for rail travellers
who experience journey delays to
request compensation.
Our customers just receive a
notification to confirm that they have
received compensation straight on to
their payment card – no paper forms or
telephone calls required.
We know from talking to our customers
that providing automatic compensation
for journeys on delayed trains is a key
need so we are aiming to roll out
similar, simple delay repay solutions for
Trainline customers in other markets.
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Annual Report and
Accounts 2020/21
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Recup’ Retard / Delay Repay
How Récup' Retard works
Recup’ Retard / Delay Repay
Railcards
Railcards
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Receive a notification
If your train has arrived
at the station more
than 30 minutes late
and you are eligible
for compensation, we
will let you know via a
notification or email.
Receive a
compensation
estimate
We automatically
calculate the estimated
amount of your
compensation.
Fill out the
form
We direct you to make
the compensation
request.
Receive
your compensation
Depending on the length
of delay, compensation
can be transferred
to your bank or used
against future travel
bookings. Multiple
compensation codes can
be saved in the app, so
they are always on hand
for future bookings.
24
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Annual Report and
Accounts 2020/21
Strategy in action
Growing Trainline
Partner Solutions
Connecting
45k
stations
Access to nearly
1.8bn
unique routes
Unlocking
10
markets
Global API
We are building the
world’s number one
rail travel platform,
pioneering the
technology behind rail
content and ticketing
globally to provide
access to nearly
1.8bn unique rail routes,
across ten different
markets, through one
simple connection.
Trainline Partner Solutions provides a
market-making role for the rail industry
by bringing incremental customers to
rail through its multi-channel reach.
For over 20 years we’ve been powering
some of the largest travel brands and
online booking tools to help them
provide a seamless rail booking
experience for their customers and
travellers.
Our global API allows our partners
to maximise revenues by providing
extensive customer-first, feature-rich
rail content all through one simple
connection. It is quick and easy to
integrate with Trainline's continuous
support to ensure a seamless go-live
through to transaction growth.
Quality global coverage
• Up-to-date content: new entrants
and low-cost carriers
• Standardisation layer to normalise
market-by-market differences
• All carriers; single search journey
planning across markets and
borders
• Connections updated and
managed by us, behind the scenes
Customer-first feature set
• Real-time information
• Support for multiple languages
• Ten currencies and a variety of
payment methods including
on-account
• Aftersales; void tickets,
change of journey, refunds
• Market-specific features e.g.
SplitSave in UK and Mandatory
Seat Mapping
Accessed through modern,
dynamic technology
• Modern, efficient bandwidth
through our RESTful API
• Up-to-date tech stack
• Dynamic capabilities
• Cloud-based hosting for
instant scalability
• Industry best practice
security standards
Trainline
Annual Report and
Accounts 2020/21
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Access to rail content from
more than 270 carriers,
enabling travel in and across
45 countries, via our one
simple connection.
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Financial Statements
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Key performance indicators
We use the following financial and
non-financial KPIs to measure the
strategic performance of our business.
Net ticket sales (£m)
473
75 235
783
UK Consumer
UK TPS
International
2,046
1,191
490
3,727
FY21
FY20
FY19
1,648
1,198
349
3,194
Description
Net ticket sales represents the gross value of
ticket sales to customers, less the value of
refunds issued, during the year. Net ticket sales
does not represent the Group’s revenue.
Revenue (£m)
44
12 11
67
FY21
FY20
FY19
178
137
Adjusted EBITDA (£m)
UK Consumer
UK TPS
International
57
26
261
(25)
FY21
FY20
FY19
85
58
14
210
53
Description
The Group generates the majority of its
revenue in the form of commissions earned
from the rail and coach industry on ticket sales
based on a percentage of the value of the
transaction. The Group also earns booking fees
and other service charges billed directly to the
customer, on a per transaction basis.
Description
Adjusted EBITDA is profit or loss after tax
before net financing expense, tax, depreciation
and amortisation, exceptional items (primarily
impairment of goodwill) and share-based
payment charges.
Performance
Given the impact of COVID-19 on passenger
numbers, net ticket sales decreased to 21% of
prior year at £783 million, with UK Consumer at
23%, International at 48% and TPS at 6% of
prior year.
Performance
Given the impact of COVID-19 on passenger
numbers, revenue decreased to 26% of prior
year at £67 million, with UK Consumer at 25%,
International at 43%, and TPS at 21% of prior
year.
Performance
Adjusted EBITDA reduced to a loss of £25
million from a profit of £85 million last year,
reflecting the significant impact of COVID-19 on
passenger numbers though partly offset by
operating cost reductions.
Adjusted basic earnings
per share (p)
Basic earnings per share (p)
Operating free cash flow (£m)
FY21
FY20
FY19
(10.8)
(19.1)
8.1
(17.7)
2.4
(3.3)
FY21
FY20
FY19
(146)
FY21
FY20
FY19
59
42
Description
Adjusted basic EPS is profit after tax for the
year, excluding exceptional items, amortisation
of acquired intangibles and share-based
payment charges together with the tax impact
of these items, divided by the weighted average
number of ordinary shares.
Description
Basic EPS is profit after tax for the year divided
by the weighted average number of ordinary
shares.
Description
Operating free cash flow is cash generated
from operating activities adding back
exceptional items, and deducting cash flow
in relation to capital expenditure.
Performance
Adjusted EPS was a loss of 10.8 pence, an 18.9
pence decrease on the prior year,
predominantly driven by the significant impact
of COVID-19 on passenger numbers though
partly offset by operating cost reductions.
Performance
Basic earnings per share was a loss of 19.1
pence, a reduction of 1.4 pence on the prior
year, predominantly driven by the increased
loss after tax driven by the significant impact of
COVID-19. Prior year included significant
exceptional costs relating to IPO.
Performance
Operating free cash flow was £(146) million
versus £59 million in the prior year. The
reduction was predominantly driven by a £110
million reduction in adjusted EBITDA and a
reduction in working capital benefit of £96
million due to the impact of COVID-19.
Please see page 140 for the definition and reconciliation of Alternative Performance Measures
(Net Ticket Sales, Adjusted EBITDA, Net Debt, Operating free cashflow and liquidity).
Trainline
Annual Report and
Accounts 2020/21
27
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Operating (loss)/profit (£m)
Average visits per month (m)
UK industry eticket penetration (%)
(100)
FY21
FY20
FY19
FY21
FY20
FY19
38.6m
89.7m
FY21
FY20
FY19
30%
21%
75.5m
14%
2
11
Description
Operating profit is a profit measure reflecting
profit or loss after tax before net financing
income/expense and tax.
Description
Average number of visits per month to our
consumer apps or websites (UK Consumer and
International).
Description
Internally calculated value of eticket sales as a
percentage of total rail ticket sales value for the
UK rail industry.
Performance
Operating loss of £100 million was driven by
the significant impact of COVID-19 on passenger
numbers and the one-off International goodwill
impairment of £25 million, partly offset by
operating cost reductions.
Performance
Our platforms hosted 39 million visits per
month from UK and International consumers
this year, a decrease of 57%.
Performance
By the end of FY 2021, eticket penetration
increased to 30%, from 21% in FY 2020,
reflecting heightened preference for etickets
due to COVID-19 and growing availability.
Liquidity (£m)
Cumulative app downloads (m)
Transactions through mobile app (%)
FY21
FY20
FY19
259.7m
181.4m
131.3m
FY21
FY20
FY19
36.2m
32.4m
FY21
FY20
FY19
83%
76%
23.5m
66%
Description
Liquidity is the aggregate of the Group's cash
and cash equivalents plus available headroom
on the Group's Revolving Credit Facility.
Description
Cumulative number of app downloads in UK
Consumer and International.
Description
Gross transactions through the mobile app as a
percentage of total gross transactions over the
year in UK Consumer.
Performance
Trainline's liquidity headroom increased due to
the £150 million convertible bond issuance,
partly offset by the impact of COVID-19 on cash
flows and working capital balances.
Performance
Total cumulative downloads of the Trainline app
increased to 36.2 million.
Performance
The percentage of transactions that went
through the Trainline mobile app increased by 7
percentage points to 83%.
Financial Statements
28
Trainline
Annual Report and
Accounts 2020/21
CFO’s financial highlights
By bolstering our liquidity and
reducing cash burn we have
mitigated the impact of COVID-19
and having maintained our
investment in our strategic priorities
we are well positioned for recovery.
Shaun McCabe
Chief Financial Officer
Group overview
COVID-19 and the government
measures to curb its spread led to a
significant reduction of passenger
volume in FY 2021. With national and
regional lockdowns, and social
distancing restrictions in place for
much of the year, Group net ticket sales
decreased to £783 million, equivalent
to 21% of the prior year.
While the current trading environment
remains challenging, vaccine rollouts
and government roadmaps to ease
lockdowns are expected to create the
conditions necessary for recovery.
Encouragingly, when lockdowns and
restrictions were eased during the
Summer months of 2020, leisure and
commuter passenger volumes
recovered relatively quickly in
Trainline’s key European markets, while
Trainline’s UK Consumer net ticket sales
recovered faster than the market,
reflecting an acceleration in the shift
to online and digital channels.
The decline in Group net ticket sales
resulted in Group revenue decreasing
to £67 million, 26% of revenue in the
prior year. Gross profit for the year
decreased from £201 million to £49
million and we reported an adjusted
EBITDA loss of £25 million, against an
adjusted EBITDA profit last year of £85
million.
c.£5m
Monthly cash burn
£260m
Liquidity headroom
Trainline
Annual Report and
Accounts 2020/21
29
FY 2021
£m
FY 2020
£m
%
of PY
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23%
6%
17%
48%
21%
25%
21%
24%
43%
26%
24%
21%
23%
38%
24%
473
75
548
235
783
44
12
56
11
67
34
8
42
7
49
(25)
(100)
2,046
1,191
3,237
490
3,727
178
57
235
26
261
144
40
184
17
201
85
2
Cost of sales reduced to £10 million,
29% of the prior year, given reduced
transaction volumes partly offset by an
investment in customer service to
process the unprecedented level of
refunds arising due to government
lockdown measures. Gross profit
decreased to £34 million, 24% of the
prior year.
UK Trainline Partner Solutions
Net ticket sales for Trainline Partner
Solutions ('TPS') declined to £75 million,
6% of the prior year, with demand
remaining subdued, particularly for
business travel, while the Carrier
IT Solutions business was also
impacted by season ticket refunds.
Revenue declined to £12 million, 21%
of the prior year, given materially
lower net ticket sales. TPS’s revenue
take-rate was distorted by a higher
proportion of fixed fee income for
our Carrier IT Solutions business
as well as a significantly higher
volume of refunds processed.
Cost of sales was £4 million, 23% of
the prior year given lower transaction
volumes. Gross profit declined to
£8 million, 21% of the prior year.
Net ticket sales
UK Consumer
UK TPS
UK total
International
Total Group
Revenue
UK Consumer
UK TPS
UK total
International
Total Group
Gross Profit
UK Consumer
UK TPS
UK total
International
Total Group
Adjusted EBITDA
Operating (loss)/profit
UK Consumer
Net ticket sales for UK Consumer
decreased to £473 million, 23% of the
prior year, reflecting the effects of
COVID-related lockdowns over the
course of the year. Net ticket sales
peaked in August (between the first
and second lockdowns) at 46% of prior
year vs the wider industry passenger
volumes at 34%.
UK Consumer revenue declined to
£44 million, 25% of the prior year,
driven by the material decline in net
ticket sales. Revenue take-rate (the rate
of revenue generated from net ticket
sales) was distorted upwards by a
significantly higher number of refunds
in the period, partly offset by a lower
mix of customers from overseas, who
tend to generate higher revenue per
transaction.
Financial Statements
30
Trainline
Annual Report and
Accounts 2020/21
CFO’s financial highlights continued
International
International net ticket sales were
£235 million, or 48% of the same
period in the prior year. This was
better than the UK segments given an
earlier and more prolonged relaxation
of restrictions in our key European
markets in Q2, within which Trainline’s
top three domestic markets in Europe
(France, Italy, Germany) returned to
year-on-year growth. With further
COVID-19 related lockdowns in the
second half, demand fell back across
all our markets. While timing of
recovery remains uncertain for our
International business, we continue
to invest in our product roadmap to
be ready for recovery when it comes.
Revenue decreased to £11 million, 43%
of the prior year, given the reduction
in net ticket sales. As with the UK,
International take-rate was impacted
by a lower mix of customers from
overseas, who typically generate
higher revenues per transaction.
Cost of sales decreased to £5
million, 54% of the prior year, given
reduced transaction volumes.
Gross profit reduced to £7
million, 38% of the prior year.
Adjusted EBITDA
The Group reported an adjusted
EBITDA loss of £25 million, within the
guided range of a £24-27 million loss as
set out in the Group’s trading update
published on 11 March 2021. This
compared to an adjusted EBITDA of £85
million in FY 2020, with the reduction
driven by the significant impact on
trading from COVID-19, partly offset
by a reduction in operating costs.
Operating loss
The Group reported an operating
loss of £100 million compared to
an operating profit of £2 million
last year. In addition to the impact
of trading losses from COVID-19,
the operating loss included:
• Depreciation and amortisation
charge of £41 million, £10 million
lower than last year, driven by a
reduction in the amortisation of
acquired intangibles, partly offset by
a higher amortisation charge
relating to capital investment in our
product pipeline.
• Exceptional goodwill impairment
charge of £25 million relating to the
International business. This was a
one-off, non-cash charge. There is
no significant change in the Group’s
expectations in relation to the
long-term trading and profitability
outlook for the International
business, though COVID-19
continues to have a significant
short-term adverse impact on
business performance. Ongoing
uncertainty within the travel sector
and the subsequent challenges in
long-term forecasting have been
reflected within the FY 2021
impairment calculation by increasing
the discount rate and reducing the
long-term growth rate applied
within the impairment calculation.
For more information see page 112.
• Share-based payment charge of
£7 million, down from £11 million
in prior year given a one-off credit
from the departure of our outgoing
CEO, and due to the prior year
including charges relating to pre-IPO
schemes.
Loss after tax
Loss after tax was £91 million,
reflecting the operating loss from
COVID-19, offset in part by a £15
million tax credit primarily arising
from that loss. This compares to an
£81 million loss after tax in the prior
year, which reflected significant
exceptional costs incurred by the
Group in relation to its IPO.
Earnings per share ('EPS')
Adjusted basic loss per share was
10.8 pence, an 18.9 pence decrease on
last year. Adjusted basic earnings per
share adjusts for the exceptional one-
off costs in the period, amortisation
of acquired intangibles and share-
based payment charges, together
with the tax impact of these items.
Basic loss per share was 19.1 pence, a
reduction of 1.4 pence versus FY 2020.
Outlook for FY 2022
While COVID-19 continues to impact
near-term trading, vaccination rollouts
and the easing of lockdowns are
creating the conditions necessary for
the rail industry to recover. We are
already seeing signs of recovery in the
UK, with UK Consumer net ticket sales
stepping up in Q1 FY 2022.
We are well placed to recover quickly as
lockdown restrictions ease across our
markets, as the business already
demonstrated in the second quarter of
FY 2021 (June-August 2020). During that
period, passenger volumes recovered
relatively quickly across Trainline’s key
European markets, with our top three
markets returning to sales growth in the
summer months, while Trainline’s UK
Consumer net ticket sales recovered
faster than the rest of the UK market.
This reflected an acceleration in the shift
to online and digital channels, in part
driven by a greater reluctance from
customers to use ticket machines or
queue at stations, government guidance
to book in advance, and an increased
need for clear and accurate, on-the-go
travel information to reassure
customers they can travel safely.
Trainline
Annual Report and
Accounts 2020/21
31
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FY 2021
£m
FY 2020
£m
Change
%
532
37
25
(42)
(267)
284
557
92
52
(169)
(159)
373
(5)%
(60)%
(53)%
75%
(68)%
(24)%
Net current assets increased to £19
million from £25 million net current
liabilities in FY 2020. The increase was
caused by working capital outflow due
to the impact on trading of COVID-19
throughout FY 2021, meaning trade
receivables and payables balances were
significantly lower at the end of FY 2021
than FY 2020. This working capital
outflow is expected to reverse and
recover to pre-COVID-19 levels in line
with sales recovery.
Cash flow
Operating free cash flow ('FCF') was
negative £146 million, primarily driven
by the impact of COVID-19 on trading
and net working capital, which reduced
£95 million, as well as our decision to
maintain investment in Product and
Technology through the pandemic to
drive long-term growth. Capital
expenditure in the period was £26
million, broadly in line with the prior
year (FY 2020: £27 million).
However, for the most part this was
offset by the Group’s convertible bond
issuance in January 2021, resulting in
cash and cash equivalents ending the
year at £37 million, a net cash outflow
of £55 million.
Shaun McCabe
Chief Financial Officer
6 May 2021
Non-current liabilities have increased
to £267 million from £159 million. This
was driven by the successful £150
million convertible bond issuance
which completed in January 2021 and is
accounted for as debt on the balance
sheet. The raise has added additional
liquidity to the Group's balance sheet,
protecting the business further in an
extended COVID-19 downturn scenario
and giving greater flexibility to invest in
possible future growth opportunities.
The increase is partly offset by a
reduction in cash drawings on the
Group's Revolving Credit Facility due
to net repayments across the year of
£42 million.
As announced in January 2021,
Trainline’s financial covenant on its
Revolving Credit Facility has been
waived until August 2022. The financial
covenant, tested semi-annually,
requires that net debt not surpass 3.75x
adjusted EBITDA for the trailing twelve
months.
Statement of financial position
Non-current assets
Cash and cash equivalents
Other current assets
Current liabilities
Non-current liabilities
Net assets & total equity
Long term we see no change to our
structural tailwinds:
• Rail is a large and growing market,
with significant investment in
high-speed rail planned over the
next decade;
• Growing environmental awareness
of the benefits of rail vs. air and car;
• Online and digital migration remains
under-penetrated with c.60% of
tickets purchased at the station
pre-COVID; and
• Liberalisation and fragmentation of
European rail markets as a result of
the EU’s Fourth Railway Directive,
with new entrant rail carriers such as
Avlo and Ouigo in Spain creating a
greater market fit for an online
marketplace like Trainline.
Statement of financial position
Total net assets at the end of FY 2021
were £284 million, a decrease from
£373 million in FY 2020.
Non-current assets decreased to £532
million from £557 million in FY 2020. The
decrease was predominantly caused by
the impairment of the goodwill balance
relating to the International segment of
£25 million. This is a one-off, non-cash
charge. There is no material change in
the Group’s expectations in relation to
the long-term trading and profitability
outlook for the International business,
though COVID-19 continues to have a
significant short-term adverse impact
on business performance. Ongoing
uncertainty within the travel sector and
the subsequent challenges in long-term
forecasting have been reflected within
the FY 2021 impairment calculation by
increasing the discount rate and
reducing the long-term growth rate
applied within the impairment
calculation.
Financial Statements
32
Trainline
Annual Report and
Accounts 2020/21
Principal risks and uncertainties
At Trainline, we ensure a robust risk
management strategy, to ensure we continue
to sustainably grow our business, meet our
objectives and provide the best possible
customer experience across geographies
and customer segments.
Trainline’s framework for risk
management spans all levels
of our business.
Our Board of Directors has ultimate
responsibility for our risk management
programme and in setting the risk
parameters within which Trainline’s
Executive Team operates. The Board
also sets the tone for and around risk
management; the culture as well as how
decisions are made when evaluating risk.
The Board is also responsible for
assessing events and circumstances which
could threaten Trainline’s current and/or
future strategy, business operations or
business model, and for providing
guidance and advice to our Executive and
broader Leadership Team on navigating
risks. The Board is supported by the
Group, through Trainline’s Leadership
Team and the Audit and Risk Committee,
in particular, to review, report on and
manage risk.
The Audit and Risk Committee is
responsible for reviewing the effectiveness
of Trainline’s internal controls and risk
management processes, and for
reporting such matters to the Board.
The responsibility for reviewing and
maintaining Trainline’s risk register also
belongs to the Audit and Risk Committee.
The Committee makes sure that Trainline’s
risk register is: frequently updated and
reviewed; comprehensive; monitored; and
effectively communicated back to the
Board on a regular basis. This helps to
ensure that the Board remains up to date
with Trainline’s risk profile and allows
them to define appropriate strategic
objectives for the Group.
During our annual long-term business
planning process, all high-level strategic,
financial, regulatory and reputational
risks are formally assessed by the Board.
Our risk management framework
Trainline Board
Overall responsibility for Trainline’s risk
management programme
Audit & Risk Committee
Responsible for reviewing the
effectiveness of Trainline’s internal
controls and risk management
processes, and for reporting such
matters to the Board
Compliance & risk
management processes
Annual review of risk identification
and management of systems and
processes, with regular reporting
to the Audit and Risk Committee
on changes to the risk register
and risk profile
Management Team
Supported by and contributors to
internal risk management systems
and processes
Trainline
Annual Report and
Accounts 2020/21
33
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The Audit and Risk Committee is
overseen by the Board and holds
responsibility for monitoring and
maintaining the Board’s approach to
Group risk management. The Board
receives updates from the Chair of the
Audit and Risk Committee on its work
and provides guidance on assessing
risk against our strategic and
operational priorities and on the
implementation of mitigation plans.
A flow of clear, timely and relevant
communication exists between the
Audit and Risk Committee and the
Board, which continues from the Board
to Trainline’s wider business and vice
versa. This clear flow of communication
seeks to ensure that our leadership
remains aligned on our risk appetite,
how decisions around risk are made
and how our strategy is executed in line
with Trainline’s risk parameters.
Trainline takes risk and compliance
seriously and ensures that applicable
legislation and directives are complied
with across all geographies in which
Trainline operates.
All Trainline teams are given Security
and Data Privacy training on a rolling
basis.
Principal risks heat map
Procurement process and assessing
our suppliers
Trainline’s procurement processes
reflect our commitment to sustainability
and governance. All material suppliers
are assessed to ensure they are fit for
purpose and meet Trainline’s ethical
standards, security requirements,
environmental and corporate
responsibilities, and comply with
relevant legislation, wherever they are
in the world.
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1
7
8
3
Moderatesignificance
Highsignificance
Majorsignificance
Key
Market shock/economic disruption
Prolonged COVID-19
IT security and cybercrime
People
Competitive landscape
Compliance
General supply
Regulatory and political environment
Financial Statements
34
Trainline
Annual Report and
Accounts 2020/21
Principal risks and uncertainties continued
Trainline identified risks
and mitigants
At Trainline, risk management is an
integral part of our business culture and
organisation. The Board holds ultimate
responsibility for risk management,
supported by the Audit and Risk
Committee which has responsibility for
reviewing and maintaining Trainline’s
risk register, and approach to risk
management and compliance.
Trainline continually looks to identify
emerging risks and to perform deep-
dive analyses on risks it considers most
important to the business, at regular
intervals throughout planning processes
and through each financial year.
Our Management Team takes an active
role in managing risk throughout
day-to-day operations at Trainline,
guided by the Board and the risk
parameters as set through Trainline’s
strategic objectives.
By providing input to the risk register
process, as overseen by the Audit and
Risk Committee, the Management Team
helps to determine the risk appetite for
the business which is approved by the
Board. Trainline’s risk register is
continually updated and reviewed
formally at least every six months.
Description of risk
How we mitigate the risk
How we monitor the risk
Status of risk
As part of our operations, we conduct detailed and careful analysis
and modelling of cash balances and debt levels to ensure
Trainline’sliquidity,accesstofinancialfacilitiesandsustainable
business operations, all support our long-term growth.
Through this analysis, we create forecasts and projections,
including contingencies that help us cater for any negative
impactsonourbusiness–operationallyorfinancially.
Trainline has a large and diverse portfolio of investors, allowing us
to maintain access to global capital markets and funding.
• Duration and
cost of debt
High
• Monitoringoffinancial
and investment
markets
• Investor engagement
• Engagement with
banking and
finance partners
• Monitoring our credit
rating
• Analysis of industry,
economicandfinancial
drivers
Market shock/
economic disruption
Exposure to market risks
including foreign currency
rates, general market
sentiment and the risk of
global market shocks,
including a recession.
COVID-19hasinfluenced
trading across Trainline's
markets.
Significantmarketevents
could damage Trainline’s
competitiveness,
creditworthiness and the
spending power of our
customers, ultimately
impactingourfinancial
results and the success of
our product offering.
Trainline
Annual Report and
Accounts 2020/21
35
Description of risk
How we mitigate the risk
How we monitor the risk
Status of risk
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• Monitoring
Very High
government
updates andadvice
across markets
• Engagement with key
government
organisations and
representatives
• Monitoring customer
feedback and
sentiment across
markets
• Monitoringfinancial
performance and
frequently updating
financialprojections
• Level of customer
contact rates
• Employee check-ins
and engagement
surveys
• Investor engagement
• Engagement with
carrier partners
Prolonged COVID-19
Exposure to and effect of
COVID-19, notably as a
result of lockdown
measures taken by most
governments, particularly
by the UK, Europe and
USA.
Restrictions on domestic
leisure and commuter
travel, as well as cross-
border travel into
and aroundEuropeand
international in bound
travel into the UK and
Europe from overseas.
Over the last 12 months,
Trainline has seen a
downturnintrafficonall
platforms, on ticket
purchases and on
ancillary revenue in all
markets as a result of the
impact of COVID-19.
The onset of COVID-19
sawasignificantdropin
bookings due to national
and localised lockdowns,
asignificantincreasein
the numberofcustomers
contacting Trainline to
refund or exchange
tickets and the closure of
ouroffices.
A further prolonged
COVID-19 heightens the
need for Trainline to
carefully manage its
operations to sustain a
profitableandstable
business in the longer
term.
Throughout COVID-19 Trainline’s priorities have remained the
safety and wellbeing of our people, supporting our customers and
engaging with industry and governments to plan and support
growth post pandemic. Protecting our shareholders against the
economic impact of COVID-19 has also been a huge priority for us,
andwe'vetakenseveralactionstoleveragetheGroup'sfinancial
position.
At the onset of the pandemic, we swiftly transitioned all of our
teamstoworkfromhomewithminimaldisruptionto ourbusiness
and we continue to support them whilst they work remotely. In
addition, we have managed unprecedented levels of inbound
customer service requests, as a result of repeated local and
national lockdowns and continued disruption to travel. To ensure
we provide as seamless a customer experience as possible, we
have worked to improve our customer self-serve functionality so
that customers can access simple, automated change and refund
processes via our website and app, whilst also working with the
wider rail industry for more favourable refund terms and
conditions for rail travellers.
We monitor customer feedback daily and work closely to make
sure our customers stay updated via our social media channels
andthroughCRM,aswellasthroughnotificationsin-app.
To mitigate the impact of COVID-19 on Trainline’s business in the
longer term, we have undertaken the following actions:
• Evaluatedandreducedoperatingcostsandcashoutflows
• Reduced marketing and other discretionary spend
• Paused recruitment of new team members and evaluated
back-fillpositionsacrossFY2021
• Deferredpayreviewsforallstafffor FY2020
• Voluntary salary reductions of Management Team and Board
of Directors,includingourCEOduringFY2021
• Effective management of our working capital
• Secured leverage covenant waivers from Lenders
• Issued convertible bond to provide £150 million additional
liquidity
At Trainline, the wellbeing of our team is our highest priority. We
continue to work hard to ensure that we have key touchpoints
between all staff and the Management Team. We have increased
wellbeingactivitiesforallteammembersincluding:onlinefitness
sessions and activities including regular and frequent all-company
meetings; virtual wellbeing sessions; meditation and yoga;
24-hour,free,confidential,one-on-onecounselling;andcoming
together once a week to celebrate achievements and progress
during these times.
We continue to monitor developments closely and adapt our
responses accordingly, to make sure we are best placed for
COVID-19 recovery and longer-term growth, once restrictions
are lifted.
Financial Statements
36
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Annual Report and
Accounts 2020/21
Principal risks and uncertainties continued
Description of risk
How we mitigate the risk
How we monitor the risk
Status of risk
IT security and
cybercrime
As an online, digital
platform, Trainline could
suffer a major breach in
security as a result of
identity fraud, theft,
hacking, phishing or an
information security
incident which could
adversely impact our
business operations,
reputation and/or our
competitive position and
expose the Group to
litigation or other
regulatory action.
By selling rail and coach tickets to customers in over 45 countries
through our digital offering, Trainline is a processor of large
amounts of customer data. Trainline has a best-in-class Security &
Privacyteamsupportingbusinessgrowthandcommercialefficiency
through a service-orientated model. All key business units including
Finance, Legal and Technology are instrumental in adopting a
pragmatic,risk-basedapproachtosecurityandriskmanagement.
Trainline performs regular independent assessments to assess the
effectiveness of protective measures and systems. Industry best
practice and frameworks are used to deliver a robust, privacy and
customer-firstsecuritystrategyacrossallpartsoftheorganisation.
TheCompanycontinuestoadheretoGDPRandourprivacyoffice
maintains good relationships with key EU supervisory and privacy
authorities.TrainlineisalsocertifiedPCIcompliant.
DuringthisfinancialyearwehavealsoappointedanewChief
InformationSecurityOfficertocontinuetoensureweprotecteachof
our customers.
For more information on our technology, see page 17.
• Regular review of risk
High
registers with
Executive team
• Regular, independent
review of detection
and prevention
systems / process
operating
effectiveness and
remedial activity
• Engagement with
sector peers to
ensure complete line
of sight of risks
• Regular employee
High
engagement surveys
and satisfaction
scores
• Regretted
attrition rate
• External
benchmarking
People
Trainline’s business
depends on hiring and
retainingfirst-classtalent
in the highly competitive
tech industry. Inability to
attract and retain critical
skills and capabilities
could hinder our ability
to deliver on our
strategic objectives.
In order for Trainline to deliver on its ambition and strategic
objectives,attracting,nurturingandretainingfirst-classtalentand
building a pioneering team is critical. We invest heavily in building our
teamwiththebestskillswecanfind,ensuringthatallnewjoinersare
carefully screened and recruited by our in-house talent team. Once
onboard, each member is encouraged and nurtured to develop their
skills, through a wide range of resources, tools and mentoring.
We work hard to develop and sustain our highly collaborative, agile
and innovative culture, which incorporates the wellbeing and
professional development of team members across each site. At
Trainline we also ensure that we actively monitor and engage with
ourpeople,tohelpensurethatweflourishandsuccessfullydeliver
against our operational and strategic objectives.
We regularly engage with our teams through employee engagement
surveys to make sure that our people are motivated and
professionally and personally looked after, and we continuously
strive to improve our engagement results, year-on-year.
Organisation design reviews, talent reviews and succession planning
processes are undertaken on a regular basis, as well as regular
benchmarking and remuneration reviews to ensure that we remain
competitive.
Through COVID-19 and the shift of our teams to working from home,
we continue to place a high priority on the mental health and
wellbeing of our people, through our well-developed wellbeing
initiative.Weofferone-on-onecounsellingsessions,fitnessand
yoga,workshops,mentoring,accesstoafree,confidential,24-hour
employee assistance hotline and a wealth of health and wellbeing
advice through our health portal.
For more information on our people and culture, see page 40.
Trainline
Annual Report and
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37
Description of risk
How we mitigate the risk
How we monitor the risk
Status of risk
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At Trainline, we recognise the importance of building and
sustaining both a strong team and strong relationships. Our
leadership, exceptional team, strong industry networks and
agile way of working helps to ensure that we stay ahead of
our competitors, up-to-date and innovative.
With over 300 tech specialists, we use our skills and
experience across our Product and Tech teams, to innovate
for, engage with and listen to our customers, so that we may
continue to provide an accessible, world-class, user-friendly
and seamless experience for rail and coach travel.
We also undertake regular market and competitor analysis to
understand potential competitive threats and opportunities
for partnerships and growth.
• Monitoring and
Moderate
analysis of competitor
behaviours
• Customer feedback and
research
• Regular evaluation of
industry and consumer
trends
At Trainline, we take an uncompromising approach to
compliance, which is overseen by the Audit & Risk Committee,
our Board and by our Management, Legal, Finance,
Technology and Security teams on an operational basis.
• Regular assessment of
laws and regulations
across geographies in
which we operate
Moderate
• Regular review and
maintenance of risk
register
• Monitoring of customer,
industry and Board
concerns
• Audit & Risk Committee
reviews of compliance
processes
We have dedicated resources and training, to ensure that
each member of our team is appropriately trained on
compliance topics. Security, privacy and data, as well as
corporate hospitality, bribery, gifting and political and
charitable donation compliance training are mandatory for all
at Trainline. All policies are also included in our Staff
Handbook which is shared with all employees. We also ensure
that extra training is given to team members, relative to their
roles at Trainline.
At Trainline, we operate a whistleblowing policy, whereby any
memberofourteamisabletoquicklyandconfidentiallyraise
concerns and feedback through an appropriate, procedural
channel.
We employ dedicated staff members and teams who help to
track and monitor legal, contractual and regulatory
compliance requirements. Where required, annual
assessments are performed and reported to the relevant
party on compliance. Under some contracts and regulations,
Trainline is subject to third-party review on either a regular or
ad hoc basis to assess its compliance with the underlying
requirements and the results of such reviews are reported to
the relevant third party.
Competitive landscape
Ensuring that Trainline meets
the needs of its consumers,
both B2C and Trainline
Partner Solutions customers,
is of paramount importance
in building, growing and
sustaining a healthy business.
Failure to ensure our
technology and user-
experience meets those
needs and that Trainline’s
offering remains ahead of
competitor products could
have an adverse impact on
our future results.
Compliance
Trainline is a listed company,
with business operations in
the UK and France. The Group
also works within various
licence terms and with
licensing bodies and
regulatory structures in order
that it may retail rail and
coach tickets to customers
across the world.
Examples include anti-bribery
and corruption legislation, tax
laws, legal and governance
requirements of Trainline
operating as a publicly listed
company and retail licences
that Trainline holds with
carrier partners across the UK
and Europe.
Should Trainline not comply
with licences, legislation,
regulatory requirements or
other such frameworks, this
could affect the reputation of
the Group and the Group’s
ability to conduct business
operations. Non-compliance
could also result in legal or
financialpenalties,the
inability to retail rail and
coach tickets and the loss of
revenue.
Financial Statements
38
Trainline
Annual Report and
Accounts 2020/21
Principal risks and uncertainties continued
Description of risk
How we mitigate the risk
How we monitor the risk
Status of risk
General supply
Trainline retails rail and coach
tickets across many countries and
to customers across the world. We
therefore rely on performing and
operationally safe rail and coach
operators and systems.
A unilateral termination or
variation by a rail or coach carrier
of its licence terms with Trainline
includingasignificantreductionin
the levels of commissions Trainline
receives,orasignificantor
prolonged disruption to traveller
services or systems such as
prolonged bad weather, industrial
action or a pandemic, such as
COVID-19, would have an adverse
impact on Trainline’s results.
In order to ensure a superior
customer experience for our
customers, we also rely on
accurate and relevant information
and data from carrier partners.
Lack of or incomplete information
would also impede Trainline’s
ability to offer a useful product to
meet the needs of customers.
Regulatory and
political environment
Trainline’s operations could be
affected by changes to
government policy or regulation,
whether in the UK or Europe,
domestically or cross-border
(for example Brexit) and such
changes could result in
unfavourable changes to carrier
licence terms, such as reductions
to commission levels.
Similarly, changes to state-owned
carriers, which operate in most
geographies in continental
Europe, as a result of government
activity in their respective
jurisdictions could also affect
Trainline’s operation and/or
financialprospects,intheshort
to medium term.
