Trainline plc
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T
rainline
 
Annua
l Repo
r
t and Ac
count
s 20
22
Ann
ual R
epor
t an
d Acco
u
nt
s 2022
Eu
r
op
e’
s
leadi
ng
i
ndependen
t
rai
l
p
la
t
f
orm
T
rainline
Annual Report and Accounts 2022
W
e
empo
w
er
gre
ener
tra
v
el
cho
ices,
conne
c
ti
ng
p
e
ople
a
nd
places.
investors
.thetrain
line.com
Visit our inv
estor site for more informati
on on T
rainline:
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Strategic Report
02
Chair’s statement
04
At a glance
06
CEO’s statement
08
Sustainability
10
Market overview
18
Business
model
22
Our
technology
24
Strategy
32
Key performance indicators
34
CFO’s
financial
highlights
37
Viability
statement
38
Principal risks and
uncertainties
48
Our people and culture
54
TCFD and SASB disclosures
61
Stakeholder
engagement
& s.172 statement
Gov
ernance
68
Chair’s governance
statement
72
Our Board of Directors
76
Report of the Nomination
Committee
78
Report of the Audit and Risk
Committee
82
Directors’
remuneration
report and policy
102
Directors’
report
105
Statement of Directors’
responsibilities
Financial Statements
108
Independent
auditor’s report
119
Consolidated
income statement
120
Consolidated
statement of other
comprehensive income
121
Consolidated balance sheet
122
Consolidated
statement
of changes in equity
123
Consolidated
statement
of cash flow
124
Notes to the Group
Financial Statements
157
Parent
Company
balance sheet
158
Parent Company statement
of changes in equity
159
Notes to the Parent
Company Financial
Statements
162
Alternative
performance
measures
W
e belie
ve w
e mu
st mak
e more en
viron
mental
ly
fri
endly tra
vel choices – with rail oeri
ng a greener
alternative to air and
car
.
Throug
h our customer-centric, scalable platform,
we a
re commi
tted t
o dr
iv
in
g respon
si
ble a
nd
sustainabl
e business growth, by:
Making rail travel easier
,
championing a m
uch
greener wa
y to
trav
el
Leveraging scale,
data and techno
logy
to oer a sup
erior
customer e
xperience
O
ering our carrier
partners global
distribution at a
lower cost to ser
ve
Ove
r
v
ie
w
Strategic Report
Gover
nanc
e
Financial Statements
01
Chair
’
s statement
Over the last year Tr
ainline has played
a leading role in the rail industry’s
recovery fr
om the signicant
disruption of Covid-19. Having
continued to invest in product and
technology through the pandemic,
the business was in a strong position
to encourage people back to train
travel and accelerate the mark
et
shift to online and mobile.
The unwavering focus of the business
reects a team and organisational
culture centred around a cor
e
purpose – to increase greener tr
avel.
Looking forward, the business is in a
strong position to gro
w and further
support the rail industry reco
very.
Financial and st
rategic
per
formance
The Board is focused on the Group’
s
nancial and strategic performance.
We were pleased with the nancial
recovery in FY2022, with net tick
et
sales recovering well and the business
returning to positive EBITDA despite
the impact of Covid-19.
The Group made further good
progress against its strategic priorities,
enhancing the customer experience,
building demand, increasing customer
lifetime value and growing T
rainline
Partner Solutions. We invested
behind an enhanced ‘new commuter’
proposition in the UK and stepped up
our investment in our International
business as the domestic rail markets
in Europe increasingly liberalise. Y
ou
can read more about progr
ess on
our strategy this year and our future
priorities on pages 24 and 25.
Williams-
Shapps Plan for Rail
Following the publication by the
Department for Tr
ansport of the
Williams-Shapps white paper in
May 2021, the Group has continued
to engage with the UK Government
and the wider rail industry to help
formulate the detail of its proposals
and support their delivery.
The white paper included proposals
to replace many of the sub-scale train
operating company websites and
apps with a Great British Railways
(‘GBRʹ) branded app and website. At
this stage, neither the UK Government
nor the GBR Tr
ansition T
eam have
conrmed how they plan to de
velop
and operate an online retailing
platform for GBR.
The Company engaged with
Rail Delivery Groupʹs (‘RDGʹ)
consultative revie
w of the broader
retailing landscape and the
commercial framework. W
e have
reached agreement with RDG on a
memorandum of understanding to
amend the third-party retail licence,
including a back stop arrangement
we estimate would result in a c.0.25%
net reduction in our commission rate,
effective 1 April 2025.
You can r
ead more about the
Williams-Shapps Plan for Rail
and our response on page 17.
Looking ahead
While there may continue to
be some bumps ahead, the rail
industry is on a path to recovery
and Tr
ainline continues to benet
from signicant structural tailwinds.
With increased awareness of the
environmental benets of rail tr
avel,
growing investment in the industry
, a
continuing shift to online and mobile
ticketing and liberalisation tr
ends
in European rail, we ar
e condent
in the huge opportunity ahead. By
maintaining investment in product
and tech through the pandemic, the
business is well-positioned to drive
long-term growth and create value
for customers and shareholders.
I would like to thank the T
rainline
team for the resilience and dedication
they have demonstrated thr
ough
the pandemic. While it has been
a challenging time the team has
continued to prioritise the needs of
our customers and remained focused
on delivering our strategic goals.
Brian Mc
Bride
Chair
5 May 2022
T
rain
l
in
e has p
la
y
e
d a lea
di
ng role
in t
he ra
il i
ndustry’
s reco
very
.
Brian Mc
Bride
Chair
T
rainline
Annual Report and Accounts 2022
02
Highlights FY2022
Strategic highlights
Financial highlights
Enhancing the
customer ex
perience
Launched new pro
ducts and features for
commuters in the UK while position
ing
ourselves as the rail aggregator app in
France, Italy and Spain
Buil
ding
dem
and
Strong rebound in new app customers
to record levels, customer engagement
back to pre-
Covid-19 levels and launched
our rst major brand c
ampaign in Italy
Gr
owing
T
ra
inline
partner
solut
ions
Expanding white label into E
urope
with new client NT
V Italo
Increasing c
ustomer
life
time
value
Growing relevance for more of our
customers
ʹ
travel
ne
ed
s, s
elling >1milli
on
digital railcards and growing n
umber of
customers travelling 2
+ times a month
by 39% in the UK ov
er the last two years
Net tick
et sales
+
222
%
Increased to £2.5 billion, from £783 million
last year, and recovering to 68% of FY2020
Reve
nu
e
+1
8
1
%
Recovered to £189 million fr
om £67 million
last year as a result of the reco
very in net
ticket sales
Adjuste
d E
BITDA
£
3
9m
At the top end of previously stated guidance
expectations, versus £25 million loss in FY2021
Operati
ng f
ree casho
w
£
166m
£312 million improvement since FY2021,
reecting EBITDA generation and r
ecovery in
net working capital as business recover
ed
EPS
+1
6
.
6
p
Improved to -2.5p loss,
from -19.1p loss in FY2021
Find our strategic objectiv
es on page 24
Find our KPIs on page 32
Strategic Report
Gover
nanc
e
Financial Statements
03
A
t a glance
W
e enab
le m
i
l
l
io
ns of tr
a
v
el
lers t
o sea
mlessl
y
sea
rch, boo
k and m
an
age th
ei
r j
ou
rn
e
ys
through our
highly r
ated
T
r
ainline website,
mob
i
le a
pp a
nd B2B p
artne
r ch
an
nels.
W
e
are Eu
rope
ʹ
s
l
e
a
ding
i
ndependen
t
rai
l
pla
t
for
m
T
rainline
Annual Report and Accounts 2022
04
2
70+
rail and coach companies
44m
cumulativ
e app downloads
>7
5
0
people in our T
rainline team
from >50 nationalities.
4
.
9/5
star app rating
8
4%
of our UK transactions
are through our app
1
75
+
countries where o
ur
customers come from
45
countries t
ravelled in and across
by T
rainline customers
W
e work w
it
h mor
e
th
an 270 ra
il a
nd
coach c
ompanies
acro
ss 45 count
ries.
Thro
ug
h ou
r broad ran
ge
of car
ri
er pa
rtners w
e
cov
er ov
er 80
% of ra
il
rou
tes
in Euro
pe.
By bringing all of the major
carriers and new entrants onto
one platform, we provide tr
avellers
with an unrivalled set of journey
options. Our smart technology,
data driven features and real-time
information help our customers to
stay one step ahead.
For our carrier and B2B partners,
Tr
ainline Partner Solutions offers
access to a huge supply of rail
carrier inventory across the UK
and continental Europe through
our proprietary platform. With
tested and proven technology – we
enable them to offer best in class
customer experience at low cost.
10
currencies and multiple
payment methods including
Apple P
ay
, Google Pay
, PayP
al,
SOFORT and iDEAL
Strategic Report
Gover
nanc
e
Financial Statements
05
Over the last year we have continued
to innovate to make r
ail travel
easier for millions of people, which
in turn encourages them to make
travel choices that are better for the
environment. We belie
ve our actions
will have a huge impact, with a
5-million tonne annual CO
2
saving for
every 1% of air and car journeys that
switches to rail in the UK alone.
Our innovation focuses on creating
a simple, consistent, friction-free
experience for booking and managing
travel. We bring together all carriers
into one app while providing smart,
real-time travel information and self-
serve capabilities like journey changes
and refunds.
As a platform business, we offer
our innovative retailing e
xperience
directly to customers through our
Tr
ainline-branded businesses, while
also giving carrier partners and other
travel businesses access to our retail
solutions to offer to their customers.
As a business we benet from
structural tailwinds that pro
vide
signicant and long-term growth
opportunities. We operate in a
large market, set to benet from
signicant investment in capacity
expansion across Europe and gr
owing
awareness of the environmental
benets of switching to rail. Within
that, the ongoing market transition
to digital ticketing offers signicant
upside opportunity, as does market
liberalisation in Europe, with
growing carrier competition
enhancing Tr
ainline’s r
ole as
a third-party aggregator.
Acceler
ating grow
th of our
International
business
Domestic competition between rail
carriers in Europe is stepping up
meaningfully, with the r
ecent launch
of new entrants Ouigo in Spain
and Tr
enitalia in France. Carrier
competition now exists on six of the
top ten high-speed routes in Europe.
As already evidenced in mark
ets
like Italy
, greater competition
increases the value and choice
for consumers in rail.
Against this backdrop, we have
the opportunity and ambition to
signicantly scale our international
business in France, Italy and Spain
over the medium term. T
o accelerate
our pace of growth, we have stepped
up investment in the customer
experience. We ar
e progressing well
against our plan to hire 150 people,
predominantly software developers
and data scientists, while expanding
our performance marketing capability
and launching new, abo
ve-the-line
brand marketing campaigns.
Goo
d progr
ess again
st our
strateg
ic priorities
Having maintained investment in
product and technology throughout
the pandemic, we have enjoyed
strong momentum of delivery
against our four strategic priorities.
These priorities are: enhancing
the customer experience, building
demand, increasing customer
lifetime value and growing
Tr
ainline Partner Solutions.
Enhancing the
customer e
xperience
Online penetration for the UK rail
industry increased to 52% by
February 2022, up from 39%
pre-Covid-19. Within this, etick
et
penetration has doubled over the
last two years to reach 42% in Q4.
This reected a greater pr
evalence of
people buying train tickets thr
ough
our 4.9-star app. With Covid-19
changing the way we work and travel,
we invested behind an enhanced ‘new
commuter’ proposition in the UK,
including new features like Save Y
our
Commute journey personalisation
and ticket rebooking in just two clicks.
We also launched exi tick
ets on our
app and will roll-out our new digital
season ticket product ne
xt year.
In International we are gaining
ground as the aggregator for newly
liberalised routes, giving customers
an easy way to compare carriers, fares
and journey options all in one place.
At the same time we are enhancing
our offering, launching airline style
seatmaps in France and Italy and
recently upgrading our Récupʹ
Retard (delay-repay) pr
oduct feature.
Building demand
As Covid-19 related r
estrictions
eased, we scaled up our performance
marketing and ran brand-led leisur
e
campaigns. This generated a sharp
rebound in new customers – with
record levels of ne
w app customer
acquisition. Likewise customer
engagement recovered, with
unique monthly active users
(‘MAUsʹ) reaching the same
level as its pre-Co
vid-19 peak.
In the UK we increased our reach,
integrating T
rainline into the Google
Maps app for Android, while in Italy
we launched our rst brand campaign
as we begin to grow consumer
awareness in Europe.
Increas
ing custome
r
lifetime value
We deepened our relationship with
customers, growing our rele
vance for
more of their travel needs. Ther
e was
a signicant step up in our
transaction
I
n
no
v
at
i
ng t
o ma
k
e rai
l tr
a
v
el
easier for
mil
li
ons of
p
eople.
CEO
’
s statement
T
rainline
Annual Report and Accounts 2022
06
frequency (the number of tickets
purchased by existing customers),
particularly in the UK where
customers purchasing 2+ tickets per
month grew 39% vs pr
e-Covid-19
in Q3. In Europe we delivered a
meaningful step up in regional travel,
increasing 125% in Italy and 106% in
France in H2 versus the same period
two years ago.
In the UK we also made progress
scaling digital railcards, selling
over 1 million in FY2022, a signicant
performance considering there were
an estimated 6 million railcards
in use when we launched the
product in FY2021.
Growing T
rainline Partne
r
Solutions (
‘
TPS
ʹ
)
Demand for business travel remained
subdued, but TPS saw some signs of
recovery as r
estrictions eased – with
TPS net ticket sales 88% up between
H1 and H2 this year. We rene
wed
contracts for all our existing white
label train carrier clients, giving them
access to our industry-leading core
platform functionality and upgraded
customer experience features. We
also signed a multi-year deal in
Italy with challenger brand NTV
Italo, enabling them to sell
regional transport connections
to their customers.
Within our Global Distribution and
Business Solutions segment, we
continued to scale the Global API
platform, giving B2B partners the
ability to offer European rail options
to their customers through one
simple, seamless connection. We
have continued to sign B2B
customers, including the recent
addition of Tr
avelport, one of the
top three Global Distribution
Systems (‘GDSʹ).
Strong re
covery
We have taken a leading r
ole in the
rail industry’s recovery
, encouraging
people back on to trains and helping
accelerate the market shift to online
and digital channels, leveraging our
continued investment in product,
technology and marketing.
As a result, the business delivered
a strong recovery
, with a nancial
performance in line with expectations
despite the effects of the Omicron
variant in the fourth quarter. Net
ticket sales were £2.5 billion, 222%
higher year-on-year, and 68% of the
same period in FY2020. We delivered
revenue of £189 million, up 181%, and
adjusted EBITDA of £39 million.
Next year, assuming no travel
disruption, we expect sales and
revenue for the Gr
oup to be above
FY2020 (the last pre-Covid-19 year).
Jod
y Ford
Chief E
xecutive O
cer
The on
goi
ng mar
k
et tra
nsi
ti
on t
o di
gital t
ick
eti
ng
oers si
gn
ica
nt upsid
e oppo
rtuni
t
y
, as does
market
libe
rali
sat
ion
in Eur
op
e, w
ith
growin
g
rail c
arrier co
mpe
tition enh
ancing T
rainline
ʹ
s role
as a third-part
y aggregator
.
New hires to the
Managem
ent T
eam
We further evolved our Management
T
eam based on the needs of our
organisation and broader strategy
,
with the addition of Milena Nikolic
as Chief T
echnology Ocer to lead
our tech engineering teams, Mike
Hyde as Chief Data Ocer to unlock
our signicant data opportunity, and
Martin Sheehan as Chief Corporate
Affairs Ocer to further enhance our
engagement with government and
industry stakeholders.
People and culture
I continue to be impressed with the
way our teams actively engage with
our purpose, working tirelessly every
day to innovate and impro
ve the
customer experience, and in doing
so empower people to make gr
eener
travel choices. This year we welcomed
our people back to our oces, rolled
out our new ‘exi-rst’ hybrid-working
approach, and introduced objective
and key results (‘OKRʹ) methodology
to align the team behind a set of
common objectives, improving focus
and transparency
.
Jod
y Ford
Chief E
xecutive O
cer
5 May 2022
Strategic Report
Gover
nanc
e
Financial Statements
07
Purp
o
s
e
driven
sus
tai
nabi
l
it
y
What sus
tainability m
eans to us
Empower people to make
greener tr
avel choices
At Tr
ainline, environmental
sustainability is fundamental
to our purpose. Through our
technology and data, we make
rail travel easier, empo
wering
people to make travel choices that
are better for the environment.
Rail offers travellers a greener
alternative to ying or driving,
generating less than 1/20 of the
CO
2
emissions of air travel and
approximately 1/7 of the C
O
2
emissions compared with car travel,
per passenger. It can move millions
of people quickly and cleanly, for
leisure or business, across countries
and continents. We believe we have
a key r
ole to play in supporting
the rail industry
, businesses and
governments in meeting their
emissions targets by promoting
modal shift and encouraging
greater use of rail and coach.
This is why when the UK hosted the
26th UN Climate Change Conference
of the Parties (‘COP26ʹ) we were pr
oud
to be Provider of Rail T
ravel.
T
o ensure we support the transition to
a lower carbon economy
, in June 2021
we set a ve-year climate strategy
.
In FY2023, we will create a dedicated
cross-functional team that will work
across all areas of the business to
drive modal shift through use of
our platform as well as reduce the
impact of our own operations.
T
ra
v
el
i
ng b
y rai
l genera
tes le
ss
th
an 1
/
20 of th
e CO
em
issions
of a
i
r tr
a
v
el and a
ppro
xi
mat
ely
1/
7 of th
e CO
em
issions p
er
passenger
of tra
v
e
ll
in
g b
y car
.
¹
1.
Eur
op
ea
n En
vi
ro
n
me
nt A
ge
n
c
y St
u
dy (
20
14)
T
rainline
Annual Report and Accounts 2022
08
The exte
rnal contex
t
UK and European governments have
continued to encourage modal shift
to rail and increase their investment
in rail in order to meet their net-zer
o
emissions goals. The EU is targeting
a 55% reduction target for CO
2
emissions by 2030, and the UK
a reduction target of at least
78% by 2035.
Tr
ansport 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
fth of greenhouse gas emissions,
almost 72% of which come from
road transport whilst less than 0.4%
comes from rail tr
ansport. Strategic
priority one of the UK Decarbonising
Tr
ansport plan is to accelerate modal
shift by making public transport
“the natural rst choice for our
daily activities” and, where the
car remains attractive for longer
journeys, increasing “
competition
from high-speed decarbonised rail
and zero emissions coaches”.
The UK Decarbonising Tr
ansport
plan highlights rail as “the greenest
form of motorised transport”. It
sets a target of achieving net-zero
greenhouse gas emissions from
trains by 2050, thr
ough increased
electrication of the rail network
and introduction of new technologies
such as hydrogen-powered tr
ains.
The EU Commission have highlighted
rail as playing a ke
y role in the EU
becoming climate-neutral by 2050.
They target the doubling of high-
speed rail trac
by 2030 and a
tripling
of high-speed rail by 2050. Thir
d-party
ticket vendors such as T
rainline have
been identied as having a key r
ole
to play in the delivery of elements
of this plan.
European governments are also
starting to take steps to encourage
modal shift from cars and planes to
rail to achieve their carbon r
eduction
targets, for example France is
introducing a ban on internal ights
where the equivalent rail journe
y is
less than two and a half hours. Also,
as part of its Covid-19 crisis support
programme for Austrian Airlines,
Austria has introduced a similar
prohibition where the equivalent
rail journey is under thr
ee hours
as well as a tax on ights spanning
less than 350 km.
Produc
t and promo
tion
Our aim is to empower people
to make greener tr
avel choices,
driving a modal shift that benets
the world.
In October 2021 we conducted
a survey across the UK. Thr
ee in
every ve respondents stated the
y
feel a sense of pride to travel by
train, knowing it’s better for the
environment. Like
wise, 85% of
respondents wanted to see more
publicity about the sustainability
benets of rail. Howe
ver only 4%
of respondents knew quite how
much their carbon footprint could
be reduced by choosing to tr
avel by
train rather than car. The majority
estimated a reduction of between
10-30%, when in reality it is
closer to 80%.
In FY2023 we are making green data
more accessible and transparent on
our platform to allow customers to
better understand and reduce the
carbon impact of their journey and
continue to build awareness around
the benets of using rail and coach
instead of car or plane. We will also
continue to steer customers to digital
tickets where available to r
educe
paper ticket waste, promote digital
railcards and encourage modal shift
more broadly
.
What we’re doing internally
In September 2021, through the
Science Based T
argets initiative (‘SB
Ti’)
we committed to set an SBTi aligned
Net-Zero target, achievable no later
than 2050, and to reduce emissions
from our own operations (Scopes 1
& 2) in line with 1.5°C and from our
value chain (Scope 3) in line with the
Well-Below 2
o
C scenario. We also
signed up to the Business Ambition
for 1.5°C and UNFCC Race to Zero
campaigns.
Since then, we have completed a
greenhouse gas inventory of our
full value chain and modelled our
near-term science-based targets.
We have offset our operational
greenhouse gas emissions for FY2022,
including the impact of our people
working from home as well as scope
1, 2, waste, water and business travel.
We did this by investing in the Gandhi
Wind Project, which plays a vital part
in India’s shift to
wards a low carbon
economy. The project is fully certied
by the Veried Carbon Standar
d and
spans the Indian states of Rajasthan,
Gujarat, T
amil Nadu, Maharashtra
and Madhya Pradesh. The Gandhi
Wind Project aims to ensure access
to affordable, reliable, sustainable
modern energy as well as promote
sustained, inclusive and sustainable
economicgrowth. The SDGs for this
project are:
Ensure access
to aordable,
reliable, sustainable
modern energy
.
Promote sustained,
inclusive and
sustainable
economic gro
wth.
Strategic Report
Gover
nanc
e
Financial Statements
09
Market worth over
€
2
2
5
bn
Inv
estm
ent ple
dged in
UK Integrate
d Rail Plan
£9
6
bn
T
o
tal inv
estm
ent acros
s
continental Euro
pe planne
d
ov
er the nex
t ten years totals
£
1
76
b
n
Mark
et o
v
erview
Pre-Covid-19, the global r
ail and
coach market’s worth was estimated
to be over €225 billion per annum.
Europe represents o
ver €70 billion of
this total, giving Tr
ainline signicant
headroom to grow acr
oss existing
and future geographies.
In the UK, rail usage effectively
doubled over the 20 years
prior to 2019, growing faster
than any other mode of transport.
Since then, the rail industry has
been dealing with the impacts of the
coronavirus pandemic, at times with
a signicant downturn in passenger
numbers. However, the easing of
Covid-19 related tr
avel restrictions
has resulted in passengers returning
to rail in all our markets. While ther
e
have continued to be setbacks on
the road to reco
very, such as the
coronavirus Omicron variant, the
trends over the past 12 months
have been positive for Tr
ainline,
as set out for the UK below
.
UK Ra
il m
ar
k
et recov
er
y - F
Y
202
2
Leisure trav
el – re
cov
ered to growth on
pre
-pan
demic levels
Tr
aditionally Tr
ainline’s str
ongest market segment – responded str
ongly
to easing of Covid-19 restrictions. Befor
e and after the Omicron wave, it
recovered br
oadly to pre-pandemic levels
Recovered to ~50% of pr
e-pandemic levels. Historically underserved with
digital options, Tr
ainline is priming its features and digital ticket options to
make rail tr
avel easier for commuters
Commuter tra
vel – pa
rtly re
cov
ered
but higher d
igita
l share
Partially recover
ed to ~40% of pre-pandemic levels. Whilst behind the
recovery of other segments, demand should increasingly benet fr
om
growing environmental r
eporting requirements for corpor
ates
Business trav
el – slow
est to recover bu
t longer
term gro
wth due to greener trav
el choices
A la
rge a
nd rec
o
v
er
i
n
g ma
r
k
et
set
for
long-term gro
w
th
T
rainline
Annual Report and Accounts 2022
10
As passengers returned to rail, there
was a notable shift in people booking
online – avoiding queues at station
counters and ticket machines – and
choosing the contactless travel
experience provided b
y digital
tickets and our great mobile app.
The accelerated shift to online and
mobile ticketing has enabled T
rainline
to disproportionately benet as
people return to rail tr
avel.
Governments’ ongoing investment
into rail across Eur
ope will further
facilitate recovery and gr
owth. In
the UK, this includes £96 billion
announced in the Integrated Rail
Plan in November 2021. The stated
objectives of the investment are to
support continued growth, impro
ve
eciency and reliability
, and to
further facilitate the transition
of travellers to more sustainable
modes of transport including rail.
In continental Europe, governments
are seeking to double passengers
on high-speed rail by 2030 and
triple passengers by 2050, with the
most signicant network expansion
planned in Spain, France, Italy and
Germany. Investments planned
over the next ten years total £176
billion, in line with government
commitments to net zero greenhouse
gas emissions and the European
Green Deal initiatives.
Strategic Report
Gover
nanc
e
Financial Statements
11
eticket pen
etratio
n in the UK
4
0%
F
Y2
0
21%
40%
30%
F
Y2
1
F
Y2
2
1
Shift to online and mobile
tick
eti
ng acceler
ated
Online bookings in the UK increased to 52% of
total rail industry sales by February 2022, up
from 39% pre-Co
vid-19. Industry penetration
of mobile ticketing (etickets) gr
ew to 42% in Q4
FY2022, double where it was in FY2020, reecting
a greater prevalence of people buying tr
ain
tickets through T
rainlineʹs 4.9-star app.
UK eticket availability grew from 7
1%
in FY202
0 to over 80% in FY202
2
>
8
0%
Signicant headroom remains for etick
et
penetration to gro
w further, particularly as
etickets become increasingly available to use
on all rail journeys. Over 80% of journe
ys in
the UK are now etick
et-enabled, up from c.75%
at the end of 2021, following Scotrail’
s roll-out
across its network. Within the next year, etick
ets
are expected to be available on mor
e than 90%
of the UK network, with Southeastern having
commenced their roll-out from April 2022.
Our
st
ruc
tural
tailwinds:
Shi
ft to on
l
in
e and m
obi
le
tick
e
ti
ng acc
elerated
Driv
in
g Moda
l Shift wit
h
si
gn
i
can
t in
vestm
ent
s in ra
il
Greater supply frag
mentat
ion in
ou
r core E
urope
an geog
rap
hi
es
1
2
3
Mark
et o
v
erview
co
nti
nued
T
r
a
i
nl
in
e oper
a
t
es i
n a la
rge m
a
r
k
et th
at
enjo
ys signi
can
t
s
truc
tural
tailwin
ds
T
rainline
Annual Report and Accounts 2022
12
2
Driving M
odal Shif
t with
signicant in
vestments in rail
Governments are investing to drive
modal shift to rail as a greener
mode of transport amid growing
environmental awareness and
ambitious net zero targets.
Governments and businesses
continue to recognise that achieving
net zero emissions targets will requir
e
a modal shift to more sustainable
travel options. In comparison to
air and road transport, rail is a
signicantly lower carbon form of
transport, generating less than 1/20
of the CO
2
emissions of air travel and
less than 1/7 of the CO
2
emissions
compared with car travel. Rail is
also a very ecient way of moving
people into city centres and over
long distances, reducing road
congestion and pollution.
Strategic priority one of the UK
Decarbonising Tr
ansport plan is to
accelerate modal shift by making
public transport “the natural rst
choice for our daily activities” and
where the car remains attr
active
for longer journeys increasing
“competition fr
om high-speed
decarbonised rail and zero emissions
coaches”. The UK government has set
a reduction target for CO
2
emissions
of at least 78% by 2035 and plans to
invest a record £48 billion b
y 2024 to
“maximise the shift of users to rail”.
The EU is targeting a 55% reduction
for CO
2
emissions by 2030. The EU
Commission highlighted rail as
playing a key r
ole in the EU becoming
climate-neutral by 2050, with 2030
targets to double high-speed rail
trac (triple it by 2050) and for
scheduled travel of under 500 km
to be carbon-neutral. Third-party
ticket vendors such as T
rainline
have been identied as having a
key r
ole to play in the delivery of
elements of this plan.