By working closely with our carrier partners and by
remaining actively engaged with the industry across all
geographies in which we have supply, we ensure we are
as up to date as possible on any industry or service
issues. We also believe relevant competition laws may
limit the scope of carriers’ abilities to amend or otherwise
treat Trainline unfairly.
By continuing to expand our supply portfolio we reduce
our reliance on any one carrier and are able to offer our
customers greater choice, better value and an overall
more useful experience for booking and travelling by rail
and coach.
Our focus is to make rail and coach travel easier for our
customers, and whilst disruptions, delays and prolonged
suppression of rail travel as a result of recent lockdown
measures are out of Trainline’s control, our continued
and relentless focus on offering a seamless customer
experience means we provide our customers with
relevant, timely and useful updates and alternative travel
options, whether normal services are running smoothly
or not.
As a result of COVID-19, domestic, cross-border and
internationaltravelhasdecreasedsignificantlydueto
ongoing local and national lockdowns. We continue to
work closely with our industry and carrier partners to
help support the return to growth once the effect of
COVID-19 on travel has lessened.
We recognise the importance of developing and
supporting partnerships and collaborative relations
across the industry and with governments. Trainline
remains actively engaged with the UK and EU national
governments, institutions and carrier partners to stay
abreast of legislative activity and policy-making as far
as possible and in order to ensure that potential impacts
on Trainline’s business, customers, staff and partners
are minimised.
We also ensure that we actively engage in scenario-
planning and regular risk management processes to help
us fully understand and plan for potential outcomes.
• Deep-rooted
High
relationships with
the industry,ourcarrier
partners and
governments
• Highly-experienced
supply and government
relations teams
responsible for
monitoring and
responding to the
needs ofourpartners,
aswellasin identifying
new supply
opportunities
High
• Monitoring changes to
laws and regulations
across geographies in
which we operate
• Scenario-planning and
horizon-scanning,
including regular risk
management processes
• Risk analysis and
modelling
• Monitoring public
sentiment and trends
• Regular engagement
with key carrier partners
and government
representatives
Trainline
Annual Report and
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39
Viability statement
In accordance with the 2018 UK
Corporate Governance Code, the
Directors have assessed the long-term
viability of the Group and its ability to
meet its liabilities over a three-year
period. The Directors carried out a
robust assessment of the Group’s
principal risks as set out on pages 34 to
38 and the potential impact of any of
these risks on the long-term viability of
the Group.
Forecasting period
Three years was considered an
appropriate timeframe for the
assessment. Given the fast pace of the
digital environment in which the Group
operates, it is considered that a longer
forecasting period would become less
reliable, as it is hard to predict digital
trends and pace of change for a longer
period. This period is also aligned to
the Group’s strategic planning process.
The base case reflects the Group’s
current three-year plan, which also
includes the current best estimate of
COVID-19 recovery. The key
assumptions in the three-year plan
which could be impacted by the
principal risks are: the length of time
COVID-19 will impact trading; the rate
of net ticket sales growth and the
associated revenue growth; and the
level of cost required, including Capex,
to meet sales and revenue forecasts.
How viability was considered
To assess the viability of the business,
sensitivity scenarios were modelled
from the base case taking into
consideration the Group’s principal
risks if they were to occur. This involved
flexing some of the key assumptions by
downside changes, incorporating
severe but plausible downside
scenarios and quantifying the potential
impact of one or more of the principal
risks crystallising over the assessment
period. None of the scenarios include
any mitigating actions in the
underlying modelling. The viability
testing considered if the minimum
liquidity requirement of £75 million in
place until February 2022 had been met
and if the covenant requirements were
met in all periods in which they are
applicable.
Sensitivities applied
The sensitivity scenarios applied were
as follows:
• Scenario 1 – COVID-19 sensitivity –
ongoing lockdowns across the
three-year period and revenue
below base case by 10% in non-
lockdown months;
• Scenario 2 – 20% additional
marketing spend with no upside in
sales/revenue;
• Scenario 3 – £5 million additional
Capex spend in each year with no
upside in sales/revenue; and
• Scenario 4 – Data breach in FY 2023,
resulting in reduced revenue,
compliance fines and ongoing
increased IT security costs.
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Conclusion
Based upon the robust assessment of
the principal risks facing the Group and
their stress testing in the sensitivities
applied, the Directors have a
reasonable expectation that the Group
will be able to meet its liabilities over
the assessment period.
Under the base case and scenarios
2-4 the Group has a strong liquidity
position and meets the minimum
liquidity requirement and covenants
requirements in all periods in which
they are applicable. As such in all of
these scenarios there is not considered
to be any issue with the long-term
viability of the Group. The base case
reflects the Directors' best estimate of
the future prospects of the Group.
In scenario 1, the prolonged COVID-19
scenario, the Group is forecast to meet
its minimum liquidity requirement for
the period it is in place. It is also
forecast to meet its covenant
requirements in place for all periods,
with the exception of August 2022. In
the event that a breach of covenant
became likely, the Directors would be
able to implement mitigating actions
such as a reduction in discretionary
spend, specifically marketing.
Additionally, the Directors may
approach the Group’s lending syndicate
for a further covenant waiver, which
would be subject to approval by the
syndicate.
The Directors do not consider this to be
the most likely outcome given current
information available around COVID-19
and the impact on the Group, but do
consider this to be a plausible downside
scenario.
Financial Statements
40
Trainline
Annual Report and
Accounts 2020/21
Our people and culture
Committed
to our people
People
Nationalities
600+
40+
300+
Tech specialists and engineers
We’re proud to have built the world's
leading train and coach app. Our love
for technology is matched only by our
commitment to our people.
As the world’s leading independent
rail and coach travel platform, we
have made it simpler, easier, cheaper
and greener for people to plan their
journeys and see the world. It’s our
pioneering team that makes this
possible, accomplishing brilliant
things every day and moving us
closer to our goal of creating ‘the
ultimate travel companion’.
Over the course of FY 2021, which saw
us switching the majority of our teams
to remote working, we’ve worked hard
to ensure that our values, culture,
and importantly, the wellbeing of
our people has remained front and
centre, despite us not being together.
Our commitment to diversity
We know that diverse teams perform
better. Not only do they solve problems
faster than teams of similar people, but
they also make decisions 60% faster
than non-diverse teams. At Trainline,
diversity and the cohesion, positive
culture and agility it brings has allowed
us to create the superior customer
experience we provide today.
Selling tickets to people living in more
than 175 countries in 12 languages, we
aim to be as diverse as the customer
base we serve; Trainline is a family of
more than 600 bright minds, of 40
nationalities spread across our
European locations.
Over the course of FY 2021, we have
continued our focus on improving
diversity across our teams,
appreciating that our Board and
Executive Team in particular, set the
tone for the rest of the Group. During
FY 2021 we have welcomed two new
female executives to our Management
Team, Lisa Hillier as Chief People
Officer and Champa Magesh, President
of Trainline Partner Solutions.
Trainline
Annual Report and
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4141
Jennifer Duvalier has also joined
Trainline’s Board as Senior Independent
Non-executive Director and has also
been designated as Trainline's Non-
executive Director for Workforce
Engagement, where she actively
engages with members of the Trainline
team to discuss important matters for
our People, key themes of which are
then reported to the Trainline Board, all
to ensure that Trainline's culture is
positive and conducive to the
successful achievement of our purpose
and strategy.
Responding to huge interest from our
teams and to ensure they are directly
involved in shaping Trainline’s progress
on Diversity and Inclusion, we have
formed four People Led Groups
('PLGs'), each representing a different
minority group at Trainline: Differently-
abled, Womxn, LGBTQ+ and Minority-
Ethnic. Our PLGs are helping us deliver
on areas in which we can better
support, educate and inspire our
people on ethnicity, gender, sexuality
and ability.
Inclusivity and diversity
We are working hard to make tech
more inclusive – more than a third of
our people are women and we are
committed to equal pay: the payment
given to men and women doing the
same job, at the same level. The
difference between the average pay of
men and women working at Trainline
remained less than 5% in our most
recent review. We aim to deliver wider
change when it comes to gender
imbalances in tech, focusing on
increasing our 35% female
representation.
We make sure that we have
comprehensive, up-to-date policies for
our people, all contained within our
Staff Handbook, which everyone
receives when they join Trainline. Such
policies underline our commitment to:
• Creating a working environment in
which all individuals can make the
best use of their skills, free from
discrimination or harassment
• Promoting diversity and equality of
opportunity for all staff and job
applicants
• Ensuring our people understand
their duty to act in accordance with
our policies, always treat colleagues
with dignity, and not to discriminate
against, harass or victimise others,
regardless of their status
• Ensuring we pay fairly by
benchmarking roles and by
undertaking regular performance
reviews.
We continue to ensure that:
• Our hiring managers take training
on how to recognise and avoid
unconscious bias
• Female candidates are interviewed
for senior management and
leadership roles, with a minimum of
one female on each shortlist
• We review our plan to reduce our
gender pay gap on a quarterly basis
and our hiring plans monthly, at
executive level
• We champion and give a voice to
diverse groups and individuals,
ensuring women have a voice
alongside their male colleagues, and
there are visible female role models
at every level and across internal
communications
• Our learning and development
programme (Know How You Grow)
supports junior women and men at
Trainline to thrive and progress to
more senior roles within the
organisation
• Our mentoring programme gives
every mid and senior level team
member the opportunity to partner
with an executive team mentor who
can advise, champion and support
them in their roles and career.
You can find our latest gender pay gap
information on the 'Diversity at
Trainline' page on our website and
information on our gender balance on
page 60.
Our values and
behaviours
Wow our customers
Be customer obsessed
Blaze new trails
Think big and be curious
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Simplify and take
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Encourage honesty,
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bring positivity
42
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Our people and culture continued
At Trainline, we take our role in human
rights seriously, and understand that
societies in which human rights are
respected and protected enhance the
wellbeing of citizens and allow business
to flourish. We operate to ensure that
we as a company, and all of our
employees, respect international
human rights standards through our
Human Rights policy.
Our focus on wellbeing
Over the course of FY 2021, we have
placed even greater importance on the
wellbeing of our teams, to help and
support each member during
prolonged periods of lockdown,
persistent uncertainty, remote working
and in many cases, living alone and/or
being away from family and friends.
Whilst we haven’t all been together,
we’ve made great efforts to ensure our
teams feel motivated, connected to
each other and supported both
professionally and personally.
Through our Employee Assistance
Programme, we continue to provide
free, confidential, one-on-one
counselling with experienced therapists
and advisers at all hours of the day,
greater flexibility for working and
home-schooling parents, at least two
free wellbeing sessions every week,
including yoga and fitness boot camps,
as well as other live workshops on
topics including maintaining posture,
meditation, sleep, healthy cooking and
eating, laughter therapy, and a host of
guest speakers on mental wellbeing,
motivation and resilience.
Our online health portal continues to
provide useful free wellbeing advice,
from fitness to budgeting tips.
Our annual cross-company wellbeing
weeks and days help our employees
take care of their mind, body and
spirits, packed full of choice, including
nutrition workshops, meditation
classes and even puppy therapy. But
our focus on our teams' wellbeing is not
limited to specific dates – our Employee
Assistance Programme provides a free
24-hour confidential helpline and
face-to-face counselling with
experienced therapists and advisors;
plus our online health portal offers
access to a wealth of health and
wellbeing advice from budgeting to
sleep and fitness tips.
Keeping our People connected
Staying in touch with our people is
paramount and we make sure that we
keep our teams up to date with
Trainline news through our All-
Company meetings and CEO and
Executive Team updates and that there
are clear channels of communication
for all who need extra support. Every
Friday afternoon we still come together
remotely for Weekly Wins, a long-
standing tradition where we celebrate
achievements and great news from
across our organisation.
To encourage us all to keep checking in
with each other, we also launched a
popular new bot which connects team
members from across the Company to
meet for a virtual coffee and a
conversation.
Encouraging innovation
We are proud of the bright minds that
work here at Trainline, constantly
innovating, problem-solving and
obsessing over making our customer
experience even better. Aside from
celebrating new ideas every Friday in
Weekly Wins, we also still managed to
hold our annual Tech Summit where we
invite inspirational internal and
external speakers. This year, our online
Tech Summit had over 60 speakers,
hosting 58 talks, with exceptionally
positive feedback from our teams.
Our values and behaviours
We’re here to make rail and coach
travel easier for everyone and to
encourage greener travel, through our
four key values, ingrained in all we do
at Trainline. Our teams understand that
how they work is as important as what
they deliver, and every member of our
team knows what’s expected of them
and how they can succeed. We
recognise and reward our people for
living our values and behaviours
through our Reward and Recognition
programme, including our
Quarterly Awards.
We focus on Customers
We’ve become the world’s leading
independent rail and coach travel
platform by listening to the people who
use us the most – our customers.
Getting insight from the people across
Europe and the world who use our app
and website keeps us innovating and
pushing the boundaries of what
is possible.
Trainline
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43
We are energised by
technology and innovation
and it is through our people,
their commitment to our
customers and each other
that our ambition to be the
ultimate travel companion
becomes a reality.
Lisa Hillier
Chief People Officer
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Our people and culture continued
Despite the pandemic, our Customer
Research team engaged with over
7,500 travellers during this financial
year, swiftly pivoting to remote
research methods so we could continue
to learn about their evolving needs,
safely. We also launched a new
customer experience programme in
three markets to help us understand
how Trainline can provide the quickest
solutions for easier, everyday rail and
coach travel.
Repeated lockdowns and ongoing
restrictions across our markets, often
at very short notice, meant that
throughout FY 2021 we have received
an unprecedented volume of customer
contacts through our customer service
channels. Our cross-business team,
focused on response and recovery,
have worked persistently to ensure that
our customers are assisted within just a
few days. We have continued to
develop our self-serve capability so that
customers can get refunded for their
journeys quickly and easily, we’ve
launched Voice support for our French
customers, provided Chat capabilities
for our carrier partners through the
pandemic, improved automation of key
messaging to help customers quicker
and made sure that are customers are
updated with relevant and timely
information, through our enhanced
CRM programme.
Learning and development
We are proud of our industry-leading
learning and development
programmes. From day one, all
Trainline team members have access
to our tools and resources, giving
coaching, guidance, advice and training
on a wealth of career topics.
At Trainline we support development
through:
• Mentoring – all of our team have the
opportunity to take part in our
mentoring programme
• Running training specifically for all
of our managers, helping them to
upskill, develop new skills and drive
success in our teams
• Building our Executive Leadership
Team, who spend time together at
an annual off-site, working on
strategic thinking, team building and
social activities
• Our extended Learning and
Development platform, full of tools
and resources at all levels and
covering all professional areas
within our business.
When it comes to living out our values,
we walk the walk and Trainline is a place
where our people can truly own their
career and reach personal and
professional goals. Our learning
resources and mentoring programme
via the Trainline Academy give our
people the chance to learn, develop
and thrive, with access to individual
support to advance their professional
development.
Our popular mentoring and talent
accelerator programmes help those
wanting to broaden their skills with
coaching and advice.
We make sure we support our
managers through specific manager
training, and we have our newly
established Extended Leadership Team
('ELT'), a group of our senior and most
experienced managers who come
together to shape, share and discuss
ideas and to ultimately lead Trainline
and its teams.
Trainline in the Community:
Educating, inspiring and supporting
At Trainline, we’re innovating to make
sustainable travel as simple, hassle-free
and affordable as possible, to benefit
our customers, communities and the
environment. As our business grows,
so do our opportunities to positively
impact the world around us. We are
passionate about communities and
championing future talent, and that’s
why we’ve proudly partnered with the
likes of Future Frontiers, Code First:
Girls, Ada Tech School, Women in
Technology and Speakers for Schools,
among others.
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Inspiring
Future Frontiers
We believe in fulfilling potential, so over
the last four years, we’ve partnered
with the award-winning charity, Future
Frontiers. We work with them to help
equip students from disadvantaged
backgrounds with the information,
skills and mindset to achieve their
career aspirations. Since our
partnership began, our teams in
London and Edinburgh have mentored
nearly 200 secondary school students,
encouraging them to dream big,
explore opportunities and achieve their
career aspirations. Despite
circumstances over this financial year,
with students and our team members
being remote, we have continued to
support Future Frontiers, with 29 of our
team coaching students and helping
them to discover and explore inspiring
career opportunities.
Educating
Code First: Girls
After a three-year partnership, we also
helped Code First: Girls, a UK-based
social enterprise focused on building
diversity and skills in the tech sector,
achieve their goal of teaching 20,000
young women in the UK to code, for
free, in 2020.
Ada Tech Schools
Tackling gender imbalance and
championing talent within the tech
industry is at the core of our culture
and values. According to McKinsey, only
26% of women professionals are in the
tech sector, and out of them only 11%
are in leadership positions. Key to
improving this is inspiring women to
consider a career in tech from an early
stage. That’s why we joined forces and
launched a partnership with Ada Tech
School in Paris in November 2019. Ada
Tech School supports women and men
aged 18-24 years and trains them to
become developers, through a two-
year apprenticeship programme. Their
mission is ‘to rethink the school of
computer science and engineering and
promote the diversity of the sector and
women in Tech’.
Supporting
Railway Children
Across the world including India, East
Africa and the UK, many children are
living on the streets, often finding
refuge in railway stations. For many
years we’ve partnered with and
supported Railway Children, the charity
that provides safety, protection and
opportunity for these vulnerable young
people. Through our fundraising
activities such as sponsored runs and
Christmas donations, we are keen to
help Railway Children continue the
fundamental work they do for some of
the most vulnerable in our societies.
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Stakeholder engagement
At Trainline, engaging with
our stakeholders is integral
to how we achieve our vision
and strategy.
Through appropriate, timely and
proactive engagement with our
stakeholders, we aim to look after
our team, provide the best possible
experience for our customers,
generate sustainable value and
continue to grow our business.
The following table summarises:
our key stakeholders; what’s important
to them; how we have engaged with
them directly and through relevant
organisations; and highlights of the
results of that engagement during
the financial year.
Our key stakeholders and their
significance to our business
Our customers
Customer experience is at
the heart of Trainline’s
business. Understanding
our customers’ travel
needs is key to us
delivering and continually
improving our best-in-
class product experience.
What is important to them
How we engage with them
Highlights of our engagement
Accessing the latest
information on their
planned journey. Finding
the cheapest, fastest and
most convenient tickets for
their journeys, saving them
money, time and hassle.
A secure, reliable and
robust product experience.
Greater accessibility to
more sustainable modes of
transport.
We spend as much time as possible
engaging with and learning from our
customers. To stay in touch with
evolving customer needs, we launched
a new quarterly customer barometer
programme to engage with
commuters.
We swiftly pivoted to remote research
so we could continue to learn about
travellers' evolving experience and
needs.
We also launched a new customer
experience programme to help us
understand how well we're serving our
customers across their purchase and
travel experience and where they want
us to improve.
Crowd Alerts to help customers
social distance on their journey.
Improved experience for
customers contacting us and
our carrier partners through
the provision of additional
automation and live chat
facilities.
Providing and maintaining a
best-in-class customer
experience.
Trainline continues to be the
world’s leading independent
rail and coach app, with a 4.9
star app rating.
Our carrier partners
In order to provide our
customers with the best
possible rail and coach
journey experience, it’s
paramount we establish
and maintain strong
relationships with our
carrier partners. Trainline
also provides white label
services to a number of
Train Operating
Companies.
Support, especially during
COVID-19, by helping
customers find the right
information for their
planned journeys and travel
safely.
The opportunity to increase
their reach, ticket sales and
the number of customers
travelling on their services.
Lower cost to serve
customers by transitioning
to digital.
Access to Trainline’s
operational excellence and
innovation, through our
white label service.
Trainline has carrier partners in the UK,
across Europe and other parts of the
world.
Rapid introduction of new
ticketing solutions, for example
TER Coupon in France.
Provision of live chat facilities to
enable more rapid interaction
with customers.
Supporting promotions to
encourage a return to travel
when restrictions are lifted.
Improved processes to support
fraud prevention measures in
the UK and allow for targeted
revenue protection on routes.
Using our expertise to help the
industry provide better
real-time disruption
information to UK rail
passengers.
We have a dedicated, multi-national
team of rail and coach travel specialists
responsible for establishing and
growing relationships with our carrier
partners.
Beyond this team, we collaborate with
carrier partners at every level of the
organisation to drive collaboration,
deliver marketing campaigns and
improve processes to enhance
customer experience.
During the year we have been
especially focused on:
– aligning closely to adapt frequently
and rapidly as COVID-19 restrictions are
introduced and lifted
– encouraging travel where possible by
supporting flexible refund conditions,
supporting promotions and providing
reassurance on safety
– working closely with carriers to help
customers with cancellations and
refunds.
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Annual Report and
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47
Our key stakeholders and their
significance to our business
What is important to them
How we engage with them
Highlights of our engagement
Government
and regulators
Government and
regulatory policy
determine the business
environment in which
Trainline operates.
Continuing to improve the
rail passenger experience.
Developing and
implementing regulatory
frameworks and guidelines.
Overall reduction of carbon
emissions by increasing the
rail modal shift.
How Trainline can help
governments achieve their
policy aims, including the
move to sustainable travel
and liberalisation of rail
travel in Europe.
Our people
Ensuring that we attract,
nurture and retain our
people and focus them on
achieving our strategy is
key to Trainline’s success.
Trainline’s Board is keenly
aware that the interests
of our people should
be considered when
making decisions that
may impact them and the
wider business.
The opportunity to develop
and progress.
An opportunity to
contribute, take ownership
and deliver to a clear and
shared strategy.
Working with a diverse and
gender-balanced team.
The opportunity to give
back through charitable
and social causes.
Work/life balance.
The opportunity to share in
the success of the business.
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Positive public mentions from
political stakeholders including
the UK Transport Secretary.
Embedded into industry reform
decision-making procedures.
EU Rail Passenger Rights
Regulations included positives
for independent retailers by
providing a level playing field
for access to rail data and fair
liability burden in case of
missed connections.
Raised awareness of the urgent
need to regulate the EU rail
ticketing market through the
future Smart & Sustainable
Mobility Strategy.
Trainline regularly attends forum
discussions and meets with key
policymakers, government
representatives and industry bodies
across the UK and wider Europe.
During the year, our focus has been on:
– engaging on industry reform with
ministers and senior officials
– submitting responses to government
consultations on improving the
passenger experience and completing
digital ticket rollout
– building a vision for future rail retail
and communicating it to decision-
makers
– engaging extensively on EU rail
passenger rights, Sustainable & Smart
Mobility Strategy and International Rail
Platform with EU institutions
– participating in EU consultations on
rail data sharing and rail ticketing
market regulation.
Every six months we undertake a
Group-wide engagement survey so we
can evaluate how our whole team are
doing.
The survey also allows us to measure
our progress against our key
engagement indicators.
Every month all our people across all
our offices get together so our
Management Team can bring everyone
up to speed on our latest projects, the
progress towards our strategy and our
business performance.
We undertake performance reviews
twice a year to help our people
understand how they are performing
against set objectives.
We provide a comprehensive Learning
and Development programme.
We offer a health and wellbeing
programme that all our people can
benefit from.
Implementation of People Led
Groups, each sponsored by a
member of the Leadership
Team, and the roll out of the
Board Workforce Engagement
programme.
Over 70% of our people
contributed to our annual
engagement survey and our
overall engagement score
remained steady at 59%.
Increasingly high levels of
employee satisfaction, with 81%
of our people saying they ‘are
proud to work at Trainline’.
85% of our people say their
manager genuinely cares for
their wellbeing, a 4% increase.
All our people have access to
share schemes and over 75%
hold an interest in shares of the
Company.
Financial Statements
48
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Annual Report and
Accounts 2020/21
Stakeholder engagement continued
Our key stakeholders and their
significance to our business
Our shareholders
The Board is accountable
to shareholders.
Trainline aims to ensure
that a good dialogue with
shareholders, investors
and analysts is
maintained, and that their
issues and concerns are
understood and
considered by the Board,
the Leadership Team and
our people.
What is important to them
How we engage with them
Highlights of our engagement
Despite COVID-19 restrictions the
Investor Relations Team, Executives
and Leadership Team have continued to
meet regularly with investors via calls,
conferences and roadshows.
The Company has also held an investor
and analyst meeting for the Group’s
half-year results announcement.
Met with 224 existing
shareholders and prospective
investors during FY 2021.
Over 87% of our issued share
capital was voted at our AGM
with the majority of resolutions
receiving over 98% support.
Introduced sustainability
disclosures to this annual
report to give shareholders
insight into our sustainability
programme at its initiation.
Understanding the strategy
and operations of the
Group.
Financial performance and
commercial success.
Understanding the
exposure to macro-
economic and political risk.
Opportunity for dialogue
with management on key
matters, e.g. performance
and executive
remuneration.
Sustainability and the
environmental and ethical
impact of the Group.
The governance structures
that are in place and
changes to them.
Section 172(1) statement
Section 172 of the Companies Act 2006
requires a director of a company to act
in the way he or she considers, in good
faith, would most likely promote the
success of the company for the benefit
of its members as a whole.
In doing this s.172 requires a
director to have regard, amongst
other matters, to the:
•
•
likely consequences of any decision
in the long-term;
interests of the company’s
employees;
• need to foster the company’s
business relationships with
suppliers, customers and others;
•
impact of the company’s operations
on the community and environment;
• desirability of the company
maintaining a reputation for high
standards of business conduct; and
• need to act fairly as between
members of the company.
The Board understands that how we
behave matters not only to our people
but also to the many stakeholders who
have an interest in our business. We
believe that productive business
relationships with our suppliers,
customers and other key stakeholders
are key to the success of the Group and
that the interests of relevant parties
should be considered when making
decisions that may impact them.
Though engagement is carried out by
those most relevant to the stakeholder
or issue in question, the Board receives
updates on the engagement that has
been undertaken, the reoccurring
questions, concerns raised and the
feedback provided by the Group’s key
stakeholders.
When making decisions the Board
takes the course of action that they
consider best leads to the success of
the Company over the long term, and
when doing so also consider the
interests of the stakeholders that we
interact with. The Board acknowledges
that every decision made will not
necessarily result in a positive outcome
for all of our stakeholders but by
considering the Group’s purpose and
values together with its strategic
priorities the Board aims to make sure
its decision is consistent and
predictable.
We set out below and on page 58 some
examples of how the Directors have
had regard to the matters set out in
section 172(1)(a) to (f) when discharging
their section 172 duty and the effect of
that on certain of the decisions taken
by them. By considering these matters
the Directors have had regard to the
matters set out in section 172(1)(a)
to (f) of the Companies Act 2006
when performing their duty under
section 172.
Impact of COVID-19
The Board recognised the potential risks
of COVID-19 to our people, the Group
and its stakeholders and took quick and
decisive measures to mitigate its impact.
This included moving our people to
working from home, reducing marketing
expenditure, introducing a recruitment
freeze, deferring bonus payments and
pay reviews for staff, and revising
payment terms with our suppliers to
reduce operating costs and cash
outflows. In addition the Company
launched a convertible bond and agreed
a succession of covenant waivers with
the lenders of its Revolving Credit Facility
ultimately extending the waiver until and
including February 2022.
The Board recognises that whilst these
measures may have a short-term impact
on our people, our suppliers and our
customers, the benefits and increased
financial security afforded would benefit
all our stakeholders in the long term.
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Annual Report and
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49
Annual strategy review
The Board carries out a review of the
Company’s strategy on an annual basis.
This includes approving the business
plan for the following year and
considering future years. In the most
recent strategic review the Board
received presentations from our
Leadership Team which included
potential post-COVID-19 market
scenarios and investment opportunities.
Convertible bond
In making its decision to launch the
convertible bond the Board considered
not only the opportunities afforded by
the additional liquidity but also the cost
to the Group and the potentially
dilutive effect on shareholders. The
Board also noted that the increased
financial security would be of benefit to
its suppliers, customers and other
stakeholders.
Non-financial information statement
The following table sets out where
non-financial information can be found
within this Annual Report, further to
the Financial Reporting Directive
requirements contained in sections
414CA and 414CB of the Companies Act
2006. Where possible, it also states
where additional information can be
found that supports these
requirements.
As a result of that consideration the
Board ensured that the best possible
terms were negotiated and that the size
of the bond was not excessive.
In making its decision to approve the
business plan and future strategy of the
Company, the Board considered the
feedback received from engagement
exercises with our stakeholders. As a
result of that consideration, the business
plan and future strategy were focused to
ensure that they aligned with the issues
and factors that are most relevant to our
key stakeholders where these did not
impact the long-term success of the
Company or the enhancement of its
reputation.
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Reporting requirement
Business Model
Non-Financial KPIs
Principal Risks
Relevant Trainline policies and procedures
Where to read more in this report
Page
N/A
N/A
Our business model
Key performance indicators
Trainline risk management process
Principal risks and uncertainties
Environmental Matters
Environmental policy
Market overview
Sustainability
Global GHG emissions & data
Human Rights
Our People
Human rights policy
Anti-slavery and human trafficking
policy
Our people and culture
Report of the Audit and Risk Committee
Trainline staff handbook and
accompanying policies and procedures
Principal risks and uncertainties
Our people and culture
Stakeholder engagement
CEO's Statement
Our people and culture
Social Matters
N/A
Anti-Corruption
and Anti-Bribery
Anti-bribery and corruption policy
Principal risks and uncertainties
Report of the Audit and Risk Committee
14
27
32
8
13
81
42
67
36
40
47
7
44
37
65
The Strategic Report, which has been prepared in accordance with the requirements of the Companies Act 2006, has been
approved by the Board and signed on its behalf.
On behalf of the Board
Neil Murrin
Company Secretary
6 May 2021
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Annual Report and
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Governance
In this section
Chair’s governance statement
Our Board of Directors
Report of the Nomination Committee
Report of the Audit and Risk Committee
Directors’ remuneration report
Directors’ report
Statement of Directors’ responsibilities
52
56
60
62
66
79
83
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Chair’s governance statement
On behalf of the Board, I am pleased
to provide an overview of Trainline’s
corporate governance and reports
from the Board’s Committees.
Board
As Chair, my responsibility is to provide
leadership and ensure that we have a
Board that is able to make informed
and effective decisions that are in the
long-term interests of the Group and
our stakeholders. Having Directors with
a diverse range of skills, experience
and attributes ensures the Board
exercises an appropriate level of
rigorous enquiry and debate to
constructively challenge management
when necessary.
We have continued to enhance the
Board with the recruitment of Jody
Ford, as COO on appointment and now
CEO as of 28 February 2021, Jennifer
Duvalier, as Senior Independent
Non-executive Director, and Andy
Phillipps as Independent Non-executive
Director. They all bring invaluable
experience of working in high-growth,
global tech businesses and their
appointments will ensure the Board
and its Committees have an
appropriate balance of skills,
knowledge and experience.
As announced on 20 October 2020, Jody
Ford took up the position of CEO
following Clare Gilmartin stepping
down on 28 February 2021. I am
delighted that Jody is our CEO, he has
shown a great ability to provide clear
leadership and focus on improving the
experience of our customers to deliver
performance. I am confident that Jody
and the Leadership Team will continue
to position Trainline to weather
COVID-19 and achieve our long-term
growth plan. After seven years at the
helm of Trainline, Clare informed the
Board she was keen to spend more
time with her young family. I would like
to thank Clare for her leadership during
her time as CEO.
A Board effectiveness review was
conducted earlier this year which
focused in particular on how the
Board has evolved since the IPO and
integrated its new members. The
review concluded that the Board
operates effectively though highlighted
some areas which could be improved
and for which an action plan has been
agreed. You can read more on the
effectiveness review on page 61.
Governance
The Board continues to be committed
to the highest standards of corporate
governance. We have a clear
governance structure which ensures
that we as a Board, and Trainline as a
business, act responsibly in decision-
making, management of risk and
delivery of our strategic objectives.
We have taken steps during the year to
resolve the few governance areas
where Trainline diverged from the 2018
UK Corporate Governance Code (the
‘Code’). Further information on our
compliance with the Governance Code
is available on page 79.
Diversity and inclusion
The Board wholeheartedly supports all
the work Trainline undertakes to create
a diverse workforce and encourage our
people to be engaged in our success.
The Group is involved in a number of
initiatives aimed at encouraging more
diversity in technology, which you can
read more about on page 41.
Accountability and risk
The Board understands that to ensure
the success and resilience of the Group,
decisions must be taken and risks and
opportunities in the short and long
term must be assessed and, where
appropriate, mitigated. When
undertaking its annual review, the
Board ensured the impact COVID-19
has had on the Group’s principal and
emerging risks was considered.
Information on risks is available from
page 32.
Brian McBride
Chair
We have taken steps during
the year to resolve the few
governance areas where
Trainline diverged from
the 2018 UK Corporate
Governance Code.
Trainline
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Stakeholder engagement
The Board recognises that engaging
with and understanding the views of
our key stakeholders and considering
their interests when making decisions
is critical to the long-term success of
the Group. Trainline has engaged
significantly during the year, in
particular to understand the impact of
COVID-19 on our key stakeholders,
which the Board has received regular
reports on. You can read more on the
highlights of our engagement on page
46.
External audit tender
The Audit & Risk Committee has
undertaken a competitive external
audit tender and, following their advice,
the Board recommends to shareholders
that PwC be appointed for the FY 2022
audit and future audits. A resolution to
appoint PwC as external auditor for FY
2022 will be put to shareholders at our
forthcoming AGM.
Further information on the external
audit tender process and the
assessments the Audit & Risk
Committee have made when
considering the effectiveness of the
external audit process and the work of
the current external auditor are
available on pages 63 and 64.
Sustainability
As sustainability is a core component of
Trainline’s purpose, we have included
initial disclosures against the TCFD and
SASB frameworks on page 81. The
Board has a keen interest in Trainline’s
sustainability programme and will
monitor its development throughout
the coming year.
Annual General Meeting
We have prepared for the AGM based
on the anticipated status of the UK
Government’s Roadmap out of
Lockdown at the date of the meeting
not withstanding that, at the date of
publication, the UK Government has
not yet lifted restrictions on public
gatherings.
Though attendance in person at the
AGM may be possible I strongly
encourage shareholders to attend in
the safest manner possible by using the
live virtual webcast facility, details of
which are set out in the Notice of
Annual General Meeting which is
available on our website at https://
investors.thetrainline.com/AGM.
Shareholders may also submit
questions to the Board via email to
investor@trainline.com before the AGM
takes place. We will maintain a list of
responses to frequently asked
questions in relation to our AGM and
also notify shareholders of any changes
to restrictions on attendance at the
AGM on our website at https://
investors.thetrainline.com/AGM.
I also wish to strongly encourage
shareholders to submit a proxy vote in
advance of the AGM and appoint the
chair of the AGM as your proxy with
directions as to how to cast your vote
on the resolutions proposed. In doing
so your vote will be cast should you be
unable to attend the AGM in person or
via the live virtual webcast facility.
Brian McBride
Chair
6 May 2021
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Board Leadership
The Board recognises that culture
plays a fundamental role in the
delivery of Trainline’s purpose and
the successful execution of its
strategy. The Board is ultimately
responsible for ensuring that its
activities reflect the culture we wish
to instil in our people and the Chair
of the Board therefore sets a clear
emphasis on setting the tone from
the top and leading by example.
The Board is satisfied that the
Group’s culture is a positive one and
is conducive to the successful
execution of its purpose and its
strategy.
As part of the business of each
Board meeting, the CEO typically
submits a Company update, giving
details of progress against goals and
the macro-environment in which
Trainline operates. The Board also
receives accounting and other
management information about
Trainline’s resources, and
presentations on legal, governance
and regulatory developments.
To ensure that the Board has good
visibility of the key operations of the
business, members of the
Leadership Team attend Board
meetings regularly to update the
Board on their specific areas of
expertise and the execution of the
Group’s strategy.
Financial Statements
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Governance structure
The Board operates with the assistance of three permanent Board Committees
and delegates authority on specific matters to other committees where it
considers it appropriate to do so.
Board of Directors
Collectively responsible for establishing Trainline’s purpose, values and strategy to
enable the long-term success of the Group for the benefit of our shareholders and
stakeholders.
Assesses and monitors the Group’s culture, promoting its alignment with the purpose,
values and strategy, and ensuring that the Group operates within a framework of
effective controls and risk management.
Audit & Risk Committee
Provides oversight of the integrity of the Group’s financial statements and reports to
the Board on the Annual Report and Financial Statements and other disclosures.
Oversees the external auditor and monitors their independence.
Monitors and reviews the internal control and risk management system. Reviews
whistleblowing, fraud, bribery and other compliance policies and procedures.
Remuneration Committee
Develops the Group’s policy on Board remuneration and monitors its ongoing
appropriateness. Oversees workforce policies and takes colleague remuneration into
account when setting the policy for Directors’ remuneration.
Determines the levels of remuneration for Executive Directors, the Chair and the
Company’s senior management.
Nomination Committee
Reviews the composition of the Board and its Committees, including the effectiveness
of its members.
Leads the process for Board appointments, plans for the orderly succession of Board
and senior management positions and oversees the development of a diverse pipeline.
Trainline’s Leadership Team
Led by our CEO, Trainline’s Leadership Team is comprised of the Group’s senior
executives who are responsible for developing, informing and monitoring the strategy
as set by the Board. The executives oversee the day-to-day operations of Trainline and
come together to review, assess and agree on actions to be taken to achieve the
objectives of the Group.
To see more information about Trainline’s Management Team, visit:
investors.thetrainline.com
Trainline
Annual Report and
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55
Senior Independent Non-executive
Director
• acts as a sounding board for the
Chair;
• understands the views of the
workforce and communicates them
to the Board;
•
is available to shareholders if they
have concerns which have not been
resolved through the normal
channels of communication with the
Company or for which such contact
is inappropriate; and
• at least annually, leads a meeting of
the Non-executive Directors, without
the Chair present, to appraise the
performance of the Chair, taking into
account the views of the Executive
Directors.
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The role of the Board
Our Board is the driving force of
Trainline strategy, culture and
governance, ensuring that our high
standards are consistent across the
business. It is accountable to Trainline’s
shareholders and seeks to represent
the interest of other stakeholders when
setting our long-term focus, strategy,
culture and policies, ensuring that
the Group has the right resources,
overseeing risk and corporate
governance, and monitoring progress
towards meeting our objectives and
annual plans.
Our Directors are collectively
responsible for the success of Trainline.
The Non-executive Directors exercise
independent, objective judgement in
respect of Board decisions, and
scrutinise and challenge management.
They also have various responsibilities
concerning the integrity of financial
information, internal controls and risk
management.
The Board conducts an annual review
of the Group’s overall strategy. The
CEO, CFO and the Leadership Team
take the lead in developing our
strategy, which is then reviewed,
constructively challenged and
approved by the Board.
The Board works to ensure that the
Company generates and maintains
value over the long term. By
embodying and promoting Trainline’s
culture, the Board works to monitor
and assess Trainline’s objectives in
developing world-class technology and
maintaining Trainline’s robust and
scalable business model with due
regard to Trainline’s customers, people,
suppliers and other key stakeholders.
Division of responsibilities
The role of the Chair, the Chief
Executive Officer and the Senior
Independent Non-executive Director.
There is a clear division between
executive and non-executive
responsibilities to ensure accountability
and appropriate oversight. The roles
of Chair and Chief Executive Officer
are separately held and their
responsibilities are well defined in
writing and in practice.
Chair
•
leads the Board and is responsible
for its overall effectiveness in
directing the Group;
• shapes the culture in the
boardroom, in particular by
promoting openness and debate;
• sets a Board agenda primarily
focused on strategy, performance,
value creation, culture, stakeholders
and accountability, ensuring that
issues relevant to these areas are
reserved for Board decision; and
• demonstrates objective judgement.
Chief Executive Officer
• develops the Group’s proposed
strategy, plans, commercial and
other objectives for the Board to
consider and then deliver the
Board’s decisions;
• manages the Group on a day-to-day
basis within the authority delegated
by the Board;
• keeps the Chair and the Board
informed of potentially complex,
contentious or sensitive issues
affecting the Group; and
• manages the Group’s risk profile in
line with the assessment made by
the Board.
Financial Statements
56
Trainline
Annual Report and
Accounts 2020/21
Our Board of Directors
Brian McBride
Chair
Committees:
Jody Ford
Executive Director and
Chief Executive Officer
Shaun McCabe
Executive Director and Chief
Financial Officer
Jennifer Duvalier
Senior Independent
Non-executive Director
Skills and experience:
Brian has a strong track record
in leading businesses having
held many senior positions
throughout his career including
Chair of ASOS from 2012 to
2018 and Chief Executive
Officer of Amazon.co.uk from
2006 to 2011. He has also
held Non-executive Director
positions at AO World plc,
Computacenter PLC, SThree
PLC and Celtic FC PLC. He was
previously on the Board of the
BBC and was a member of the
Advisory Board of Huawei UK.
Skills and experience:
Prior to Trainline, Jody held the
position of CEO at Photobox
Group, Europe’s leading
personalisation business,
encompassing the Moonpig
and Photobox brands. Prior
to Photobox Group, he spent
ten years at eBay, latterly in
California, leading the Growth
function globally. Jody holds
an MBA from INSEAD and a
BA in Economics and Politics
from Exeter University.
Skills and experience:
Shaun joined the Group and
became Chief Financial Officer
in September 2016. Prior to
this, Shaun held the position
of International Director for
ASOS, and previously as Chief
Financial Officer for Amazon
Europe. Shaun is a Chartered
Accountant (ICAEW) and
holds a bachelor’s degree in
Finance and Economics from
the University of Essex.
Committees:
Skills and experience:
Jennifer was Executive Vice
President, People, for ARM
Holdings plc with responsibility
for all People and Internal
Communications globally from
2013 to 2017. Prior to ARM,
Jennifer was Group People and
Culture Director at UBM plc
from 2007 to 2013 and Group
HR Director at Emap plc from
2003 to 2007. Jennifer holds an
MA (Hons) from the University
of Oxford in English and French.
Other appointments:
None
Other appointments:
Non-executive Director at
Standard Life Aberdeen plc
and Kinnevik AB. Brian is also
a Senior Adviser to Scottish
Equity Partners and Lead
Non-executive Director on
the Defence Board of the
UK Ministry of Defence.
Other appointments:
Non-executive Director for
AO, an online-only retailer
operation in the UK and
Germany, and Non-executive
Director and Chair of the
Audit Committee of boohoo,
an online fashion retailer
with operations worldwide.
Other appointments:
Non-executive Director and
Chair of the Remuneration
Committee of Mitie plc and a
Non-executive Director of NCC
Group plc. Jennifer is also a Non-
executive Director and Chair of
the Remuneration Committee
of Guardian Media Group plc,
a Non-executive Director of
The Cranemere Group Ltd
and a senior advisor to the
Corporate Research Forum.
Trainline
Annual Report and
Accounts 2020/21
57
Key
Audit & Risk Committee
member
Remuneration & Nomination
Committee member
Nomination Committee
member
Denotes Committee Chair
Attendance during the
financial year
Board Member
Meetings
9/9
5/5
9/9
4/4
9/9
9/9
2/2
9/9
Brian McBride
Jody Ford
(joined 21 Sep 2020)
Shaun McCabe
Jennifer Duvalier
(joined 1 Oct 2020)
Duncan Tatton-Brown
Kjersti Wiklund
Andy Phillipps
(joined 1 Jan 2021)
Clare Gilmartin
(CEO until 28 Feb 2021)
Ad hoc meetings were also
convened to deal with
specific matters arising
Directors’ nationalities
British, Norwegian
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Board composition
1
4
2
Gender split
2
Chair
Executive
Independent
non-executive
Other appointments:
Member of the investment
Committee of iQ Capital,
Non-executive Director of
Thought Machine and Prodigy
Finance, Fellow at the Judge
Business School at Cambridge
University and regular lecturer
at the London Business School
and INSEAD (France).
5
Male
Female
Length of tenure of
Non-executive Directors
100
0 – 3 Years
3 – 6 Years
6+ Years
Duncan Tatton-Brown
Independent Non-executive
Director
Kjersti Wiklund
Independent Non-executive
Director
Andy Phillipps
Independent Non-executive
Director
Committees:
Committees:
Committees:
Skills and experience:
Andy brings a wealth of
experience in e-commerce
and significant knowledge of
technology and marketplaces
from his previous role as CEO
of Priceline International and
Chair of Toptable.com, both
now part of Booking.com. Andy
is currently an advisor for iQ
Capital, a deep technology
venture capital firm, and was
previously a Non-executive
Director of Albion Development
VCT PLC, an investor in higher
growth businesses with a strong
focus on technology companies.
Most recently Andy was a
Fellow at Stanford University’s
Distinguished Career Institute.
Skills and experience:
Duncan was Chief Financial
Officer of Ocado plc from
September 2012 to November
2020. Prior to joining Ocado,
Duncan held the Chief Financial
Officer’s role at Fitness First
plc, and prior to that, Duncan
was Group Finance Director
of Kingfisher plc. He has also
been Finance Director of B&Q
plc and Chief Financial Officer
of Virgin Entertainment Group
and held various senior finance
positions at Burton Group Plc.
Until July 2018, Duncan was a
Non-executive Director and
Senior Independent Director
of Zoopla Property Group
PLC. Prior to this, he was a
Non-executive Director and
Audit Committee Chair of
Rentokil Initial plc. Duncan
holds a master’s degree in
Engineering from King’s College,
Cambridge. He is also a member
of the Chartered Institute of
Management Accountants.
Skills and experience:
Kjersti has held senior roles,
including Director, Group
Technology Operations of
Vodafone, and Chief Operating
Officer of VimpelCom Russia,
Deputy Chief Executive Officer
and Chief Technology Officer of
Kyivstar in Ukraine, Executive
Vice President and Chief
Technology Officer of Digi
Telecommunications in Malaysia,
and Executive Vice President
and Chief Information Officer at
Telenor in Norway. Kjersti was
also a Non-executive Director of
Laird PLC in the United Kingdom,
Cxense ASA in Norway, Fast
Search & Transfer ASA in
Norway and Telescience Inc in
the United States. She holds a
Master of Business Management
from BI Norwegian Business
School and an MSc in
Electronical Engineering
from Chalmers University
of Technology, Sweden.
Other appointments:
Senior Adviser to Ocado
Group and Non-executive
Director of certain Ocado
Group subsidiaries.
Other appointments:
Non-executive Director of
Babcock International Group
PLC, Spectris PLC and Zegona
Communications PLC.
Financial Statements
58
Trainline
Annual Report and
Accounts 2020/21
Board in action
Workforce engagement
To help the Board understand the views
and concerns of our People, Jennifer
Duvalier, our Senior Independent
Non-executive Director, has been
designated as the Non-executive
Director for Workforce Engagement.
Since her appointment Jennifer has
taken part in colleague engagement
sessions with our Paris office team,
representatives of our People Led
Groups and a subset of our Extended
Leadership Team which, due to
COVID-19 restrictions, had to be held
virtually.
Sessions were held as an open forum
for Jennifer and participants to discuss
matters important to the workforce.
Key themes identified were then shared
with the Board by Jennifer. The Board
used the key themes raised at these
sessions, the results of our Group-wide
colleague engagement surveys and
other sources of insight to assess and
monitor whether the culture and
behaviours the Group strives for
aligns with reality. The workforce
engagement programme will continue
to evolve over time, in particular once
COVID-19 restrictions have been lifted.
The Board has valued the feedback
received and were encouraged that
conversations at sessions were candid
and constructive in tone. As a result the
Board is satisfied that the Group’s
culture is a positive one and is
conducive to the successful execution
of Trainline’s purpose and strategy.
Key stakeholders
The Board has received reports
throughout the year on stakeholder
issues and concerns, in particular the
impact of COVID-19, and updates on
the issues and concerns raised by
shareholders and stakeholders.
Further details on how the Group has
engaged with our key stakeholders is
available on page 46.
COVID-19
Throughout the year the Board has
closely monitored the impact of
COVID-19 on the Group, our people and
our stakeholders.
The Board took quick and decisive
steps to scale back cash outflows at the
start of the pandemic and has
continued to closely monitor them. In
addition the Board supported securing
additional financing and the deferral of
covenants of existing loan facilities to
provide liquidity, protect the business
from the extended COVID-19 downturn
that has taken place and to provide
greater flexibility to invest in possible
future growth opportunities.
Whilst near-term operational matters
have been a focus, the Board has also
encouraged management to consider
the medium to long-term prospects of
the Group to enable Trainline to be well
positioned once COVID-19 restrictions
have relaxed and ultimately ended.
Strategy
The Board receives updates on the
execution of the Group’s strategy at
each Board meeting, typically from the
CEO and CFO but also from members of
the Leadership Team when appropriate.
In addition the Board and the
Leadership Team took part in a strategy
day where: the Group’s strategy in the
medium and long term was
constructively reviewed and
challenged; market opportunities, in
light of the expected impact of
COVID-19, were discussed; and
investment and acquisition
opportunities were considered.
The principal matters considered by the Board during the year were:
Strategy, performance and liquidity
Detailed review of the Group’s strategy, updates on initiatives, discussions of short and long-term
priorities and setting medium-term plans
Operational
Regular updates on the impact of COVID-19, formally at Board meetings and informally when
appropriate
Issuance of Convertible Bond due 2026, raising £150 million
Shareholders and stakeholders
Investor relations and key stakeholder updates
Reporting and risk management
Annual review of the Group’s principal and emerging risks, including the impact of COVID-19 on
those risks
Received updates on specific risk areas, including information security and privacy
Reviewed and approved annual and half-yearly reporting
Leadership and people
Introduction of new Directors to the Board and Trainline
Updates on culture and colleague engagement, in particular the impact of remote working on our
People
Governance and corporate
responsibility
Considered and discussed the results of the Board effectiveness review and agreed on the
development opportunities identified
Reviewed and approved disclosures including the gender pay gap statement, modern slavery
statement and Group tax strategy
Trainline
Annual Report and
Accounts 2020/21
59
Composition, succession and evaluation
Board appointments
and succession
The following changes have taken place
in the membership of the Board during
the year:
•
Jody Ford joined the Board as Chief
Operating Officer on 21 September
2020 and succeeded Clare Gilmartin
as Chief Executive Officer on
1 March 2021 following Clare’s
resignation;
•
Jennifer Duvalier joined the Board as
Senior Independent Non-executive
Director on 10 October 2020; and
• Andy Phillipps joined the Board as an
Independent Non-executive Director
on 1 January 2021.
Board composition
Appointments to the Board are made
solely on merit with the objective of
ensuring that the Board contains an
appropriate balance of skills and
knowledge of the Group and its
business, and length of service.
Appointments are made based upon
the recommendations made by the
Nomination Committee with due
consideration given to diversity. In
compliance with the Governance Code
at least half of the Board, excluding the
Chair, is composed of Independent
Non-executive Directors.
Skills, knowledge and experience
As set out in the table below, each
irector provides a range of skills,
knowledge and experience that is
relevant to the success of the Group
and enables strong independent
judgement and constructive challenge.
Board and Committee
effectiveness evaluation
An evaluation of the operation and
effectiveness of the Board, its
Committees and the Chair took place
during the year.
Directors completed an online
questionnaire which was designed to
provide insight on all areas of Board,
Committee and individual Director’s
effectiveness. Questions included
whether Board members thought the
Board effectively monitored equality,
diversity and inclusion as well as
whether the Board’s effectiveness had
been negatively impacted by COVID-19
measures. In addition the Non-
executive Directors, excluding the
Chair, led by the Senior Independent
Non-executive Director, met privately
to appraise the performance of the
Chair.
The evaluation concluded that the
Board, its Committees and each of the
Directors were effective, with most
review areas scoring in the range of
good or excellent and with consistency
in scoring and commentary between
individual submissions. Opportunities
identified for further development
included additional reporting on: key
stakeholders; culture, talent, diversity
and inclusion; and the evolving
governance landscape.
The results of the evaluation were
reviewed and assessed by the
Nomination Committee. The outcome
and proposed actions were
recommended to the Board and
accepted in full.
The intention is for the FY 2022
evaluation to be externally facilitated,
thereby complying with the
Governance Code guidance that an
externally facilitated evaluation take
place at least every three years.
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Skills, knowledge and experience
High-growth
Digital &
Government
Risk
business
ecommerce
& Regulatory
People
Operations
Technology
Finance
Management
Andy Phillipps
Brian McBride
Duncan Tatton-Brown
Jennifer Duvalier
Jody Ford
Kjersti Wiklund
Shaun McCabe
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Financial Statements
60
Trainline
Annual Report and
Accounts 2020/21
Report of the Nomination Committee
I am pleased to present Trainline’s Report
of the Nomination Committee which
provides a summary of the Committee’s
role and activities for FY 2021.
During the period we reviewed the areas
under our remit in accordance with the
Committee’s terms of reference. These
reviews assist the Board in determining
appointments to the Board and
succession planning for the Board and
Leadership Team. The Committee is
satisfied with the current composition of
the Board and its Committees though it
will continue to monitor and refresh
their composition where appropriate.
Membership
The Committee comprises five
Independent Non-executive Directors,
Andy Phillipps, Jennifer Duvalier, Kjersti
Wiklund, Duncan Tatton-Brown, and
myself (Brian McBride) as its Chair.
The Committee’s key activities
Key matters discussed by the
Committee during FY 2021 included a
review of:
• the suitability of Jody Ford, Jennifer
Duvalier and Andy Phillipps as
candidates for appointment to the
Board and its Committees;
• the suitability of Jody Ford to
succeed Clare Gilmartin as CEO;
• the effectiveness of the Board, its
Committees and individual
Directors;
• the structure, size and composition
of the Board, including the skills,
knowledge, independence, experience
and diversity of its members; and
• the additional external
appointments undertaken by Board
members during FY 2021.
The Committee’s key activities
planned for FY 2022
The Committee recognises the
importance and benefits of the Board
having an appropriate balance of skills,
experience, independence and
knowledge to enable the Directors to
discharge their respective duties and
responsibilities effectively.
Following Clare Gilmartin’s last day as
CEO on 28 February 2021, the Committee
recognises that the Board does not
currently align with the Hampton-
Alexander recommendations and is also
not yet in alignment with the Parker
recommendations.
ethnically, racially and gender diverse
backgrounds are always included in
shortlists for Board positions with the
intention of maximising the opportunity
to make appointments that allow the
Board to reflect the diversity at Trainline
and the wider community. The
Committee is confident that by ensuring
the candidates included on shortlists for
Board appointments are genuinely
diverse the Board will align with the
Hampton-Alexander and Parker
recommendations.
Prior to the Committee’s next report for
FY 2022 it intends to undertake the
following key activities:
• an externally facilitated annual
evaluation of the Board; and
• a review of the Group’s policies on
diversity and inclusion, their
implementation and progress
against objectives.
Brian McBride
Chair of the Nomination Committee
6 May 2021
Gender balance (actual headcount
as at 28 February 2021)
Board of Directors
3
5
Male
Female
Following Clare Gilmartin’s last day as CEO
on 28 February 2021 the gender balance of the
Board of Directors is two female and five male.
Senior Management Team
and their direct reports
44.4%
55.6%
Male
Female
All our People
35.3%
In order to address this the Committee
will ensure that candidates from
64.7%
Male
Female
Brian McBride
Chair of the Nomination Committee
Attendance during the
financial year
Committee Member
Meetings
Brian McBride (Chair)
Jennifer Duvalier
(joined 1 October 2020)
Andy Phillipps
(joined 1 January 2021)
Duncan Tatton-Brown
Kjersti Wiklund
2/2
2/2
1/1
2/2
2/2
Ad hoc meetings were also convened
to deal with specific matters arising
Our responsibilities
• Monitor the composition of the
Board and its Committees,
including the effectiveness of
its members
• Lead the process for Board
appointments
• Plan for the orderly succession
of Board and Leadership Team
positions and oversee the
development of a diverse
pipeline of talent
Trainline
Annual Report and
Accounts 2020/21
61
Key areas of focus for the Nomination
Committee during FY 2021
The main matters that the Committee
considered during the year were:
Selection process for the appointment
of new Board members
When considering new appointments
to the Board, the Committee:
The appointment of new Directors to
the Board
After considering the structure, size
and composition of the Board,
including the skills, knowledge,
independence, experience and diversity
of its members, the Committee agreed
that the proposal to appoint new
Directors was appropriate.
All new Directors received tailored
induction training which included
meetings with all of the Leadership
Team and other senior managers,
access to historic Board materials and
guidance on their duties as Director’s.
Appointment of Jody Ford
The Committee had identified the need
for additional executive leadership on
the Board and undertook a search for
candidates who could provide this as
part of a COO role on the Board.
Following an extensive market
assessment exercise undertaken by the
Committee’s external executive search
consultants, the Committee identified
Jody Ford as the stand-out candidate.
Following Clare Gilmartin informing the
Board that she intended to step down
as CEO, the Committee considered
Jody’s suitability to succeed Clare. After
considering Jody’s previous experience,
his clear leadership and focus on
improving product and customer
experience to deliver performance, the
Committee recommended the Board
appoint Jody as CEO.
Annual Board effectiveness evaluation
The Committee undertook a Board
effectiveness evaluation during the
year, the actions resulting from which
were recommended to, and approved
by, the Board.
Further information on the evaluation
is available on page 59.
• selects appropriate external
executive search consultants for the
role in question;
• prepares a specification for
candidates, setting out the agreed
key skills and character profile being
sought to fit the desired balance,
membership and dynamics of the
Board;
• receives a long list of candidates
meeting the specification, ensuring
that this includes candidates from a
diverse range of backgrounds and
that it includes a sufficient number
of female candidates;
• agrees a shortlist and invites these
candidates to be interviewed by the
Chair, the Chief Executive Officer, the
Chief Financial Officer and other
members of the Board where
appropriate; and
• agrees on the preferred candidates
and recommends them to the Board.
During the year the Committee has
used the services of The Up Group Ltd
as external executive search
consultants. Trainline also utilises the
services of The Up Group when making
senior appointments, below Board
level, to the Group. The Up Group has
no other connection with the Company
or the Board.
Succession planning
The Committee recognises the
importance of developing and
maintaining a diverse talent pipeline to
provide succession options for the
Leadership Team. Given the Group’s
focus on diversity and inclusion, the
Committee welcomed the appointment
of Champa Magesh and Lisa Hillier to
the Leadership Team, not only due to
the extensive experience and
knowledge they bring but also that
their appointments have resulted in
women representing half of the
Leadership Team excluding the
Executive Directors.
During FY 2022 the Committee will
continue to monitor succession planning
arrangements for the Board and the
Leadership Team and assess whether
the succession planning arrangements
and the Board appointment process will
continue to support the development of
a diverse pipeline of candidates.
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Policy on diversity and inclusion
One of the pivotal considerations on
any appointment to the Board and the
Leadership Team is diversity. The
Committee takes an active role in
setting and meeting diversity
objectives and strategies for the Group
as a whole. The Board’s policy is to
continue to seek and encourage
diversity within long and shortlists,
including with regard to gender, as part
of the overall selection process for
Director roles. The Committee believes
we have a diverse Leadership Team
which is able to effectively serve the
Group’s interests.
Trainline is committed to having a
diverse and inclusive workplace and
the Committee supports this goal and
the recommendations set out in the
Hampton-Alexander Review and the
Parker Report wholeheartedly. The
Committee recognises that technology
is a male dominated sector and that the
Group has more work to do to balance
its gender split. Further information on
Trainline’s initiatives to improve
diversity is available on page 40.
The Committee intends to review the
Group’s diversity and inclusion policies
during FY 2022, how they link to the
Group’s objectives and strategy, how
they are being implemented, and
progress towards achieving diversity
and inclusion objectives.
Director reappointment
In accordance with the provisions of
the Governance Code, all Directors will
retire at the forthcoming AGM of the
Company and the Board has
recommended their reappointment. In
reaching its decision to recommend
reappointment, the Board acted on the
advice of the Nomination Committee.
The Committee reviewed the
independence of the Non-executive
Directors and confirmed to the Board
that it considers each of the Chair and
the Non-executive Directors to be
independent in accordance with the
Code.
All the Directors being proposed for
reappointment attended all meetings
they were scheduled to attend and the
Committee is satisfied they devote
sufficient time to their duties and
demonstrate great enthusiasm and
commitment to their roles.
Financial Statements
62
Trainline
Annual Report and
Accounts 2020/21
Report of the Audit and Risk Committee
I am pleased to present Trainline’s
Report of the Audit and Risk Committee
which provides a summary of the
Committee’s role and activities for
FY 2021.
During the year, we reviewed the areas
under our remit with management and
external auditors, in accordance with
the Committee’s terms of reference.
These reviews help ensure the interests
of our shareholders are protected and
that the Group’s reporting is fair,
balanced and understandable.
Membership
The Committee comprises three
Independent Non-executive Directors,
Jennifer Duvalier, Kjersti Wiklund and
myself (Duncan Tatton-Brown) as
its Chair.
The biography of each member of the
Committee is set out on pages 56 and
57. The Committee as a whole has the
competence relevant to the sector in
which the Group operates. As a
member of the Chartered Institute of
Management Accountants and as a
former Chief Financial Officer of a FTSE
100 company I have the relevant
financial knowledge and extensive
experience to be the Chair of the
Committee.
Role and work of the Audit
& Risk Committee
Meetings are held to coincide with key
events, in particular the reporting and
audit cycle for the Group. The Chair of
the Committee reports at the next
subsequent Board meeting on the
business concluded at the previous
Committee, the discharge of its
responsibilities and informs the Board
of any recommendations made by the
Committee.
The Committee’s key activities during
FY 2021
Key matters discussed by the
Committee during FY 2021 included:
• undertaking a competitive tender
for the provision of external audit
services to the Group;
• considering the going concern and
viability statements in light of the
impact of COVID-19;
• an update on the Group’s
information security and privacy
processes and controls;
• an update on the Group’s tax profile
and related legislative changes;
• a review of the Group’s risk
management process including the
risk register, the internal control
system and the effectiveness and
independence of the risk
management function;
• the integrity of the Financial
Statements of the Group and all
formal announcements relating to
its financial performance;
• the Group’s accounting policies,
the use of Alternative Performance
Measures, significant financial
reporting issues, judgements and
estimates;
• considering the Group’s impairment
assessment and the subsequent
impairment of the International CGU
in FY 2021; and
• whether this Annual Report, taken
as a whole, is fair, balanced and
understandable, provides
shareholders with the information
necessary to assess the Company’s
position, performance, business
model and strategy, and the
completeness of the included
disclosures.
The Committee’s key activities
planned for FY 2022
Prior to the Committee’s next report for
FY 2022 it intends to undertake the
following further key activities:
• monitor the effectiveness of the new
external auditor; and
• oversee the implementation of the
internal audit function.
Duncan Tatton-Brown
Chair of the Audit and Risk Committee
6 May 2021
Duncan Tatton-Brown
Chair of the Audit and Risk Committee
Attendance during the
financial year
Committee Member
Meetings
Duncan Tatton-Brown
(Chair)
Jennifer Duvalier
(joined 1 October 2020)
Kjersti Wiklund (INED)
4/4
3/3
4/4
Ad hoc meetings were also convened
to deal with specific matters arising
Our responsibilities
• Monitor the integrity of
the Company’s Financial
Statements and report to the
Board on the Annual Report
and Financial Statements and
other disclosures
• Oversee the external auditor
and monitor their
independence
• Monitor and review the
internal control and risk
management system and
internal audit function
• Review whistleblowing, fraud,
bribery and other compliance
policies and procedures
Trainline
Annual Report and
Accounts 2020/21
63
Key areas of focus for the Audit & Risk
Committee during FY 2021
External audit tender
In order to comply with The Statutory
Audit Services for Large Companies
Market Investigation (Mandatory Use
of Competitive Processes and Audit
Committee Responsibilities) Order 2014
(Article 7.1), the Committee conducted a
competitive tender for the provision of
external audit services during 2020.
The Board and the Committee have
remained satisfied with both KPMG’s
quality of service and their
independence and objectivity
throughout their tenure. The tender
process was initiated in order to comply
with the Competition and Markets
Authority’s tendering requirements.
The Committee led the tender process,
including agreeing the timetable and
requirements for the tender document
and firms presentations, together with
selecting the firms to be invited to
attend. An outline of the process is
included in the table below. The
Committee, following consultation with
Management, recommended the Board
appoint PwC LLP as external auditors
with effect from FY 2022, including the
half year ended 31 August 2021.
The Board accepted the Committee’s
recommendation to appoint PwC LLP as
external auditors and a resolution for
the appointment of PwC LLP will be put
to shareholders at the Annual General
Meeting in June 2021. The Committee
confirms this recommendation is free
from influence by a third party and that
no contractual term has been imposed
Audit tender process
on the Company limiting the choice of
auditor. KPMG will cease to hold office
following the completion of the audit of
the Group’s Financial Statements for
the year ended 28 February 2021.
Going concern and viability
assessments
The Committee reviewed and advised
the Board on the Group’s going
concern and viability statements
included in this Annual Report and the
assessment reports prepared by
management in support of such
statements. The current and
anticipated impact of COVID-19 was
considered as part of the review. The
external auditor discussed the
statements with the Committee and
reviewed the conclusions reached by
management regarding going concern
and viability.
FRC thematic review
During the year Trainline engaged with
the Financial Reporting Council (‘FRC') in
relation to their thematic review of
cashflow and liquidity disclosures. Their
review was conducted in relation to
Trainline’s FY 2020 Financial Statements.
As part of this review Trainline received
a letter from the FRC with questions
and requests for additional information
to which Trainline Management drafted
a response which was reviewed by the
Committee.
The FRC confirmed it was satisfied
with the response and that no further
follow-up was required. As a result of
the review no major financial reporting
changes were required. One
classification change has been made in
the comparative period in Note 20.
The FRC’s review only covered specific
disclosures relating to this thematic
review and provides no assurance that
the Annual Report and Financial
Statements are correct in all material
respects. The FRC's role is not to verify
the information provided but to
consider the compliance with reporting
requirements. Trainline Management
and the Committee welcomed
comments and queries received by the
FRC and are supportive of their goal of
increasing transparency in corporate
reporting.
Audit Quality Review
The Audit Quality Review team (‘AQR’)
from the Financial Reporting Council
undertook an inspection of KPMG’s
audit of FY 2020. The AQR’s final report
noted improvements in relation to the
audit of point of sale revenue, which
KPMG has accepted and updated
during its FY 2021 audit.
Tax strategy review
The Committee reviewed the tax
strategy the Group is required to
disclose from 28 February 2021 and the
steps taken to comply with the 2016
Finance Act now that Trainline qualifies
as a ‘large group’ prior to review and
approval by the Board. In addition the
Committee received reports on future
developments and the tax-related
disclosures in this Annual Report.
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Stage one
The Audit and Risk Committee recommended the external audit tender to the Board.
The Audit and Risk Committee agreed the timetable for the process, requested content for the tender document and firms’
pitches and the key decision criteria it would use in making the final recommendation to the Board.
Stage two
The Audit and Risk Committee Chair and CFO met separately with the audit partner of each short-listed firm in advance of
issuing the formal invitation to tender.
Each firm was then invited to the following meetings:
• Meeting with proposed Audit Partner and Duncan Tatton-Brown
• Meeting with proposed Audit Partner and Shaun McCabe
• Meeting with wider audit team members and the wider Trainline finance team
• Meeting with audit team including IT specialists and the wider Trainline finance team and Trainline IT specialists
Each firm was given the opportunity to ask follow-up questions.
Each firm submitted their written proposals to Trainline in December 2020.
Stage three
The written proposals were reviewed, and it was agreed all three firms would be invited to the final presentation to the Audit
and Risk Committee and the Finance team. Each firm presented individually to the Audit and Risk Committee and the Finance
team in mid-December 2020. All sessions took place in person, reflecting COVID-19 safety precautions, and were interactive and
included questions and answers from the Committee and the Finance team to the firms.
Stage four
The Audit and Risk Committee met to evaluate each firm using the agreed evaluation criteria and to reach a recommendation to
the Board.
Financial Statements
64
Trainline
Annual Report and
Accounts 2020/21
Report of the Audit and Risk Committee continued
Financial Statements and reporting
The Committee monitored the financial
reporting process for the Group, which
included receiving reports from, and
discussing these with, the external
auditor. As part of the year end
reporting process the Committee
reviewed this Annual Report, a
management report on accounting
estimates and judgements, a
management report on Alternative
Performance Measures, the external
auditor’s report on internal controls,
accounting and reporting matters, and
management representation letters
concerning accounting and reporting
matters. Monitoring the integrity of the
Company’s financial statements, the
financial reporting process and
reviewing the significant accounting
issues are key roles of the Committee.
The Committee plays an important role
in advising the Board when it considers
whether the Annual Report, taken
as a whole, is fair, balanced and
understandable and provides the
information necessary for shareholders
to assess the Company’s position,
performance, business model and
strategy.
Accounting judgements and key
sources of estimation uncertainty
The Committee assessed whether
suitable accounting policies had been
adopted and the reasonableness of the
judgements and estimates that had
been made by management. The
Committee, alongside management
and the external auditor, identified the
areas set out in the table below as the
key areas of judgement and estimation.
Internal controls review
The Board monitors the key elements
of the Group’s internal control and risk
management framework arrangements
supported by the Committee. During
the period the Committee advised the
Board on its review of the effectiveness
of the systems and processes including
financial, operational and compliance
controls.
Internal audit
The intended implementation of an
internal audit function facilitated by an
Internal Audit Manager supported by
an external advisor was delayed due to
the impact of COVID-19 but will be a
focus for the Group and the Committee
during FY 2022.
Risk management review
The Committee received updates from
the Group’s risk management function,
in particular on the Company’s risk
register and whistleblowing system
and policies, prior to the Board
determining the Company’s overall risk
appetite, tolerance and strategy.
The Committee, in supporting the
Board to assess the effectiveness of
risk management and internal control
processes, relies on reporting by
management, compliance reports and
the assurance provided by the external
auditor.
The Board discussed and reviewed the
Group’s risk appetite when reviewing
the principal risks and the strategy for
the Group. Regular review of the risk
appetite ensures that the Company’s
risk exposure remains appropriate and
acceptable in enabling the Group to
achieve its strategic objectives. The
Committee considers the Group risk
appetite and principal risks when
considering the effectiveness of the
risk management system.
Further information on the Group’s risk
management is available on page 32.
Assessing the effectiveness of the
external audit process and the
external auditor
The Committee places great importance
on ensuring that the external audit is
effective and of a high standard. The
Committee reviewed and approved the
annual audit plan to ensure it was
consistent with the scope of the audit
engagement. In reviewing the audit
plan, the Committee discussed the areas
identified by the external auditor as
most likely to give rise to a material
financial reporting error or those that
are perceived to be of higher risk and
requiring additional audit emphasis
(including those set out in the
Independent Auditor’s Report). The
Committee also considered the audit
scope and materiality threshold. The
Committee also met privately with the
external auditor, without Company
management presence, to discuss their
remit and issues arising from their work.