European governments have also
begun taking action to promote
rail over internal ights in or
der to
meet their net-zero targets and we
anticipate more governments will
introduce similar regulations in the
coming years.
With growing environmental
awareness by travellers, it is e
xpected
that over time road tr
avel 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.
Sustainability is increasingly
becoming a necessity for corporations
of all sizes around the world and
implementing sustainable business
practices includes the introduction
of sustainable travel policies.
A recent SAP Concur report found
that 97% of business travellers
would increase their journey
time if it signicantly reduced the
environmental impact, and 69% of
travel managers have updated their
company’s travel guidelines to have
a greater focus on sustainability
.
Several large Eur
opean companies
have said they will reduce their carbon
emissions from ights including
Deloitte, PwC, Lloyds Banking Group,
ABN Amro and Nestlé.
Strategic Report
Gover
nanc
e
Financial Statements
13
Mark
et o
v
erview
co
nti
nued
3
Greater supply fragmentation in
our core European geographies
Tr
ainline operates in an increasingly
complex and fragmented rail mark
et,
where we provide tr
ansparency and
choice for our customers and partner
with carriers, governments and the
wider rail industry
.
There are appro
ximately 400 rail
carriers and more than 120 long-
distance bus operators in the UK and
continental Europe. With ongoing
liberalisation and investment in rail
and greener modes of transport, we
expect these numbers to increase.
The liberalisation of domestic
rail has opened a new chapter
of competition between operators
in continental Europe – with major
carriers from France, Italy and Spain
starting to compete in each other’s
domestic markets.
France’s SNCF enter
ed the Spanish
market under its low-cost br
and
Ouigo Spain in May 2021 on the
busy Madrid-Barcelona route. In turn,
the incumbent rail operator Renfe
launched its own low-cost offshoot
Avlo on the same route and is
planning to enter the French
market in 2024.
Italy’s Tr
enitalia followed suit in late
2021, entering the French market
with services between Paris, Lyon and
Milan. This trend is set to continue:
Iryo, for example, a new br
and
joint-owned by T
renitalia, will start
running train services in the Spanish
market before the end of 2022.
We are also witnessing the advent
of smaller new operators in mark
ets
across Europe – such as Lumo, who
commenced a competing service
between London and Edinburgh in
2021. Railcoop is aiming to offer a
new service between Bordeaux and
Lyon in France and has received the
approval to operate on six r
outes –
Le Tr
ain and Midnight Tr
ains are
further examples of new operators
planning to launch services.
With these operators offering new
and different customer propositions –
from low-cost (Lumo, Ouigo Spain and
Avlo) to premium service (T
renitalia
France and Iryo) – such competition
will provide mor
e choice, convenience
and quality for customers, as well as
more competitive fares.
As competition grows, passengers
will increasingly need help to nd the
right ticket at the best value. T
rainline
will full this role by positioning
ourselves as the rail app of choice
for European rail travel. W
e will
aggregate all the carriers, fares
and journey options in one place,
so customers can compare and
select the right option for them.
For carrier partners seeking to
grow or enter new mark
ets, we
can rapidly add their inventory and
offer access to a diverse global
customer base across our B2C
and B2B channels – connecting to
consumers, business travellers and
travel resellers. T
rainline also offers
carriers world-class digital distribution
solutions through Platform One
– our single global tech platform –
which enables them to outsource
the technology behind their retail
channels at a lower cost.
T
ra
i
nl
in
e opera
tes i
n a large ma
rk
et tha
t
enjoys signican
t s
truc
tur
al tailwin
ds
T
rainline
Annual Report and Accounts 2022
14
rail carriers in Europ
e
4
0
0+
Selected k
ey r
ai
l rou
tes in con
tinen
ta
l
Europ
e wit
h c
ompe
tition
Strategic Report
Gover
nanc
e
Financial Statements
15
Europe
Working t
owards more
comp
etitive mobilit
y
Liberalisation of the national rail and
coach markets continues to unfold,
promoted by a series of Eur
opean
Commission initiatives aimed at
encouraging competition across
Europe’s r
ailways and facilitating
ecient transport systems that
operate effectively across bor
ders.
The Fourth Railway Package
(proposed by the European
Commission in 2013) is one such
initiative and comprises a series of
measures aimed at creating a truly
integrated European Railway Ar
ea and
making EU railways more attr
active,
innovative and competitive. This
process started in 2019 with the
opening of the market for domestic
passenger transport services by
rail and aims to be nalised by
the end of 2023 with the opening
of competition for public service
contracts for rail domestic
passenger transport services.
These legislative initiatives are
helping to create an environment
which is supportive of further
competition and market volume
growth, expanding opportunities for
new rail oper
ators to enter the rail
markets in other geographies as well
as for independent retailers who have
played a key part in supporting these
new entrants. Independent retailers
do so by aggregating, combining and
showcasing a multitude of operators
on their platforms and provide much
needed transparency and optionality
to rail users.
Working t
owards digital mobility
The Commission’s Eur
opean Green
Deal had established a goal of
becoming climate-neutral by 2050
and committed to a rethink of EU
policies for clean energy in the
transport sector. This priority was
conrmed and reiterated with the
Smart & Sustainable Mobility Strategy
(‘SSMSʹ) in December 2020, which
the Commission started to deliver
on in 2021. The EU’s ambitions for
rail stated above wer
e promoted
by making 2021 the European Y
ear
of Rail. As part of this promotional
initiative the EU organised a series
of events throughout the year and a
special EU train toured the continent
from 2 September to 7 October 2021,
stopping in over 100 cities in 26
countries. The initiative showcased
rail to encourage its use for carrying
people and freight.
Working t
owards green mo
bility
Concluding the European Y
ear of
Rail, in late 2021 the European
Commission presented its “
Action
Plan on boosting long-distance and
cross-border passenger rail” as part of
a package of initiatives to foster green
mobility. The Action Plan is a follo
w-up
to the Smart & Sustainable Mobility
Strategy and presents a r
oadmap for
concrete priority measures to achie
ve
the goals of doubling high-speed rail
trac by 2030 and tripling it b
y 2050.
Objectives of the Action Plan include
the promotion of more user-friendly
ticketing and access to the rail system
such as allowing passengers to nd
the best tickets at the most attractive
price and better support when faced
with disruption. The category of third-
party ticket vendors (e.g. T
rainline)
have been identied as having a key
role to play in the delivery of this plan.
Mark
et o
v
erview
co
nti
nued
2x high-speed
rail t
rac
Sche
duled collec
tive
tra
vel of u
nder 500km
should b
e carb
on-
neu
tra
l wi
thin th
e EU
3x
hi
gh
-speed
rail t
rac
European Y
ear
of Ra
il
By 2030
By 205
0
2021
Regu
lator
y
and polit
ical en
viron
ment
T
rainline
Annual Report and Accounts 2022
16
UK
Passenger rail services are curr
ently
delivered by 34 tr
ain operators
including those let as franchises to
private companies by the Department
for Tr
ansport, Tr
ansport Scotland, and
Tr
ansport for Wales; and those run
by private companies under an Open
Access model (where track access
rights are bought from Network Rail
for specic routes).
The UK railway is,
however, currently
going through a
period of industry
reform, led by the
Department for
Tr
ansport. This
was announced
through the
Williams-Shapps
Plan for Rail, published in May 2021,
which sets out the government’s plans
for the implementation of changes to
the management of the railways.
The current franchising model is due
to be replaced by a ne
w structure in
which a central organisation called
Great British Railways (‘GBRʹ) may
grant concessions to companies
to run train services in different
areas. Most existing tr
ain operator
brands are likely to be r
etired and
replaced with a single GBR brand
as agreements run to an end.
The process of restructuring the
industry is complex and is expected
to take sever
al years, requiring
legislation to complete.
Another aspect of the Williams-
Shapps Plan for Rail is the proposal
for a new GBR website and app for
the sale of rail tickets online, which is
expected to subsume most existing
train operator websites. At the same
time, the Department for Tr
ansport
recognised the importance of the
role of independent retailers in the
market. It was acknowledged that
independent retailers will continue
to operate alongside GBR’s dir
ect
retail channels.
At this stage, neither the UK
Government nor the GBR T
ransition
T
eam have conrmed how they plan
to develop and operate an online
retailing platform for GBR. Howe
ver,
RDG has taken preliminary steps
ahead of a formal procurement
exer
cise under which it may look
to procure a Consolidated Online
Retailing Solution (‘CORSʹ) for the sale
and purchase of Great British Rail
tickets. Pro
visional documentation
outlines the proposed scope for a
‟cost effective, market leading, online
ecommerce serviceˮ. The proposed
contract length is four years, with the
potential opportunity to extend for a
further four years. It is expected that
the contract would be entered into
by RDG and novated to GBR at some
future stage. The estimated contract
notice (effectively the ocial process
start date) was 1 April 2022, but no
formal procurement ex
ercise has yet
started at time of writing. We have
engaged with the preliminary stages
of the CORS procur
ement exercise
and are ready to engage more fully
once the ocial process begins.
RDG Retail Review
Along with other third-party retailers,
Tr
ainline was invited by RDG to
take part in a re
view process of the
broader retailing landscape and the
commercial framework, including
industry commission rates. As
an output of the revie
w, we have
reached agreement with RDG on
a memorandum of understanding
(‘MOUʹ) to amend our third-party retail
licence. Tr
ainline and other third-
party retailers will now enter into a
collaborative phase of engagement
with RDG to mutually agree new
contractual licence terms.
In the event new contr
actual terms
cannot be mutually agreed, under the
provisions of the MOU
, RDG has the
right to implement a legally binding
minimum set of commercial terms.
We estimate this would result in a
c.0.25% net reduction in commission
rate for T
rainline, effective 1 April
2025. The minimum terms
applicable to Tr
ainline include:
•
A 0.5% reduction in the base B2C
online sales commission rate,
from 5% to 4.5%
•
An offsetting removal of shared
central industry costs. T
rainline
estimates this to be c.0.25%.
Strategic Report
Gover
nanc
e
Financial Statements
17
W
e aggregate data from
>270 car
ri
ers across E
urope
on our plat
form
W
e apply the br
il
li
ant m
ind
s of ou
r
people, o
ur sm
art technol
ogy and
cus
tom
er
ins
ight
s...
We hav
e in
te
gra
te
d ov
er
270
car
rier
pa
r
t
ne
r
s to da
te
, mo
s
tl
y a
cro
s
s th
e
UK
and E
urope, bringing togethe
r the
maj
or
i
t
y o
f rai
l an
d co
ach o
p
era
to
r
s
on
to on
e pl
at
fo
rm
, co
ve
ri
ng a
ll of
th
e
UK
rail n
et
wo
rk a
nd ~
80
% of th
e
European net
work
.
Th
is b
re
ad
th a
ll
ow
s us t
o of
fe
r al
l th
e
journey
s, fares and tick
et options
to our
cus
tomers
, whenever
and
whereve
r they may be travelling.
Our propriator
y te
chnolog
y - Platform O
ne
Pla
t
f
or
m O
ne is o
ur a
gi
le a
nd p
ro
pr
ia
tor
y t
ec
hno
lo
g
y. It is
the engine behind our T
rainline consumer app and website,
an
d it a
ls
o po
we
r
s th
e bo
ok
i
ng an
d re
t
ai
li
ng s
ol
ut
io
ns f
or o
ur
pa
r
t
ne
r
s an
d
B2B
clients such as rail carriers
, travel sellers,
businesses and
public sector orga
nisations.
Powerful data as
set
s
We un
de
r
s
t
and t
h
e tra
ve
l ne
e
ds an
d p
at
t
er
n
s of ou
r
customers in over
45
c
ountries through
our
B2C
and
B2B
channels with around
78
million
visit
s to our
platfor
m each
month
.
Market-speci
c features an
d per
sonalisation
Usi
ng o
ur p
ro
du
c
t an
d te
ch
no
lo
g
y ex
p
er
ti
se p
lu
s th
e un
iq
ue
dat
a i
ns
ig
ht
s g
en
er
ate
d ac
ro
ss o
ur l
ar
ge c
us
to
me
r b
as
e, we
continue
to enh
ance ou
r customer propos
ition and
tailor it to
th
e ne
ed
s of d
if
fe
re
nt m
ar
ket
s
.
Rev
enue mode
l
We ear
n a co
mm
is
si
on a
nd f
ee
s on t
ic
ket s
al
es
. We a
ls
o
generate
revenu
e from
advertising and
ancill
ar
y serv
ices
such as travel
insurance and
multi-
cur
renc
y payment options.
B2B
pa
r
t
ne
r
s pa
y a com
mi
ss
io
n an
d
/or tra
ns
a
c
t
ion f
e
e on
ti
cke
t sa
le
s
, as w
ell a
s ot
he
r re
la
te
d te
chn
o
lo
gy s
e
r
v
i
ce fe
e
s
for the
provision of
our
solutions.