The appointment of PwC LLP as
external auditor to the Group will be
recommended to shareholders at the
2021 AGM. KPMG LLP acted as external
auditor to the Group from 2002 with
the current Audit Partner, Anna Jones,
new in the role this year. KPMG has
indicated that it will not raise any areas
of concern when confirming its
resignation as external auditor.
Key areas of judgement and estimation
Issue considered
How the issue was addressed
Going concern
The going concern disclosure is an area of
judgement. Given the impact of
COVID-19 the level of uncertainty around
this judgement is considered higher in the
current environment.
Carrying value of international goodwill
The carrying value of goodwill depends
on the future cash flow forecast
supporting the carrying value. There is
inherent uncertainty in forecasting future
cash flows and as such this area of
estimate is a focus for the Committee.
The Committee considered the work performed by management in assessing the Group’s ability to
continue as a going concern, particularly around its consideration of the impact of COVID-19 and the
steps taken to protect and enhance the Group’s liquidity.
The Committee reviewed management’s base case and downside scenarios which all showed the
Group has sufficient cash and liquidity headroom to continue for a period of greater than 12 months.
This, combined with the covenant waivers in place, led the Committee to conclude there is no
material uncertainty around the Group’s ability to continue as a going concern and as such the
disclosures in this area are considered appropriate.
The Committee reviewed and discussed Management’s conclusions around the carrying value of
goodwill, including: the methodology applied; the achievability of the business plans and how
COVID-19 had been reflected in the plans; considering the appropriateness of discount rates and
long-term growth rates applied; and considering the outcome of sensitivity analysis.
The Committee agreed with Management’s conclusion that an impairment is required based on the
discounted cash flow forecast of £25 million (FY 2020: £nil).
Report of the Audit and Risk Committee continued
Trainline
Annual Report and
Accounts 2020/21
65
The Committee considered the
safeguards in place to protect the
external auditor’s independence. KPMG
provided a letter of independence to
the Committee reporting that it had
considered its independence in relation
to the audit and confirmed that it
complies with UK regulatory and
professional requirements and that its
objectivity is not compromised. The
Committee took this into account when
considering the external auditor’s
independence and concluded that
KPMG remained independent and
objective in relation to the audit.
Non-audit work carried out by the
external auditor
The Committee has set a policy around
the provision of non-audit services by
the external auditor. This policy is
designed to comply with the FRC
guidance on the provision of non-audit
services and helps maintain the
independence and integrity of the
Group’s external auditor. The policy
sets out specific considerations around
the provision of non-audit services and
requires approval by part or all the
Committee for any proposed services
with an expected fee of more than
£50,000.
Certain types of work, as defined by
the FRC, are explicitly prohibited to
be provided to the Group including
specific tax advisory services and
internal audit services. A detailed list of
prohibited services is included in the
Committee’s non-audit services policy.
Audit fees
The Committee was satisfied that the
level of audit fees payable in respect of
the audit services provided (being
£358,000) was appropriate and that an
effective audit could be conducted for
such a fee.
Risk
The Group’s risk tolerance is set by the
Board and is the level of risk it is willing
to accept to sustainably achieve our
strategic objectives. The Group’s risk
management policies identify and
analyse the risks faced by Trainline, set
appropriate risk limits and controls,
and monitor ongoing risks.
Through its training and management
standards and procedures, the Group
aims to maintain a disciplined and
constructive control environment in
which all our people understand their
roles and obligations in relation to risk.
The fees paid for non-audit services
during the year ended 28 February
2021 amounted to £50,000. Of these
fees, £40,000 relate to audit-related
assurance services for the 31 August
2020 half-year review undertaken by
the external auditor. Further details of
these amounts can be found in Note 4
of the Financial Statements.
An overview of the Group’s risk profile,
and the management of those risks is
available on page 32. The Group
undertakes a robust assessment of its
principal and emerging risks, which
takes into account the risks that
threaten our business model, future
performance, solvency or liquidity and
the Group’s strategic objectives.
The Committee periodically receives
assurance reports on the Group’s risk
management and internal control
systems and monitored progress
against risk function testing,
development and goals. The
Committee advises the Board on the
effectiveness of the risk management
system as the Board has overall
responsibility for the establishment
and oversight of the Group’s risk
management framework.
Anti-bribery and corruption
Trainline is committed to the highest
standards of ethical conduct and
integrity in our business practices and
adopts a zero-tolerance approach to
bribery and corruption. Any of our
people found to have breached the
Group’s policies will face disciplinary
action which could include dismissal for
gross misconduct. We pass on these
policies, where appropriate, to our
supply chain as part of our
procurement and contracting
procedures.
Whistleblowing
Trainline is committed to the highest
possible standards of openness,
honesty and accountability and will
take every step possible to create a
positive environment where people
will feel comfortable in raising any
concerns they have. Our whistleblowing
procedures are included in the Group’s
staff handbook. If anyone has a
concern they wish to raise they can
contact an independent reporting line
for anonymous reporting of concerns.
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Overview of our anti-bribery and corruption policies and procedures:
Our anti-bribery, corruption and human rights policies are available at https://investors.thetrainline.com/corporate-responsibility
Receiving corporate hospitality and gifts
Should be refused if they could influence or appear to influence decisions made on behalf of the
Group. Colleagues are required to update the Group Gift Register. Substantial physical gifts
should be passed onto the Group for donation to charity or disposal.
Offering corporate hospitality and gifts
Must be fully documented, approved by the relevant member of the Leadership Team and
recorded in the Group Gift Register. Any hospitality above a set value must also be approved by
the Business Review and Approvals Group.
Facilitation payments
Corruption
Are strictly prohibited, no matter the value, even where such payments are perceived as a
common part of local business practice or law. This prohibition also applies to those who work
on behalf of the Group.
All our people are made aware of the Group’s Anti-Fraud and Corruption Strategy when they
join. Concerns should be reported in accordance with the Group’s Whistleblowing Policy.
Disciplinary action and other appropriate measures will be taken as necessary.
Financial Statements
66
Trainline
Annual Report and
Accounts 2020/21
Directors’ remuneration report
Dear Shareholder,
On behalf of the Board, I am pleased to
present the Directors’ Remuneration
Report for FY 2021 which covers a
challenging year for the industry but
one in which our employees continued
to contribute strongly.
price and to align him with
shareholders’ interests, his FY 2021 PSP
award was based on a total award of
400% of salary, which as his first PSP
award was consistent with the
Remuneration Policy approved by
shareholders.
Key areas of focus for the
Remuneration Committee during
FY 2021
Former CEO’s outgoing remuneration
It is with regret that we announced the
resignation of Clare Gilmartin, CEO,
during the year. The Committee
considered Clare Gilmartin’s
remuneration in light of her resignation
and determined that Clare’s
outstanding PSP and DSBP grants
would lapse, in accordance with the
respective plan rules, and that given
Clare had continued in her role to the
end of the financial year that Clare
would be eligible for any FY 2021 bonus
that is paid, although ultimately no
bonus was paid.
New COO’s remuneration
We are delighted that Jody Ford was
appointed to the Board as COO on
21 September 2020 and succeeded
Clare Gilmartin as CEO on 1 March
2021. Jody comes with a wealth of
experience of innovating consumer-
facing digital and technology
businesses, helping them transform
and grow across new sectors, markets
and audiences.
On appointment Jody’s salary was set
at £500,000 which the Committee
considered a fair and reasonable level
for the role. His pension was set at
5.5% of salary, to match the pension
allowance available to the wider
workforce. Jody’s bonus opportunity
for FY 2021 was set at the same level as
the CFO’s, at 150% of salary. To help
ensure Jody’s exposure to our share
When deciding Jody Ford’s
remuneration for his transition from
COO to CEO, the Committee considered
external benchmarks for Trainline’s
sector and size peers and the
remuneration arrangements of
Trainline’s employees. As a result of
these considerations the Committee
approved a base pay package, starting
on 1 March 2021, that matched the
former CEO's (£575,000) with a reduced
benefits allowance and a lower pension
allowance of 5.5% of salary to match
the pension allowance available to the
wider workforce.
Employee remuneration
and engagement
The Committee considers carefully the
wider employee experience when
making decisions around senior
executive pay. The Committee will
receive an update on colleague
remuneration during FY 2022 which will
provide both an overview of how our
annual pay reviews are managed and
employee sentiment on remuneration
that has been collated through surveys,
feedback and any matters raised
through the workforce engagement
mechanism. In addition the Committee
will consider and make
recommendations to management’s
plans to address any considerations
raised.
During FY 2022, the Committee will
review how direct engagement with the
broader employee base can be
effected, to help facilitate dialogue on
pay alignment across the Company.
Kjersti Wiklund
Chair of the Remuneration Committee
Attendance during the
financial year
Name
Meetings
Kjersti Wiklund (Chair)
Andy Phillipps (joined
1 Jan 2021)
Brian McBride (member
until 24 Feb 2021)
Duncan Tatton-Brown
Jennifer Duvalier (joined
1 Oct 2020)
4/4
2/2
3/3
4/4
2/2
Ad hoc meetings were also convened
to deal with specific matters arising
Our responsibilities
• Develop the Group’s policy on
executive remuneration and
monitor its ongoing
appropriateness
• Determine the levels of
remuneration for Executive
Directors, the Chair and the
Leadership Team
• Review employee
remuneration and administer
the Group’s share schemes
Trainline
Annual Report and
Accounts 2020/21
67
Remuneration outcomes for FY 2021
Given the uncertainty created by
COVID-19, the Committee deferred
determining targets for the FY 2021
Annual Bonus until H2 FY 2021 so that a
Group reforecast could be completed.
Due to the deferral the Committee
determined that the FY 2021 Annual
Bonus would be measured only on the
H2 FY 2021 period and with the total
opportunity prorated by 50% (100% of
salary maximum for Clare Gilmartin
and 75% of salary maximum for Shaun
McCabe and Jody Ford) to recognise the
six-month time frame.
The total annual bonus opportunity
was based 75% on core financial targets
(25% each for Group net sales, Group
revenue and Group adjusted EBITDA)
and 25% for key strategic and personal
targets for the Executive Directors with
a gate requirement that Group
adjusted EBITDA must meet the H2 FY
2021 target for pay-out of any bonus.
Given the continued impact of COVID-19
and the reintroduction of increased
travel restrictions in key markets, the
H2 FY 2021 target for Group adjusted
EBITDA was not achieved and, as a
result, no FY 2021 annual bonus will be
paid to the Executive Directors even
though many of their individual
strategic targets were met.
Awards under the Company’s
Performance Share Plan were granted
on 22 May 2020 to Clare Gilmartin,
which have lapsed due to her stepping
down on 28 February 2021, and Shaun
McCabe equivalent to 250% of salary. A
one-off new joiner award of 400% of
salary was granted to Jody Ford on
16 November 2020. Awards will vest
after a three-year performance period,
subject to the achievement of
stretching earnings growth and relative
TSR performance targets.
As was the case for previous PSP
awards, 50% of salary will be structured
as an award which vests only for the
achievement of exceptional EPS
performance and if Trainline’s relative
TSR performance is above upper
quartile. All vested PSP awards will be
subject to a two-year post-vesting
holding period.
The Committee considered the volatility
in the Company’s share price when
determining PSP grants and used the
longest average period permitted
under the plan rules when determining
the grant share price (30 calendar days
average daily MMQ) to help reduce the
sensitivity to short-term share price
movements.
The Committee will ensure that any
vesting of the FY 2021 PSP cycle is
consistent with the stakeholder
experience over this uncertain period,
taking into account perspectives of
shareholders, employees and
customers, as well as other factors such
as the mitigation of any windfall gains.
Implementation of the Remuneration
Policy for FY 2022
The maximum annual bonus
opportunities for FY 2022 will be 200%
and 150% of normal salary for the new
CEO and the CFO, respectively. The
performance measures will be based
on a Company scorecard of financial
and strategic metrics, including Group
revenue, Group adjusted EBITDA and
Group net ticket sales (weighted at
least 75% of the bonus) and strategic
pillar objectives (weighted no more
than 25% of the bonus). The financial
measures are aligned with KPIs for
Trainline, and the combination of
financial and strategic targets and
personal objectives will ensure direct
alignment between incentive outcomes
and the Company’s performance, as
well as the delivery of near-term
strategic objectives.
The current intention is for awards of
250% of salary to be made in FY 2022 to
the new CEO and the CFO under the
PSP. The performance measures will
continue to be EPS and relative TSR vs.
the FTSE 250 excluding investment
trusts, and will also include Revenue to
reinforce Trainline’s ambitious growth
strategy. As was the case for previous
award grants, of the 250% of normal
salary, 50% of salary will be structured
as an award which vests only for the
achievement of exceptional
performance, based on stretching EPS,
Relative TSR and Revenue targets.
Vested awards will be subject to a
two-year post-vesting holding period.
Targets for the FY 2022 annual bonus
and PSP targets will factor in the
current and expected impact of
COVID-19 on the business. The
Committee will ensure that any payout
of the FY 2022 bonus and any vesting of
the FY 2022 PSP cycle is consistent with
the stakeholder experience over this
uncertain period, taking into account
perspectives of shareholders,
employees, and customers, as well as
other factors such as the mitigation of
any windfall gains.
The Committee believes that the
approach to remuneration in FY 2022 is
in the best interests of all shareholders,
and we respectfully ask for your
support at the 2021 AGM.
Kjersti Wiklund
Chair of the Remuneration Committee
6 May 2021
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Financial Statements
68
Trainline
Annual Report and
Accounts 2020/21
Remuneration at a glance
This section is a snapshot of the Company’s performance over the FY 2021 year and the remuneration received
by our Executive Directors. Full details can be found in the Annual Report on Remuneration on pages 70 to 78.
FY 2021 remuneration outcomes
Annual bonus
The annual bonus was based on a mix of financial (weighted 75% of the total) and strategic (weighted 25% of the total)
performance measures for FY 2021. The performance targets and actual performance are set out below:
Measures
Group Net Sales
Group Revenue
Group Adjusted EBITDA1
Total
Weighting
(% of
total bonus)
25%
25%
25%
75%
Performance targets
Threshold
Target
Stretch
£1,004.5m £1,232.7m £1,420.9m
£94.5m
£9.5m
£81.3m
£5.5m
n/a
£1.5m
Strategic objectives2
25%
Weighting
(% of total bonus)
1 See page 140 for the definition of Group Adjusted EBITDA.
2 No annual bonus payout will be made in respect of strategic objectives as the Group adjusted EBITDA target was not achieved.
Due to the uncertainty generated by COVID-19, targets for financial performance measures and some strategic objective
measures were based upon performance in H2 FY 2021 only, with the total bonus opportunity prorated by 50% to represent
the six-month time frame. Given the continued impact of COVID-19 and the reintroduction of increased travel restrictions in
key markets, the H2 FY 2021 target for Group adjusted EBITDA was not achieved and as a result no FY 2021 annual bonus will
be paid to the Executive Directors.
Implementation of the Remuneration Policy in FY 2022
For FY 2022, the Executive Directors will be remunerated in line with the current Remuneration Policy, as summarised in the
table below.
Element of pay
Fixed remuneration
Base salary
Pension
Benefits
Variable pay
Annual bonus and DSBP
PSP
Implementation for FY 2022
£575,000 for Jody Ford and £400,000 for Shaun McCabe
The CEO’s pension contributions align with the broader workforce.
The CFO has agreed to reduce pension contributions such that alignment with the broader
workforce (currently c.5.5% of salary) is achieved by the end of FY 2023.
Any new hires are to be offered a pension consistent with the prevailing rate for the broader
workforce.
As per FY 2021
Awards of up to 200% of normal salary for CEO and 150% of salary for CFO, based on the
achievementofGroupfinancialtargetsandspecificandquantifiablestrategic(weighted75%
of maximum) and personal objectives (weighted 25% of maximum). Awards earned above
100% of salary deferred in shares for two years.
Awards of 250% of salary based on EPS, Relative TSR and Revenue, of which 50% of salary is
based on the achievement of exceptional performance levels.
Actual
FY 2021
achievement
Resulting bonus
outcome
(% of total bonus)
£783.1m
£67.1m
£(24.9)m
0%
0%
0%
0% out of 75%
Resulting bonus
outcome
(% of total bonus)
Clare Gilmartin
Jody Ford
Shaun McCabe
0% out of 25%
0% out of 25%
0% out of 25%
Trainline
Annual Report and
Accounts 2020/21
69
Remuneration policy overview
This section of the report provides a summary of our Remuneration Policy which was approved by shareholders at the
2020 AGM. The full Remuneration Policy is available in our FY 2020 Annual Report.
Consistency with the UK Corporate Governance Code
The Committee is satisfied the principles of the UK Corporate Governance Code relating to the design of remuneration
policies and practices have been applied:
Clarity: we ensure pay for performance and our policy is designed to be logical and transparent.
Simplicity: Executive Director remuneration comprises a regular package including fixed pay, and short and long-term
variable pay.
Risk: a significant proportion of the Executive Director remuneration package is delivered in long-term or deferred pay
which ensures the longer-term impact of decisions is reflected in pay. Furthermore, the combination of in-post and post-
employment shareholding requirements, as well as capturing several categories of performance in the variable pay
elements, helps to ensure multiple mechanisms through which to expose senior executive pay to inadequate risk
management.
Predictability: variable pay is subject to the achievement of specific and transparent performance targets, and the
Committee has the ability to apply its discretion to ensure variable pay outcomes reflect underlying corporate health.
Proportionality: the Executive Director pay mix is similar to that at comparable companies, and the Committee has the
ability to apply its discretion to ensure overall pay outcomes are proportionate to the Group’s long-term performance.
Alignment to culture: variable pay captures several categories of performance, including non-financial objectives, helping to
ensure pay reflects multiple perspectives on performance, and not just financial outcomes.
Executive Directors’ remuneration policy table
The table below sets out the individual elements of Executive Directors’ remuneration, how each element operates, and the
maximum opportunity and any applicable performance measures.
Element
Salary
Purpose and link to strategy
Policy
To recruit and retain high-calibre
Executive Directors.
Salaries are typically reviewed annually, on 1 April. Base salaries are determined
taking intoaccountanumberoffactors,including:theindividual’srole,
responsibilities, and performance; salary levels at comparable companies, adjusted
to reflect scale; and salary increases for the wider workforce.
Pension
To provide appropriate retirement
plans.
The Executive Directors currently participate in the Company’s pension scheme, and
the Company makes contributions on their behalf.
Annual Bonus &
Deferred Share
Bonus Plan
(‘DSBP')
Toincentiviseand rewardthe
achievementofannual financialand
non-financialtargets,in linewiththe
Company’s strategic priorities.
Performance objectives are reviewed at the beginning of each year to ensure
that the bonus opportunity, performance measures, targets and weightings are
appropriate. The level of pay-out is determined by the Committee after the year-end,
based on performance against targets and any additional factors they deem relevant.
To directly align the interests of
Executive Directors and shareholders
and support retention through
long-term deferral in shares.
Any annual bonus earned above a threshold of 100% of salary is deferred in shares for
a period of two years.
The maximum annual bonus opportunity is 200% of salary.
Performance
Share plan
(‘PSP')
To incentivise and reward the delivery
of long-term shareholder value and
the achievement of long-term
financial targets.
Awards are made annually, with vesting dependent on the achievement of
performance conditions. Performance conditions are reviewed prior to grant to
ensure that the award level, performance measures, targets and weightings are
appropriate.
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Awards normally vest based on performance measured over a minimum of three
years. The level of vesting is determined by the Committee after the performance
period, based on the degree to which the performance conditions have been met. In
adjudicating the final vesting outcome, the Committee will also consider the underlying
performanceofthebusiness,as wellasthevaluecreatedforshareholders.
A two-year holding period will apply to vested PSP awards during which vested shares
may not be sold save to cover tax liabilities.
The maximum annual award level is 250% of salary. The maximum award level for a
new joiner Executive Director’s first award is 400% of salary.
The Company operates an HMRC-approved plan that provides all employees with a
tax-efficient way of purchasing Partnership Shares and allows the grant of Free and/
or Matching Shares. Executive Directors are entitled to participate in the SIP on the
same terms as other employees.
Share Incentive
Plan (‘SIP')
To encourage employee share
ownership and further support
shareholder alignment.
Financial Statements
70
Trainline
Annual Report and
Accounts 2020/21
Annual report on remuneration
The following section sets out our Annual Report on Remuneration, outlines decisions made by the Committee in relation
to Directors’ remuneration in respect of FY 2021 and how the Committee intends to apply the Remuneration Policy for FY
2022. The Annual Report on Remuneration will be subject to an advisory shareholder vote at the AGM to be held on
1 July 2021. Where information has been audited, this has been stated. All other information in this report is unaudited.
Role and responsibilities of the Remuneration Committee
Detailed responsibilities are set out in the Committee’s terms of reference, which may be found at www.investors.thetrainline.com.
The Committee currently consists of four independent Non-executive Directors. The Committee invites other individuals
such as the Chair of the Board, Chief Executive Officer, Chief Financial Officer, Chief People Officer and external consultants
to attend its meetings when appropriate. No Director takes any part in any decision affecting his or her own remuneration.
Advisors
Up to 31 December 2020, the Committee’s advisor was Mercer. As a result of the lead advisor moving to Ellason, the
Committee appointed Ellason as advisor in January 2021, and during FY 2022 the Committee will review the provision of its
advice. Ellason attends Committee meetings, reports directly to the Committee Chair, and is a signatory and adheres to the
Code of Conduct for Remuneration Consultants (which can be found at www.remunerationconsultantsgroup.com). Ellason
was paid fees of £38,030 for its services to the Committee during the year, excluding expenses and VAT, in accordance with
its letter of engagement.
Prior to Ellason’s appointment, the Committee received advice from Mercer, to whom fees of £47,932, excluding expenses
and VAT, were paid for the period to 31 December 2020.
Shareholder voting
The table below sets out the voting outcome for the remuneration report and the remuneration policy at the 2020 AGM.
Remuneration report
Remuneration policy
Votes For
Votes Against
Votes Withheld
Number of
shares (m)
428.8
428.7
Percentage
99.9
99.9
Number of
shares (m)
Percentage
Number of
shares (m)
0.5
0.6
0.1
0.1
3.6
3.6
Implementation of the Remuneration Policy in FY 2021
Single figure of total remuneration for Executive Directors (Audited)
The following table sets out the single figure of total remuneration for Executive Directors in FY 2021. In recognition of the
uncertainty generated by COVID-19, Clare Gilmartin and Shaun McCabe volunteered to take a salary reduction of 50% and
20% respectively, which was effective from 20 April 2020 to 1 August 2020 and deferred payment of their FY 2020 annual
bonus until October 2020.
Clare Gilmartin
Jody Ford2
Shaun McCabe
Salary
(000)
£480
£227
£377
Pension
(000)
Benefits
(000)
Total fixed
(000)
£84
£11
£41
£24
£1
£3
£588
£239
£421
Annual
bonus
(000)
£0
£0
£0
PSP1
(000)
£0
£0
£0
Total
variable
(000)
Total
remuneration
(000)
£0
£0
£0
£588
£239
£421
1 No PSP vesting occurred in the period.
2
Jody Ford joined the Company as COO on 21 September 2020 and became CEO on 1 March 2021.
The single figure of total remuneration for Executive Directors for FY 2020, the period from Admission (26 June 2019) to
29 February 2020, (audited) was:
Clare Gilmartin
Jody Ford2
Shaun McCabe
Salary
(000)
£392
n/a
£273
Pension
(000)
Benefits
(000)
Total fixed
(000)
£61
n/a
£29
£17
n/a
£2
£469
n/a
£303
Annual
bonus
(000)
£451
n/a
£247
PSP1
(000)
£0
n/a
£0
Total
variable
(000)
Total
remuneration
(000)
£451
n/a
£247
£920
n/a
£550
1 No PSP vesting occurred in the period.
2
Jody Ford joined the Company as COO on 21 September 2020 and became CEO on 1 March 2021.
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71
Single figure of total remuneration for Non-executive Directors (Audited)
The following table sets out the single figure of total remuneration for Non-executive Directors in FY 2021. In recognition of
the uncertainty generated by COVID-19, from 20 April 2020 to 1 August 2020, the Chair and the Non-executive Directors
volunteered a 20% reduction to their base fees.
Andy Phillipps1
Brian McBride
Duncan Tatton-Brown
Jennifer Duvalier2
Kjersti Wiklund
1
2
Joined the Board on 1 January 2021.
Joined the Board on 1 October 2020.
Fees
(000)
£10
£250
£72
£29
£72
Taxable
benefits
(000)
£0
£0
£0
£0
£0
Total fees
(000)
£10
£250
£72
£29
£72
The single figure of total remuneration for Non-executive Directors for FY 2020, the period from Admission (26 June 2019) to
29 February 2020, (audited) was:
Andy Phillipps1
Brian McBride
Douglas McCallum2
Duncan Tatton-Brown
Jennifer Duvalier3
Kjersti Wiklund
Philipp Freise4
Franziska Kayser5
Joined the Board on 1 January 2021.
1
2 Resigned from the Board on 5 November 2019.
3
Joined the Board on 1 October 2020.
Fees
(000)
n/a
£111
£86
£51
n/a
£51
£0
£0
4 Resigned from the Board on 12 November 2019.
5 Resigned from the Board on 20 September 2019.
Taxable
benefits
(000)
n/a
£0
£0
£0
n/a
£0
£0
£0
RSU
(000)
n/a
£300
£0
£0
n/a
£0
£0
£0
Total fees
(000)
n/a
£411
£0
£51
n/a
£51
£0
£0
Notes to the tables (Audited)
Base salary
During FY 2021 the annual salaries of the Executive Directors were £575,000 (FY 2020: £575,000) for Clare Gilmartin as CEO
and £400,000 (FY 2020: 400,000) for Shaun McCabe as CFO. Jody Ford was appointed to the Board as COO on 21 September
2020 on a salary of £500,000.
Pension
During FY 2021, Clare Gilmartin, Shaun McCabe and Jody Ford received pension benefits by way of cash allowances equal to
15% (FY 2020: 15%), 10.5% (FY 2020: 10.5%) and 5.5% of salary respectively.
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Annual report on remuneration continued
Annual bonus
The maximum bonus opportunities for FY 2021 were 200% of salary for Clare Gilmartin as CEO (FY 2020: 200%) and 150% of
salary for each of Jody Ford and Shaun McCabe (FY 2020: 150%). The annual bonus is based on the achievement of Group
financial targets weighted 75% and a set of specific and quantifiable strategic objectives weighted 25%. Performance targets
and actual outturn are set out below.
Financial element
Measure
Group Net Sales
Group Revenue
Group Adjusted EBITDA3
Total
Performance targets
Weighting
(% of total bonus)
Threshold1
Target2
Stretch
25% £1,044.5m £1,232.7m £1,420.9m
£94.5m
25%
£9.5m
25%
£81.3m
£5.5m
n/a
£1.5m
75%
Actual
FY 2021
achievement
Resulting bonus
outcome
(% of total bonus)
£783.1m
£67.1m
£(24.9)m
0%
0%
0%
0% out of 75%
1 Achievement results in 0% of maximum payout.
2 Achievement results in 50% of maximum payout.
3 See page 140 for the definition of Group Adjusted EBITDA.
Due to the uncertainty generated by COVID-19, targets for financial performance measures and some strategic objective
measures were based upon performance in H2 FY 2021 only, with the total bonus opportunity prorated by 50% to represent
the six-month time frame. Given the continued impact of COVID-19 and the reintroduction of increased travel restrictions in
key markets, the H2 FY 2021 target for Group adjusted EBITDA was not achieved and as a result no FY 2021 annual bonus will
be paid to the Executive Directors in respect of financial performance measures.
Strategic element
Clare Gilmartin
Jody Ford
Shaun McCabe
Weighting
(% of total bonus)
25%
Resulting bonus
outcome
(% of total bonus)
0% out of 25%
0% out of 25%
0% out of 25%
The Committee considered the successful achievement of key strategic targets by the Executive Directors when reviewing
the FY 2021 annual bonus outcome, however in the context of the Company’s underlying business and financial performance
for FY 2021 no payment will be made.
The resulting bonus outcomes for FY 2021 for the Executive Directors are set out below.
Executive Director
Clare Gilmartin
Shaun McCabe
Jody Ford
Annual bonus
outcome
(% of maximum)
Annual bonus
outcome
(% of salary)
Annual bonus
outcome
(000)
0%
0%
0%
0%
0%
0%
£0
£0
£0
PSP awards granted in FY 2021
The Executive Directors received awards under the PSP as set out in the table below:
Executive Director
Clare Gilmartin
Jody Ford
Shaun McCabe
Date of grant
22 May 2020
16 Nov 2020
22 May 2020
Number of
shares granted
Share price
of grant
304,148
495,610
211,581
£3.781
£3.531
£3.781
Face value
£1.15m
£1.75m
£0.8m
Award as %
of salary
Vesting date
200%1 2 22 May 20233
350%4 22 May 2023
200%1 2 22 May 2023
1 Up to an additional 25% of the PSP award (50% of salary) is structured as a kicker based on exceptional EPS and relative TSR performance.
2 FY 2020: 200% of salary.
3 The grant lapsed on 1 March 2021 following Clare Gilmartin’s resignation as CEO.
4
In accordance with the Remuneration Policy and to help ensure Jody’s exposure to the share price, and alignment with shareholders, is maximised a one-off
new joiner award of 400% of salary was granted to Jody Ford on 16 November 2020. Up to an additional 50% of salary of the PSP awards is structured as a
kicker based on exceptional EPS and relative TSR performance.
Trainline
Annual Report and
Accounts 2020/21
73
The vest period for these awards is three years from grant followed by a two-year post-vest holding period. Dividend
equivalents will not accrue in respect of the awards over the period from the date of grant to the vesting date.
Vesting of up to 50% of the award is based on EPS, as set out below:
Executive Director
EPS¹ for FY 2023
1 The EPS measure is Basic EPS with the impact of share-based payments excluded.
Vesting of up to 50% of the award is based on relative TSR, as set out below:
Measure
Relative TSR vs. FTSE 250 excluding investment trusts
Performance targets
Threshold
(20% vesting)
Median
(50% vesting)
Stretch
(100% vesting)
8.74p
11.23p
13.73p
Performance targets
Threshold
(20% vesting)
Stretch
(100% vesting)
Median
Upper quartile
Up to an additional 50% of salary of the PSP awards can be earned as a PSP kicker based on exceptional EPS and relative TSR
performance. It will vest only if the stretch EPS target (13.73p) has been achieved, and then only if relative TSR is above upper
quartile as follows:
Measure
Relative TSR vs. FTSE 250 excluding investment trusts
Performance targets
Threshold
(0% vesting)
Stretch
(100% vesting)
Upper quartile
Upper decile
The performance period for these awards is TSR for the period 1 March 2020 to 28 February 2023, and for EPS the three
financial years ending 28 February 2023.
The Committee considered the volatility in the Company’s share price when determining PSP grants and used the longest
average period permitted under the plan rules when determining the grant share price (30 calendar days average daily
MMQ) to help reduce the sensitivity to short-term share price movements. The Committee will ensure that any vesting of the
FY 2021 PSP cycle is consistent with the stakeholder experience over this uncertain period, taking into account perspectives
of shareholders, employees and customers, as well as other factors such as the mitigation of any windfall gains.
Deferred share bonus plan (‘DSBP’) awards granted in FY 2021
No DSBP awards were granted in FY 2021 (FY 2020: none).
Leaving arrangements for Clare Gilmartin
As Clare is a voluntary leaver, she will not receive any severance payment or pay in lieu of notice. As Clare continued in the
role of CEO through to the end of the financial year Clare was eligible for any annual bonus that was payable in respect of FY
2021 but none was paid. In line with the remuneration policy and the rules of the respective plans, Clare’s outstanding PSP
and DSBP grants lapsed on 28 February 2021. Clare is required to retain a shareholding equivalent to 200% of salary for a
period of two years from 28 February 2021, compliance with which will be monitored by the Company.
Arrangements for Jody Ford
Jody joined Trainline on 21 September 2020 as COO and succeeded Clare Gilmartin as CEO on 1 March 2021. All pay and
benefits have been set in line with the current remuneration policy. Jody’s CEO salary has been set at a level that the
Committee regards as appropriate for the size and scope of the role. In line with the remuneration policy, Jody also receives
benefits including private medical cover. Jody is required to build up a shareholding of 200% of base salary and is subject to
the Remuneration Policy’s post-employment shareholding requirement. There were no buyout arrangements for Jody.
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Annual Report and
Accounts 2020/21
Annual report on remuneration continued
Legacy items
Clare Gilmartin and Shaun McCabe were subject to a 365-day lock-up period which expired on 26 June 2020 for the balance of
their shares following admission of 8,513,397 shares and 2,612,879 shares respectively. Further details can be found in the FY
2020 Annual Report Directors’ Remuneration Report.
Payments for loss of office
No payments for loss of office were made during the year under review (FY 2020: none).
Payments to past Directors
No payments were made to past Directors during the year under review (FY 2020: none).
Pay ratio information in relation to the remuneration of the CEO
The table below provides disclosure of the ratio between the CEO’s salary and total remuneration and that of the lower
quartile, median and upper quartile UK-based employee.
Financial year
Calculation
methodology
P25
(lower quartile)
P50
(median)
P75
(upper quartile)
FY 2021
FY 20201
A
A
Total remuneration ratio
Total remuneration (£000)
Salary ratio
Salary (£000)
Total remuneration ratio
Total remuneration (£000)
Salary ratio
Salary (£000)
14.4:1
£41
13.3:1
£36
32.1:1
£29
16.4:1
£24
8.4:1
£70
7.4:1
£65
19.6:1
£47
9.3:1
£42
6.3:1
£93
5.7:1
£85
14.3:1
£64
7.1:1
£56
CEO
£588
£480
£920
£392
1 The figures for FY 2020 are for the 10 months from Admission to the end of the financial year.
The lower quartile, median and upper quartile employees were determined using calculation methodology A which involved
calculating the actual full-time equivalent remuneration for all UK employees for FY 2021. From this analysis, three
employees were then identified as representing the 25th, 50th and 75th percentile of the UK employee population. Trainline
chose this method as it is the preferred approach of the government and that of shareholders, and the Company had the
systems in place to undertake this method.
The Committee has considered the pay data for the three employees identified and believes that it fairly reflects pay at the
relevant quartiles amongst our UK workforce. The three individuals identified were full-time employees during the year.
None received an exceptional incentive award which would otherwise inflate their pay figures. Assumptions were made
regarding taxable benefits for employees given some data was unavailable, however the methodology used was consistent
with the methodology used to calculate the single figure of the CEO.
The CEO pay ratio is based on comparing the former CEO’s pay to that of Trainline’s UK-based workforce, the largest
proportion of whom work in our technology teams developing and maintaining our platform. The ratio reduced from 19.6 in
FY 2020 to 8.4 in FY 2021 primarily as a result of no annual bonus payout being made for FY 2021 (compared to a 58%
achievement in FY 2020) which has a more significant impact on the CEO’s pay outcomes given the greater weighting on
variable pay for our more senior executives. The Committee expects that the ratios will continue to be largely driven by the
CEO’s incentive pay outcomes, which will likely lead to greater variability in pay than that observed at lower levels who,
consistent with market practices, have a greater proportion of their pay linked to fixed components. The Committee takes
into account these ratios when making decisions around the Executive Director pay packages, and Trainline takes seriously
the need to ensure competitive pay packages across the organisation.
Relative importance of spend on pay
The table below shows the change in total employee pay, as detailed in Note 5 of the financial statements. No dividends or
share buybacks have occurred since Listing.
Total gross employee pay
Revenue
Group Adjusted EBITDA1
1 See page 140 for the definition of Group Adjusted EBITDA.
% change
FY 2021 £m
FY 2020 £m
(9)%
(74)%
(71)%
£60
£67
£25
£66
£261
£85
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Annual Report and
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75
Percentage change in Directors’ and employee remuneration
The table below shows the percentage change in individual Directors’ salary, benefits and annual bonus between FY 2020
and FY 2021 compared to the average percentage change for all employees of the Group for the same elements of
remuneration. To provide a more accurate percentage change the remuneration data for FY 2020, which represents a
10-month reporting period, has been prorated to a 12-month period.
Executive Directors
Clare Gilmartin
Jody Ford2
Shaun McCabe
Non-executive Directors
Andy Phillipps3
Brian McBride
Duncan Tatton-Brown
Jennifer Duvalier5
Kjersti Wiklund
Employees
Change in FY 2021 against FY 2020 (%)
Salary/fees
Benefits
Annual Bonus
(17)%1
n/a
(6)%1
n/a
53%1 4
(4)%1
n/a
(5)%1
6%
(5)%
n/a
(3)%
n/a
(100)%
n/a
n/a
n/a
2%
(100)%
n/a
(100)%
n/a
n/a
n/a
n/a
n/a
(100)%
In recognition of the uncertainty generated by COVID-19 the Director voluntarily reduced their salary/fee from April 2020 to August 2020.
Joined the Board on 21 September 2020.
Joined the Board on 1 January 2021.
1
2
3
4 Brian’s fee as Chair of the Board has not changed. The percentage change represents his revised fee following his change in role from Deputy Chair and
Senior Independent Non-executive Director to Chair of the Board on 4 November 2020.
Joined the Board on 1 October 2020.
5
Historical TSR performance and remuneration outcomes for the CEO
The graph below compares the Company’s TSR against the FTSE 250 Index excluding investment trusts, of which the
Company is now a constituent. Performance, as required by legislation, is measured by TSR over the period from
commencement of conditional dealing (21 June 2019) to 28 February 2021.
Trainline
FTSE 250 Index
180
160
140
120
100
80
60
40
20
0
06/2019
07/2019
08/2019
09/2019
10/2019
11/2019
12/2019
01/2020
02/2020
03/2020
04/2020
05/2020
06/2020
07/2020
08/2020
09/2020
10/2020
11/2020
12/2020
01/2021
02/2021
The table below illustrates Clare Gilmartin’s single figure of total remuneration over the same period.
Single figure (£000)
Annual bonus outcome (% of max)
PSP vesting (% of max)
1 The figures for FY 2020 are for the 10 months from Admission to the end of the financial year.
FY 2021
FY 20201
588
0%
n/a
920
57.6%
n/a
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Annual report on remuneration continued
Implementation of the Remuneration Policy in FY 2022
Executive Director remuneration in FY 2022
A summary of how the current Remuneration Policy will be applied to Executive Director remuneration for FY 2022 is set out
below.
Base salary
Jody Ford’s salary, on his appointment to CEO on 1 March 2021 was increased to £575,000 in line with the salary previously
paid for this role. No change has been made to Shaun McCabe’s salary for FY 2022.
Executive Director
Jody Ford
Shaun McCabe
FY 2021
FY 2022
£500,0001
£400,000
£575,000
£400,000
1 On joining the Company as COO, Jody Ford’s annual salary was £500,000.
Pension and benefits
For FY 2022, the CEO and the CFO will receive pension benefits by way of cash allowances of 5.5% and 10.5% of salary respectively,
in line with the Remuneration Policy.
Annual bonus
The FY 2022 annual bonus will be consistent with that detailed in the Remuneration Policy, with maximum opportunities of
200% and 150% of normal salary for the CEO and the CFO, respectively, and with measures based on a range of financial and
strategic metrics, and personal objectives. The Committee will ensure any payout of the FY 2022 annual bonus is consistent
with the stakeholder experience over this uncertain period, taking into account perspectives of shareholders, employees,
and customers.
Long-term incentive
The intention is for the CEO and the CFO to receive awards under the PSP of 250% of salary with vesting based on EPS,
Relative TSR and Revenue measured over three years, with 50% (out of 250%) of salary subject to the delivery of exceptional
performance levels. Revenue is included in these awards to reinforce the Company’s ambitious growth strategy. The relative
TSR targets will be based on the same performance range as for the FY 2020 awards. The targets will be disclosed in the
announcement of the PSP grant. The number of shares under grant will be determined at the time of the grant, taking into
consideration historical prices and more recent share price performance relative to sector peers and the broader market. As
with the FY 2021 annual bonus, the Committee will ensure that any vesting of the FY 2021 PSP cycle is consistent with the
stakeholder experience over this uncertain period, taking into account perspectives of shareholders, employees and
customers, as well as other factors such as the mitigation of any windfall gains.
Non-executive Director fees in FY 2022
Non-executive Director fees are determined by the Board within the limit approved by shareholders in the Articles of
Association, with the exception of the Chair of the Board, whose remuneration is determined by the Committee.
Basic fee
Company Chair
Non-executive Director
Additional fees
Senior Independent Director
Audit and Risk Committee Chair
Remuneration Committee Chair
Fee at
1 March 2020
Fee from
1 Mar 2021
£265,000
£60,000
£265,000
£60,000
£10,000
£15,000
£15,000
£10,000
£15,000
£15,000
External appointments
We recognise the opportunities and benefits to both the Company and to the Executive Directors of serving as Non-
executive Directors of other companies. The Executive Directors are permitted to hold one significant external appointment
and are entitled to retain the fees earned from such appointments. All Directors are required to seek approval from the
Board prior to accepting external appointments.
Trainline
Annual Report and
Accounts 2020/21
77
Outstanding share awards (Audited)
Details of outstanding share awards in the Company’s share schemes granted to the Directors as at 28 February 2021, are set
out in the table below.
Director
Jody Ford
Shaun McCabe
Clare Gilmartin
Brian McBride
Award type
Date of grant
Number of
shares granted
Share price
of grant
Face value
Award as %
of salary
Vesting date
PSP 16 Nov 2020
PSP
31 Jul 2019
PSP 22 May 2020
PSP
31 Jul 2019
PSP 22 May 2020
RSU 26 Jun 2019
RSU 26 Jun 2019
495,610
186,915
211,581
268,691
304,148
28,571
28,572
£3.531
£4.28
£3.781
£4.28
£3.781
£3.50
£3.50
£1.75m
£0.8m
£0.8m
£1.15m
£1.15m
£0.1m
£0.1m
350%1 22 May 2023
200%2 28 Feb 2022
200%2 22 May 2023
200%2 28 Feb 20223
200%2 22 May 20233
38% 26 Jun 20214
38% 26 Jun 20224
1
In line with the Policy and the rules of the PSP, Jody Ford’s initial PSP grant on joining the Company was for 400% of salary, of which 350% of salary is for core
performance with up to an additional 50% of salary structured as a kicker based on exceptional EPS and relative TSR performance.
2 Up to an additional 25% of the PSP award (50% of salary) is structured as a kicker based on exceptional EPS and relative TSR performance.
3 Lapsed on 1 March 2021 following Clare Gilmartin’s resignation as CEO.
4 Vesting subject to his continued appointment to the Board in equal tranches over the three years following Admission and required to hold the vested shares
so long as he remains a Director of the Company.
Statement of Directors’ shareholding and share interests (Audited)
The table below shows the beneficial interests of Directors on 28 February 2021 (including the beneficial interest of their
spouses, civil partners, children, and stepchildren) in the Ordinary Shares of the Company, as well as unvested awards.
Interests
Ordinary
Shares held at
1 March 2020
Ordinary
Shares held at
28 Feb 2021
Subject
to deferral/
holding period
Unvested and
subject to
performance
conditions
Shareholding
requirement as
% of salary
Current
Shareholding
as % of salary1
Shareholding
requirement
met?
Executive Directors
Jody Ford2
Shaun McCabe
Former Executive Director
Clare Gilmartin
Non-executive Directors
Andy Phillipps4
Brian McBride
Duncan Tatton-Brown
Jennifer Duvalier5
Kjersti Wiklund
0
2,612,879
69,287
2,012,879
8,513,397
7,629,239
74,237
28,571
28,571
0
2,142
74,237
57,142
28,571
0
2,142
0
0
0
57,143
495,610
398,496
200%
200%
62%
2,604%
572,8393
200%
6,866%
No
Yes
Yes
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Joined the Board on 21 September 2020.
1 Calculated using the closing price on 26 February 2021, the last market day of FY 2021, of £5.71 per share.
2
3 Lapsed on 1 March 2021 following Clare Gilmartin’s resignation as CEO.
4
5
Joined the Board on 1 January 2021.
Joined the Board on 1 October 2020.
Executive Director shareholding guidelines
Shareholding guidelines are in place whereby Executive Directors are encouraged to build and maintain over time a
shareholding in the Company with a value of equivalent to at least 200% of their base salary commencing on the date of their
appointment to the Board.
Executive Directors are subject to a post-employment shareholding guideline. Executive Directors will normally be expected
to maintain a holding of Trainline shares at a level equal to the lower of the in-post shareholding guideline and the
individual’s actual shareholding for a period of two years from the date the individual ceases to be a Director. The specific
application of this shareholding guideline will be at the Committee’s discretion. The post-employment guideline introduced
at the 2020 AGM will be policed through the holding of vested PSP awards granted after the 2020 AGM and through the
monitoring of shareholdings by the Company.
Financial Statements
78
Trainline
Annual Report and
Accounts 2020/21
Annual report on remuneration continued
Executive Directors’ service contracts and termination remuneration policy
The Executive Directors have service contracts with an indefinite term, which are terminable by either the Company or the
Executive Director on 12 months’ notice. The service contracts make provision, at the Board’s discretion, for early termination
involving payment of salary and other emoluments in lieu of notice.
Effective dates of Executive Director service contracts are set out in the table below.
Executive Director
Jody Ford
Shaun McCabe
Date of contract
21 September 2020
12 June 2019
Non-executive Director letters of appointment
The Non-executive Directors have letters of appointment, the terms of which recognise that their appointments are subject
to the Company’s Articles of Association and their services are at the discretion of the shareholders. The appointment letters
for the Non-executive Directors provide that no compensation is payable on termination, other than any accrued fees and
expenses. The table below shows the appointment and expiry dates for the Non-executive Directors.
Non-executive Director
Effective date of appointment
Expiry of appointment
Andy Phillipps
Brian McBride
Duncan Tatton-Brown
Jennifer Duvalier
Kjersti Wiklund
1 January 2021
10 June 2019
10 June 2019
1 October 2020
10 June 2019
AGM 2023
AGM 2022
AGM 2022
AGM 2023
AGM 2022
Consideration of wider employee views and shareholders
In reviewing remuneration outcomes for FY 2021, the Committee has taken into account the internal context, including the
remuneration arrangements that apply for other employee groups, recent developments in the UK governance landscape
for executive remuneration, and the views of our shareholders.
Remuneration arrangements throughout the Group
Remuneration arrangements throughout the Group are based on the same high-level remuneration principles as for the
Executive Directors. Annual salary reviews take into account personal performance, Group performance, local pay and
market conditions, and salary levels for similar roles in comparable companies.
Mid-level staff are eligible to participate in annual bonus schemes; opportunities and performance measures vary by
organisational level, and an individual’s role. Senior executives are eligible for PSP awards on similar terms to Executive
Directors, although award opportunities are lower and vary by organisational level; other staff are eligible to participate in a
restricted stock plan. All UK employees are eligible to participate in the Share Incentive Plan on identical terms and we also
offer similar all-employee share plans to overseas colleagues.
Approved by the Board on 6 May 2021
Kjersti Wiklund
Chair of the Remuneration Committee
6 May 2021
Trainline
Annual Report and
Accounts 2020/21
79
Directors’ report
The Directors present their report, together with the audited Financial Statements for the year ended 28 February 2021.
Compliance with the UK Corporate Governance Code 2018
This Annual Report has been prepared with reference to the UK Corporate Governance Code 2018 published by the UK
Financial Reporting Council (‘FRC') in July 2018 (the ‘Governance Code’). During the year the following steps were taken to
resolve the outstanding areas of non-compliance with the Governance Code:
• the appointment of Jennifer Duvalier as the Senior Independent Non-executive Director on 1 October 2020 (Provision 12)
• the initiation of the Board’s workforce engagement mechanism following Jennifer Duvalier’s appointment (Provision 5)
• the period from 21 September 2020 to 1 October 2020 during which the Independent Non-executive Directors, excluding
the Chair, represented just under half of the Board (Provision 11)
From 1 October 2020 onwards the Company applied the Main Principles and complied with the relevant provisions set out in
the Governance Code. Details demonstrating how the main principles and relevant provisions of the Governance Code have
been applied can be found below in the Directors’ Report and throughout the Corporate Governance Report, each of the
Board Committee reports and the Strategic Report. The Corporate Governance Report, each of the Board Committee reports
and the Strategic Report for their Corporate Governance disclosures all form part of the Directors’ Report. The Financial
Reporting Council (‘FRC') is responsible for the publication and periodic review of the Governance Code, which can be found
on the FRC website www.frc.org.uk.
Diversity and inclusion
Our Diversity and Inclusion policies support managers and employees in creating a diverse and inclusive culture where
everyone is welcome. Our policies demonstrate our commitment to providing equal opportunities to all employees,
irrespective of age, disability, gender, marriage and civil partnership, pregnancy or maternity, race, religion or belief, sex or
sexual orientation.
Disclosure of information to auditors
The Directors who held office at the date of approval of this Annual Report confirm that, so far as they are each aware, there
is no relevant audit information of which the Company’s auditors are unaware; and each Director has taken all the steps that
he or she ought to have taken as a Director to make himself or herself aware of any relevant audit information and to
establish that the Company’s auditors are aware of that information.
Insurance and indemnities
The Company maintained Directors’ and Officers’ Liability Insurance cover throughout the period. The Directors are also able
to obtain independent legal advice at the expense of the Company, as necessary, in their capacity as Directors. The Company
has entered into a deed of indemnity in favour of each Board member. These deeds of indemnity are still in force and provide
that the Company shall indemnify the Directors to the fullest extent permitted by law and the Articles, in respect of all losses
arising out of, or in connection with, the execution of their powers, duties and responsibilities as Directors of the Company or
any of its subsidiaries. This is in line with current market practice and helps us attract and retain high-quality, skilled Directors.
Subsidiaries, branches and principal activities
The Company is the holding company for a group of subsidiaries (‘the Group’) whose principal activities are described in this
Annual Report. The Group’s subsidiaries and their locations are set out in Note 24 in the Financial Statements. In accordance
with the Companies Act 2006, the Board confirms that there were no branches of the Company or its subsidiaries during the
financial year.
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Directors’ report continued
Share capital
Details of the Company’s share capital including changes during the period are given in note 18 to the Financial Statements.
There are no restrictions on voting rights or the transfer of shares in the Company and the Company is not aware of
agreements between holders of securities that result in such restrictions. No shareholder holds securities carrying special
rights with regards to control of the Company. The Company had been notified under Rule 5 of the FCA’s Disclosure Guidance
and Transparency Rules of the following interests in voting rights in its shares. The latest information on major shareholders
is available via the Regulatory Information Service or on the Company’s Investor Relations website.
T. Rowe Price Associates, Inc.
Baillie Gifford
The Capital Group Companies, Inc.
Jupiter Fund Management Plc
BlackRock, Inc.
Invesco Ltd.
% of total
voting rights as
at 28 Feb 2021
% of total
voting rights as at
the date of this report
15.04%
11.02%
9.54%
5.79%
5.74%
5.15%
15.00%
11.02%
9.54%
5.79%
5.74%
5.15%
The Company was authorised by shareholders to purchase its own shares in the market up to a maximum of approximately
10% of its issued share capital. No shares were purchased under that authority during the financial year. The Company is
seeking to renew the authority at the forthcoming AGM, within the limits set out in the notice of that meeting and inline with
the recommendations of the Pre-emption Group. Shares held by the Company’s Employee Benefit Trust (the ‘Trust’) rank pari
passu with the shares in issue and have no special rights. Voting rights and rights of acceptance of any offer relating to the
shares held in the Trust rests with the trustees, who may take account of any recommendation from the Company. Voting
rights are not exercisable by the colleagues on whose behalf the shares are held in trust.
Convertible Bonds due 2026 listed on the unregulated open market of the Frankfurt Stock Exchange (Freiverkehr)
The Company issued £150 million of senior unsecured Convertible Bonds due 2026 (the ‘Bonds’) on 7 January 2021. The net
proceeds of the Bonds will be used to provide liquidity and flexibility to invest in possible future growth opportunities. The
Bonds were issued at par and carry a coupon of 1.0% per annum payable semi-annually in arrears in equal instalments on
14 January and 14 July in each year, with the first interest payment date being 14 July 2021. The Bonds will be convertible into
ordinary shares of the Issuer (the ‘Ordinary Shares’). The initial conversion price shall be £6.6670, representing a premium of
50% above the reference share price of £4.444698, being the volume weighted average price (the ‘VWAP') of an Ordinary
Share on the London Stock Exchange on 7 January 2021. The conversion price will be subject to adjustment in certain
circumstances in line with market practice. Unless previously redeemed, or purchased and cancelled, the Bonds will be
convertible at the option of the bondholders on any day during the conversion period. The Company has the option to
redeem all, but not some only, of the Bonds on or after 4 February 2024, at par plus accrued interest, if the parity value (as
described in the Terms and Conditions relating to the Bonds) on each of at least 20 dealing days in a period of 30 consecutive
dealing days exceeds £130,000 (130%). The Company also has the option to redeem all outstanding Bonds, at par plus
accrued interest, at any time if 85% or more of the principal amount of the Bonds shall have been previously converted or
repurchased and cancelled.
Articles of Association and powers of the Directors
The Company’s Articles of Association contain the rules relating to the powers of the Company’s Directors and their
appointment and replacement. The Company’s Articles of Association may only be amended by special resolution at a
general meeting of the shareholders. Subject to the Company’s Articles of Association, the Companies Act and any directions
given by special resolution, the business of the Company will be managed by the Board which may exercise all the powers of
the Company, whether relating to the management of the business of the Company or not.
Events after the balance sheet date
There have been no balance sheet events since the end of FY 2021.
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Disclosure against TCFD and SASB frameworks
As part of Trainline’s journey to become a more sustainable business, Trainline is committed to reporting against the
Taskforce for Climate-Related Financial Disclosures (‘TCFD') framework and is making progress against its recommended
disclosures:
• We are currently working with climate consultants to agree our net zero ambitions, science-based targets and long-term
strategy for action, and will publish these later in the year. Our sustainability strategy will be informed by a materiality
exercise to help determine the most material climate-related risks facing the business.
• We have provided the Group’s GHG emissions below (Scope 1, 2 and some Scope 3 emissions), which we have offset. More
information on our offsetting is available on page 13.
We are also committed to report against the Sustainability Accounting Standards Board’s (‘SASB') reporting standards for the
‘Internet and Media Services’ industry, where they apply to Trainline. Disclosure can be found in relevant sections within this
report, including our people and culture on page 40, our technology on page 17 and principal risks and uncertainties on
pages 32 to 38. We intend to expand disclosure against both TCFD and SASB frameworks over time.
Global GHG emissions and energy use data
Current reporting year 2020-21 Previous reporting year 2019-20
UK and
offshore
Global
(excluding UK
and offshore)
UK and
offshore
Global
(excluding UK
and offshore)
Emissions from activities which the Company own or control including
combustion of fuel & operation of facilities (Scope 1)/tCO2e
Emissions from purchase of electricity, heat, steam, and cooling
purchased for own use (Scope 2, location-based)/tCO2e
Total gross Scope 1 & Scope 2 emissions/tCO2e
Total energy consumption used to calculate above emissions: /kWh
Intensity ratio: tCO2e gross figure based from mandatory fields
above/m² of office space
Intensity ratio: tCO2e gross figure based from mandatory fields
above/FTE
Emissions from purchased goods and services (Scope 3)/tCO2e
Emissions from employee business travel (Scope 3)/tCO2e
Emissions from disposal of waste generated in operations (Scope 3)/
tCO2e
Emissions from energy use in data centres (Scope 3)/tCO2e
Estimate of emissions associated with our workforce working from
home due to the COVID-19 pandemic (Scope 3, Cat.7) / tCO2e
69.85
41.81
84.36
42.01
148.34
218.20
1,016,200
2.89
44.71
280,879
238.65
323.01
1,392,555
0.05
0.33
2.78
0.62
0.31
18.69
0.02
0.89
0.46
–
0.02
5.54
369.23
44.25
0.09
0.57
5.72
81.17
1.22
20.02
–
6.21
48.22
346,620
0.02
0.79
0.54
156.29
0.13
7.21
–
Methodology: As a large, quoted company, Trainline is required to report its energy use and carbon emissions in accordance
with the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. The
data detailed in this table represent emissions and energy use for which Trainline is responsible, including energy use in our
offices. We have also included emissions associated with our use of our offices, such as from water use and waste sent for
recycling. We have reported emissions from energy use from data centres for a minority of our outsourced data processing
activities and are working to obtain activity data or a reasonable estimation methodology for the remainder of this emissions
source. In addition, we have estimated the extraordinary impacts of our workforce working from home due to the COVID-19
pandemic, and reported these emissions under Scope 3, Category 7 (Commuting) in accordance with the GHG Protocol Scope
3 reporting guidance. We do not have any company vehicles for which we purchase fuel directly.
We have used the main requirements of the Greenhouse Gas Protocol Corporate Standard to calculate our emissions, along
with the UK Government GHG Conversion Factors for Company Reporting 2020 and the IEA Emissions Factors 2020. Any
estimates included in our totals are derived from actual data extrapolated to cover missing periods. As this is Trainline’s second
year of reporting, we have reported on a like-for-like basis with last year’s data which is provided for comparison purposes.
Energy efficiency actions: Due to the impact of COVID-19, no energy efficiency actions were implemented in the reporting
year.
Financial Statements
82
Trainline
Annual Report and
Accounts 2020/21
Directors’ report continued
Going concern
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 including the next covenant test on 31 August 2022, and
the expected operational activities of the Group. 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 has therefore continued to
adopt the going concern basis in preparing the consolidated Financial Statements.
Significant agreements
Following a change of control of the Company, the holder of each of the Bonds will have the right to require the Company to
redeem that Bond at its principal amount, together with the accrued and unpaid interest or the bondholders may exercise
their conversion right using the formula as described in the Terms and Conditions relating to the Bonds.
Political and charitable donations
The Group did not make any political donations (FY 2020: £nil) or incur any political expenditure during the year (FY 2020:
£nil). During the year the Company made charitable donations totalling £75,285, of which £70,000 was donated to the
National Emergencies Trust for COVID-19, in addition to charitable donations via matched funding under the reporting
threshold to support the charitable fundraising efforts of our people.
Additional disclosures
Other information which is incorporated by reference into this report can be located as follows:
Other information relevant to the Directors’ Report
Page
Information required by Listing Rules 9.8.4R
Page
Likely future developments
Research and development
Group’s employees
Directors of the Company
Financial instruments and financial risk management
2 to 39
18 to 19
40 to 45
56 to 57
129 to 131
s.172 and relationships with stakeholders
Long-term incentive schemes
Directors' interests in shares
Statement of capitalised interest
46 to 49
68 to 78
77
106
The Directors’ Report, which has been prepared in accordance with the requirements of the Companies Act 2006, has been
approved by the Board and signed on its behalf by
Neil Murrin
Company Secretary
6 May 2021
Trainline
Annual Report and
Accounts 2020/21
83
Statement of Directors’ responsibilities
Statement of Directors’ responsibilities in respect of the Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual Report and the Group and Parent Company Financial Statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Parent Company Financial Statements for each financial year.
Under that law they are required to prepare the Group Financial Statements in accordance with International Accounting
Standards in conformity with the requirements of the Companies Act 2006 and applicable law and have elected to prepare
the Parent Company Financial Statements in accordance with UK accounting standards and applicable law, including FRS 101
Reduced Disclosure Framework. In addition the Group Financial Statements are required under the UK Disclosure Guidance
and Transparency Rules to be prepared in accordance with International Financial Reporting Standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union (‘IFRSs as adopted by the EU').
Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Group and Parent Company and of the Group’s profit or loss for that period. In
preparing each of the Group and Parent Company Financial Statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable, relevant, reliable and prudent;
•
•
for the Group Financial Statements, state whether they have been prepared in accordance with International Accounting
Standards in conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union (‘IFRSs as adopted by the EU');
for the Parent Company Financial Statements, state whether applicable UK accounting standards have been followed,
subject to any material departures disclosed and explained in the Parent Company Financial Statements;
• assess the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern; and
• use the going concern basis of accounting unless they either intend to liquidate the Group or the Parent Company or to
cease operations or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and
enable them to ensure that its Financial Statements comply with the Companies Act 2006. They are responsible for such
internal control as they determine is necessary to enable the preparation of Financial Statements that are free from material
misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
company’s website. Legislation in the UK governing the preparation and dissemination of Financial Statements may differ
from legislation in other jurisdictions.
Responsibility statement of the Directors in respect of the Annual Financial Report
We confirm that to the best of our knowledge:
• the Financial Statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the
consolidation taken as a whole; and
• the Strategic Report includes a fair review of the development and performance of the business and the position of the
issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal
risks and uncertainties that they face.
We consider the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s position and performance, business model and strategy.
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Shaun McCabe
Chief Financial Officer
6 May 2021
Financial Statements
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Financial
Statements
In this section
Independent auditor’s report
Consolidated income statement
86
95
Consolidated statement of other comprehensive income 96
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated cash flow statement
Notes to the Group Financial Statements
Parent statement of financial position
Parent statement of changes in equity
Notes to the parent financial statements
Alternative performance measures
97
98
99
100
136
137
138
140
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Financial Statements
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Trainline
Annual Report and
Accounts 2020/21
Independent auditor’s report
to the members of Trainline plc
1. Our opinion is unmodified
We have audited the Financial Statements of Trainline plc (‘the Company’) for the year ended 28 February 2021 which
comprise the consolidated income statement, consolidated statement of other comprehensive income, consolidated
statement of financial position, consolidated statement of changes in equity, consolidated statement of cash flows, Parent
Company statement of financial position and Parent Company statement of changes in equity, and the related notes,
including the accounting policies.
In our opinion:
•
the Financial Statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at
28 February 2021 and of the Group’s loss for the year then ended;
•
•
•
the Group Financial Statements have been properly prepared in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006;
the Parent Company Financial Statements have been properly prepared in accordance with UK accounting standards,
including FRS 101 Reduced Disclosure Framework; and
the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as
regards the Group Financial Statements, Article 4 of the IAS Regulation to the extent applicable.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law. Our
responsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate
basis for our opinion. Our audit opinion is consistent with our report to the Audit and Risk Committee.
We were first appointed as auditor by the Directors on 31 May 2019 which was prior to the Parent Company becoming a
public listed entity. The period of total uninterrupted engagement is for the two financial years ended 28 February 2021.
Prior to that we were also auditor to the Group’s previous UK Parent Company, but which, being unlisted, was not a public
interest entity. The period of total uninterrupted engagement for that previous UK Parent Company is for the 20 financial
years ended 28 February 2021. We have fulfilled our ethical responsibilities under, and we remain independent of the Group
in accordance with UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. No
non-audit services prohibited by that standard were provided.
Overview
Materiality: Group financial
statements as a whole
Coverage
Key audit matters
Recurring risks:
Group
Recurring risks:
Parent Company
£1.5 million (FY 2020: £2.0 million)
0.8% of four-year average revenue
(FY 2020: 0.8% of revenue)
100% (FY 2020: 91.5%) of Group revenue
vs 2020
Going Concern
Commission Revenue
Recoverable amount of goodwill –
International business
Recoverability of Parent Company’s
investment in subsidiaries
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the
Financial Statements and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. We summarise below the key audit matters, in decreasing order of
audit significance, in arriving at our audit opinion above, together with our key audit procedures to address those matters
and, as required for public interest entities, our results from those procedures. These matters were addressed, and our
results are based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the Financial
Statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not
provide a separate opinion on these matters.
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Annual Report and
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87
The risk
Our response
Going Concern
Audit and Risk Committee
Report pages 62-65
Accounting policy and
financial disclosure page
100
Disclosure quality
The Financial Statements explain how
the Board has formed a judgement
that it is appropriate to adopt the
going concern basis of preparation
for the Group and the Parent
Company.
We considered whether these risks could plausibly affect
the liquidity or covenant compliance in the going
concern period by assessing the Directors’ sensitivities
over the level of available financial resources and
covenant thresholds indicated by the Group’s financial
forecasts taking account of severe, but plausible,
adverse effects that could arise from these risks
individually and collectively.
That judgement is based on an
evaluation of the inherent risks to the
Group’s and the Parent Company’s
business model and how those risks
might affect the Group’s and the
Parent Company’s financial resources
or ability to continue operations over
a period of at least the next 12
months from the date of approval of
the Financial Statements including
consideration of the covenant test at
31 August 2022.
The risks most likely to adversely
affect the Group’s and the Parent
Company’s available financial
resources and metrics relevant to
debt covenants over this period were:
• COVID-19: The pandemic affecting
the global economy leading to
significant economic uncertainty
and a significant reduction in the
use of rail transport. In addition,
there is inherent estimation
uncertainty in the assumptions
used in the Group and Company’s
business model, particularly in
respect of COVID-19 including the
length of the period that the
reduction in the use of rail transport
will continue; and
• the Group’s ability to negotiate a
further adjusted EBITDA covenant
waiver in August 2022, in a severe
but plausible downside to avoid
alternative mitigating actions.
The risk for our audit was whether or
not those risks were such that they
amounted to a material uncertainty
that may have cast significant doubt
about the ability to continue as a
going concern. Had they been such,
then that fact would have been
required to be disclosed.
Our procedures included:
• Funding assessment: We examined correspondence
and supporting documentation with third-party
funding providers, to ascertain the committed level of
financing available to the Group and Parent Company,
the duration of the facilities and related covenant
requirements.
• Period of assessment: We assessed the terms of the
loan agreements and assessed the appropriateness of
the management’s going concern assessment period.
As a result, we requested Directors to extend that
period to August 2022.
• Historical comparison: We evaluated the Directors’
forecasting accuracy by comparing the accuracy of
previous forecasts to the actual cashflows.
• Sensitivity analysis: We considered sensitivities over
the level of available financial resources indicated by
the Group’s and Parent Company’s financial forecasts
taking account of severe but plausible (but not
unrealistic) adverse effects that could arise from these
risks individually and collectively. We have also
considered the compliance with covenant requirements
over the forecast period.
• Benchmarking assumptions: We challenged the
appropriateness of key assumptions in the cash flow
projections, applying our sector knowledge and
experience based on our historical knowledge of the
Group and the markets in which the subsidiaries
operate, together with market and other externally
available information.
• Mathematical accuracy: We checked the mathematical
accuracy of the cash flow projections and recalculated
the forecast covenant calculations based on the terms
of the Group’s borrowing facilities.
• Evaluating Directors’ intent: We have evaluated the
assumptions in respect of the costs that could be
avoided, if needed, in the severe but plausible
scenarios in order for the August 2022 adjusted EBITDA
covenant test to be met.
• Assessing transparency: Considering whether the going
concern disclosure in note 1(e) to the Financial
Statements gives a full and accurate description of the
Directors’ assessment of going concern including the
identified risks and related sensitivities.
Our results
We found the going concern disclosure in note 1(e)
without any material uncertainty to be acceptable (FY
2020 result: acceptable).
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2. Key audit matters: our assessment of risks of material misstatement continued
The risk
Our response
Recoverable amount of
goodwill (International
business)
£68.1 million (FY 2020:
£92.1 million)
Audit and Risk Committee
Report pages 62-65
Accounting policy and
financial disclosure
page 110
Forecast-based assessment
International business goodwill is
significant and at risk of
irrecoverability due to continuing
weak demand in the rail industry.
The estimated recoverable amount is
subjective due to the inherent
uncertainty involved in forecasting
and discounting future cash flows.
The effect of these matters is that, as
part of our risk assessment, we
determined that the value in use of
International business goodwill
has a high degree of estimation
uncertainty, with a potential range of
reasonable outcomes greater than
our materiality for the Financial
Statements as a whole, and possibly
many times that amount. Note 10 to
the Financial Statements discloses
the sensitivity estimated by the
Group.
Our procedures included:
• Benchmarking assumptions: We challenged and
compared the Group’s assumptions to externally
derived data in relation to key inputs such as projected
economic growth, discount rates, the impact of
COVID-19 on these assumptions and ensured the
consistency of assumptions with those used for the
purposes of the going concern and viability
assessments.
• Our valuation expertise: We reperformed our own
calculations to develop an acceptable range, using
external and our own source data, to challenge the
discount rates used in the impairment model.
• Sensitivity analysis: We evaluated the sensitivity of the
outcomes to reasonably possible changes to the key
assumptions.
• Historical comparison: We evaluated the Directors’
forecasting accuracy by comparing the accuracy of
previous estimates of revenue and profits to the actual
results of the international operations.
• Mathematical accuracy: We checked the mathematical
accuracy of the cash flow projections in management’s
impairment model.
• Assessing transparency: We assessed whether the
Group’s disclosures about the sensitivity of the
outcome of the impairment assessment to changes in
key assumptions reflected the risks inherent in the
valuation of goodwill.
We performed the tests above rather than seeking to
rely on any of the Group’s controls because the nature of
the balance is such that we would expect to obtain audit
evidence primarily through the detailed procedures
described.
Our results
We found the carrying amount of goodwill, and the
related impairment charge, to be acceptable (FY 2020:
acceptable).
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The risk
Our response
Commission revenue
Audit and Risk Committee
Report pages 62-65
Accounting policy and
financial disclosure
page 104
Revenue recognition
Given the significance of the
commission revenue amount to the
Financial Statements as a whole, we
consider the volume of transactions
creates a specific risk of error in
relation to recognition of commission
revenue.
Parent Company risk:
recoverability of Parent
Company’s investment in
subsidiary
Low risk, high value
The Parent Company has significant
investment in a subsidiary company
totalling £1,888 million as at
28 February 2021.
£1.9 billion (2020:
£1.8 billion)
Audit and Risk Committee
Report pages 62-65
Accounting policy and
financial disclosure
page 138
Its recoverability is not at a high risk
of significant misstatement or
subject to significant judgement.
However, due to its materiality in
the context of the Parent Company
Financial Statements, this is
considered to be the area that had
the greatest effect on our overall
Parent Company audit.
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We performed the detailed tests below rather than
seeking to rely on any of the Group’s controls, except for
manual cash reconciliations, because our knowledge of
related IT controls indicated that we would not be able
to obtain the required evidence to support reliance on
controls.
Our procedures included:
Control effectiveness: We have evaluated the design and
implementation as well as operating effectiveness of the
Group’s cash reconciliation control (reconciling third-
party revenue to cash received).
Service organisation reporting: We obtained and
examinedanAgreedUponProceduresreport fromRail
Delivery Group’s (‘RDG’) (a service organisation of the
Group) auditor in relation to the operating effectiveness
of the control environment at RDG for the period January
2020 to December 2020, together with a bridging letter
for the remaining period to 28 February 2021. We have
assessed the professional competence of the auditor
issuing the report.