C
u
s
t
o
m
e
r
s
+
D
a
t
a
+
I
n
s
i
g
h
t
s
S
u
p
p
l
y
Build
ing the wor
ld’
s
#1
rail plat
form
B
usiness model
carriers acr
oss Europ
e
>2
7
0
T
rainline
Annual Report and Accounts 2022
18
T
o
generate our hi
ghly rat
ed user
experi
ence and partner solutions
Highly rated cus
tomer expe
rience
for trav
ellers globally
•
4
.9
/5
s
t
ar r
at
ed a
pp
•
Search and book train tickets
fo
r jo
ur
ne
y
s in
45
countr
ies
•
Available ticket ty
pes, journey combinations
an
d far
es a
cr
os
s c
ar
ri
er
s i
n on
e pl
ace
•
Seamle
ss, fric
tion
-f
ree booking exper
ience
•
Mult
iple languages, currencies
and payment options
•
Digit
al tickets, smar
t perso
nalisation, real-
time
tr
ave
l in
fo
rm
at
io
n an
d ma
ny mo
re f
ea
tu
res
We pro
vide end-to
-
end digital
retailing solution
s for carriers
•
Fa
s
t an
d se
cu
re te
ch p
la
t
f
or
m fo
r re
t
ai
lin
g
an
d ti
cke
ti
ng a
t a lo
wer c
os
t t
o se
r
v
e
•
D
ee
p ra
il te
ch e
x
pe
r
t
is
e – c
us
to
mi
se
d, h
ig
h
conver
ting and high-
qualit
y solutions
We giv
e travel sellers acce
ss to
our rail content via our gl
obal API
•
A
cce
ss o
ur r
ail c
on
te
nt w
it
h al
l lo
c
al
features thr
ough one
connection
•
A
ll
ow
s t
ra
vel s
e
lle
r
s to i
nt
egr
at
e rai
l in
to t
he
ir
of
fe
ri
ng
, he
lp
in
g th
em g
ro
w th
ei
r bu
sin
es
s
We oer smar
t rail book
ing solutions
for companie
s of all sizes
•
T
rainline branded
business por
t
al
for businesses
and public
s
ector
clients of all siz
es
•
A
ll i
n on
e pl
ace f
or f
u
ll t
rav
el v
i
sib
il
it
y,
cost control,
and s
ust
ainability repor
ting
For tra
vel
lers
F
or businesse
s
Strategic Report
Gover
nanc
e
Financial Statements
19
C
re
a
t
in
g v
a
l
u
e fo
r ou
r ap
p
and onl
ine customers
B
usiness model
c
ontinued
At Tr
ainline, our purpose is to empower greener tr
avel choices,
connecting people and places. Our vision is to be the world’s
Number One rail platform, pro
viding us with the scale and
reach to achieve our purpose.
Offering smarter travel, T
rainline unlocks the power of
our platform and data, offering unrivalled value, a friction-free
experience and motivating greener habits – ther
eby
encouraging customers to switch from car and air to r
ail.
We work tirelessly to pr
ovide the best possible product t in
our target markets – tailoring our app and website experience
to the needs of our local customers, providing high-quality
and relevant features and services.
Smarter
trav
el
•
Simpl
e, intuitive user inter
face
•
Digi
tal ticketing including seasons
•
S
et multiple commute favourites
•
Real-
time information
•
Se
lf-ser
v
ice change of
journey,
automate
d refund cap
abilit
y
•
Modern payment options
F
riction
free
Enabling c
ustomers to
ge
t it righ
t
Unrival
led
value
Unearthing the g
reatest, most
truste
d value for your journey
Greener
habi
ts
Mo
tivati
on an
d prid
e to swi
tch
fro
m car an
d air to r
ail
•
A
ll carrier
s, fares and
rai
lc
ar
ds i
n on
e pl
ace
•
Mon
ey-s
aving features include:
Split
Save, Price Predic
tion,
T
icke
t A
le
r
t
s
, B
es
t Fa
re F
in
de
r
,
Railcard Finder
•
Route emission info
•
C
ampaigns to d
rive awareness
of sustainabilit
y of rail
K
ey features
K
ey features
K
ey features
Unrivall
ed
val
ue
F
riction
fre
e
Greener
habits
T
rainline
Annual Report and Accounts 2022
20
Through T
rainline Partne
r
Solutions
, we provide retailing
capabilities and s
olutions to
trav
e
l sellers, busi
nesses,
and rail carrier
s.
Dist
ribution Solutions
for T
rav
el Sellers
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.
We aim to be the leading distributor of
global rail content, providing unrivalled
reach and access for our partners at
lower cost as well as opening new
points of sale for carriers.
Our Global API and Agent T
ools allow
our partners to maximise revenues
by providing e
xtensive customer-rst,
feature-rich rail content all thr
ough
one simple connection. It is quick
and easy to integrate with T
rainlineʹs
continuous support to ensure a
seamless go-live through
to transaction gro
wth.
T
r
ainline B
usine
ss f
or
companies o
f all sizes
For businesses of all sizes we provide
a suite of products that ensures full
employee travel visibility
, better cost
eciencies and controls as well as
CO
2
reporting, and gives millions
of employees an effortless way to
book rail for business travel in
and across 45 countries.
IT Solutions fo
r Carriers
Through Platform One, we enable
digital innovation in the rail industry
.
Our tailored retailing solutions meet
the needs of our carrier partners,
lowering their cost to serve and
simplifying their innovation process.
Carrier partners can access our
innovative suite of products and
features, beneting from our
scale and expertise:
•
One-stop shop (front-end and
back-end retailing needs)
•
Customer-centric
ecommerce experience
•
Deep inventory connections
•
Security, payments, fullment,
fraud safeguards
•
Dedicated customer team
For the ra
il ind
ustr
y
Across our whole platform ecosystem,
we provide cutting-edge r
ail
technology and digital ticketing
innovation that encourages mor
e
people to travel by tr
ain versus other
less sustainable modes of transport,
at a lower cost to the industry
.
On the ipside, we bring incremental
demand from customers, and provide
our carrier partners and the rail
industry more broadly with access
to travellers all over the world.
C
re
a
t
in
g v
a
l
u
e fo
r ou
r partne
rs,
business cus
t
omers
and the industr
y
Strategic Report
Gover
nanc
e
Financial Statements
21
Our technology
T
rainline
Annual Report and Accounts 2022
22
Our ability to bring together teams comprising developers, designers,
infrastructure and data scientists to cr
eate a world-class experience for
our customers and carrier partners is what denes us and allows us to
continually innovate and maintain our superior customer experience.
Reliable, scalabl
e, secure
•
>
50
0
micr
oser
v
ices,
increasing speed of
development, flex
ibility
and scalabilit
y
•
c
.400
engineer
s, data
and tech specialists
•
600
+ releases per
week
Deep inventor
y connec
tions
•
Rail and coach
•
Pr
e
- an
d p
os
t-s
a
le
s
•
Re
al
-
t
im
e dat
a
•
Add
-
on travel ser
vices:
insurance, etc.
Personalised
AI data products
•
>4
TB
dat
a p
ro
ce
ss
e
d pe
r day
•
B
e
sp
o
ke
AI
-
dr
iven feat
ures
•
Personalised
UX
an
d
CRM
Customer-centric
ecommerce
•
S
imp
le ‘
on
e cli
ck
’ u
se
r in
ter
f
ace:
hides industr
y complexity
;
multi-
produc
t basket
•
Proprie
tar
y multi
-
carr
ier
/modal
journey planner
•
10
+ payment options
including
Go
og
le Pa
y an
d A
pp
le Pa
y
Securit
y
, payments,
fullment
, fraud safe
guards
•
PC
I
-
DSS
Le
ve
l
1
(Merchant &
Se
r
v
ice Pr
ov
id
er
) sinc
e
2
0
13
•
C
yber Essentials
cer
tif
ication
sin
ce
2
0
17
•
Pa
r
t
ne
r
sh
ip w
it
h
NCSC
&
NCA
•
Internal s
tandards aligned
wi
t
h
IS
O2
7
0
0
1
cer
tif
ic
ation
&
NIST
frame
work
•
Busine
ss Continuit
y Planning
(
I
SO
22
301
) compl
ia
nt
•
3DS
ver
sion
2
i
mplemented
•
Payme
nt Ser
v
ices Direc
ti
ve
II
Secure C
ustomer
Authentication ready
•
Indus
tr
y
-leadin
g fraud
to s
al
es r
at
io
•
Indus
tr
y
-leadin
g payment
accept
an
ce rates
3.8m
origin
-de
s
tination
pairs p
er mon
th
6
0
0+
relea
ses a we
ek
>5
0
0
microse
r
vice
s
2
96
searc
hes p
er sec
ond
c.4
0
0
engine
ers, d
ata and
tech specialist
s
4
+T
B
data pro
ce
sse
d a day
A
t T
rainl
in
e, w
e pr
ide ou
rselv
es on our prop
ri
etary
,
moder
n, scal
abl
e tech pl
atfor
m creat
ed and ma
in
tai
ned
b
y our c
.400 brigh
t prod
uct, data a
nd tech m
ind
s
Plat
form
O
ne
Systems and tools for smart access and use of our unique
data set to provide services for our B2C and B2B customers.
Supp
ly d
ata UK & E
U
Global A
P
I and
White L
abel
ecommerce
Ticketing an
d
settlement
Pa
yments
and fr
aud
Jour
ney pl
anner
and r
eal-tim
e
Cus
tom
er
accoun
t
Strategic Report
Gover
nanc
e
Financial Statements
23
St
rategy
Our str
ategic growt
h priorities:
By maki
ng rai
l
tra
vel easier a
nd
more acce
ssible,
we a
re in
viti
ng
new generations of
tra
v
el
lers to d
it
ch
the car or p
lane
and sw
it
ch t
o trai
n
tra
vel i
nstead
.
Providing a smart, intuitive and seamless experience for our
customers is at the heart of our business – we are continually
improving and optimising our user experience on our mobile
app and web interface, removing friction for customers while
offering them access to unrivalled value and the widest choice.
Through customer insights and research, personalisation, data
and machine learning, we invest in designing features that
enhance the journeys of our customers at every stage, from
planning and booking through to post sales.
We have created a platform that consolidates rail and coach
inventory for carriers across our European markets, pr
oviding
one convenient online experience for customers.
We remain committed to delivering the best possible user
experience through a pipeline of new
, innovative products
and features, for deployment to all our customers globally
.
Our key focus is to strengthen demand b
y deploying our
marketing playbook.
We have built a strong brand, notably in the
UK
, with
opportunity to grow customer awareness in Eur
ope.
Our addressable customer base remains large and the
headroom for T
rainline to grow acr
oss our core markets
remains significant.
We continue to deploy our marketing playbook in or
der to
drive customer acquisition, encouraging more customers to
choose more environmentally sustainable modes of transport.
Increasing customer lifetime value means, for us, our customers
use us more frequently for more of their tr
avel needs – be it
commuting, shopping trips, getting to university, business trips,
family days out, buying a railcard or international travel.
Through our enhanced product offering and broader mark
eting,
we are significantly increasing our ability to help people mak
e
these everyday travel choices.
While helping to drive faster growth, increasing customer
lifetime value is also improving our customer economics,
allowing us in turn to invest more in customer acquisition.
Tr
ainline Partner Solutions (‘TPSʹ) is playing a key role in
providing reach and scale to r
ail operators. TPS has primarily
focused on opportunities in the UK to date, but we are
now starting to break through into Eur
opean markets with
our retailing solutions for carriers as well as distribution
capabilities for travel sellers.
Our solutions for Distribution, Carrier IT and Businesses
offer further and significant growth headroom for T
rainline.
We remain focused on increasing demand fr
om our existing
accounts and winning new accounts in all three areas.
Enhance the
customer
experi
ence
Build
demand
Increase
customer
life
time valu
e
Gr
ow
T
rainlin
e
Partner
Solutions
T
rainline
Annual Report and Accounts 2022
24
K
ey
measures
Progres
s in F
Y
202
2
Prioritie
s fo
r 20
2
2
/23
•
App rating
•
Conversion
rate growth
•
eticket penetration
•
Monthly Active Users
•
New customers
•
App share of
transactions
•
Customer transaction
frequency
•
Customer retention
•
Digital railcards sold
•
B2B win/retention
rate
•
Growth in
international business
travel market share
•
Supporting our
Carrier IT Solutions
clients through
Covid-19
•
4.9/5 star rated app
•
Enhanced ‘new commuter’ experience – with ex
citing
new features
•
New ‘Favouritesʹ tab – allowing customers to personalise
their journey and rebook in two clicks
•
Real-time push notifications – alerting customers to delays
•
We upgraded Récup’ Retard (Delay Repay) in Fr
ance,
making it even easier to submit a claim
•
We introduced airline style seatmap reservation capability
in France and Italy
•
We partnered with every Eur
opean high-speed rail entrant
as they launched their services, including Lumo in the UK,
Avlo and Ouigo in Spain and Tr
enitalia in France
•
Customer engagement recovered to pr
e-Covid-19 levels of
c.30m unique monthly active users in Q3
(prior to Omicron)
•
Scaled our marketing investment as Covid-19 restrictions
eased – with particular focus on performance marketing
•
Generated a sharp rebound in new app customer acquisition
reaching its highest ever levels in the
UK and Europe
•
UK Consumer app share of transactions up 1 percentage
point to 84%
•
Increased our reach by integr
ating Tr
ainline into Google
Maps for Android users, who are now able to click thr
ough
to us to book their travel
•
Google Pay now integrated into our app alongside other
payment options such as Apple Pay
•
Notable increase in repeat usage with
customers booking their commute and
regional travel through T
rainline
•
Strong progress in scaling digital r
ailcards
with >1 million railcards sold during FY2022
•
Launched UK Flexi Season Tickets in the app and are in
the process of rolling out further digital season tickets
•
New Global API wins and growth in Distribution
(e.g. Tr
avelport, CTM
)
•
Renewed contracts for all UK white label train carrier
clients, giving them access to our industry-leading
core platform functionality and upgraded customer
experience features
•
Signed a multi-year deal in Italy with challenger brand
NTV Italo, enabling them to sell regional transport
connections to their customers
•
Investing in our strong
pipeline of innovation with a
particular focus on features that
differentiate our offer and meet
specific local market needs in our
European target markets
•
Continuing to innovate for
the returning commuter
market in the UK
•
Adding new supply as it hits
the European markets, offering
our customers better choice
and value whilst enabling our
carrier partners to reach a wide
userbase
•
Flexible ramping of performance
marketing and customer
acquisition as Covid-19
restrictions ease, supporting
the marketʹs recovery
•
Significant investment in
brand awareness in ke
y
European markets
•
Continuing to win and retain
high value and loyal customers
•
Investing in and building
out monetisation levers
beyond commission in
the UK and International
•
Making Trainline more r
elevant for
more of our customers’ journeys
•
Completing the full roll-out
of digital season tickets
•
Retaining and growing
existing UK customer base
•
Expanding into
European markets
Strategic Report
Gover
nanc
e
Financial Statements
25
C
ase study
B
rin
g
in
g
c
o
m
m
ute
r
s
and
fr
e
qu
ent
tra
v
e
l
ler
s
on
b
o
ar
d
A
t T
ra
inl
ine
, we are d
riv
en
b
y ma
ki
ng r
ai
l tra
vel ea
si
er
.