Test of details:
• We have inspected the 12 monthly RDG reports and
compared these reports to the Group’s underlying
accounting records;
• We have tested unusual manual journal entry
transactions posted in revenue commission-related
accounts.
Our results
The results of our testing were satisfactory and we
consider the amount of commission revenue recognised
to be acceptable (FY 2020: acceptable).
Our procedures included:
Test of details:
• We compared the carrying amount of the investment
to the underlying aggregate recoverable amount of the
Group’s CGUs. Our procedures covered the
International and UK CGUs and are consistent with
those described in the Recoverability of International
goodwill (International business) key audit matter
above.
• We compared the carrying amount of the investment
to the market capitalisation for the Group.
We performed the tests above rather than seeking to
rely on any of the Company’s controls because the
nature of the balance is such that we would expect to
obtain audit evidence primarily through the detailed
procedures described.
Our results
We found the carrying amount of investment in
subsidiary to be acceptable (FY 2020: acceptable).
We continue to perform procedures over financial statements and annual report disclosures. However, as this is the second
year of the Group’s preparation of the Annual Report and Accounts, post listing on the UK Stock Exchange, we have not
assessed this as one of the most significant risks in our current year audit and, therefore, it is not separately identified in our
report this year.
Financial Statements
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3. Our application of materiality and an overview of the scope of our audit
Materiality for the Group Financial Statements as a whole was set at £1.5 million (FY 2020: £2.0 million), determined with
reference to a benchmark of Group revenue, normalised in 2021 by averaging over the last four years due to fluctuations in
the business performance due to COVID-19, of £179 million, of which it represents 0.8% (FY 2020: 0.8%).
Materiality for the Parent Company Financial Statements as a whole was set at £1.2 million (FY 2020: £1.2 million), determined
with reference to component materiality set by the Group audit team. This is lower than the materiality we would otherwise
have determined by reference to total assets of £1,929 million (FY 2020: £1,808 million) and represents 0.06% (FY 2020: 0.07%)
of the Parent Company’s total assets.
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a
lower threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a material amount across the Financial Statements as a whole.
Performance materiality was set at 75% (FY 2020: 75%) of materiality for the Financial Statements as a whole, which equates
to £1.0 million (FY 2020: £1.5 million) for the Group and £0.8 million (FY 2020: £0.9 million) for the Parent Company.
We agreed to report to the Audit and Risk Committee any corrected or uncorrected identified misstatements exceeding
£0.07 million (FY 2020: £0.1 million), in addition to other identified misstatements that warranted reporting on qualitative
grounds.
Of the Group’s three (FY 2020: three) reporting components, we subjected three (FY 2020: two) to full scope audits for Group
purposes. The components within the scope of our work accounted for the percentages illustrated below.
The Group team instructed component auditors as to the significant areas to be covered, including the relevant risks detailed
above and the information to be reported back. The Group team approved the component materialities, which ranged from
£0.5 million to £1.2 million (FY 2020: £1.2 million), having regard to the mix of size and risk profile of the Group across the
components. The work on one of the three components (FY 2020: zero of the three components) was performed by
component auditors and the rest, including the audit of the Parent Company, was performed by the Group team.
Due to COVID-19 restrictions, the Group team did not physically visit the component. Video and telephone conference
meetings were held with the component auditor. At these meetings, the findings reported to the Group team were discussed
in more detail. The Group audit team performed audit file reviews of the component auditor and any further work required
by the Group team was then performed by the component auditor.
Group revenue
£67m (2020: £261m)
Normalised group revenue:
£179m
Group materiality
£1.5m (2020: £2m)
£1.5m
Whole financial
statements materiality
(2020: £2m)
£1.0m
Whole financial
statements performance
materiality (2020: £1.2m)
£1.2m
Range of materiality at 3
components
(£0.55m-£1.2m)
(2020: £1.2m)
Normalised revenue
Group materiality
£0.07m
Misstatements reported to
the Audit and Risk
Committee (2020: £0.1m)
Group revenue
Group loss before tax
8.5
100%
(2020: 100%)
91.5
100
Group total assets
99.8%
(2020: 99.8%)
99.8
99.8
10.4
100%
(2020: 100%)
89.6
100
Full scope for Group
audit purposes 2021
Full scope for Group
audit purposes 2020
Specified risk-focused
audit procedures 2020
Residual components
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4. Going concern
The Directors have prepared the Financial Statements on the going concern basis as they do not intend to liquidate the
Group or the Company or to cease their operations, and as they have concluded that the Group’s and the Company’s financial
position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast
significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the Financial
Statements including consideration of the covenant test at August 2022 (‘the going concern period’).
An explanation of how we evaluated management’s assessment of going concern is set out in the related key audit matter in
Section 2 of this report.
Our conclusions based on this work:
• we consider that the Directors’ use of the going concern basis of accounting in the preparation of the Financial
Statements is appropriate;
• we have not identified, and concur with the Directors’ assessment that there is not, a material uncertainty related to
events or conditions that, individually or collectively, may cast significant doubt on the Group’s or Company’s ability to
continue as a going concern for the going concern period;
• we have nothing material to add or draw attention to in relation to the Directors’ statement in note 1(e) to the Financial
Statements on the use of the going concern basis of accounting with no material uncertainties that may cast significant
doubt over the Group and Company’s use of that basis for the going concern period; and
•
the related statement under the Listing Rules set out on page 79 is materially consistent with the Financial Statements
and our audit knowledge.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee
that the Group or the Company will continue in operation.
5. Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (‘fraud risks’) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
•
•
•
Enquiring of Directors, the Audit and Risk Committee and inspection of policy documentation as to the Group’s high-
level policies and procedures to prevent and detect fraud, including the Group’s channel for ‘whistleblowing’, as well as
whether they have knowledge of any actual, suspected or alleged fraud.
Reading Board, Audit and Risk Committee and Remuneration Committee meeting minutes.
Considering remuneration incentive schemes and performance targets for management including the EPS target for
management remuneration.
• Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud
throughout the audit. This included communication from the Group to the component audit team of relevant fraud risks
identified at the Group level, and a request to the component audit team to report to the Group audit team any instances of
fraud that could give rise to a material misstatement at Group level.
As required by auditing standards, and taking into account possible pressures to meet profit targets, we perform procedures
to address the risk of management override of controls, in particular the risk that Group and component management may
be in a position to make inappropriate accounting entries and the risk of bias in accounting estimates and judgements such
as impairment. On this audit we do not believe there is a fraud risk related to revenue recognition because there is limited
perceived pressure and opportunity for management to make inappropriate revenue accounting entries.
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We did not identify any additional fraud risks.
We performed procedures including:
•
•
•
Identifying journal entries and other adjustments to test for all full scope components based on risk criteria and
comparing the identified entries to supporting documentation. These included those posted by senior finance
management and those posted to unusual accounts.
Assessing significant accounting estimates for bias.
Evaluating the business purpose of significant unusual transactions.
Financial Statements
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5. Fraud and breaches of laws and regulations – ability to detect continued
Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the Financial
Statements from our general commercial and sector experience, through discussion with the Directors and other
management (as required by auditing standards), from inspection of the Group’s regulatory and legal correspondence and
discussed with the Directors and other management the policies and procedures regarding compliance with laws and
regulations.
As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including
the entity’s procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-
compliance throughout the audit. This included communication from the Group to component audit team of relevant laws
and regulations identified at the Group level, and a request for the component auditor to report to the Group team any
instances of non-compliance with laws and regulations that could give rise to a material misstatement at Group level.
The potential effect of these laws and regulations on the Financial Statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the Financial Statements including financial reporting
legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed
the extent of compliance with these laws and regulations as part of our procedures on the related Financial Statement items.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a
material effect on amounts or disclosures in the Financial Statements, for instance through the imposition of fines or
litigation or the loss of the Group’s licence to operate. We identified the following areas as those most likely to have such an
effect: general data protection regulation; e-commerce directive; competition law; anti-bribery; employment law; and
certain aspects of company legislation recognising the financial and regulated nature of the Group’s activities. Auditing
standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the
Directors and other management and inspection of regulatory and legal correspondence, if any. Therefore if a breach of
operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the Financial Statements, even though we have properly planned and performed our audit in accordance
with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and
transactions reflected in the Financial Statements, the less likely the inherently limited procedures required by auditing
standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect
material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect
non-compliance with all laws and regulations.
6. We have nothing to report on the other information in the Annual Report
The Directors are responsible for the other information presented in the Annual Report together with the Financial
Statements. Our opinion on the Financial Statements does not cover the other information and, accordingly, we do not
express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements
audit work, the information therein is materially misstated or inconsistent with the Financial Statements or our audit
knowledge. Based solely on that work we have not identified material misstatements in the other information.
Strategic report and Directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the Strategic Report and the Directors’ Report;
•
•
in our opinion the information given in those reports for the financial year is consistent with the Financial Statements; and
in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with
the Companies Act 2006.
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Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a material inconsistency between the Directors’
disclosures in respect of emerging and principal risks and the viability statement, and the Financial Statements and our audit
knowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
•
•
•
the Directors’ confirmation within the viability statement on page 39 that they have carried out a robust assessment of
the emerging and principal risks facing the Group, including those that would threaten its business model, future
performance, solvency and liquidity;
the principal risks and uncertainties disclosures describing these risks and how emerging risks are identified, and
explaining how they are being managed and mitigated; and
the Directors’ explanation in the viability statement of how they have assessed the prospects of the Group, over what
period they have done so and why they considered that period to be appropriate, and their statement as to whether they
have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due
over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications
or assumptions.
We are also required to review the viability statement, set out on page 39 under the Listing Rules. Based on the above
procedures, we have concluded that the above disclosures are materially consistent with the Financial Statements and our
audit knowledge.
Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements
audit. As we cannot predict all future events or conditions and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time they were made, the absence of anything to report on these
statements is not a guarantee as to the Group’s and Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency between the Directors’
corporate governance disclosures and the Financial Statements and our audit knowledge.
Based on those procedures, we have concluded that each of the following is materially consistent with the Financial
Statements and our audit knowledge:
•
•
•
the Directors’ statement that they consider that the Annual Report and Financial Statements taken as a whole is fair,
balanced and understandable, and provides the information necessary for shareholders to assess the Group’s position
and performance, business model and strategy;
the section of the Annual Report describing the work of the Audit and Risk Committee, including the significant issues
that the Audit and Risk Committee considered in relation to the Financial Statements, and how these issues were
addressed; and
the section of the Annual Report that describes the review of the effectiveness of the Group’s risk management and
internal control systems.
We are required to review the part of the Corporate Governance Statement relating to the Group’s compliance with the
provisions of the UK Corporate Governance Code specified by the Listing Rules for our review. We have nothing to report in
this respect.
7. We have nothing to report on the other matters on which we are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
•
•
•
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
the Parent Company Financial Statements and the part of the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
Financial Statements
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8. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 83, the Directors are responsible for: the preparation of the
Financial Statements including being satisfied that they give a true and fair view; such internal control as they determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud
or error; assessing the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or
the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the
Financial Statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
9. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit
work, for this report, or for the opinions we have formed.
Anna Jones (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square, London E14 5GL
6 May 2021
Consolidated income statement
Continuing operations
Net ticket sales1
Revenue
Cost of sales
Gross profit
Administrative expenses
Adjusted EBITDA1
Depreciation and amortisation
Share-based payment charges
Exceptional items
Operating (loss)/profit
Finance income
Finance costs
Net finance costs
Loss before tax
Income tax income/(expense)
Loss after tax
Earnings per share (pence)
Basic
Diluted2
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Notes
2021
£’000
2020
£’000
783,084
3,726,780
3
67,084
(18,408)
260,753
(59,602)
48,676
201,151
(148,380)
(198,890)
(24,904)
(41,199)
(7,093)
(26,508)
85,201
(50,907)
(10,631)
(21,402)
(99,704)
2,261
578
(7,636)
(7,058)
692
(83,184)
(82,492)
(106,762)
(80,231)
15,458
(707)
(91,304)
(80,938)
(19.10)p
(19.10)p
(17.67)p
(17.67)p
10,11
16
6
7
7
7
8
9
9
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1 Non-GAAP measure – see alternative performance measures section on page 140.
2 As the Group has incurred a loss in FY 2021 and FY 2020 the impact of its potential dilutive ordinary shares have been excluded as they would be anti-dilutive.
The notes on pages 100 to 135 form part of the Financial Statements.
Financial Statements
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Consolidated statement of other comprehensive income
Loss after tax
Other comprehensive income:
Remeasurements of defined benefit liability
Foreign exchange movement1
Other comprehensive income/(loss), net of tax
Total comprehensive loss
1 May subsequently be reclassified to the income statement in a future period.
The notes on pages 100 to 135 form part of the Financial Statements.
Notes
2021
£’000
2020
£’000
(91,304)
(80,938)
19
27
876
903
18
(214)
(196)
(90,401)
(81,134)
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Consolidated statement of financial position
Non-current assets
Intangible assets
Goodwill
Property, plant and equipment
Derivative assets
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Current tax payable
Loan and borrowings
Net current assets/(liabilities)
Total assets less current liabilities
Non-current liabilities
Loan and borrowings
Provisions
Deferred tax liability
Net assets
Equity
Share capital
Share premium
Preference shares
Foreign exchange reserve
Other reserves
Retained earnings
Total equity
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2021
£’000
2020
£’000
10
10
11
8
12
13
14
14
17
8
18
18
18
18
18
81,379
419,457
25,871
–
5,083
93,555
443,357
20,184
6
–
531,790
557,102
–
24,516
36,575
61,091
26
52,078
92,120
144,224
(37,990)
(165,735)
–
(4,167)
(552)
(2,698)
(42,157)
(168,985)
18,934
(24,761)
550,724
532,341
(266,369)
(154,402)
(850)
–
(681)
(4,345)
(267,219)
(159,428)
283,505
372,913
4,807
4,807
1,198,703
1,198,703
–
2,848
50
1,972
(1,124,992)
(1,125,755)
202,139
283,505
293,136
372,913
The notes on pages 100 to 135 form part of the Financial Statements.
These Financial Statements were approved by the Board of Directors of Trainline plc (registered number 11961132) on
6 May 2021andweresignedonitsbehalfby
Jody Ford
Chief Executive Officer
6 May 2021
Shaun McCabe
Chief Financial Officer
6 May 2021
Financial Statements
98
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Annual Report and
Accounts 2020/21
Consolidated statement of changes in equity
For the year ended 28 February 2021:
Share
capital
£’000
Share
premium
£’000
Preference
shares
£’000
Other
reserves
£’000
Foreign
exchange
reserve
£’000
Retained
earnings
£’000
Total
equity
£’000
Balance as at 29 February 2020
4,807
1,198,703
50 (1,125,755)
1,972
293,136
372,913
Loss after tax
OCI1
Preference share redemption
Acquisition of Treasury Shares
Share-based payments
Transfer between reserves
Balance as at 28 February 2021
–
–
–
–
–
–
–
–
–
(50)
–
–
–
(4,123)
5,166
(280)
–
876
–
–
–
(91,304)
(91,304)
27
–
–
–
280
903
(50)
(4,123)
5,166
–
4,807
1,198,703
–
(1,124,992)
2,848
202,139
283,505
For the year ended 29 February 2020:
Share
capital
£’000
Share
premium
£’000
Preference
shares
£’000
Other
reserves
£’000
Foreign
exchange
reserve
£’000
Retained
earnings
£’000
Total
equity
£’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
OCI1
Interest on CPECs
–
–
–
–
–
–
Shares issued on listing net of fees
31,526
75,817
Issue of shares
59
148
Share issue to extinguish liabilities
26,541
67,055
Disposal of treasury shares
Share capital reduction
Share-based payments
–
(475,874)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
10,895
–
7,360
–
(80,938)
(80,938)
(214)
–
–
–
–
–
–
–
18
(3,166)
–
–
–
–
475,874
(196)
(3,166)
107,343
207
93,596
10,895
–
–
7,360
Balance as at 29 February 2020
4,807
1,198,703
50
(1,125,755)
1,972
293,136
372,913
1 Other comprehensive income.
The notes on pages 100 to 135 form part of the Financial Statements.
Consolidated statement of cash flow
Cash flows from operating activities
Loss before tax
Adjustment for non-cash items:
Depreciation and amortisation
Goodwill impairment
Net finance costs
Share-based payment charges
Changes in working capital
Inventories
Trade and other receivables
Trade and other payables
Cash generated from operating activities
Taxes refunded/(paid)
Net cash from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment and intangible assets
Net cash flow used in investing activities
Cash flows from financing activities
Proceeds from IPO share issue
Sale of treasury shares
Purchase of treasury shares
Issue of shares
Repayment of pre-IPO borrowings
Proceeds from Revolving Credit Facility
Repayment of Revolving Credit Facility and other borrowings
Proceeds from issuance of convertible bonds
Issue costs relating to convertible bonds
Issue costs relating to loans and borrowings
Payments of lease liabilities
Payment of interest on lease liabilities
Interest paid
Interest on CPEC
Net cash flows used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Effect of foreign exchange on cash
Closing cash and cash equivalents
The notes on pages 100 to 135 form part of the Financial Statements.
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99
Notes
2021
£’000
2020
£’000
10,11
10
7
16
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(106,762)
(80,231)
41,199
25,195
7,058
7,093
(26,217)
–
33,021
(128,058)
(121,254)
159
(121,095)
50,907
–
82,492
10,631
63,799
(1)
(7,805)
9,372
65,365
(5,198)
60,167
(26,335)
(26,335)
(28,358)
(28,358)
–
–
(4,123)
–
–
95,000
(137,184)
150,000
(2,690)
–
(2,676)
(536)
(4,940)
–
107,343
30,724
(20,210)
207
(276,763)
206,941
(60,223)
–
–
(6,832)
(2,247)
(828)
(9,711)
(3,166)
92,851
(34,765)
(54,579)
(2,956)
92,120
(966)
36,575
94,477
599
92,120
Financial Statements
100
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Annual Report and
Accounts 2020/21
Notes
(forming part of the Group Financial Statements)
1. Significant accounting policies
a) General information
Trainline plc (the ‘Company’) and subsidiaries controlled by the Company (together, the ‘Group’) are the leading independent
rail and coach travel platform selling rail and coach tickets worldwide. The Company is publicly listed on the London Stock
Exchange(‘LSE’)andisincorporatedanddomiciledinEnglandandWales.TheCompany’sregisteredaddressis 120Holborn,
London EC1N 2TD.
The Financial Statements for the year ended 28 February 2021 were approved by the Directors on 6 May 2021.
These Group Financial Statements were prepared in accordance with International Accounting Standards in conformity with
the requirements of the Companies Act 2006 and in accordance with International Financial Reporting Standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
b) Basis of consolidation
Th 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 2020 to 28 February 2021.
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The
Financial Statements of subsidiaries are included in the Consolidated Financial Statements from the date on which control
commences until the date on which control ceases. Control is achieved when the Group has (i) power over the investee; (ii) is
exposed, or has rights to variable returns from its involvement with the investee; and (iii) has the ability to use its power to
affect the returns.
(ii) Transactions eliminated on consolidation
Intra-Group balances and transactions, and any unrealised income and expenses arising from intra-Group transactions,
are eliminated.
c) Basis of measurement
The Financial Statements are prepared on the historical cost basis except for the following:
• Non-current assets are stated at the lower of the carrying value and the recoverable amount
• 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 pounds sterling. All amounts have been rounded to the nearest thousand, unless
otherwise indicated.
e) Going concern
The Consolidated Financial Statements have been prepared on a going concern basis, which assumes that the Group will be
able to meet its liabilities as they fall due over at least the next 12 months from the date of the approval of these Financial
Statements including consideration of the covenants associated with the Group’s Revolving Credit Facility at the next
covenant test date on 31 August 2022 (the ‘going concern assessment period’).
The UK Corporate Governance Code requires the Board to assess and report on the prospects of the Group and whether the
business is a going concern. The Directors have undertaken a rigorous assessment of going concern and liquidity, taking into
account financial forecasts, key uncertainties and sensitivities, including the potential impact of COVID-19 on the future
performance of the Group, borrowing facilities and the relating covenant requirements.
The spread of COVID-19 has had a profound impact on the demand for rail and coach travel across all markets Trainline
operates in. Though steps have been taken to reduce cost and protect the business and a partial recovery has been seen
since the initial lockdown restrictions across the UK and Europe, trade remains heavily impacted by national lockdowns,
localised travel restrictions and a temporarily reduced public demand for travel. This has had a significant impact on
profitability which is evident in the results presented for the year ended 28 February 2021.
Despite the impact on profitability the Group reinforces and maintains the strong liquidity position that it reported at the
year ended 29 February 2020. Liquidity, being cash plus undrawn available facilities, as at 28 February 2021 was £260 million
and as at 30 April 2021 was £243 million. Liquidity has been strengthened in the period following the £150 million senior
unsecured convertible bonds issued in January 2021 and due in 2026. As part of the convertible bond raise a further extension
to the covenant waiver was also issued, meaning the next adjusted EBITDA covenant test date is 31 August 2022. As part of this
waiver a minimum liquidity requirement of £75 million was put in place until 28 February 2022 by the lending syndicate.
Trainline
Annual Report and
Accounts 2020/21
101
The Directors performed a detailed going concern review using Board approved forecasts (the ‘base case’) as well as
considering two severe but plausible downside scenarios, without any mitigations, and their potential impact on the Group’s
forecast, specifically considering varying degrees of impact and duration of COVID-19 restrictions. Two severe but plausible
downside scenarios were modelled: (1) UK nationwide lockdown and ongoing EU COVID-19 restrictions from March to May
2021 and two further one-month lockdowns, in November 2021 and January 2022; and (2) UK nationwide lockdown and
ongoing EU COVID-19 restrictions from March to May 2021 and two further one-month lockdowns, in November 2021 and in
January 2022, and assuming only half of the forecast EBITDA is reached in the month following the one-month lockdowns.
A further severe downside scenario was modelled, which though considered implausible, highlights the strength of the
Group’s liquidity position. This scenario assumed a UK nationwide lockdown and ongoing EU COVID-19 restrictions for the
period March 2021 to May 2022 and a return to the base case forecast thereafter.
In the base case, the two severe but plausible scenarios and the additional severe downside scenario, the Group has
sufficient liquidity, including complying with the banking syndicates’ £75 million minimum liquidity, to continue in operation
and meet its liabilities until the adjusted EBITDA covenant is reintroduced on 31 August 2022.
In a prolonged COVID-19 scenario, should either of the two severe but plausible downside scenarios described above
materialise, the forecast indicates a breach of covenant at 31 August 2022. These downside scenarios do not include any
mitigating actions. In the event that a breach of covenant became likely the Directors would be able to implement mitigating
actions such as a reduction in discretionary spend, specifically marketing, to prevent a breach. Additionally, the Directors
would approach the Group’s lending syndicate for a further covenant waiver, which would be subject to approval by the
syndicate. The Directors do not consider this to be a likely outcome given current information available around COVID-19 and
the impact on the Group but do consider this to be a severe but plausible downside scenario. As described in the Viability
Statement on page 39, the Directors have also considered the Group’s viability and its ability to meet its liabilities over a
three-year period.
Following the assessment described above, the Directors are confident that the Group and the Company have adequate
resources to continue to meet their liabilities as they fall due and remain in operation for the going concern assessment
period. The Board has therefore continued to adopt the going concern basis in preparing the Consolidated Financial
Statements.
f) Cost of sales
Cost of sales include costs in relation to the provision of rail tickets, ancillary services, settlement and fulfilment costs and
are recognised as incurred (at the point of sale).
g) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group companies at exchange
rates applicable on the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency 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 retranslated.
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. Revisions to estimates are recognised
prospectively.
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Notes continued
(forming part of the Group Financial Statements)
1. Significant accounting policies continued
h) Use of judgements and estimates continued
The following estimate is deemed significant as it has been identified by Management as one which could result in a material
adjustment in the next financial year:
• Note 10 – 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 28 February 2021 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.
The following estimate has been identified by Management as involving estimation uncertainty but not deemed significant
as it is not considered likely to result in a material adjustment in the next financial year:
• Note 10 – 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 the 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
A number of new standards are effective from 1 March 2020, but they do not have a material effect on the Group’s
Financial Statements.ThefollowingadoptedIFRSshavebeenissuedbuthavenotbeenappliedbytheGroupinthese
consolidated Financial Statements. Their adoption is not expected to have material effect on the Financial Statements unless
otherwise indicated:
•
•
•
•
•
•
Amendments to IFRS 9, IAS 39, IFRS 7 and IFRS 16: Interest Rate Benchmark Reform – Phase 2 (effective periods starting
on or after 1 January 2021). The Interest Rate Benchmark Reform is expected to have an impact on the Group but the
quantum has not yet been assessed;
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and
Classification of Liabilities as Current or Non-current (effective date to be confirmed);
Amendments to IAS 37: Onerous Contracts – Cost of Fulfilling a Contract (effective date to be confirmed);
Amendments to References to the Conceptual Framework in IFRS 3 (effective date to be confirmed);
Amendments to IAS 16: Property, Plant and Equipment – Proceeds before Intended Use (effective date to be confirmed); and
Annual Improvements to IFRS Standards 2018-2020 (effective date to be confirmed).
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 Consumer1 – Travel apps and websites for individual travellers for journeys within the UK;
• UK Trainline Partner Solutions1 (formerly T4B, Trainline for Business) – Branded travel portal platforms for corporates and
travelmanagementcompaniesandwhitelabelecommerceplatformsforTrainOperatingCompanieswithintheUK; and
International – Travel apps and websites for individual travellers for journeys outside the UK.
•
1 UK Consumer and UK Trainline Partner Solutions 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 are reported to the CODM at the Group level, rather than being allocated to segments. No single
customer accounted for 10% or more of the Group’s sales.
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 thisdisclosure);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.
Trainline
Annual Report and
Accounts 2020/21
103
UK
Consumer
£’000
472,808
43,798
(9,885)
33,913
Segmental analysis for the year ended 28 February 2021:
Net ticket sales
Revenue
Cost of sales
Gross profit
Directly allocable administrative expenses
Contribution
Central administrative expenses
Adjusted EBITDA
Depreciation and amortisation
Share-based payment charges
Exceptional items
Operating loss
Net finance costs
Loss before tax
Tax
Loss after tax
1 Formerly T4B, Trainline for Business.
Segmental analysis for the year ended 29 February 2020:
UK Trainline
Partner
Solutions1
£’000
75,476
12,087
Total
UK
£’000
International
£’000
Total
Group
£’000
548,284
234,800
783,084
55,885
(3,843)
(13,728)
11,199
(4,680)
67,084
(18,408)
8,244
42,157
6,519
48,676
(21,540)
(10,986)
(32,526)
20,617
(4,467)
16,150
(41,054)
(24,904)
(41,199)
(7,093)
(26,508)
(99,704)
(7,058)
(106,762)
15,458
(91,304)
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Net ticket sales
Revenue
Cost of sales
Gross profit
Directly allocable administrative expenses
Contribution
Central administrative expenses
Adjusted EBITDA
Depreciation and amortisation
Share-based payment charges
Exceptional items
Operating profit
Net finance costs
Loss before tax
Tax
Loss after tax
1 Formerly T4B, Trainline for Business.
UK
Consumer
£’000
UK Trainline
Partner
Solutions1
£’000
Total
UK
£’000
International
£’000
Total
Group
£’000
2,046,178
1,190,549
3,236,727
490,053
3,726,780
177,993
(34,306)
56,790
(16,629)
234,783
(50,935)
25,970
(8,667)
260,753
(59,602)
143,687
40,161
183,848
17,303
201,151
(40,039)
(31,185)
(71,224)
143,809
(13,882)
129,927
(44,726)
85,201
(50,907)
(10,631)
(21,402)
2,261
(82,492)
(80,231)
(707)
(80,938)
Financial Statements
104
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Annual Report and
Accounts 2020/21
3. Revenue
Accounting policy
Consumer
Commission revenue earned from carriers on net ticket sales and service charges billed to customers. Each sale 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.
Trainline Partner Solutions
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
because the customer simultaneously receives and consumes the benefits provided to them. Revenue is recognised at point
in time for bespoke builds and contributions earned per transaction.
The Group’s operations and main revenue streams are those described in these Financial Statements. The Group’s
revenue is derivedfromcontractswithcustomersandaredisaggregatedbyprimarygeographicalmarketandtiming
of revenuerecognition.
Timing of revenue recognition
At point in time
Over time
Total revenue
2021
£’000
2020
£’000
64,516
2,568
67,084
258,194
2,559
260,753
Geographic information
In presenting the information on the basis of geography, revenue is based on the geographical location of the customers.
UK
Rest of the world
Total revenue
2021
£’000
54,643
12,441
67,084
2020
£’000
223,825
36,928
260,753
Contract balances
The Group’s contract balances consist of trade receivables, contract assets and contract liabilities. Trade receivables are
disclosed in Note 12. The contract assets primarily relate to the Group’s rights to consideration for services provided but
not invoiced at the reporting date, recorded as accrued income. The contract assets are transferred to receivables when
invoiced. The Group’s contract assets amounted to £1.1 million (FY 2020: £0.8 million) which are included within the
Prepayments and accrued income in Note 12. The contract liabilities primarily relate to the advance consideration received
from customers, for which revenue is recognised when the services are deemed to be provided. The contract liabilities
amounted to £0.2 million (FY 2020: £2.9 million) which are included within the Accruals and deferred revenue in Note 13.
4. Auditor remuneration
This note details a breakdown of the auditor remuneration recognised across the Group.
During the year, the Group obtained the following services from its auditor:
Audit of these Financial Statements
Audit of Financial Statements of subsidiaries pursuant to legislation
Audit-related assurance services
Corporate finance services
Other non-audit services
Total auditor remuneration
2021
£’000
285
73
40
–
10
408
2020
£’000
240
57
105
1,607
–
2,009
Notes continued(forming part of the Group Financial Statements) Trainline
Annual Report and
Accounts 2020/21
105
5. Employee benefit expenses
Staff costs presented in this note reflect the total wage, tax, pension and share-based payment cost relating to
employees of the Group. These costs are allocated between administrative expenses, cost of sales or capitalised
where appropriate as part of software development intangible assets. The allocation between these areas is
dependent on the area of business the employee works in and the activities they have undertaken.
Average number of full-time equivalent employees
Sales and marketing
Operations
Technology and product
Management and administration
Total number of employees
Employee benefits expense
Wages and salaries
Social security contributions
Contributions to defined contribution plans
Share-based payment expense
Total employee benefits
2021
Number
2020
Number
103
126
319
111
659
2021
£’000
45,215
5,889
1,849
7,093
60,046
115
120
279
116
630
2020
£’000
46,921
6,667
1,781
10,631
66,000
Details of Directors’ remuneration are disclosed in Note 25 under Transactions with key management personnel of the Group.
6. 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.
Goodwill impairment
This is the impairment charge on the goodwill on the International CGU. Refer to Note 10 for disclosure.
IPO transaction costs
Restructuring costs
Goodwill impairment charge
Net exceptional costs
2021
£’000
–
1,313
25,195
26,508
2020
£’000
21,402
–
–
21,402
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7. 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.
Bank interest income
Foreign exchange gain
Finance income
Interest on bank loans
Foreign exchange loss
Loss on interest rate swap
Interest on convertible bonds
Interest on lease liability
Other interest
Exceptional finance costs1
Derecognition of previously capitalised finance costs
Fair value change on share-based payments
Fair value change on put/call option
Finance costs
2021
£’000
22
556
578
2020
£’000
692
–
692
(6,729)
(10,900)
–
(6)
(189)
(694)
(18)
–
–
–
(7,636)
(558)
(454)
–
(828)
–
(8,466)
(49,705)
(12,273)
(83,184)
Net finance costs recognised in the income statement
(7,058)
(82,492)
1 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 (Note 16) 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 2021 would be
£7.1 million (FY 2020: £12.0 million).
8. Taxation
This note analyses the tax income 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/credit comprises current and deferred tax. It is recognised in the income statement except to the extent
thatit relatestoabusinesscombination,oritemsrecogniseddirectlyinequityorinothercomprehensiveincome.
(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.
Notes continued(forming part of the Group Financial Statements) Trainline
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Accounts 2020/21
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Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities
for financialreportingpurposesandtheamountsusedfortaxationpurposes.Deferredtaxisnotrecognisedfor:
•
•
•
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 reversalofthetemporarydifferencesanditisprobablethattheywillnotreverseintheforeseeablefuture;and
taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the
extent that it is probable that future taxable profits will be available against which they can be used before their expiry.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that
the relatedtaxbenefitwillberealised.
Amounts will be recognised first to the extent that taxable temporary differences exist and it is considered probable that
they will reverse and give rise to future taxable profits against which losses or other assets may be utilised before their
expiry. Assets will then be recognised to the extent that forecasts or other evidence support the availability of future profits
against which assets may be realised.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
using taxratesenactedorsubstantivelyenactedatthereportingdate.Themeasurementofdeferredtaxreflectsthetax
consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle
the carryingamountofitsassetsandliabilities.Deferredtaxassetsandliabilitiesareoffsetonlyifcertaincriteriaaremet.
Amounts recognised in the income statement
Current tax (credit)/charge
Current year
Adjustment in respect of prior years
Total current tax (credit)/charge
Deferred tax (credit)/charge
Current year
Adjustment in respect of prior years
Effect of change in tax rates
Total deferred tax (credit)/charge
Tax (credit)/charge
2021
£’000
2020
£’000
(3,205)
(2,608)
(5,813)
(11,777)
1,511
621
(9,645)
(15,458)
7,178
(2,978)
4,200
(5,601)
2,108
–
(3,493)
707
Corporation tax was calculated at 19% (FY 2020: 19%) of the taxable profit for the year. Taxation for territories outside of the
UK was calculated at the rates prevailing in the respective jurisdictions. The total tax credit of £15.5 million (FY 2020: charge
of £0.7 million) is made up of a current corporation tax credit of £5.8 million (FY 2020: charge of £4.2 million) arising in the UK,
and a deferred tax credit of £9.6 million (FY 2020: £3.5 million).
As a result of the impact of COVID-19, part of the tax loss suffered has been used to offset the taxable profit arising in FY
2020 allowing the Group to recover the tax paid in FY 2020. This is reflected below as a current tax corporation tax credit.
The remainingavailablelosseshasbeencarriedforwardandrecognisedasadeferredtaxcreditthatcanbeusedtooffset
the tax charge for the Group in future periods. This is on the basis that it is probable that future taxable profit will be
available against which the unused tax losses and unused tax credits can be utilised. The deferred tax credit in FY 2021
also includestheunwindofdeferredtaxliabilitiesarisingonacquiredintangiblesanddeferredtaxonequity-settledshare-
based payment charges. The release of deferred tax assets and liabilities is an accounting unwind and does not impact the
corporation tax payable in cash by the Group.
Financial Statements
108
Trainline
Annual Report and
Accounts 2020/21
8. Taxation continued
Amounts recognised in the income statement continued
Loss before tax
Loss multiplied by standard rate of corporation tax of 19% (FY 2020: 19%)
Non-taxable expenses
Depreciation in excess of capital allowances
Amounts not recognised1
Rate difference on deferred tax
Adjustment in respect of prior years
Other
Losses utilised
Difference in overseas tax rates
Total tax (credit)/charge
Effective tax rate
2021
£’000
(106,762)
(20,285)
4,849
–
924
621
(1,097)
–
(489)
19
(15,458)
14%
2020
£’000
(80,231)
(15,244)
15,460
–
1,627
–
(870)
(266)
–
–
707
(1)%
1 Primarily relates to unrecognised losses which are not expected to be recoverable and therefore not recognised as deferred tax assets.