W
e hel
p t
ra
v
el
lers fi
nd t
he best
va
lue j
ou
rne
y fo
r t
hei
r needs i
n an
intu
itiv
e and
seamle
ss
experie
nce.
Link to strategic o
bjec
tives:
Enhance the c
ustomer exper
ience
Build demand
Increas
e custome
r lifetime value
T
rainline
Annual Report and Accounts 2022
26
Digitalising commuter tic
kets
Despite being the most frequent
rail users, until recently commuters
had to put up with an antiquated,
paper-based ticketing experience.
Tr
ainline deployed the industryʹs
new commuter ticket offering
with the launch of in-app digital
exi tickets last summer – for
our carrier partners as well as
Tr
ainline customers – with digital
season tickets to come next year.
In order to be able to offer all season
tickets digitally we have taken etick
et
barcodes to the next le
vel. We have
developed the sTicket – a secur
e
eticket, which has been established
as an ocial ticketing standard for
high-value barcode tickets with Rail
Delivery Group. It includes extr
a
smart security features such as time
limited barcodes in the app and also
allows for passenger photos to be
embedded directly in the digital ticket,
removing the need for a separate
physical photo card.
Season tickets have historically
been the largest ticket type not
available through T
rainline digitally
.
Pre-Covid-19 about 20% of the
market were season tick
ets. After
successfully piloting digital season
tickets in early 2022, we now have the
technical ability to offer all types of
season tickets in-app, offering a much
improved customer e
xperience on
commuter routes.
New commuter and
frequent t
raveller features
and func
tionality
Finding journey options and buying
tickets for your favourite routes has
never been easier – with our new
Favourites experience, commuters
can save their most frequent journeys,
buy a ticket in just a few taps, and
track their daily commute
in real time.
Further enhancements of our
Favourites experience are underway
including push notications of real-
time updates.
Enhance
d digital
railcard exp
erience
In 2020, we launched our in-app
digital railcard in the UK – allo
wing
our customers to buy, stor
e and
use a digital railcard alongside
their tickets in our app, without
the hassle of keeping and
renewing a paper version.
In 2021 and 2022, we have continued
to enhance the railcard e
xperience
for our customers in the UK and in
France, making buying and applying
railcards in the app and online
even easier.
Making Del
ay Repa
y
easier fo
r our custome
rs
For some time, Delay Repay has
been one of our top unmet customer
needs, consistently coming out top in
customer research.
We do listen to our customers! In
response, we introduced Récup’
Retard in 2020, helping our French
customers to request compensation
for delayed journeys.
This year, Récup’ Retard v2 simplied
this even further – unique automation
capabilities allow our customers to
submit their compensation claim
from within the app in just two taps.
Our customers are clearly loving
it, around 65% of notied customers
submitted a compensation
claim through our app.
Thi
s y
ear
, we la
un
ched e
xci
ti
ng ne
w feat
ures add
ressi
ng need
s
of t
he f
requ
en
t t
ra
v
el
ler a
nd comm
ut
er across a
l
l ou
r ma
rk
ets.
In t
he UK, thi
s incl
udes th
e la
unch o
f th
e di
gita
l season t
ick
et.
Strategic Report
Gover
nanc
e
Financial Statements
27
C
ase study
A
c
c
e
ler
ati
ng
g
r
o
w
t
h i
n
In
t
er
nat
iona
l
Grea
t
er co
m
pet
it
io
n i
n ra
il i
ncre
ases
va
lue a
nd c
ho
ice f
or cust
omers an
d
en
ha
nces t
he role o
f T
ra
i
nl
ine a
s a
thi
rd-part
y
aggregator
. B
y p
osit
ioni
ng
T
ra
i
nl
ine as t
he mar
k
etp
la
ce of c
ho
ic
e
fo
r E
urope
an ra
il t
ra
v
el
, we ar
e we
l
l
pl
aced t
o sig
nic
an
t
ly sca
le our
Int
ernationa
l business.
Link to strategic o
bjec
tives:
Enhance the c
ustomer exper
ience
Build demand
Increas
e custome
r lifetime value
T
rainline
Annual Report and Accounts 2022
28
Aggregator advantage in
liber
alising
markets
Since December 2020, the EU’s
Fourth Railway Package has opened
domestic rail passenger services to
competition.
At that point, Italy was the only large
country with major competition
across its high-speed routes,
following NTV Italo’
s market
entry several years earlier.
Over the last year, domestic
competition between rail carriers in
Europe has stepped up meaningfully:
•
In France, the new Tr
enitalia service
launched on the Paris-Lyon route in
December 2021, with Tr
ainline the
only place where travellers wer
e
able to compare and book tickets
across all operators (SNCF
, OuiGo
and
Trenitalia).
Following
the
recent
ight ban on journeys that can
be made by train in less than
2.5 hours, this is a route ripe
for modal shift to rail.
•
In Spain, three different rail
carrier brands now run services
on the Barcelona to Madrid route
– Renfe, Avlo and SNCFʹs low-cost
brand OuiGo. More competition
is expected in late 2022 when Iryo
(a Tr
enitalia joint venture) is due
to enter the market. The 386-mile
journey can be done by tr
ain in
2.5 hours – a great alternative to
ying on what was the busiest
domestic airline route in Europe
pre-Covid-19.
Competition in domestic European
rail markets incr
eases the need for
an aggregator like T
rainline, where
customers can compare fares, ticket
types and journey options across all
the different operators – and then
book the combination they want.
Inv
esting in pro
duct market fit
,
marketing and brand awarenes
s
By positioning Tr
ainline as the
marketplace of choice for European
rail travel, we ar
e well placed to
signicantly scale our International
business in France, Italy and Spain
over the medium term.
We are scaling up our organisation
as we invest to enhance our product
offering in our target markets –
including integrating all carriers
and fare options – and to build
brand awareness.
•
We are growing headcount
– predominantly software
developers and data scientists
– increasing the pace at which
we can launch innovation in our
digital and online channels and
integrate new carriers onto our
platform. We have also opened
oces in Milan and a tech hub
in Barcelona to ensure we have
a localised presence in our
emerging markets.
•
To meet the specic needs of
local customers, we innovate
and integrate new features. For
example, we recently launched
airline-style seatmap selection
in France and Italy
, so customers
can now choose a specic seat
to enjoy for their journey
. All new
features are developed with the
broadest possible applicability
across markets in mind.
•
We are scaling our marketing
investment, utilising our deep
in-house expertise developed
from our marketing playbook,
expanding our performance
marketing capability
, and
launching our rst major brand
marketing campaigns to grow
awareness. We will r
emain agile
and disciplined, only investing
where the unit economics are
attractive and sustainable.
Strategic Report
Gover
nanc
e
Financial Statements
29
G
r
owin
g
T
r
a
in
lin
e
P
ar
tn
e
r
S
o
lutio
n
s
C
ase study
Dist
ribution Solutions – G
lobal API
Our vision is to build the world’s Number One rail
travel platform, pioneering the technology behind
rail content and ticketing globally to pr
ovide access
to nearly 1.8 billion unique rail routes, acr
oss 11
different markets, through one simple connection.
Tr
ainline Partner Solutions provides a mark
et-
making role for the rail industry b
y bringing
incremental customers to rail thr
ough 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 r
ail booking
experience for their customers and travellers.
Our Global API allows our partners to maximise
revenues by pr
oviding extensive customer-rst,
feature-rich rail content all thr
ough one simple
connection. It is quick and easy to integrate
with Tr
ainline’s continuous support to ensur
e a
seamless go-live through to transaction gr
owth.
Connecti
ng t
o 45k
train s
tatio
ns
4
5k
Access t
o nearly
1.8bn uni
que ro
ut
es
1
.
8
bn
Access t
o 11 mar
k
ets
through our API
11
Grow T
r
ainline Partn
er Solution
s
T
rainline
Annual Report and Accounts 2022
30
Leading corporate tr
avel platform
T
ripActions partnered with
T
rainline to enhance their customer
proposition thr
ough launching
their European r
ail oer
.
TripActions, the only all-in-one
travel, corporate car
d, and expense
management solution partnered with
Tr
ainline to enhance their customer
proposition by launching their European r
ail offer.
TripActions became the rst partner to go live on
Tr
ainline’s Global API, offering their appr
oximately 8,800
corporate customers a seamless rail booking e
xperience
that also provides a sustainable tr
avel option – all through
one simple connection.
Tr
ainline’s Global API enables T
ripActions to provide their
customers with a superior and feature-rich customer service.
As well as offering a wide choice of routes and fares, customers
have the freedom to manage their own booking, empower
ed
by self-service capabilities such as obtaining refunds on-the-go,
saving both time and money
.
‟TripActions
believes in helping
customers
deliver sustainable
business travel, giving the business traveller the tools and
resources to make a mor
e informed choice to reduce their
impact on carbon emissions. Our partnership with Tr
ainline has
strengthened and broadened our train offering acr
oss Europe,
giving travellers an additional mode of transport to consider
when looking
to offset
their carbon footprint,ˮ
said
Danny Fink
el, Chief
Commercial
Ocer, T
ripActions.
Ca
s
e
s
tud
y
Strategic Report
Gover
nanc
e
Financial Statements
31
F
Y2
2
39
FY21
(25)
F
Y2
0
85
UK Consumer
UK TPS
International
UK Consumer
UK TPS
International
F
Y2
2
2,520
F
Y2
1
783
F
Y2
0
3,7
2
7
F
Y2
2
189
F
Y2
1
67
F
Y2
0
261
FY21
(11
)
F
Y2
0
8
FY21
(1
9)
FY20
(1
8)
F
Y2
2
166
F
Y2
1
(14
6
)
F
Y2
0
59
K
ey per
f
ormance indicators
W
e use
the follo
wi
ng financ
ial and
non-fina
ncia
l KPIs t
o measure the
strategic per
formance of ou
r business.
Net tic
ket
sales
1
(£
m)
Adju
ste
d ba
sic e
arnin
gs p
er sh
are
1
(
p)
Re
ve
n
u
e (£
m)
Ba
sic ea
rnin
gs p
er sh
are (
p)
Adjusted E
BITDA
1
(£
m)
Op
era
ting f
re
e cas
h ow
1
(£
m)
Description
Net ticket sales represents the gr
oss 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.
Description
Adjusted basic EPS is prot / loss after tax
for the year, excluding ex
ceptional items,
amortisation of acquired intangibles, gain on
repurchase of covertible bonds, and shar
e-
based payment charges together with the tax
impact of these items, divided by the weighted
average number of ordinary shares.
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 fees
and other service charges billed directly to
the customer, on a per transaction basis.
Description
Basic EPS is prot / loss after tax for the year
divided by the weighted average number of
ordinary shares.
Description
Adjusted EBITDA is prot or loss after
tax before net nancing expense, tax,
depreciation and amortisation, exceptional
items and share-based payment charges.
Description
Operating free cash ow is cash gener
ated
from operating activities adding back
exceptional items, and deducting cash
ow in relation to capital expenditur
e.
Performance
Net ticket sales increased to 322% of prior
year at £2,520 million, with UK Consumer at
383%, International at 178% and TPS at 384%
of prior year.
Performance
Adjusted EPS was (0.8) pence, a 10 pence
increase on the prior year, reecting the
recovery from Co
vid-19.
Performance
Revenue increased to 281% of prior year at
£189 million, with UK Consumer at 348%,
International at 185% and TPS at 126% of
prior year.
Performance
Basic earnings per share was (2.5) pence,
an increase of 16.6 pence on the prior year,
reecting the recovery fr
om Covid-19.
Performance
Adjusted EBITDA increased to £39 million from
a loss of £25 million last year, reecting the
recovery from Co
vid-19.
Performance
Operating free cash ow was £166 million
versus (£146) million in the prior year. This
reected EBITDA generation and working
capital inows as the business recover
ed.
F
Y2
2
F
Y2
2
(1)
(2)
1.
S
ee p
ag
e 162 to 16
4 f
or t
he d
e
f
in
i
ti
on o
f t
hi
s K
PI
.
T
rainline
Annual Report and Accounts 2022
32
FY22
(1
0)
FY21
(1
0
0)
F
Y2
0
2
F
Y2
2
27
.5
F
Y2
1
1
0.9
F
Y2
0
3
0
.1
F
Y2
2
40
F
Y2
1
30
F
Y2
0
21
90
FY21
241
F
Y2
0
71
F
Y2
2
44
F
Y2
1
36
F
Y2
0
32
F
Y2
2
84
F
Y2
1
83
F
Y2
0
76
F
Y2
2
Operating (
loss
)/
profit (
£m
)
Monthly activ
e users (
m)
Cumul
ative a
pp dow
nloa
ds (m)
UK industry etick
et penetration (
%)
T
ransactions through mobile
app (
%)
Description
Operating loss/prot is a prot measur
e
reecting prot or loss after tax before net
nancing income/expense and tax.
Description
Net debt is a measure used by the Group to
measure the overall debt position after taking
into account cash held by the Group.
Description
Number of unique visitors to Trainline
’s
sites and mobile apps each month as at
end of February.
Description
Cumulative number of app downloads
in 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.
Description
Gross transactions through the mobile app as
a percentage of total gross transactions o
ver
the year for UK Consumer.
Performance
Operating loss improved to £10 million
from £100 million last year, reecting the
recovery from Co
vid-19.
Performance
Net debt reduced to £90 million at the end
of February 2022 from £241 million a year
before, primarily as a result of the positive
operating free cash ow
.
Performance
MAUs recovered to 27.5 million in February
FY2022, reaching 30 million in Q3 (prior to
impact of Omicron).
Performance
Total cumulative do
wnloads of the Tr
ainline
app increased to 44 million.
Performance
In FY2022, eticket penetration increased
to 40% (42% in Q4) from 21% in FY2020,
reecting heightened demand for etickets
during Covid-19 and growing availability
.
Performance
The percentage of transactions that went
through the Tr
ainline mobile app increased
by 1 percentage point to 84%.
Net de
bt
1
(£
m)
1.
S
ee p
ag
e 163 f
or t
h
e de
f
i
ni
ti
o
n of t
hi
s K
PI
.
Strategic Report
Gover
nanc
e
Financial Statements
33
UK Consumer
Net ticket sales for UK Consumer were
£1.8 billion, 283% higher YoY
, and
89% of FY2020. Net ticket sales were
materially higher prior to Omicron,
with Q3 up 14% versus the same
period in FY2020.
UK Consumer revenue reco
vered to
£153 million, 248% higher than the
prior year given the increase in net
ticket sales. Gross pr
ot increased
to £129 million, a 279% increase
on the prior year.
T
rainline P
artner Solutions (
‘
TP
S
ʹ
)
Net ticket sales for TPS were £290
million, 284% higher than the prior
year and 24% of FY2020 sales. While
business travel remained subdued,
net ticket sales stepped up 88% in
H2 versus H1, and in Q3 reached
35% of the same period in FY2020.
TPS revenue gre
w 26% Y
oY to £15
million while gross prot was 31%
higher at £11 million, with increased
net ticket sales partly offset by
lower project r
evenue from
white label clients.
International
Net ticket sales were £418 million,
78% higher YoY
, and 85% of FY2020
sales. Net ticket sales impro
ved
throughout the year and in Q3
were at 99% of the same period two
years ago, despite travel restrictions
continuing to impede the return of
inbound customers to Europe.
In Q4, International net ticket
sales reached 106% of FY2020
levels, although this was lapping
a quarter of French rail strik
es and
the onset of Covid-19 in Europe.
Gr
o
up ove
r
v
ie
w
Group net ticket sales reco
vered to
£2.5 billion, 222% higher year-on-year
(‘YoY’),
and 68% of FY2020.
They wer
e
also within our guidance range of
£2.4-2.8 billion despite the impact
of the Omicron variant in the fourth
quarter. Net ticket sales were materially
higher prior to Omicron, with Q3 at
86% of the same period in FY2020.
As a result of the reco
very in net ticket
sales, Group revenue r
ecovered to
£189 million, 181% higher YoY
, and
gross prot increased b
y 214% to
£153 million. The business returned
to positive EBITDA, with adjusted
EBITDA of £39 million – at the top end
of the £35-40 million guidance range
– versus an EBITDA loss in the prior
year of £25 million.
International revenue gr
ew 85% Y
oY
to £21 million given the increase in
net ticket sales. Gross pr
ot increased
to £13 million, 105% higher than the
prior year.
Adjuste
d EBITDA
The Group returned to positive
adjusted EBITDA of £39 million
(adjusted EBITDA loss of £25 million
in FY2021). Adjusted EBITDA was at
the top of the £35-40 million guided
range set out in the Group’
s half year
trading update last September.
The UK business contributed £98
million, £78 million higher than the
prior year driven by the reco
very
in the UK Consumer business. The
net investment in the International
business was £9 million (£4
million last year) as we stepped
up investment in marketing and
customer experience from the
second half of this year.
Central administrative costs wer
e £51
million, up from £41 million in FY2021
and £45 million in FY2020, reecting a
normalisation of our costs as trading
conditions recover
ed and as we make
progress against our International
growth investment plans.
Net ticket sal
es
Adjuste
d EB
ITDA
£2
.5b
n
£
39m
See our KPIs on page 32
S
tro
ng g
ro
w
th i
n net t
ic
k
et sal
es
a
nd a r
et
ur
n t
o pos
it
iv
e EBI
TD
A
CFO
’
s financial highlights
Oper
ating free c
ash ow
Basic lo
ss pe
r share
£
166m
(
2
.
5)
p
T
rainline
Annual Report and Accounts 2022
34
FY2022
£m
FY2021
£m
Change from
PY %
FY2020
£m
%
of FY2020
Net ticket sales
UK Consumer
1,812
473
28
3%
2,0
4
6
89%
UK TPS
290
75
2
8
4%
1,
191
2
4%
UK total
2
,1
0
2
548
283%
3,23
7
65%
International
41
8
235
7
8%
490
8
5%
T
otal Group
2,520
783
222%
3
,72
7
6
8%
Reven
ue
UK Consumer
153
44
24
8%
178
86%
UK TPS
15
12
26%
57
27%
UK total
168
56
200%
235
7
1%
International
21
11
8
5%
26
80%
T
otal Group
189
67
18
1%
261
72%
Gross profit
UK Consumer
129
34
2
7
9%
144
90%
UK TPS
11
8
31%
40
27%
UK total
139
42
23
1%
184
76%
International
13
7
10
5%
17
7
7%
T
otal Group
153
49
2
14%
201
76%
Adjusted EBITDA
39
(25)
85
Operating (loss)/profit
(1
0
)
(
100
)
2
Shaun McC
abe
Chief Finan
cial O
f
ficer
We
’
re back on t
rack with
strong g
ro
w
th e
xpected in
F
Y2
0
2
3
.
Strategic Report
Gover
nanc
e
Financial Statements
35
Statement of f
inancial position
FY2022
£m
FY2021
£m
Change from
PY %
FY2020
£m
Change from
FY2020 %
Non-current assets
525
532
(1
%)
557
(6%)
Cash and cash equivalents
68
37
84%
92
(2
6
%)
Other current assets
50
25
100%
52
(4%)
Current liabilities
(2
3
3)
(4
2
)
(4
5
4
%)
(1
69
)
(3
8
%)
Non-current liabilities
(1
5
1
)
(267
)
4
3%
(1
5
9)
5%
Net assets & total equity
259
284
(9
%)
373
(3
1
%)
Outlo
ok for F
Y
20
23
Assuming no signicant disruption
to rail travel, T
rainline expects strong
growth in FY2023, gener
ating:
•
Net ticket sales in the range
of £3.8-£4.2 billion
•
Revenue in the range of
£280-£310 million
•
Adjusted EBITDA in the range
of £70-£75 million, factoring in
higher investment for growth
in our International business
Statement of f
inancial position
T
otal net assets at the end of FY2022
were £259 million, a decrease
from £284 million in FY2021. Net
current assets decreased to £(114m)
million from £19 million in FY2021.
The decrease was predominantly
the result of a signicant working
capital inow as our sales reco
vered,
reversing the outo
w seen in the
prior year.
Oper
ating loss
The Group reported an operating
loss of £10 million versus a £100
million loss last year. The operating
loss included:
•
Depreciation and amortisation
charges of £43 million, slightly
higher than last year given our
continued investment in product
and technology throughout the
pandemic (FY2021: £41 million)
•
Share-based payment charges of
£7 million, in line with prior year
(FY2021: £7 million)
Loss af
ter ta
x
Loss after tax was £12 million,
reecting the £10 million operating
loss and a net nance charge of
£5 million (which beneted from a
£4 million gain on our repurchase of
convertible bonds in the year), partly
offset by a tax credit of £4 million
arising from the operating loss. This
compares to a £91 million loss last
year, reecting the strong r
ecovery
of the business.
Earnings per s
hare (
‘
EPS
ʹ
)
Adjusted basic loss per share was 0.8
pence versus a loss of 10.8 pence in
FY2021. Adjusted basic earnings per
share adjusts for ex
ceptional one-off
costs in the period (of which there
were none), gain on repurchase of
convertible bonds, amortisation of
acquired intangibles, gain on the
repurchase of convertible bonds
and share-based payment charges,
together with the tax impact of
these items.
Basic loss per share was 2.5 pence
versus a loss of 19.1 pence in FY2021.
Non-current liabilities decreased
to £151 million from £267 million
in FY2021. The reduction was
predominantly driven by using
surplus cash to reduce the drawn
down balance of our Revolving
Credit Facility
, and by repurchasing
£35.2 million of convertible bonds.
Net debt reduced to £90 million at
the end of February 2022 from £241
million a year before, primarily as a
result of the positive operating fr
ee
cash ow.
Cash ow
Operating free cash ow was £166
million, a £312 million improvement
year-on-year. This reected our return
to positive EBITDA and working
capital inows as the business
recovered, as well as the timing
of industry settlement payments.
This was partly offset by capital
expenditure in the period of £29
million, slightly higher than the
prior year (FY2021: £26 million) as
we step up investment in product
and technology for our International
business. Cash and cash equivalents
ended the year at £68 million, a net
cash inow of £31 million.
Shaun McC
abe
Chief Finan
cial O
cer
5 May 2022
CFO
’
s financial highlights
c
ontin
ued
T
rainline
Annual Report and Accounts 2022
36
Viability statement
In accordance with the requirements of
the UK Corporate Governance Code
2018, 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 and emerging risks as set out
on pages 38 to 47 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 assessment period.
Given the fast pace of the digital
environment in which the Group
operates, a longer forecasting period
would become less reliable as it is
dicult to pr
edict digital trends
and
the pace of change over a longer
period. The three-year period is
also aligned to the Group’s annual
strategic planning process. The base
case reects
the Group’
s three-year
plan, which includes the current
best estimate of outlook. The key
assumptions in the three-year plan
which could be impacted by the
principal risks are: the legacy of
Covid-19 and its impact on trading; the
rate of net ticket sales gro
wth and the
associated revenue gro
wth; and the
level of cost required, including cape
x,
to meet sales and revenue forecasts.
How viability was con
sidere
d
T
o 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 exing some of the ke
y
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 modelled include
any mitigating actions. The viability
assessment considered the liquidity
of the Group and whether the
covenant requirements would
be met in all applicable periods.
The Board
has reasonable condence
that the Gr
oup will be able
to renance
its existing £350 million revolving
credit facility and intends to do so in
advance of its contractual maturity
in June 2024. Management have
considered covenant requir
ements
for public listed companies seeking
nance under curr
ent market
conditions. The most likely covenant
tests do not indicate a risk to viability
and requirements would be met by
the Group in all applicable periods.
The outcome of RDG’s Retail Revie
w as
disclosed on page 17 is not expected
to come into effect until 1 April 2025,
and as such falls outside of the
assessment period.
Sens
itivities app
lied
The sensitivity scenarios
applied were as follows:
Scenario 1
•
A signicant reduction in sales
with no corresponding reduction
in costs, resulting in a c.15%
decrease in adjusted EBITDA
in each year during the
assessment period
Link to pri
ncipa
l risk
s: all
Scenario 2
•
20% additional marketing spend
with no upside in sales/revenue
Link to pri
ncipa
l risk
s: market s
hoc
k
/
ec
onom
ic disru
ption, I
T sec
urit
y an
d
cyb
erc
rime, c
omp
etitive l
ands
cap
e,
regulat
ory and polit
ical en
vironment
Scenario 3
•
£10 million additional capex in
each year with no upside in
sales/revenue
Link to pri
ncipa
l risk
s: IT se
curit
y
and cy
be
rcri
me, pe
op
le, co
mpe
titive
landscape
Scenario 4
•
Data breach in FY2024, resulting in
reduced r
evenue, compliance
nes
and ongoing increased IT security
costs
Link to pri
ncipa
l risk
s: IT se
curit
y an
d
cybercrime,
complia
nce, regul
atory
and polit
ical environment
Conclusion
The Group is forecast to meet
covenant requirements in all periods
in which they are applicable under
the base case and under all
scenarios considered.
Although existing covenant
requirements would no longer be
applicable when the Group’s e
xisting
revolving cr
edit facility expires in
June 2024, the Group is expected
to comply with management’s best
estimate of covenant requir
ements
imposed as part of renancing
under the base case and under
all scenarios considered.
The Board conrms that it has a
reasonable expectation that the
Group will be able to continue in
operation and meet its liabilities as
they fall due over the next thr
ee years.
Strategic Report
Gover
nanc
e
Financial Statements
37
Our risk manag
ement fram
ework
The Gr
oup has
a dened
Enterprise Risk Management
(‘ERMʹ) fr
amework that
governs our risk
management and
methodologies. The
process
allows
a r
obust identication
and
assessment of the risks facing the Group. Our risk management
framework and processes ar
e described in detail opposite.
P
rincipal risks and uncer
tainties
A
t T
rain
li
ne, w
e ad
opt a rob
ust ri
sk ma
na
gemen
t
strat
egy t
o ens
ure w
e cont
in
ue t
o grow o
ur b
usi
ness in a
susta
i
nab
le w
ay
, ach
ie
ve o
ur o
bj
ectiv
es and pr
o
vi
de v
alu
e
to our c
ustomers, shareholders and other stakeho
lders.
T
rainline’s framework for
risk managem
ent spans
all levels of our business
The Board of Directors has
ultimate responsibility for our risk
management programme and for
setting the risk parameters within
which Tr
ainline’s Management T
eam
operates. The Board also sets the tone
for risk management; the culture, as
well as the context, for how decisions
are made when evaluating risk.
The Board is also responsible for
assessing events and circumstances
which could threaten T
rainline’
s
current and/or future strategy
,
business operations or business
model, and for providing guidance
and advice to our Management T
eam
on navigating risks. The Board is
supported by the Group, through
Tr
ainline’s Management T
eam and
the Audit and Risk Committee,
in particular, to revie
w, report
on and manage risk.
The Audit and Risk Committee
is responsible for re
viewing the
effectiveness of Tr
ainline’s internal
controls and risk management
processes, and for reporting
such matters to the Board. The
responsibility for re
viewing T
rainline’
s
risk register also belongs to the Audit
and Risk Committee. The Committee
makes sure that T
rainline’s risk
register is: frequently updated and
revie
wed; comprehensive; monitored
and managed; and effectively
communicated back to the
Board on a regular basis.
T
r
ainline B
oard
Overall responsibility for T
rainline’s risk
managementprogramme.
Audit & Risk Commit
tee
Responsible for reviewing the effectiveness of T
rainline’s
internal controls and risk management processes, and for
reporting such matters to the Board.
Managem
ent T
eam
Supports and contributes to internal risk management
systems and processes.
Internal Risk Com
mittee (
‘
IRC
ʹ
)
The IRC serves as a forum to consider new risks facing
the business, discuss the existing risk register and the
mitigation in place and identify emerging risks facing
the Group and reports regularly to the Audit and Risk
Committee and the Board.
T
rainline
Annual Report and Accounts 2022
38
This helps to ensure that the Board
remains up to date with T
rainline’
s
risk prole, allows them to dene
appropriate strategic objectives
for the Group and consider the
effectiveness of the risk
management process.