The effective tax rate is lower than the UK corporation tax rate of 19% which primarily reflects a significant impairment to
goodwill. This impairment does not have a cash tax impact for the Group. If the impairment is excluded, the effective rate of
tax would be 19%, in line with the UK current tax rate of 19%.
The Finance Bill 2021 includes legislation to increase the main rate of corporation tax from 19% to 25% from 1 April 2023.
This ratechangeisnotincludedaboveastheFinanceBill2021hasnotbeensubstantivelyenacted.
Deferred tax asset/(liability) as at 28 February 2021:
At 1 March 2020
Adjustments posted through equity
Current year credit/(charge) to consolidated income statement
At 28 February 2021
Deferred tax asset/(liability) as at 29 February 2020:
Acquired
intangible
assets
£’000
(5,298)
–
933
Tangible
assets and
other
£’000
Share-based
payments
£’000
(508)
37
(1,089)
1,461
(254)
20
(4,365)
(1,560)
1,227
At 1 March 2019
Adjustment in respect of prior years
Adjustments posted through equity
Acquired
intangible
assets
£’000
(9,712)
–
–
Current year credit/(charge) to consolidated income statement
4,414
At 29 February 2020
(5,298)
Tangible
assets and
other
£’000
Share-based
payments
£’000
1,830
(2,108)
(209)
(21)
(508)
–
–
253
1,208
1,461
Losses
carried
forward
£’000
–
–
9,781
9,781
Losses
carried
forward
£’000
–
–
–
–
–
Total
£’000
(4,345)
(217)
9,645
5,083
Total
£’000
(7,882)
(2,108)
44
5,601
(4,345)
Notes continued(forming part of the Group Financial Statements) Trainline
Annual Report and
Accounts 2020/21
109
9. 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 ordinarysharesoutstandingduringtheperiod.
(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’.
Weighted average number of ordinary shares:
Ordinary shares
Treasury shares
Weighted number of ordinary shares1
2021
No. shares
2020
No. shares
480,680,508
462,099,526
(2,678,111)
(4,108,486)
478,002,397
457,991,040
1 As the Group has incurred a loss in FY 2021 and FY 2020, the impact of its potential dilutive ordinary shares has been excluded as they would be anti-dilutive.
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Loss after tax
Earnings attributable to equity holders
Adjusted earnings1
(Loss)/earnings per share
Basic
Diluted2
Adjusted (loss)/earnings per share
Basic
Diluted2
2021
£’000
2020
£’000
(91,304)
(80,938)
(91,304)
(51,678)
(80,938)
36,887
2021
pence
2020
pence
(19.10)p
(19.10)p
(10.81)p
(10.81)p
(17.67)p
(17.67)p
8.05p
8.05p
1 Refer to the alternative performance measures section for the calculation of adjusted earnings.
2 As the Group has incurred a loss in FY 2021 and FY 2020, the impact of its potential dilutive ordinary shares has been excluded as they would be anti-dilutive.
Financial Statements
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Accounts 2020/21
10. 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.
Accounting policy
(i) Goodwill
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount
recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and
liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the
Group reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews
the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an
excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in
the income statement.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. 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.
The estimated useful lives are as follows:
Software development
Brand valuation
Customer lists
3–5 years
10 years
5–7 years
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Notes continued(forming part of the Group Financial Statements)
Trainline
Annual Report and
Accounts 2020/21
111
Intangible assets and goodwill as at 28 February 2021:
Cost:
At 1 March 2020
Additions1
FX2
At 28 February 2021
Accumulated amortisation and impairment:
At 1 March 2020
Amortisation
Impairment charge
At 28 February 2021
Carrying amounts:
At 28 February 2021
Software
development
£’000
Brand
valuation
£’000
Customer
valuation
£’000
Goodwill
£’000
Total
£’000
108,621
24,134
–
51,738
92,690
443,357
696,406
–
–
–
–
–
1,295
24,134
1,295
132,755
51,738
92,690
444,652
721,835
(46,181)
(28,147)
–
(25,633)
(5,167)
–
(87,680)
(2,996)
–
–
–
(25,195)
(159,494)
(36,310)
(25,195)
(74,328)
(30,800)
(90,676)
(25,195)
(220,999)
58,427
20,938
2,014
419,457
500,836
1 Total additions of £24.1 million all relate to internally developed intangible assets.
2 Effects of foreign exchange rate changes.
Intangible assets and goodwill as at 29 February 2020:
Cost:
At 1 March 2019
Additions1
FX2
At 29 February 2020
Accumulated amortisation:
At 1 March 2019
Amortisation
At 29 February 2020
Carrying amounts:
At 29 February 2020
Software
development
£’000
Brand
valuation
£’000
Customer
valuation
£’000
Goodwill
£’000
Total
£’000
83,262
25,359
–
51,738
92,690
443,271
–
–
–
–
–
86
670,961
25,359
86
108,621
51,738
92,690
443,357
696,406
(22,545)
(23,636)
(20,452)
(5,181)
(69,923)
(17,757)
(46,181)
(25,633)
(87,680)
–
–
–
(112,920)
(46,574)
(159,494)
62,440
26,105
5,010
443,357
536,912
1 Total additions of £25.4 million is split between internally developed intangible assets of £24.4 million and trade and asset acquisitions of £1.0 million.
2 Effects of foreign exchange rate changes.
Additions in the year includes £nil (FY 2020: £nil) of directly attributable borrowing costs.
Of the amortisation charge for the year, £8.2 million (FY 2020: £22.9 million) related to the amortisation of intangible assets
which were recognised on the Group’s acquisition of Trainline.com Limited and Trainline SAS, while £28.1 million (FY 2020:
£23.7 million) related to internally developed and purchased intangible assets recognised at historical cost.
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Financial Statements
112
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Accounts 2020/21
10. Intangible assets and goodwill continued
Goodwill impairment testing
The Group tests goodwill annually for impairment by reviewing the carrying amount against the recoverable amount of
the investment.Therecoverableamountisthehigheroffairvaluelesscoststodisposeandvalueinuse.However,in
line withIAS36ImpairmentofAssets,fairvaluelesscoststodisposeisonlydeterminedwherevalueinusewouldresult
in animpairment.
Goodwill acquired in a business combination is allocated on acquisition to the Cash Generating Units (‘CGUs') that are
expected to benefit from that business combination. Management monitors goodwill no lower than the geographical
operating segments, hence, CGUs are the same as the geographical operating segments.
The Group has gross goodwill balances totalling £444.7 million (FY20: £443.4 million) which comprise:
i.
ii. £108.3 million (FY 2020: £107.0 million) from the FY 2017 acquisition of Trainline SAS (formerly Capitaine Train SAS)
£336.4 million (FY 2020: £336.4 million) from the FY 2016 acquisition of Trainline.com
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 Capitaine 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
UK Consumer
UK Trainline Partner Solutions
International
Total goodwill
2021
£’000
2020
£’000
351,271
351,271
–
68,186
419,457
–
92,086
443,357
For all CGUs the recoverable amount was determined by measuring their value in use (‘VIU').
Assumptions
The key value in use assumptions were:
Pre-tax discount rate1
Terminal growth rate2
Number of years forecasted before
terminal growth rate applied
2021
UK
Consumer
11.6%
1.5%
2020
UK
Consumer
10.7%
2%
5
5
2021
UK Trainline
Partner
Solutions
2020
UK Trainline
Partner
Solutions
N/A
N/A
N/A
N/A
N/A
N/A
2021
International
2020
International
18.6%
1%
16.7%
2%
5
5
1 The pre-tax discount rate is based upon the weighted average cost of capital reflecting specific principal risks and uncertainties. The discount rate takes into
account the risk-free rate of return, the market risk premium and beta factor.
2 The terminal growth rate reflects the expected growth into perpetuity of the business, taking into account the current market and sector risks.
The Group prepares cash flow forecasts based on the most recent financial budgets and five-year projections approved by
the Board. The forecasts have been used in the VIU calculation along with risk-adjusted discount rates. Cash flows beyond
the five-year period are extrapolated using a long-term growth rate. The forecasts reflect management’s expectations and
best estimates for each CGU. Where costs or assets in the forecast are not reported to the CODM at a CGU level, as disclosed
in Note 2, a reasonable and consistent allocation basis is applied for the purposes of impairment testing.
For the impairment review for the year ended 28 February 2021, cash flow forecasts have remained impacted by the
COVID-19 pandemic through FY 2022, most notably this included forecasting significantly lower sales during FY 2022.
As the International CGU is currently loss making, the impairment calculation is more sensitive to a change in assumptions in
the initial five-year forecast period than the UK Consumer CGU. To reflect the higher level of uncertainty in the International
forecasts, a premium is applied to the discount rate.
For the year ended 28 February 2021, an impairment charge of £25.2 million (FY 2020: £nil) was recognised in relation to the
International CGU. The impairment charge is recorded within exceptional items in the income statement to reflect its one-off
nature. Despite there being no material change in the Group’s expectations in relation to the long-term trading and
profitability outlook for the International business, COVID-19 continues to have a significant short-term adverse impact on
business performance. Ongoing uncertainty within the travel sector and the subsequent challenges in long-term forecasting
have been reflected within the FY 2021 impairment calculation by increasing the discount rate and reducing the long-term
growth rate applied within the impairment calculation.
The UK Consumer CGU continues to have significant headroom, and as such, no impairment was identified for this CGU.
Notes continued(forming part of the Group Financial Statements) Trainline
Annual Report and
Accounts 2020/21
113
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.
Increase in discount rate
Reduction in long-term growth rate
applied in terminal year
Decrease in Adjusted EBITDA forecast in
each year
2021
UK
Consumer
1pt
2020
UK
Consumer
1pt
0.5pts
0.5pts
15%
10%
2021
UK Trainline
Partner
Solutions
2020
UK Trainline
Partner
Solutions
N/A
N/A
N/A
N/A
N/A
N/A
2021
International
2020
International
1pt
1pt
0.5pts
0.5pts
20%
20%
As the International CGU has been impaired during the period any movement up or down of the above assumptions would
result in a fluctuation in the value in use calculation for the CGU, as follows: 1 pt change in discount rate – £7 million; change
in long-term growth rate of 0.5 pts – £3 million; and 20% change in adjusted EBITDA – £23 million. The UK Consumer CGU is
not sensitive to a change in the above sensitivities and none of the sensitivities change the conclusion that the UK Consumer
CGU is not impaired.
11. Property, plant and equipment
This note details the physical assets used by the Group in running its business.
Accounting policy
Items of property, plant and equipment (‘PPE') are measured at cost less accumulated depreciation and any accumulated
impairment losses. Any gain or loss on disposal of an item of property, plant and equipment is recognised in the income
statement. Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated
residual values using the straight-line method over their estimated useful lives and is generally recognised in the income
statement. The estimated useful lives of property, plant and equipment are as follows:
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Leasehold improvements
Right-of-use assets
3–7 years
3–10 years/remaining lease length if shorter
Lease length
The Group tests the carrying value of assets including right-of-use (‘ROU') assets for impairment if there is an indicator
of impairment.ThePPEareincludedinthecarryingvalueoftheCGUsandhavebeenincludedintheCGUimpairment
assessments (see Note 10). There were no additional indicators of specific impairment identified during the year relating
to PPE(FY2020:noindicators).
Property, plant and equipment as at 28 February 2021:
Cost:
At 29 February 2020
Additions
Disposals
Lease extensions1
At 28 February 2021
Accumulated depreciation and impairment:
At 1 March 2020
Depreciation
Disposals
At 28 February 2021
Carrying amounts:
At 28 February 2021
Plant and
equipment
£’000
Leasehold
improvements
£’000
Right–of–use
assets
£’000
8,278
1,411
(18)
–
4,448
–
–
–
17,692
4,948
–
4,221
Total
£’000
30,418
6,359
(18)
4,221
9,671
4,448
26,861
40,980
(6,075)
(1,301)
14
(1,445)
(445)
–
(2,714)
(3,143)
–
(10,234)
(4,889)
14
(7,362)
(1,890)
(5,857)
(15,109)
2,309
2,558
21,004
25,871
1 Relates to lease extensions which do not constitute a new lease addition pursuant to IFRS 16.
Financial Statements
114
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Annual Report and
Accounts 2020/21
11. Property, plant and equipment continued
Property, plant and equipment as at 29 February 2020:
Cost:
At 28 February 2019
Recognition of right-of-use asset on initial application of IFRS 16
Adjusted balance at 1 March 2019
Additions
Disposals
At 29 February 2020
Accumulated depreciation and impairment:
At 1 March 2019
Depreciation
Disposals
At 29 February 2020
Carrying amounts:
At 29 February 2020
Plant and
equipment
£’000
Leasehold
improvements
£’000
Right-of-use
assets
£’000
Total
£’000
11,415
17,692
29,107
1,365
(54)
4,448
–
4,448
–
–
–
17,692
17,692
–
–
4,448
17,692
30,418
(1,001)
(444)
–
–
(2,714)
–
(5,953)
(4,333)
52
6,967
–
6,967
1,365
(54)
8,278
(4,952)
(1,175)
52
(6,075)
(1,445)
(2,714)
(10,234)
2,203
3,003
14,978
20,184
Additions in the year includes £nil (FY 2020: £nil) of directly attributable borrowing costs.
12. Trade and other receivables
Trade and other receivables include amounts due from credit card companies for consumer ticket sales and amounts
due from business customers and Train Operating Companies on account.
Receivables are held with the objective to collect the contractual cash flows and are therefore recognised initially at
fair value and subsequently measured at amortised cost using the effective interest rate method, less provision for
impairment. A provision for the expected loss on trade receivables is established at inception. This is modified when
there is a change in the credit risk. The amount of the expected loss is considered immaterial for the Group.
Trade receivables
Other receivables
Prepayments and accrued income
Current tax receivable
Total trade and other receivables
2021
£’000
9,043
590
7,361
7,522
24,516
2020
£’000
43,154
3,453
5,471
–
52,078
There is no material difference between the carrying value and fair value of trade and other receivables. See Note 21 for
more detail on the trade and other receivables accounting policy.
13. Trade and other payables
Trade and other payables include liabilities for ticket sale monies to be passed on to carriers, as well as accounts
payable and accruals for general business expenditure and deferred revenue.
Trade payables
Accruals and deferred revenue
Total trade and other payables
2021
£’000
22,523
15,467
37,990
2020
£’000
136,355
29,380
165,735
There is no material difference between the carrying value and fair value of trade and other payables presented. See Note 21
for more detail on the trade and other payables accounting policy.
Notes continued(forming part of the Group Financial Statements) Trainline
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Accounts 2020/21
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14. Loans and borrowings
This note details a breakdown of the various loans and borrowings of the Group. It also provides the terms and
repayment dates of each of these.
Accounting policy
Borrowings are recognised initially at fair value less attributable transaction costs incurred. Subsequent to initial recognition,
interest-bearing borrowings are stated at amortised cost using the effective interest method. At the date borrowings are
repaid any attributable transaction costs are released as an exceptional finance cost.
Non-current liabilities
Revolving Credit Facility1
Convertible bonds2
Other term debt
Lease liabilities
Total non-current liabilities
Current liabilities
Accrued interest
Lease liabilities
Total current liabilities
2021
£’000
2020
£’000
100,417
147,378
216
18,358
266,369
831
3,336
4,167
141,057
–
388
12,957
154,402
309
2,389
2,698
1 Included within the Revolving Credit Facility is the principal amount of £104.9 million (FY 2020: £146.9 million) and directly attributable transaction costs of
£4.5 million (FY 2020: £5.8 million).
2 Included within the Convertible bonds is the principal amount of £150.0 million and directly attributable transaction costs of £2.6 million.
Terms and repayment schedule
Agreement
Revolving Credit Facility
Convertible bonds
Lease liabilities
Other term debt
Total borrowings
Interest rate
LIBOR +1-2%
1.00%
Year of
maturity
2024
2026
Various
Various
0.0%
2022
Face value
£’000
104,941
150,000
23,427
216
Carrying
amount
£’000
100,417
147,378
21,694
216
278,584
269,705
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.
Revolving Credit Facility
Convertible bonds
Lease liabilities
Other term debt
Total cash flows
Total
contractual
cash flows
£’000
104,941
150,000
23,427
216
278,584
Less than
1 year
£’000
Between
1 and 2 years
£’000
Between
2 and 5 years
£’000
–
–
3,863
178
4,041
–
–
3,761
38
104,941
150,000
12,867
–
3,799
267,808
Over
5 years
£’000
–
–
2,936
–
2,936
Financial Statements
116
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Annual Report and
Accounts 2020/21
14. Loans and borrowings continued
Revolving Credit Facility
The Revolving Credit Facility became effective on 26 June 2019, the total facility amount is £350.0 million. The facility allows
draw downs in cash or non-cash to cover bank guarantees. At 28 February 2021 the cash drawn amount is £104.9 million (FY
2020: £146.9 million), the non-cash bank guarantee drawn amount is £21.9 million (FY 2020: £113.8 million) and the undrawn
amount on the facility is £223.2 million (FY 2020: £89.3 million).
The Group’s Revolving Credit Facility is secured by a fixed and floating charge over certain assets of the Group. Interest
is payableonamarginof1.0%to2.0%aboveLIBOR.TheGroupissubjecttocertainbankcovenantsunderthisfacility,
however, those financial covenants have been waived by the Group’s loan syndicate until and including February 2022,
to supportthebusinessthroughtheCOVID-19pandemicandtherelatedimpactontrading.Aspartofthewaiver,theGroup
is required to maintain a minimum liquidity headroom of £50 million on a monthly basis from April 2020 to December 2020.
This requirement was increased to £75 million on a monthly basis subsequent to the issuance of the convertible bonds in
January 2021. The Group was in compliance with the liquidity requirement throughout the year. See Note 21 for the
related disclosure.
Convertible bonds
On 7 January 2021, Trainline plc announced the launch of an offering of £150.0 million of senior secured convertible bonds
due in 2026. Settlement and delivery of convertible bonds took place on 14 January 2021.
The total bond offering of £150.0 million covers a five-year term beginning on 14 January 2021 with a 1% per annum coupon
payable semi-annually in arrears in equal instalments. The initial conversion price was set at £6.6670 representing a
premium of 50% above the share price on 7 January 2021 (£4.444698).
The bonds have been accounted for as a liability of £150.0 million. Directly allocable fees of £2.7 million have been offset
against the liability and will be unwound over the lifetime of the instrument. The bond was accounted for as a liability as
certain terms within the terms and conditions attached to the bonds meant Trainline plc has an unavoidable obligation
to settleincash.
15. Other non-current liabilities
As part of the Group’s acquisition of Capitaine Train SAS, the Group issued non-cash consideration in the form of
Tracker Shares and Tracker CPECs to certain employee-shareholder and venture capital sellers. These Tracker Shares
and Tracker CPECs entitled the holders to cash returns, payable on a liquidity event (sale or IPO), that mirrored the
economics of the Company’s actual shares and CPECs. Where employee-shareholders of Capitaine Train SAS continued
to provide services to the post-combination Group and had leaver conditions attached to their Tracker Shares, their
Tracker Shares were accounted for as share-based payments under IFRS 2 Share-Based Payments (see Note 16). All
tracker securities were settled as part of the IPO funds flow.
Accounting policy
Tracker shares are remeasured to fair value at each reporting date. Gains and losses on fair value remeasurement are
recognised in net finance costs.
At the date of the IPO, the difference between the fair value and carrying value was recognised as an exceptional finance
cost. At the date of the IPO the full liability was settled through the issue of ordinary shares in Trainline plc.
The following amounts were recognised in the income statement in relation to these schemes:
Finance costs
Total income statement impact
The carrying value of each instrument on the statement of financial position is £nil (FY 2020: £nil).
2021
£’000
–
–
2020
£’000
12,273
12,273
Notes continued(forming part of the Group Financial Statements) Trainline
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Accounts 2020/21
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16. Share-based payments
During the year the Group has operated a number of equity-settled share-based payment schemes. Before the IPO
the Group had two cash-settled schemes and one equity-settled scheme which were settled in full as part of the IPO
funds flow.
Accounting policy
Equity-settled share-based payments to employees are initially measured at fair value at the grant date and recognised as
a chargeintheincomestatementoverthevestingperiodbasedontheGroup’sestimateofthesharethatwilleventually
vest andadjustedfortheeffectofnon-marketvestingconditions.Acorrespondingincreaseinreservesisalsorecognised
in equity.
Cash-settled share-based payments to employees are initially measured and recorded as a liability at the fair value of the
equity instruments. The initial fair value is then expensed in employee benefit expenses evenly over the vesting period. The
fair value is remeasured at each balance sheet date with any changes recognised in net finance costs for the relevant period.
Share-based payment charges to 28 February 2021
Income statement
Post-IPO schemes
Total income statement impact
Share-based payment charges to 29 February 2020
Income statement
Pre-IPO schemes
Post-IPO schemes
Total income statement impact
Pre-IPO schemes
Cash-settled schemes
Before the IPO, cash-settled schemes consisted of the following:
Within
administrative
costs
£’000
Within
finance
costs
£’000
7,093
7,093
–
–
Within
administrative
costs
£’000
Within
finance
costs
£’000
3,524
7,107
49,705
–
10,631
49,705
Total
£’000
7,093
7,093
Total
£’000
53,229
7,107
60,336
Joint Share Ownership Plan (‘JSOP’)
The JSOP was a share ownership scheme under which the employee and Equity Trust (Jersey) Limited, the EBT Trustee, held
a jointinterestinclassAshares.InterestsundertheJSOPtooktheformofrestrictedinterestsinclassAsharesintheformer
Parent Company of the Group. An interest permitted a participant to benefit from the increase, if any, in the value of a
number of class A shares over specified threshold amounts. In prior years the fair value of interests awarded was determined
using a Monte Carlo option pricing model. The final IPO value was based on the market value of the shares within the IPO
funds flow.
Tracker shares
As part of the pre-IPO Group’s consideration for the acquisition of Capitaine Train SAS on 16 April 2016, the Group issued
Trackers A, B and E in the shares of one of its subsidiaries to certain selling shareholder-employees of Capitaine Train SAS,
who went on to become employees of the post-combination Group. These Tracker shares and CPECs entitled the holders to
cash proceeds in a liquidity event (sale or IPO) that were calculated as if the holders held shares and CPECs in the former
Parent Company of the Group. The Tracker shares were also subject to a put/call option that was exercisable by the pre-IPO
Parent Company in the event that the holders leave the business. As a result of the link between the put/call option exercise
pricing and the holders’ continued employment in the pre-IPO Group, the arrangement was required to be accounted for
under IFRS 2 – Share-Based Payments as a cash-settled share-based payment. In prior years the fair value of interests
awarded was determined using a Monte Carlo option pricing model. The final IPO value was based on the market value of the
shares within the IPO funds flow.
Financial Statements
118
Trainline
Annual Report and
Accounts 2020/21
16. Share-based payments continued
Pre-IPO schemes continued
Tracker shares continued
The Group’s liabilities under the JSOP and Tracker share schemes were settled in the IPO.
As part of the Group’s reorganisation on IPO, the holders of Tracker shares exchanged their entitlements for newly issued
shares in Trainline plc. The Group’s liability to JSOP holders was settled by the Group’s EBT through a combination of cash of
£20.9 million, before deduction of transaction costs, and shares of £25.2 million in Trainline plc. The cash portion of the
consideration was funded by the Group’s EBT selling down part of its shareholding in the Group IPO, which realised proceeds
of £30.7 million, after the deduction of fees.
Equity-settled schemes
Certain employees held shares in the former Parent Company of the Group. The underlying agreement in relation to these
shares included employment conditions and therefore all such shares were accounted for as equity-settled share-based
payments. As these shares were purchased by employees at fair value, no associated share-based payment charge has been
booked through the income statement.
As part of the Group’s reorganisation on IPO, all holders of shares in the former Parent Company of the Group exchanged
their interests for newly issued shares in Trainline plc.
The following amounts were recognised in relation to the pre-IPO schemes:
Income statement
Employee costs
Finance costs
Total income statement impact
Statement of financial position
JSOP
Tracker shares
Total statement of financial position
2021
£’000
2020
£’000
–
–
–
–
–
–
3,524
49,705
53,229
–
–
–
All costs of the pre-IPO share-based payment schemes in the year ended 29 February 2020 were funded by the IPO funds
flow and did not represent a cash outflow to the trading business of the Group.
The movements in these share awards can be summarised as follows:
Outstanding
At 1 March 2019
Granted
Forfeited
Exercised
At 29 February 2020
JSOP interests
Number
Tracker Shares
Number
58,108
34,318
–
–
(58,108)
(34,318)
–
–
–
–
The pre-IPO schemes were settled in full at the date of IPO and ceased to exist following that settlement.
Post-IPO schemes
Following the IPO, the Group operates eight equity-settled share-based payment schemes with a £nil exercise price.
1,000 RSU IPO award
The 1,000 restrictive stock unit (‘RSU') IPO award was offered to all Company staff employed at both 26 June 2019 and 31 July
2019, being the IPO date and grant date respectively. The awards vested on 31 July 2020; all employees that have not opted
out or left the business between 26 June 2019 and 31 July 2020 were entitled to 1,000 RSUs which each represent the right to
receive one ordinary share in Trainline plc.
Notes continued(forming part of the Group Financial Statements) Trainline
Annual Report and
Accounts 2020/21
119
Share incentive plan
The share incentive plan (‘SIP') was offered to all UK Company staff employed at both 26 June 2019 and 31 July 2019, being
the IPO date and grant date respectively. The awards will vest on 31 July 2022; all employees that have not opted out or left
the business between 26 June 2019 and 31 July 2022 will be entitled to shares in Trainline plc worth £3,600 at vesting date.
International share incentive plan
The share incentive plan (‘SIP') was offered to all non-UK Company staff employed at both 26 June 2019 and 31 July 2019,
being the IPO date and grant date respectively. The awards will vest on 31 July 2022; all employees that have not opted out or
left the business between 26 June 2019 and 31 July 2022 will be entitled to shares in Trainline plc worth £3,600 at vesting date.
12-month RSU IPO award
The 12-month RSU IPO award is offered to certain members of the executive team and senior management. The awards
vested on 26 June 2020; all participants that had not left the business at this date were entitled to RSUs which each
represented the right to receive one ordinary share in Trainline plc.
Annual RSU award
The annual RSU award is offered to certain members of the executive team and senior management. The annual RSU award
– 2019 will vest in three tranches: 20% on 28 February 2020, 40% on 28 February 2021, and 40% on 28 February 2022. The
annual RSU award – 2020 will vest in three tranches: 33.33% on 28 February 2021, 33.33% on 28 February 2022 and 33.33%
on 28 February 2023. All participants that have not left the business on these dates will be entitled to RSUs which each
represent the right to receive one ordinary share in Trainline plc. Future RSU awards will vest in three equal tranches over
three years. In November 2020 additional shares were granted to specific new joiners as per the grant deed. These shares
will vest under the same tranches as the original shares issued under the scheme.
Annual performance share plan award
The annual performance share plan (‘PSP') award is offered to certain members of the Board and executive team. The annual
PSP award 2019 will vest on 28 February 2022 and the PSP award 2020 will vest on 22 May 2023, with subsequent awards
vesting three years after the grant date. Subject to the Company meeting specified performance conditions relating to
earnings per share and total shareholder returns, all participants that have not left the business at the vesting date will be
entitled to PSPs which each represent the right to receive one ordinary share in Trainline plc. In November 2020 additional
shares were granted to specific new joiners as per the grant deed. These shares will vest under the same tranches as the
original shares issued under the scheme.
Specific RSU award
In addition to the above schemes and as detailed in the prospectus, one member of the Board received a grant of RSUs with
a grant date value of £300,000 (calculated by reference to the offer price) vesting subject to continued appointment to the
Board in equal tranches over the three years following admission.
Matching shares
As of 20 April 2020, all Company employees were entitled to one free matching share for every one partnership share they
purchase under the share incentive plan (‘SIP'), subject to remaining employees for the three-year vesting period.
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Key assumptions used in valuing the share-based payments were as follows:
Exit date
Attrition rate
Weighted average fair value
1,000
RSU IPO
award
31 July
2020
17%
£4.28
Share
incentive
plan
31 July
2022
24%
£4.20
International
share
incentive
plan
12-month
RSU IPO
award
Annual
RSU award
Annual
PSP award
Specific
RSU award
31 July
2022
24%
£4.20
26 June
2020
3 years after
grant date
3 years after
grant date
23%
12–30%
19%–53%
26 June
20201
18%
£3.50
£4.28–£5.12
£3.66–£5.12
£3.50
1 Exit date for first tranche and then annually for following two years’ awards.
Financial Statements
120
Trainline
Annual Report and
Accounts 2020/21
16. Share-based payments continued
Carrying value and fair value of share-based payment liabilities
The carrying value and fair value of the Group’s equity-settled share-based payment arrangements were determined using
option pricing models.
The expense recognised in the year for post-IPO scheme share-based payments is £7.1 million (FY 2020: £7.1 million),
including the relevant employer’s social security contributions.
1,000 RSU IPO award
Share incentive plan
International share incentive plan
12-month RSU IPO award
Annual RSU award
Annual PSP award
Specific RSU award
Matching shares
2021
£’000
1,115
486
54
2,120
2,294
890
109
25
2020
£’000
1,268
281
31
3,839
816
756
116
–
Total income statement impact
7,093
7,107
The movements in share awards are summarised as follows:
Outstanding
At 1 March 2019
Granted
Lapsed
Exercised
At 1 March 2020
Granted
Lapsed
Exercised
1,000 RSU
IPO award
number
Share
incentive
plan number
International
share
incentive
plan number
12-month
RSU IPO
award
number
Annual RSU
award
number
Annual PSP
award
number
Specific RSU
award
number
–
–
–
–
–
–
–
589,000
454,210
50,563
1,904,732
444,570
1,757,249
85,714
(64,000)
(46,278)
(6,856)
(403,977)
(22,077)
(215,324)
–
–
–
–
–
–
–
–
525,000
407,932
43,707
1,500,755
422,493
1,541,925
85,714
–
–
–
–
574,898 2,543,091
(36,000)
(84,843)
(5,139)
(28,823)
(154,411) (1,487,819)
(489,000)
–
– (1,471,932)
(84,527)
–
–
–
–
At 28 February 2021
Exercisable at 28 February 2021
–
–
323,089
38,568
–
–
–
–
758,453
2,597,197
85,714
298,072
–
28,571
Notes continued(forming part of the Group Financial Statements) Trainline
Annual Report and
Accounts 2020/21
121
17. Provisions
The Group holds provisions in relation to dilapidations and historically held a provision in relation to VAT.
Accounting policy
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised
as afinancecost.
The Group provides for the cost of dilapidations in relation to the London, Edinburgh and Paris offices over the minimum
term of the leases. It is expected that the cash flows in relation to provisions will occur at the end of the lease terms, between
2026–2030.
Dilapidation provisions are capitalised as part of the right-of-use assets at inception.
Provisions at 28 February 2021:
As at 1 March 2020
Unwinding of the discount
Created
As at 28 February 2021
Provisions at 29 February 2020:
As at 1 March 2019
Unwinding of the discount
Utilised
Released
As at 29 February 2020
Dilapidation
£’000
681
39
130
850
VAT
£’000
911
–
(658)
(253)
–
Total
£’000
681
39
130
850
Total
£’000
1,566
26
(658)
(253)
681
Dilapidation
£’000
655
26
–
–
681
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18. Capital and reserves
Share capital
Share capital represents the number of shares in issue at their nominal value.
Ordinary shares in the Group are issued, allotted and fully paid up. The holders of ordinary shares are entitled to receive
dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
Shareholding at 28 February 2021 and 29 February 2020
Ordinary shares – £0.01
Number
480,680,508
£’000
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 was £1.00 but the initial offering price was £3.50.
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 £1.00 each, redeemable at the option of the Group.
These shares were redeemed on 20 August 2020.
Financial Statements
122
Trainline
Annual Report and
Accounts 2020/21
18. Capital and reserves continued
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.
Other reserves
At 1 March 2019
Group restructure
SBP1 charge
At 29 February 2020
Addition of treasury shares
SBP1 charge
Allocation of treasury shares to fulfil SBP1
Deferred tax on SBP1
Transfer to retained earnings2
At 28 February 2021
Merger
reserve
£’000
(1,122,218)
–
–
Treasury
reserve
£’000
(21,792)
10,895
SBP1
reserve
£’000
–
–
–
7,360
Total other
reserves
£’000
(1,144,010)
10,895
7,360
(1,122,218)
(10,897)
7,360
(1,125,755)
–
–
–
–
–
(4,123)
–
7,268
–
–
–
5,420
(7,268)
(254)
(280)
(4,123)
5,420
–
(254)
(280)
(1,122,218)
(7,752)
4,978
(1,124,992)
1 SBP – Share-based payment.
2 Transfer to retained earnings relates to the difference between the share price at grant date of the exercised shares and the actual cost of the treasury shares
purchased to fulfil the SBP.
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 their relating rights did not change as part of this transaction and this was treated as a
commoncontroltransactionunderIFRS.Thebalanceofthemergerreserverepresentsthedifferencebetweenthe nominal
valueofthereservesintheVictoriaInvestmentsS.C.A.GroupandthevalueofreservesinTrainlineplcpriorto therestructure.
Treasury reserve
Treasury shares reflect the value of shares held by the Group’s Employee Benefit Trusts (‘EBT’). At 28 February 2021 the
Group’s EBT held 2.1 million shares (FY 2020: 3.1 million) which have a historical cost of £7.8 million (FY 2020: £10.9 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(forming part of the Group Financial Statements) Trainline
Annual Report and
Accounts 2020/21
123
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19. Other employee benefits
This note explains the accounting policies governing the Group’s pension schemes and details the calculations
and actuarial assumptions related to these.
The majority of the Group’s employees are members of a defined contribution pension scheme. Additionally,
the Group operates one defined benefit pension plan which is closed to new entrants.
For defined contribution schemes, the Group pays contributions into separate funds on behalf of the employee
and has no further obligations to employees. The risks associated with this type of plan are assumed by the member.
Contributions paid by the Group in respect of the current year are included within Note 5.
The defined benefit scheme is a pension arrangement under which participating members receive a pension benefit
at retirement determined by the scheme rules, salary and length of pensionable service. The income statement
charge for the defined benefit scheme is the current/past service cost and the net interest cost which is the change
in the net defined benefit liability that arises from the passage of time. The Group underwrites both financial and
demographic risks associated with this type of plan.
Accounting policy
(i) Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount
expected to be paid if there is a present legal or constructive obligation to pay this amount as a result of past service
provided by the employee and the obligation can be estimated reliably.
(ii) Defined contribution plans
Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid
contribution is recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
(iii) Defined benefit plans
The Group participates in a defined benefit scheme which is closed to new members. The assets of the scheme are held
separately from those of the Group. Pension scheme assets are measured using market values.
The Group’s net obligation in respect of defined benefit plans is calculated separately by estimating the amount of future
benefitthatemployeeshaveearnedinthecurrentandpriorperiods,discountingthatamountanddeductingthe fair
value of any plan assets.
The calculation of defined benefit obligations is performed every period end by a qualified actuary using the projected
unit credit method and discounted at the current rate of return on a high-quality corporate bond of equivalent term and
currency to the liability. When the calculation results in a potential asset for the Group, the recognised asset is limited to
the present value of economic benefits available in the form of any future refunds from the plan or reductions in future
contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable
minimum funding requirements.