During our annual long-term
business planning process, all high-
level strategic, nancial, r
egulatory
and reputational risks are formally
assessed by the Board.
A ow of clear, timely and rele
vant
communication exists between the
Audit and Risk Committee and the
Board, which continues from the
Board to T
rainline’
s wider business
and vice versa. This clear ow 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 ex
ecuted in line
with Tr
ainline’s risk par
ameters.
Procureme
nt proc
ess and
assessing our su
ppliers
Tr
ainline’s pr
ocurement processes
reect our commitment to
sustainability and governance. All
material suppliers are assessed to
ensure they ar
e t for purpose and
meet Tr
ainline’s ethical standar
ds,
security requirements, envir
onmental
and corporate responsibilities, and
comply with relevant legislation,
wherever they ar
e in the world.
Complianc
e and risk
management processes
Enterprise risks are formally assessed
bi-annually as part of dedicated ‘Risk
Workshopsʹ held with responsible
risk owners. The Head of Risk and
Internal Audit joined the business in
October 2021 and has been tasked
to co-ordinate our risk management
practices. As part of the enterprise
risk management framework,
potential emerging risks and longer-
term threats are consider
ed to
identify new trends, competitor
actions, regulations, government
interventions, or business disruptors
that could impact the Group’
s
business strategy and plans.
The enterprise risk management
process has been in place throughout
FY2022 up to the date of this
Annual Report.
T
rainline identied
risks and mitigants
At Tr
ainline, 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 revie
wing and
maintaining Tr
ainline’s risk r
egister,
and approach to risk management
and compliance.
Our Management T
eam takes
an active role in managing risk
throughout day-to-day operations
at Tr
ainline, guided by the Board and
the risk parameters as set through
Tr
ainline’s str
ategic objectives. By
providing input to the risk register
process, as overseen by the Audit and
Risk Committee, the Management
T
eam helps to determine the risk
appetite for the business which
is approved by the Boar
d.
Emerging risks
Other than the Principal Risks, the
Board also considers potential
emerging risks and their impact on
our operations. Though we believe
the Group is well-positioned to take
advantage of the increased push
for sustainable travel, there are
potential uncertainties around the
climate change related legislative
agenda in our markets. Though
we continue to proactively monitor
these developments, if we are unable
to proactively demonstrate our
sustainability credentials (e.g. ‘Net
Zeroʹ commitments)
or fail to comply
with the reporting requirements (e.g.
T
ask Force on Climate-related Financial
Disclosures), our
corporate reputation
may be negatively impacted. Further
information on climate-related risks
is available on page 55.
Probability of realisation of Tr
ainlineʹs principal risks
Moderate
High
Major
Moderate
significance
High significance
Major
significance
Ke
y
 
Market
shock
/
economic d
isruption
 
Prolonged Covid-
1
9
 
I
T s
ec
ur
i
t
y a
nd c
y
be
rc
r
im
e
 
People
 
Competitive
landscape
 
Compliance
 
Supply and par
tner
ships
 
Regulator
y and political enviro
nment
Principal risks heat map
Strategic Report
Gover
nanc
e
Financial Statements
39
1. Market shoc
k
/
eco
nomic disruption
Status:
With the easing of the impact of Covid-19 on the over
all economic landscape in our principal markets, we
have seen a partial recovery in net tick
et sales. This has consequently improved our nancial position and r
educed our
exposure to uncertainties ar
ound external funding and debt levels. Howe
ver, slower reco
very of the commuter and
corporate market as well as additional economic headwinds (e.g. inationary pr
essures and other macroeconomic
repercussions due to the Russian sanctions) could still impact our nancial performance.
Description of risk
How we mitigate the risk
How we monitor t
he r
isk
Status of risk
E
xp
os
ure t
o mar
ket
risk
s including
foreign currency
rat
es
, ge
ne
ra
l mar
ket
sentiment and the
ri
sk of g
lo
ba
l mar
ket
shock
s, including
a recession.
Sig
ni
c
an
t mar
ke
t
eve
nt
s c
oul
d
damage T
rainline’s
competitiveness,
credit
wor
thiness
and the
spending
po
wer o
f ou
r cli
en
t
s
and customers,
ultimatel
y impact
ing
our 
na
nci
al re
sul
t
s
and t
he s
uc
ces
s of o
ur
pro
du
c
t o
f
f
er
in
g.
Link to Strategic
Objec
tives:
As part of our operations, we conduct detailed and
careful analysis and modelling of cash balances
and debt levels to ensure T
rainline’s liquidity, access
to financial facilities and sustainable business
operations all support our long-term gro
wth.
Through this analysis, we create for
ecasts and
projections, including contingencies that help us
cater for any negative impacts on our business –
operationally or financially
.
Tr
ainline has a large and diverse portfolio of
investors, banks and advisers, allowing us to
maintain access to global capital markets
and funding.
•
Duration and
cost of debt
•
Monitoring of
financial and
investment markets
•
Investor
engagement
•
Engagement with
banking and finance
partners
•
Monitoring our
credit rating
•
Analysis of industry
,
economic and
financial drivers
High
Change
P
rincipal risks and uncer
tainties
continued
T
rainline
Annual Report and Accounts 2022
40
2
. Prolonge
d Covid-19
Status:
Though the scale and duration of the Covid-19 pandemic r
emain uncertain and may continue to negatively
impact the corporate and commuter passenger travel, we continue to see r
ail travel reco
vering in all of our major
markets, resulting in a gr
adual improvement in our nancial performance across all our mark
ets. We continue to
maintain the appropriate health and safety protocols implemented to ensur
e the safety and wellbeing of our people
and remain committed to working with our customers, clients, and industry partners to support longer-term reco
very.
Whilst we remain vigilant around the potential r
esurgence of Covid-19 and other virus variants and remain committed
to implementing the required r
emediation measures, if necessary, we belie
ve the potential impact of this risk on our
overall business has become mor
e moderate.
Description of risk
How we mitigate the risk
How we monitor t
he r
isk
Status of risk
Increases in Covid-19
case numbers,
emerging variants and
any future government
travel restrictions
may impact domestic
leisure, corporate
and commuter travel,
as well as cross-
border travel into and
around Europe and
International inbound
travel into the UK and
Europe from overseas.
Link to Strategic
Objec
tives:
Throughout Covid-19 T
rainline’s priorities have
remained the safety and wellbeing of our people,
supporting our customers and engaging with
industry and governments to plan and support
recovery in r
ail travel. Protecting our shar
eholders
against the economic impact of Covid-19 has also
been a priority for us, and we’ve taken sever
al
actions to manage and mitigate the Group’
s financial
position. We continue to monitor developments
closely across all our markets and adapt our
responses accordingly
. 
Tr
ainline carefully manages its operations to sustain
a profitable and stable business in the long term.
Should there be a significant resurgence in Co
vid-19
we can take the following actions, amongst others,
to mitigate the impact on our business:
•
Evaluate and reduce oper
ating costs and
cash outflows
•
Reduce marketing and other discr
etionary spend
•
Effective management of our working capital
•
Secure debt co
venant waivers from Lenders
We have maintained wellbeing activities for all
team members including online fitness sessions
and activities including regular and frequent all-
company meetings; virtual wellbeing sessions;
meditation and yoga; 24-hour, free, confidential,
one-on-one counselling. We also continue to
monitor employee engagement through
our annual ‘Have Your Sayʹ surve
ys.
•
Engagement with
key government
organisations and
representatives as
well as monitoring
announcements.
•
Monitoring
customer contact,
refund rates and
sentiment across
markets
•
Engagement with
carrier partners
•
Monitoring financial
performance and
updating financial
projections
•
Staying close to
our employees
via engagement
surveys and
check-ins
Moderate
Change
Key
Enhancing the
customer experience
Increase customer
lifetime value
Growing T
rainline
Partner Solutions
Build
demand
Strategic Report
Gover
nanc
e
Financial Statements
41
3. IT securit
y and cyber
crime
Status:
The fast-moving nature of IT security and cyber risks mean that T
rainline will always face a level of vulnerability.
Due to the pandemic and changes in ways of working there has been a greater focus on ensuring that de
vices are
secured appropriately to mitigate against the incr
ease in threats as a result of r
emote working practices. With the
expansion into new and e
xisting markets, data privacy legislation risks will remain high for the for
eseeable future. We
have increased our investment in cyber security
, data privacy and related IT security systems, processes and r
esources.
Description of risk
How we mitigate the risk
How we monitor t
he r
isk
Status of risk
Tr
ainline is a processor
of large amounts
of customer data.
There is a risk that
data is intercepted
or leaked impacting
negatively on our
customers, business
and reputation.
Link to Strategic
Objec
tives:
The Group’s cr
oss-functional Security Steering
Committee regularly re
views and monitors
existing and emerging threats as well as our
current mitigation strategies and privacy matters
to validate that we continue to adhere to data
privacy regulations across our mark
ets. Tr
ainline
is certified PCI Level 1 compliant.
We perform detailed access management revie
ws
and have prioritised mitigating activities in place
around our information processing systems. We
remain focused on our business continuity activities
around critical systems to ensure that in case of
disruptions, recovery is managed with the
highest priority.
All new T
rainline employees ar
e required to complete
a cyber security and privacy related training course
as part of their on-boarding. The Chief Information
Security Officer (‘CISOʹ), Security and Privacy teams
provide additional periodic and, if r
equired, targeted
training to T
rainline employees to up-skill and ensur
e
good practices are follo
wed.
We have policies and procedures in place to monitor
systems access and remote working practices ar
e
continuously revie
wed and reinforced to help us
monitor potential cyber and data security risks.
F
or more information on o
ur technology
, see page 22
•
Regular,
independent review
of detection and
prevention systems
/ process operating
effectiveness and
remedial activity
•
Annual targeted
threat assessments
tailored to
Tr
ainline’s specific
circumstances
•
Threat and
vulnerability
monitoring by
cross-functional,
executive-
level committees
High
Change
P
rincipal risks and uncer
tainties
continued
T
rainline
Annual Report and Accounts 2022
42
4. People
Status:
As a fast-growing technology business, attr
acting and retaining the best talent is a critical element of our
strategy
. The technology market is particularly competitive, which creates challenges when hiring for technology r
oles
and retaining talent. T
rainline has taken numer
ous steps to ensure it continues to be an attractive place to work and
develop. T
o further mitigate this risk, we have launched another technology hub in Barcelona, Spain with a planned
initial staff of 60 engineers and developers. Though the over
all risk remains high, the actions implemented help
mitigate our exposure.
Description of risk
How we mitigate the risk
How we monitor t
he r
isk
Status of risk
Tr
ainline’s business
depends on hiring
and retaining first-
class talent in the
highly competitive
tech industry. Inability
to attract and retain
critical skills and
capabilities could
hinder our ability
to deliver on our
strategic objectives.
Link to Strategic
Objec
tives:
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. We
continue to build capabilities and grow our teams, in
particular focusing on Engineering, Data, Industry and
Government Relations. New joiners are r
ecruited and
carefully screened by our in-house talent team.
Organisational revie
ws are undertaken on a r
egular
basis to ensure that teams are built to succeed and that
we r
emain competitive
to r
etain and
attract talent. We
continue to place a high priority on the mental health
and wellbeing of our people, through our well-developed
and continuously improving wellbeing initiatives.
T
o help us deliver our strategic goals and ambitious
growth plans we have made a number of k
ey hires to our
Management T
eam with the addition of a Chief T
echnology
Officer, Chief Data Officer and Chief Corporate Affairs
Officer. We
have
also
expanded
our
Management
Team
in
Europe. Highlighting the strength of our succession planning
process, we have also promoted internal talent to senior
leadership roles.
F
or more information on o
ur people and culture
, see page 48.
•
We conduct
regular employee
engagement
surveys and
monitor and act on
employee feedback
•
Regretted attrition
rate monitoring
•
External
benchmarking
High
Change
Key
Enhancing the
customer experience
Increase customer
lifetime value
Growing T
rainline
Partner Solutions
Build
demand
Strategic Report
Gover
nanc
e
Financial Statements
43
5. Co
mpetitive landsc
ape
Status:
There is an increasingly competitive online tr
avel environment as existing tr
avel service providers
continuously improve their offerings and ne
w disruptive technologies may emerge. The Williams-Shapps Plan for Rail
may further increase competitive pressur
e. We continue to closely monitor the market and pr
oactively manage our
technology portfolio.
Description of risk
How we mitigate the risk
How we monitor t
he r
isk
Status of risk
As we operate in
the fast-moving
technology sector, we
are faced with new and
emerging technologies
as well as new entrants
in our markets.
Ensuring that Tr
ainline
meets the needs of its
consumers – both B2C
and Tr
ainline 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
Tr
ainline’s offering
remains ahead of
competitor products
could have an adverse
impact on our
future results.
Link to Strategic
Objec
tives:
At Tr
ainline, we recognise the importance of
building and sustaining both a strong team and
strong relationships. Our leadership, e
xceptional
team, strong industry networks and agile way of
working help to ensure that we stay ahead of
our competitors, up to date and innovative. We
continue to make targeted product investments
and proactively monitor our brand health.
With c.400 engineers, data and tech specialists, we
use our skills and experience across our Pr
oduct and
T
ech teams, to innovate for, engage with and listen
to our customers.
We work closely with industry groups and leaders
to understand key tr
ends to proactively respond to
emerging changes and requirements.
We also undertake regular mark
et and competitor
analysis to understand potential competitive threats
and opportunities for partnerships and growth. We
have created a strategic partnership with Google,
as part of which we are now able to integr
ate our
product offering with Google Maps on the
Android platform.
•
Monitoring
and analysis
of competitor
behaviours
•
Clearly defined
performance
indicators to
monitor customer
engagement
statistics
•
Regular evaluation
of industry and
consumer trends
High
Change
P
rincipal risks and uncer
tainties
continued
T
rainline
Annual Report and Accounts 2022
44
6. Co
mpliance
Status:
The Group has maintained its focus on compliance with ke
y regulations and mandatory training
programmes have continued throughout the year. As we continue to e
xpand our operations within the EU, we r
emain
fully committed to maintaining our compliance processes by r
ecruiting, training and deploying legal and compliance
professionals in those markets.