The scheme is subject to an asset ceiling, meaning when the scheme is remeasured and shows a net asset position
an ‘assetceiling’isappliedequaltothisamount,meaningtheGrouprecognisesnoassetonitsstatementoffinancial
position. This is because the Group does not have an irrevocable right to the surplus of the scheme. If the scheme is in
a netdeficittheGroupwouldrecognisetheliability.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other
comprehensive income. The Group determines the net interest expense/(income) on the net defined benefit liability/
(asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning
of theannualperiodtothethennetdefinedbenefitliability/(asset),takingintoaccountanychangesinthenetdefined
benefit liability/(asset) during the period as a result of contributions and benefit payments. Net interest expense and
other expenses related to defined benefit plans are recognised in the income statement.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past
service or the gain or loss on curtailment is recognised immediately in the income statement. The Group recognises
gains and losses on the settlement of a defined benefit plan when the settlement occurs.
(iv) Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits
and when the Group recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12
months of the end of the reporting period, then they are discounted.
Financial Statements
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19. Other employee benefits continued
Defined benefit pension plan
(a) The Scheme
Qjump Limited, a subsidiary of the Group, operates a defined benefit pension scheme which is closed to new entrants.
The Qjump Shared Cost Section of the Railways Pension Scheme (‘the Scheme’) is a funded scheme and provides benefits
based on final pensionable pay. The assets of the Scheme are held separately from those of the Company and are
managed by RPMI. As the Scheme is currently in an asset position no contributions are expected from the Group in the
coming year, apart from to cover the Scheme’s administration costs.
Triennial valuation
ThemostrecentpublishedactuarialvaluationwascarriedoutbytheSchemeActuaryasat31December2019.
IAS 19 Employee benefits valuation
The IAS 19 valuations of the defined benefit pension scheme have been updated at each period end, the latest being
28 February 2021 by qualified independent actuaries Willis Towers Watson Ltd. The main financial assumptions applied
in the valuations and an analysis of schemes’ assets are as follows:
(i) Actuarial assumptions
The following were the principal actuarial assumptions at the reporting date (expressed as weighted averages).
Discount rate
Price inflation (RPI measure)
Increases to deferred pensions (CPI measure)
Pension increase (CPI measure)
Salary increase
2021
% pa
2.2
3.05
2.6
2.6
n/a
Assumptions regarding future mortality have been based on published statistics and mortality tables. The current
longevities underlying the values of the defined benefit obligation at the reporting date were as follows:
Longevity at age 65 for current pensioners
Males
Females
Longevity at age 65 for current members aged 45
Males
Females
2021
years
19.9
22.7
21.3
24.3
2020
% pa
1.9
2.8
2.1
2.1
n/a
2020
years
20.2
22.8
21.9
24.7
Assumptions used are best estimates from a range of possible actuarial assumptions, which may not necessarily be borne
out in practice.
Given the net position is not significant, changes in assumptions are not likely to impact the valuation significantly.
When defined benefit funds have an IAS 19 surplus, they are recorded at the lower of that surplus and the future economic
benefits available in the form of a cash refund or a reduction in future contributions. Any adjustment to the surplus is
recorded in other comprehensive income.
Notes continued(forming part of the Group Financial Statements)
Trainline
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125
2021
£’000
2020
£’000
(3,688)
(1,144)
(4,832)
4,946
114
(46)
(68)
–
2021
£’000
27
–
27
–
27
2021
£’000
105
61
43
(269)
33
(27)
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(4,061)
(572)
(4,633)
4,689
56
(22)
(34)
–
2020
£’000
24
–
24
(6)
18
2020
£’000
7
532
(124)
(212)
(221)
(18)
Liability
Deferred members
Pensioner members (including dependants)
Total
Value of assets at end of year
Funded status at end of year
Adjustment for the member’s share of surplus
Effect of asset ceiling
Net defined benefit at end of year
Employer’s share of administration cost
Past service cost adjustment
Total employer’s share of service cost
Employer’s share of net interest on net defined benefit
Employer’s share of pension expense
(ii) Other comprehensive income (‘OCI’)
Loss due to the liability expense
Loss/(gain) due to the liability assumption changes
Adjustment for the members’ share
Return on plan assets (greater)/less than discount rate
Change in effect of the asset ceiling
Total gain recognised in OCI
(b) Movements in net defined benefit asset/liability
The following table shows the reconciliation from the opening balances to the closing balances for net defined benefit
liability/asset and its components.
Defined benefit obligation
Opening balance
Interest cost
Defined benefit obligation
Actuarial gain arising from:
Financial assumptions
Experience adjustment
Demographic adjustment
Other
Benefits paid
Section amendment
Closing balance
2021
£’000
4,633
85
4,718
121
105
(60)
166
(52)
–
2020
£’000
4,078
107
4,185
626
7
(94)
539
(91)
–
4,832
4,633
Financial Statements
126
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19. Other employee benefits continued
(b) Movements in net defined benefit asset/liability continued
Reconciliation of value of assets:
Opening value of scheme assets
Interest income on assets
Return on plan assets greater than discount rate
Employer and employee contributions
Actual benefit payments
Administration costs
Closing value of scheme assets
(c) Plan assets
Plan assets comprise:
Growth assets
Government bonds
Non-government bonds
Other assets
Total plan assets
2021
£’000
4,689
86
269
–
(52)
(46)
2020
£’000
4,491
117
212
–
(91)
(40)
4,946
4,689
2021
£’000
3,117
1,240
578
11
4,946
2020
£’000
2,872
1,311
500
6
4,689
All equity securities and government bonds have quoted prices in active markets.
(d) Risk exposure
Through its defined benefit pension plans, the Group is exposed to a number of risks, the most significant of which are
detailed below:
•
•
•
•
Asset volatility: There is a risk that a fall in asset values is not matched by a corresponding reduction in the value placed
on the Scheme’s defined benefit obligation. The Scheme holds a proportion of growth assets, which are expected to
outperform corporate and government bond yields in the long term, but gives exposure to volatility and risk in the
short term.
Change in bond yields: A decrease in corporate bond yields will increase the value placed on the Scheme’s defined
benefit obligation, although this will be partially offset by an increase in the value of the Scheme’s corporate bond
holdings.
Inflation risk: The majority of the Scheme’s defined benefit obligation is linked to inflation, where higher inflation will
lead to a higher value being placed on the defined benefit obligation. Some of the Scheme’s assets are either unaffected
by inflation or loosely correlated with inflation (e.g. growth assets), meaning that an increase in inflation will generally
increase the deficit.
Life expectancy: An increase in life expectancy will lead to an increased value being placed on the Scheme’s defined
benefit obligation. Future mortality rates cannot be predicted with certainty.
Notes continued(forming part of the Group Financial Statements) Trainline
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(e) Sensitivity analysis
A quantitative sensitivity analysis for significant assumptions as at 28 February is shown below:
Discount rate
0.25% decrease
0.25% increase
Price inflation (CPI measure)
0.25% decrease
0.25% increase
Life expectancy
Decrease by 1 year
Increase by 1 year
Approximate change in
defined benefit obligation
2021
£’000
2020
£’000
270
(251)
(246)
264
185
(185)
292
(269)
(264)
258
(164)
164
(f) Funding arrangements
Under the UK’s scheme-specific funding regime, contributions are payable in line with the Schedule of Contributions from
the most recent formal actuarial valuation. There are no contributions expected for next year.
20. Changes in liabilities arising from financing activities
The table below details changes in liabilities arising from financing activities, including both cash and
non-cash changes.
Balance at 1 March 2020
Changes from cash flows
Interest paid
Issue costs relating to loans and borrowings
Proceeds from issuance of convertible bonds
Proceeds from Revolving Credit Facility
Repayment of Revolving Credit Facility and other borrowings
Repayment of lease liability
Total changes from financing cash flows
Changes in fair value
Other changes
Capitalised borrowing cost releases
Interest expense
Additional lease liabilities
Remeasurement of lease liabilities1
Foreign exchange revaluation
Balance at 28 February 2021
1 Remeasurement of the lease liabilities arising from the modification of the lease term.
Loans &
borrowings
(current &
non-current)
£’000
141,754
(4,940)
(2,690)
150,000
95,000
(137,184)
–
100,186
–
1,428
5,473
–
–
–
248,841
Other
non-current
liabilities
£’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Lease
liabilities
£’000
Total
£’000
15,346
157,100
(536)
–
–
–
–
(2,676)
(3,212)
–
–
694
4,631
4,261
(25)
(5,476)
(2,690)
150,000
95,000
(137,184)
(2,676)
96,974
–
1,428
6,167
4,631
4,261
(25)
21,695
270,536
Financial Statements
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20. Changes in liabilities arising from financing activities continued
Loans &
borrowings
(current &
non-current)
£’000
Other
non-current
liabilities
£’000
Lease
liabilities
£’000
Total
£’000
Balance at 1 March 2019
269,253
19,561
17,692
306,506
Changes from cash flows – Restated
Interest paid
Issue costs relating to loans and borrowings
Repayment of pre-IPO borrowings
Proceeds from Revolving Credit Facility
Repayment of Revolving Credit Facility and other borrowings
Repayment of lease liability
Total changes from financing cash flows – Restated
Changes in fair value
Other changes – Restated
Capitalised borrowing costs
(9,711)
(6,832)
(276,763)
206,941
(60,223)
–
(146,588)
–
9,318
–
–
–
–
–
–
–
–
–
Settlement of other non-current liabilities1
–
(19,561)
Interest expense
Foreign exchange revaluation
Balance at 29 February 2020
9,771
–
141,754
–
–
–
–
–
–
–
–
(3,075)
(9,711)
(6,832)
(276,763)
206,941
(60,223)
(3,075)
(3,075)
(149,663)
–
–
–
828
(99)
–
9,318
(19,561)
10,599
(99)
15,346
157,100
1 The amount shown under the ‘Settlement of other non-current liabilities’ of £19.6 million was reclassified from ‘changes from cashflows’ to ‘other changes’
to reflectthenatureofthistransaction,beingsettlementthroughtheissueofshares.‘Totalchangesfromfinancingcashflows’haschangedfromanoutflow
of £169.2 million to an outflow of £149.7 million. This reclassification did not have any impact on the consolidated statement of cash flows or any other
primary statements.
Notes continued(forming part of the Group Financial Statements) Trainline
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21. Financial instruments
Financial instruments comprise financial assets and financial liabilities. The fair values and carrying amounts
are set out in the table below.
Accounting policy
Categorisation within the hierarchy, measured or disclosed at fair value, has been determined based on the lowest level
of inputthatissignificanttothefairvaluemeasurementasfollows:
•
•
•
Level 1 – valued using quoted prices in active markets for identical assets or liabilities
Level 2 – valued by reference to valuation techniques using observable inputs other than quoted prices included
within Level1
Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data
Cash and cash equivalents
Trade and other receivables
Derivative assets
Total financial assets
Trade and other payables
Loans and borrowings
Lease liabilities
Total financial liabilities
Measurement
level
1
2
2
2
2
2
2021
£’000
36,575
9,633
–
2020
£’000
92,120
46,607
6
46,208
138,733
(22,523)
(248,011)
(21,694)
(136,355)
(141,754)
(15,346)
(292,228)
(293,455)
There have been no transfers between levels in any of the years. Other non-current liabilities are valued using market
established valuation techniques.
Accounting definitions
Financial assets
The Group classifies its non-derivative financial assets into the following categories: cash and cash equivalents, and trade
and other receivables. The classification depends on the purpose for which the assets are held. The classification is first
performed at initial recognition and then re-evaluated at every reporting date for financial assets other than those held at
fair value through the income statement.
(i) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits.
The carrying value of cash in the statement of financial position is valued at fair value.
(ii) Trade and other receivables
Trade and other receivables are initially recognised at fair value. Subsequent to initial recognition, they are measured at
amortised cost using the effective interest method, less any impairment losses. Trade and other receivables are presented in
current assets in the statement of financial position, except for those with maturities greater than one year after the
reporting date.
Trade and other receivables, classified as financial assets, exclude prepayments.
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21. Financial instruments continued
(iii) Derivative assets
The Group’s only derivative asset is an interest rate cap, which is used according to the Group’s risk management policy
relating to interest rate risk.
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into
and are subsequently remeasured at fair value through profit and loss. Derivatives are carried as assets when the fair value
is positive and as liabilities when the fair value is negative. The fair value of the interest rate cap held at year end was valued
based on broker quotes.
Financial liabilities
The Group classifies its financial liabilities into the following categories: trade and other payables, loans and borrowings,
other non-current liabilities, and lease liabilities.
(i) Trade and other payables
Trade payables and accruals, which include amounts owed to carriers in respect of ticket sale monies that the Group has
collected on their behalf and amounts due to other suppliers for general business expenditure, are initially recognised
at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured
at amortised cost using the effective interest method.
Trade and other payables are classified as financial liabilities, excluding deferred revenue.
(ii) Loans and borrowings
The financial liabilities recognised in this category include secured loan facilities, convertible bonds and preference
shares heldbytheGroupandarepresentedinborrowingsinbothcurrentandnon-currentliabilitiesinthestatement
of financialposition.
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.
(iii) Other non-current liabilities
The Group has issued tracker entitlements as disclosed in Note 15.
(iv) Lease liabilities
The Group recognises lease liabilities for leases within the scope of IFRS 16 Leases.
Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and liquidity
risk. The Group’s overall risk management framework seeks to minimise potential adverse effects on the Group’s financial
performance.
(i) Risk management framework
The Group’s Directors have overall responsibility for the establishment and oversight of the Group’s risk management
framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate
risk limits and controls and to monitor risks and adherence to conditions and the Group’s activities. The Group, through its
training and management standards and procedures, aims to maintain a disciplined and constructive control environment in
which all employees understand their roles and obligations.
(ii) Market risk
The Group is exposed to movements in LIBOR on its variable rate Revolving Credit Facility (see Note 14) and the Group has
transactional foreign currency exposures, which arise from sales and purchases by the relevant segment in currencies other
than the Group’s functional currency.
To manage the risk of LIBOR rate increases, the Group held an interest rate cap which expired in January 2021, which had the
effect of limiting the Group’s exposure on £190 million of its borrowings to a maximum LIBOR of 1.0%.
Notes continued(forming part of the Group Financial Statements) Trainline
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(iii) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Group’s receivables from customers. Trade receivables are assessed
for risk of default by customers on a periodic basis and terms of trade are adjusted accordingly. Trade receivables are insured
on risk and cost grounds.
Under the terms of the Group’s retail licences, carriers require certain security arrangements with the Group in order to
mitigate its credit risk under the payment and settlement procedures outlined in the licences. The Group satisfies these
security arrangements through letters of credit from the Group’s lenders. The letters of credit are provided under the
Group’s £350 million Revolving Credit Facility, details of which are included in Note 14.
During COVID-19 extra procedures have been put in place to monitor customer and counterparty debt. Debt has been
reviewed on a weekly basis and any customers who fall overdue are chased immediately; if payment is not received, the
account was put on hold until previous debts are cleared.
(iv) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Group’s approach is to ensure, as far as possible,
that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group maintains a daily cash forecast in order to ensure that it has sufficient liquidity to cover all expected cash flows
including scheduled repayment of debt.
In addition, a Revolving Credit Facility under which the Group is able to draw down cash of up to £350 million is in place. Of
the £350 million, £8.2 million (FY 2020: £97.5 million) was utilised by a guarantee provided to the Rail Settlement Plan Limited.
A further £13.2 million (FY 2020: £15.2 million) was utilised by guarantees provided to European Train Operating Companies
and £0.5 million (FY 2020: £0.7 million) for other guarantees. The remaining headroom on the Revolving Credit Facility at
28 February 2021 was £223.2 million (FY 2020: £105.6 million); this is available to draw in cash or bank guarantees.
Under the Revolving Credit Facility, the Group’s covenant requires the ratio of consolidated net debt to consolidated Adjusted
EBITDA to be no more than 3.75x. This covenant ratio is tested on a semi-annual basis. As disclosed in Note 14, this financial
covenant has been waived by the Group’s loan syndicate until and including February 2022. As part of the waiver, the Group
is required to maintain a minimum liquidity headroom of £50 million on a monthly basis from April 2020 to December 2020.
This requirement was increased to £75 million on a monthly basis subsequent to the issuance of the convertible bonds in
January 2021. The Group was in compliance with the liquidity requirement throughout the year. The Group is expected to
return to its semi-annual financial covenant tests on 31 August 2022.
Moreover, the Group’s issuance of £150 million convertible bonds, as disclosed in Note 14, enabled the Group to further
strengthen its liquidity. The Group used £137.0 million of the convertible bonds to repay cash drawings on the RCF in FY 2021.
Capital management
The Group defines capital as equity, borrowings (Note 14), and cash and cash equivalents. The Group’s policy is to maintain
a strong capital base that ensures financial stability and provides a solid foundation for ongoing development of business
operations and maintains investor and creditor confidence. The Group’s objectives when managing capital are to ensure the
Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for stakeholders. The
Group currently has sufficient capital for its needs.
The Group has requirements under the Revolving Credit Facility of how drawn amounts can be used. This RCF agreement
states drawings should be used for financing or refinancing for general corporate purposes and working capital requirements,
including capital expenditure and acquisitions.
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22. Leases
Accounting policy
At inception of a contract, the Group assesses whether or not a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. When a lease is recognised in a contract the Group recognises a right-of-use asset and a
lease liability at the lease commencement date.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any
lease prepayments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any
lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The
estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In
addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change
in future lease payments arising from a change in an index or rate, or if the Group changes its assessment of whether it will
exercise a purchase, extension or termination option. If there is an extension on the lease term that is not considered a new
lease, the lease liability is remeasured using revised payments and a revised discount rate at the date of the modification.
A corresponding adjustment is made to the right-of-use asset.
The Group presents right-of-use assets in property, plant and equipment and leased liabilities in loans and borrowings in the
statement of financial position.
The Group leases assets including land and buildings that are held within property, plant and equipment. Information about
leases for which the Group is a lessee is presented below.
(a) Right-of-use assets
Details of the right-of-use is shown on Note 11.
Notes continued(forming part of the Group Financial Statements) Trainline
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2021
£’000
3,336
18,358
21,694
2021
£’000
3,143
694
3,837
2021
£’000
3,212
2020
£’000
2,389
12,957
15,346
2020
£’000
2,714
828
3,542
2020
£’000
3,075
(b) Lease liabilities in the statement of financial position
Current liabilities
Non-current liabilities
The maturity analysis of lease liabilities is disclosed in Note 14.
(c) Amounts charged in the income statement
Depreciation expense of right-of-use assets
Interest expense in lease liabilities
(d) Cash outflow
Total cash outflow for leases
23. Government grants
Accounting policy
Government grants are recognised when there is reasonable assurance that the grant will be received and all
attached conditions will be complied with. Government grants that compensate the Group for expenses incurred are
recognised in the profit or loss in the periods in which the expenses are recognised and are presented as a deduction
from the related expense.
UK government grants
The Coronavirus Job Retention Scheme (‘CJRS'), is the UK government’s support measure for organisations during the
COVID-19 pandemic. The Group participated in the CJRS and received grants aggregating to £0.5 million. There are no
unfulfilled conditions or contingencies attached to this grant.
The Group voluntarily repaid all amounts claimed under the CJRS in February 2021.
French government grants
The Group participated in a number of schemes introduced by the French government to support certain eligible businesses
amidst the COVID-19 pandemic and received grants aggregating to £1.3 million. There are no unfulfilled conditions or
contingencies attached to any of these grants.
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24. List of subsidiaries
The Group holds/held, directly or indirectly, share capital in the following companies:
Name of
company
Victoria Intermediate Topco Limited1, 2
Victoria Investments Finco Limited
Victoria Investments Intermediate Holdco Limited
Victoria Investments PIKCo Limited2
Victoria Investments Midco Limited2
Victoria Investments Bidco Limited2
Victoria Investments Newco Limited1, 2
Trainline Investments Holdings Limited2
Trainline International Limited
Trainline France SAS
Trainline SAS
Trainline Group Investments Limited2
Trainline Junior Mezz Limited2
Trainline Holdings Limited2
Trainline.com Limited
Qjump Limited
Trainline Rail Enquiry Services Limited2
Trainline Short Breaks Limited2
Trainline Italia S.R.L
Railguard Limited
Trainline Holdco Limited
Victoria Investments S.C.A
Victoria Manager S.a.r.l
Country of
incorporation
Jersey
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Jersey
United Kingdom
United Kingdom
France
France
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Italy
United Kingdom
United Kingdom
Luxembourg
Luxembourg
Ownership
Registered
address
Nature of
business
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
b
a
a
a
a
a
b
a
a
c
c
a
a
a
a
a
a
a
d
a
a
e
e
In liquidation
Holding
Holding
In liquidation
In liquidation
In liquidation
In liquidation
In liquidation
Holding
Holding
Trading
In liquidation
In liquidation
In liquidation
Trading
Trading
In liquidation
In liquidation
Holding
Trading
Holding
Holding
Holding
1 Victoria Investments Newco Limited and Victoria Intermediate Topco Limited are incorporated in Jersey but tax domiciled in the UK.
2 Denoted subsidiaries went into liquidation on 26 February 2021 due to a Group reorganisation undertaken post the IPO.
120 Holborn, London, EC1N 2TD
Registered address key:
a
b 47 Esplanade, St Hellier, Jersey, JE1 0BD
c
20 rue Saint Georges, 75009 Paris
d Corso Vercelli, 40 20145 Milan, Italy
e
2, rue Edward Steichen, L-2540 Luxembourg
The following subsidiaries are exempt from the Companies Act 2006 requirements relating to the audit of their individual
accounts by virtue of Section 479A of the Act as this Company has guaranteed the subsidiary companies under Section 479C
of the Act:
Victoria Investments Finco Limited registered no. 09394939
Trainline International Limited registered no. 06881309
Qjump Limited registered no. 04124436
Railguard Limited registered no. 09621101
Trainline Holdco Limited registered no. 12098773
Victoria Investments Intermediate Holdco Limited registered no. 09451259
Notes continued(forming part of the Group Financial Statements) Trainline
Annual Report and
Accounts 2020/21
135
25. Related parties
During the year, the Group entered into transactions in the ordinary course of business with related parties.
Transactions with the Group’s former controlling shareholder
During the year fees of £nil (FY 2020: £5.4 million) were paid to KKR and Co. Inc and its subsidiaries. None of these fees
are expectedtoreoccurgoingforward.KKRandCo.Incceasedtobethecontrollingshareholderon11November2019.
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
£1,545,336 (FY 2020: £5,192,600); post-employment benefits £136,795 (FY 2020: £127,160); and ongoing share-based payment
schemes £419,856 (FY 2020: £311,811). No other long-term benefits or termination benefits were paid (FY 2020: £nil). The
highest paid Director received: short-term employee benefits £380,090 (FY 2020: £3,580,555); post-employment benefits
£40,647 (FY 2020: £37,438); and ongoing share-based payment schemes £202,676 (FY 2020: £80,266). There were two
Directors to whom retirement benefits are accruing under defined contribution schemes (FY 2020: two).
Information on the emoluments of the Directors who served during the year, together with information regarding the
beneficial interest of the Directors in the ordinary shares of the Company is included in the Directors’ Remuneration Report
on pages 70 to 78.
The IPO triggered the crystallisation of previous share-based payment schemes with key management personnel. In FY
2020, £12.9 million of the exceptional finance charge related to cash-settled share-based payment schemes with key
management personnel (Note 16). In FY 2020, £64.6 million crystallised on equity-settled share-based payment schemes
in relationtokeymanagementpersonnel,forwhichthereisnocash,incomestatementorstatementoffinancial
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 28 February 2021 key management personnel held 9,947,734 shares in Trainline plc (FY 2020: 11,185,560 shares).
26. Capital commitments
This note details any capital commitments in contracts that the Group has entered into which have not been
recognised as liabilities on the statement of financial position.
The Group entered into contracts in relation to office refurbishments and is committed to incurring payments of £2.4 million
as of 28 February 2021 (FY 2020: £nil). These commitments are expected to be settled in FY 2022.
27. Post balance sheet events
There have been no material post balance sheet events between 28 February 2021 and the date of the approval of these
Financial Statements.
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136
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Annual Report and
Accounts 2020/21
Parent Company statement of financial position
Non-current assets
Investments
Deferred tax asset
Current assets
Cash and cash equivalents
Trade and other receivables
Amounts owing from subsidiaries
Current liabilities
Trade and other payables
Amounts owing to subsidiaries
Loan and borrowings
Net current assets
Total assets less current liabilities
Non-current liabilities
Loan and borrowings
Net assets
Equity
Share capital
Share premium
Preference shares
Retained earnings
Share-based payment reserve
Total equity
Notes
2021
£’000
2020
£’000
2
3
4
4
5
1,888,364
1,759,306
981
–
1,889,345
1,759,306
1,972
1,053
37,769
40,794
(836)
(14,063)
(831)
(15,730)
935
2,105
45,922
48,962
(697)
–
(270)
(967)
25,064
47,995
1,914,409
1,807,301
5
(247,795)
(141,057)
(247,795)
(141,057)
1,666,614
1,666,244
6
6
6
6
6
4,807
4,807
1,198,703
1,198,703
–
458,126
4,978
50
462,684
–
1,666,614
1,666,244
The notes on pages 138 to 139 form part of the Financial Statements.
These Financial Statements were approved by the Board of Directors of Trainline plc (registered number 11961132)
on 6 May 2021 and were signed on its behalf by
Jody Ford
Chief Executive Officer
6 May 2021
Shaun McCabe
Chief Financial Officer
6 May 2021
Trainline
Annual Report and
Accounts 2020/21
137
Parent Company statement of changes in equity
For the year ended 28 February 2021:
Share
capital
£’000
Share
premium
£’000
Preference
shares
£’000
At 1 March 2020
Preference share redemption
Loss after tax
Share-based payments
Transfer between reserves1
4,807
1,198,703
–
–
–
–
–
–
–
–
Balance as at 28 February 2021
4,807
1,198,703
50
(50)
–
–
–
–
Retained
earnings
£’000
462,684
–
(4,838)
–
280
SBP
reserve
£’000
–
–
–
5,258
(280)
Total
equity
£’000
1,666,244
(50)
(4,838)
5,258
–
458,126
4,978
1,666,614
1 Transfer between reserves relates to the difference between the share price at grant date of the exercised shares and the actual cost of the treasury shares
purchased to fulfil the SBP.
For the year ended 29 February 2020:
On incorporation as at 24 April 2019
Share
capital
£’000
–
Shares issued on Group restructure2
449,095
1,122,738
Shares issued on listing net of fees
31,526
Issue of shares
Loss after tax
Share capital reduction
59
–
(475,873)
75,817
148
–
–
Share
premium
£’000
Preference
shares
£’000
Retained
earnings
£’000
–
50
–
–
–
–
–
–
–
–
–
(13,189)
475,873
Total
equity
£’000
50
1,571,833
107,343
207
(13,189)
–
Balance as at 29 February 2020
4,807
1,198,703
50
462,684
1,666,244
2 See Note 5 for additional detail.
The notes on pages 138 to 139 form part of the Financial Statements.
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Annual Report and
Accounts 2020/21
Notes to the Parent Company Financial Statements
1. Basis of preparation
The Financial Statements are presented in pounds sterling, rounded to the nearest thousand, unless otherwise stated. These
financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework
(‘FRS 101'). In preparing these Financial Statements, the Company applies the recognition, measurement and disclosure
requirements of International Accounting Standards in conformity with the requirements of the Companies Act 2006
(‘Adopted IFRSs'), but makes amendments where necessary in order to comply with the Companies Act 2006 and has set out
below where advantage of the FRS 101 disclosure exemptions has been taken.
As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in
relation to share-based payments, financial instruments, capital management, presentation of comparative information in
respect of certain assets, presentation of a cash flow statement, standards not yet effective, impairment of assets and
certain related party transactions. Where required, equivalent disclosures are given in the Consolidated Financial
Statements.
As permitted by section 408(4) of the Companies Act 2006, a separate income statement and statement of comprehensive
income for the Company has not been included in these Financial Statements. The principal accounting policies adopted are
described below. They have all been applied consistently to all years presented.
Amounts receivable by the Company’s auditor and its associates in respect of services to the Company and its associates,
other than the audit of the Company’s Financial Statements, have not been disclosed as the information is required instead
to be disclosed on a consolidated basis in the Consolidated Financial Statements.
2. Investment in subsidiaries
Investments in subsidiaries are stated at cost less any provision for impairment. The investment relates to the Company’s
investments in Trainline Holdco Ltd, Victoria Investments S.C.A (‘SCA') and Victoria Manager S.a.r.l.
Opening balance
Additions on Group restructure1
Capital contribution
Closing balance
1 See Note 6 and statement of changes in equity for additional detail.
2021
£’000
1,759,306
2020
£’000
–
–
1,571,833
129,058
187,473
1,888,364
1,759,306
During the year, the Company made an additional capital contribution to Trainline Holdco Limited in exchange for new shares
issued to the Company.
3. Deferred tax asset
The Company has recognised a deferred tax credit on the loss arising in the period as it is expected the loss can be used to
offset the tax charge for the Group in future periods. This is on the basis that it is probable that future taxable profit will be
available against which the unused tax losses and unused tax credits can be utilised. The deferred tax credit in FY 2021 also
includes deferred tax on equity-settled share-based payment charges.
4. Amounts owing from and to subsidiaries
Amounts owing from and to subsidiaries is comprised of intercompany loans with companies within the Group. IFRS 9
expected credit losses have been assessed as immaterial in relation to these balances.
In the current year, amounts owing from and to subsidiaries have been grossed on the balance sheet as there is no right of
offset. The gross FY 2020 amounts owing from subsidiaries were c.7% of total assets. This is not considered a material
disclosure in relation to the quantum of the investments in subsidiaries and therefore the FY 2020 comparatives have not
been restated.
5. Loans and borrowings
Loans and borrowings relate to the Revolving Credit Facility and the convertible bonds. Please refer to Note 14 of the
Consolidated Financial Statements for details.
Trainline
Annual Report and
Accounts 2020/21
139
6. Capital and reserves
Share capital
Share capital represents the number of shares in issue at their nominal value.
Ordinary shares in the Company 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.
On incorporation on 24 April 2019, the Company issued 50,000 preference shares for a total consideration of £50,000, with
one ordinarysharetobeissued.Thepreferenceshareswereredeemedinfullon20August2020.
On 26 June 2019, the Company allotted 449,095,131 ordinary shares as part of a share for share exchange in consideration
for: the transfer of the entire issued share capital of Victoria Investments S.C.A to the Company; the acquisition of the
convertible preferred equity certificates (‘CPECs') and relating interest held by Victoria Investments S.C.A; and the acquisition
andextinguishmentoftheliabilityrelatingtoTrackersharesheldbyVictoriaInvestmentS.C.A.Thenominalvalue ofthese
shares was £1.00 and the consideration per share was £3.50.
On 26 June 2019, the Company issued 31,526,093 ordinary shares in its primary listing. The nominal value of these shares was
£1.00andtheconsiderationpersharewas£3.50.Sharepremiumisstatednetofdirectlyattributablefeesof£3.0 million.
On 26 June 2019, the Company issued an additional 59,284 ordinary shares. The nominal value of these shares was £1.00 and
the consideration per share was £3.50.
Following a reduction in capital the nominal value of ordinary shares was reduced from £1.00 to £0.01 each. The reduction of
capital had no effect on the net asset position of the Company.
Shareholding at 28 February 2021 and 29 February 2020
Ordinary shares – £0.01
Number
480,680,508
£’000
4,807
Share premium
Share premium represents the amount over the nominal value which was received by the Company upon the sale of the
ordinary shares. Upon the date of listing the nominal value of shares was £1.00 but the initial offering price was £3.50.
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 £1.00 each, redeemable at the option of the Company.
These shares were redeemed on 20 August 2020.
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Retained earnings
Retained earnings represents the profit the Company makes that is not distributed as dividends.
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.
The Company allocates the share-based payment charges to the entities in which the employees’ employment contracts sit
through the amounts owing from/to subsidiaries.
Financial Statements
140
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Annual Report and
Accounts 2020/21
Alternative performance measures
When assessing and discussing financial performance, certain alternative performance measures (‘APMs') of historical
or futurefinancialperformance,financialpositionorcashflowsareusedwhicharenotdefinedorspecifiedunderIFRS.
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 believes net ticket sales are a meaningful measure of the Group’s operating performance and size of
operations.
Adjusted EBITDA
The Group believes that adjusted EBITDA is a meaningful measure of the Group’s operating performance and debt
servicing abilitywithoutregardtoamortisationanddepreciationmethodswhichcandiffersignificantly.
Adjusted EBITDA is calculated as profit/(loss) after tax before net financing income/(expense), tax, depreciation
and amortisation,exceptionalitemsandshare-basedpaymentcharges.
Exceptional items are excluded as management believes 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.
A reconciliation of operating profit to adjusted EBITDA is as follows:
Operating (loss)/profit
Adjusting items:
Depreciation and amortisation
Share-based payment charges
Exceptional items
Adjusted EBITDA
Notes
10,11
16
6
2021
£’000
(99,704)
41,199
7,093
26,508
(24,904)
2020
£’000
2,261
50,907
10,631
21,402
85,201
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 believes 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.
Trainline
Annual Report and
Accounts 2020/21
141
Notes
6
7
9
16
2021
£’000
(91,304)
(91,304)
26,508
–
8,563
7,093
(2,538)
(51,678)
2020
£’000
(80,938)
(80,938)
21,402
70,444
23,634
10,631
(8,286)
36,887
A reconciliation from the loss after tax to adjusted earnings is as follows:
Loss after tax
Earnings attributable to equity holders
Adjusting items:
Exceptional items
Exceptional finance costs
Amortisation of acquired intangibles1
Share-based payment charges
Tax impact of the above adjustments
Adjusted (loss)/earnings
1 This consists of the amortisation of brand valuation of £5.2 million (FY 2020: £5.2 million), customer valuation of £3.0 million (FY 2020: £17.8 million) and
software development of £0.4 million (FY 2020: £0.6 million).
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:
Loan and borrowings1
Cash and cash equivalents
Net debt
Notes
14
2021
£’000
2020
£’000
(277,681)
(162,900)
36,575
92,120
(241,106)
(70,780)
1 This amount is the aggregate amount of loans and borrowings as disclosed in Note 14 amounting to £270.5 million (FY 2020: £157.1 million) and the capitalised
finance charges amounting to £7.1 million (FY 2020: £5.8 million).
Operating free cash flow
The Group uses 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:
Cash (used in)/generated from operating activities
Cash exceptional items
Purchase of property, plant and equipment and intangible assets
Operating free cash flow
2021
£’000
(121,254)
1,313
(26,335)
(146,276)
2020
£’000
65,365
20,928
(27,405)
58,888
Liquidity
The Group uses liquidity as a measure of liquidity and to monitor its compliance with the liquidity requirement on the RCF.
The liquidity headroom is cash and cash equivalents plus the undrawn, unencumbered balance on the Group’s Revolving
Credit Facility. As discussed in Note 21, the Group is required to maintain a liquidity headroom of £75 million on a
monthly basis.
Cash and cash equivalents
Undrawn balance on the Revolving Credit Facility
Liquidity headroom
2021
£’000
36,575
223,152
259,727
2020
£’000
92,120
89,316
181,436
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Annual Report and
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142
Notes
Trainline
Annual Report and
Accounts 2020/21
143
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Annual Report and
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144
Notes
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