Description of risk
How we mitigate the risk
How we monitor t
he r
isk
Status of risk
The Group 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.
Should Tr
ainline 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
financial penalties, the
inability to retail rail
and coach tickets and
the loss of revenue.
Link to Strategic
Objec
tives:
At Tr
ainline, we take a comprehensive and r
obust
approach to compliance, which is overseen b
y
the Audit and Risk Committee, our Board and by
our Management, Legal, Finance, T
echnology and
Security teams on an operational basis.
We have dedicated resources and tr
aining 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 T
rainline. We also
ensure that extr
a training is given to team members,
relative to their roles at T
rainline.
We operate a whistleblo
wing policy, whereb
y
any member of our team is able to quickly and
confidentially raise concerns and feedback through
an appropriate, procedural channel.
We employ dedicated staff members and teams,
where appropriate locally in countries wher
e we
operate, who help to track and monitor legal,
contractual and regulatory compliance r
equirements
in each of the major markets in which we operate.
Where required, annual assessments ar
e performed
and reported to the rele
vant party on compliance.
Under some contracts and regulations, T
rainline is
subject to third-party re
views on either a regular
or ad hoc basis to assess its compliance with the
underlying requirements and the results of such
revie
ws are reported to the rele
vant third parties.
•
Regular assessment
of laws and
regulations across
geographies in
which we operate
•
Regular re
view and
maintenance of risk
register
•
Monitoring of
customer, industry
and Board concerns
•
Audit and Risk
Committee revie
ws
of compliance
processes
Moderate
Change
Key
Enhancing the
customer experience
Increase customer
lifetime value
Growing T
rainline
Partner Solutions
Build
demand
Strategic Report
Gover
nanc
e
Financial Statements
45
7
. Supply and partnerships
Status:
The successful execution of T
rainline’s strategy is reliant upon r
etaining its existing licences with carriers and
also integrating new carriers as they launch via e
xisting licences or by agreeing ne
w licences where requir
ed. Successful
contractual arrangements with partners to pro
vide access to T
rainline’
s supply remains key as the industry continues to
recover from Co
vid-19 and with growing inter
est in rail as a more sustainable means of business tr
avel.
Description of risk
How we mitigate the risk
How we monitor t
he r
isk
Status of risk
Tr
ainline retails rail and
coach tickets across
many countries and to
customers across the
world. We therefore
rely on secure and
reliable connections
from all rail and
coach operators.
A unilateral
termination or
variation by a rail or
coach carrier of its
licence terms with
Tr
ainline, including a
significant reduction
in the levels of
commissions which
Tr
ainline receives,
or a significant or
prolonged disruption
to traveller services or
systems would have
an adverse impact on
Tr
ainline’s r
esults. 
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 Tr
ainline’s
ability to offer a useful
product to meet the
needs of customers.
Link to Stra
tegic
Objec
tives:
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 remain up to date on any industry or service
issues. We also believe r
elevant competition laws
may limit the scope of carriers’ abilities to amend
or otherwise treat T
rainline unfairly
.
As our presence in Europe continues to gro
w and
our relationships with the train oper
ators continue
to expand, we have been expanding our team of
commercial and technology resour
ces.
Though our business-to-business and corporate
travel services were significantly impacted b
y the
Covid-19 related lock
downs, we have continued to
reinforce our Sales and Account Ex
ecutive teams.
•
Long-standing
relationships with
the industry, our
carrier partners
•
Highly experienced
Supply and
Government
Relations teams
responsible for
monitoring and
responding to
the needs of our
partners, as well
as identifying new
supply opportunities
•
We have been
continuing to add
experienced, senior
level resour
ces to
the European
supply and
partnership teams
•
We have effective
processes in
place to support
informed, data-led
decision making
High
Change
P
rincipal risks and uncer
tainties
continued
T
rainline
Annual Report and Accounts 2022
46
8. Regulator
y and p
olitical environment
Status:
The UK operating environment has seen opportunities and risks generated b
y the Williams-Shapps Plan for
Rail. This could impact our commercial environment in the UK, with changes e
xpected to our licence counterparty, the
Rail Delivery Group (‘RDGʹ). We ar
e engaged closely with relevant go
vernment and industry stakeholders to proactively
monitor and mitigate risk. We have recently agr
eed a Memorandum of Understanding with RDG to set a back-stop
for commission should we be unable to agree a mutually acceptable outcome to the Retail Revie
w, curr
ently being
undertaken by RDG. This back-stop would result in a net 25bps r
eduction in T
rainline UK Consumer economics, being
a ~50bps reduction in commission offset by a r
emoval of central industry costs pr
eviously recharged to T
rainline to
the value of ~25bps. In our European markets, the continued liber
alisation of the rail industry presents signicant
growth opportunities.
Description of risk
How we mitigate the risk
How we monitor t
he r
isk
Status of risk
Tr
ainline’s oper
ations
could be affected
by changes to
policy or regulation
by government,
regulators and
industry.
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
Tr
ainline’s oper
ation
and/or financial
prospects, in the short
to medium term.
Link to Strategic
Objec
tives:
Tr
ainline recognises the importance of developing
strong and effective relationships with go
vernments
and rail industry partners. The Corporate Affairs
team proactively engages with UK and EU national
governments, institutions and carrier partners as
part of a structured programme of stak
eholder
engagement.
We work to ensure our voice is hear
d in key debates.
In the last 12 months this has included the Williams-
Shapps Plan for Rail, the RDG Retail Review and
Europe-wide liberalisation initiatives such as the EU
Plan for Rail.
This engagement is joined with our overall
communication and brand positioning, to
present a coherent message to all our audiences.
A range of tactical work including attendance at
industry and political events, thought leadership
and media and social media interventions amplifies
this voice.
Through doing this, we ensure that T
rainline’s
external operating envir
onment remains as
supportive as possible to our growth ambitions.
•
By utilising
specialised
monitoring tools,
we track changes
to laws and
regulations across
all geographies in
which we operate
•
We undertake
comprehensive
risk analysis and
modelling, both
in-house and
through specialist
consultancies
•
We monitor public
sentiment and
trends via polling,
focus groups and
other methods
•
We have
programmatic
engagement
with key industry
partners and
government
representatives
with monitoring of
sentiment shifts
High
Change
Key
Enhancing the
customer experience
Increase customer
lifetime value
Growing T
rainline
Partner Solutions
Build
demand
Strategic Report
Gover
nanc
e
Financial Statements
47
Our people and culture
O
u
r P
eo
p
l
e a
r
e
at
the
hear
t
of
ou
r
busi
ne
ss
It
’
s
our innovativ
e team a
ccomp
lishing brill
iant
th
ing
s ev
er
y da
y tha
t ma
k
es it si
mple
r
, easi
er
,
cheaper and greener for pe
ople t
o plan thei
r
journeys and
see
the world.
T
rainline
Annual Report and Accounts 2022
48
Inv
esting in our Peopl
e
Investing in l
eade
rship
A number of key hires to our
Management T
eam are helping us
deliver on our strategic goals and
ambitious growth plans, with the
addition of Milena Nikolic from
Google as Chief T
echnology Ocer,
Mike Hyde from Facebook as Chief
Data Ocer and Martin Sheehan from
Portland as Chief Corporate Affairs
Ocer. Highlighting the strength of
our succession planning process we
also promoted James Hanratty
, who
Emplo
y
ees
75
0
+
Promotions
11
0
Nationalities
>5
0
Engineers,
dat
a and t
ech
specialists
c.
400
I wa
nt t
o mai
ntain a d
yna
mic t
ech cult
ure a
t T
rain
li
ne
so people rea
l
ly en
jo
y wor
kin
g here
. I dra
w a lot of
jo
y out of seei
ng us, as a t
eam, uti
lisin
g our d
at
a and
ex
pertise t
o shi
p gre
at prod
ucts that e
nha
nce the u
ser
ex
peri
ence a
nd gro
ws our c
ustome
r base so t
hat w
e
encoura
ge more people to reduce the en
vironmen
tal
impact of their trav
el
choices.
Milena Nik
olic
Chief T
echn
olog
y O
cer
joined Tr
ainline in 2009, to General
Counsel. As part of our commitment
to promoting diversity
, all executive
search shortlists achieved a
50:50 balance of male and
female candidates.
Inv
esting in tec
h talent
Leveraging our position in Eur
ope,
we opened new oces in both Milan
and Barcelona this year, giving us
access to new talent markets.
These new oces pro
vide an
important strategic opportunity
for us to attain the expertise and
technical skills we need to deliver
on our transnational expansion.
Strategic Report
Gover
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e
Financial Statements
49
Our people and culture
cont
inued
A culture built for succ
ess
Empower
ing pe
ople to ma
ke green
er
travel ch
oice
s, conn
ec
ting pe
ople a
nd
plac
es, si
ts at the h
ear
t of o
ur busine
ss
.
Greener workplaces
By revie
wing all the suppliers and
products we use across our oces,
we can ensure we choose more
sustainable options. This helped
us reduce the environmental
impact of our oces in FY2022.
Communication and
engagement
Our green purpose is at the forefront
of regular communications with
our People and a programme of
‘green-focused’ e
vents. This included
the launch of our rst ever ‘Green
Week’ in November 2021, which
saw employees from our London,
Edinburgh and Paris oces taking
direct action to benet our local
communities, and the launch of
a dedicated ‘Green’ learning hub
on our training platform.
Perks for good
As part of Green Week, we launched
our Tr
ainline Forest in partnership
with our charity partner, onHand, who
will plant two trees in the Bosawas
Biosphere Reserve in Nicaragua for
each of our employees. OnHand also
help provide our People with access
to volunteering opportunities and
sustainability knowledge.
Another tree planting initiative was
also put in place, where we committed
to planting a tree every time a ne
w
employee passes probation. This
enables each of us to actively have
a positive, direct and long-lasting
impact on the environment.
High per
formanc
e
Keeping our People and teams
connected to our business goals is
key to our continued success and
growth. This year we have intr
oduced
Objectives and Key Results (‘OKRs’) as
our goal setting methodology, to help
us simplify the process and better
align teams to the things that
matter most.
This way of working will also
demonstrate to our People how the
y
can directly shape and contribute
to our success, increasing job
satisfaction and engagement.
T
o help us embed this new way
of working, we have established
a partnership with a leading OKR
platform, including investment in
enablement services for our People.
We started on this journey in late
FY2022 and will continue to roll
out OKRs in our key str
ategic
activities and across all
departments during FY2023.
Encouraging innov
ation
We are proud of the bright minds
that work here at T
rainline, constantly
innovating, problem-solving and
obsessing over making our customer
experience ever better. W
e celebrate
new ideas and encourage our People
to stretch their minds, share their
knowledge and be inspired.
Our
values
We’
re b
uilding the
future of rail
We focus on ev
er
y
customer
, par
tner
and journey
We mak
e a
positive impac
t
We are one team
T
rainline
Annual Report and Accounts 2022
50
An inclusi
ve a
nd
diverse w
orkforc
e
Our app
roac
h to diver
sit
y
, inc
lusion
and b
elong
ing foc
uses o
n rem
oving
barrie
rs, c
reating c
onne
ction
s and
bein
g a plac
e wher
e ever
yone c
an
bel
ong andthr
ive.
People Le
d Group
s
People Led Groups (‘PLGs’) play a k
ey
role in our diversity and inclusion
agenda as inclusive communities
developed and led by our People
with sponsorship and support
from senior leaders. They ar
e all
about empowering and supporting
underrepresented groups, b
y
providing a safe space to talk, a place
to come up with new ideas and a
channel for voices to be heard.
We’ve worked to deliver a pr
ogramme
of events that celebrate and r
aise
awareness of key diversity and
inclusion calendar moments such
as International Women’
s Day, Black
History Month, Pride and Autism
Awareness Week.
Senior W
omen’
s Ne
twork
The Senior Women’
s Network focuses
on supporting and helping to develop
our female leaders, accelerate gender
parity and encourage more women to
take up leadership positions.
Family friendly
Family friendly policies that are both
supportive and competitive help us
increase diversity and inclusivity and
attract and retain talent.
Apprentices
There is an enormous opportunity to
increase diversity in the technology
sector. Our apprenticeship
programme was launched this year
to provide car
eer opportunities to a
cross-section of young people from
under-represented communities.
Partnering with Multiverse, we
welcomed our very rst apprentices
to our Engineering, Data and People
teams in September 2021 and we
expect to welcome our second group
of apprentices in September 2022.
Joinin
g T
rain
line
has
given
me a grea
t opportu
nity t
o
learn from man
y people
who com
e from d
iverse
back
grou
nds and a va
riety
of sectors. I’
m particu
la
rly
enjo
ying w
orking alongside
ex
perienced progra
mmers,
it’
s a very wel
comi
ng, f
r
iend
ly
and suppor
tiv
e envi
ronment!
T
ymoteu
sz Hylin
ski
Sof
tware Engi
neer Apprent
ice
Diver
se hiring pr
ac
tice
s
T
o recruit across diverse communities
we partner with diversity-focused
job boards and platforms, such as
Women in T
ech and Diversity in Tech.
Our relationships with Academy and
Bootcamp training providers help
us develop an inclusive early
career programme.
Tr
aining for our hiring managers is
provided to help r
emove any bias
from decision making and ensure that
our internal hiring process is fair and
inclusive for all.
Further information on our workforce
diversity is available on page 77.
Strategic Report
Gover
nanc
e
Financial Statements
51
Our people and culture
cont
inued
Growing a care
er
Suppor
ting our mana
gers
Management and leadership
development is offered to ensure
managers have the skills and expertise
they need to lead their teams. Our
Leading at Tr
ainline New Manager
accelerator programmes deliver
leadership coaching, leveraging
our experienced Management
T
eam to host talks and workshops
on specic management
topics.
Inv
esting in our
T
e
chnolog
y teams
Supporting our thriving T
ech
community with events, resour
ces
and tools to keep building world-
class talent is key
. We’ve gr
own
our partnerships with some of the
leading technology-focused capability
platforms to ensure we are building
the cutting-edge skills required to
keep our teams at the forefr
ont of
developments in technology
.
Our focus o
n wellbeing
Looking after our People
Over the course of FY2022, we
continued to place great importance
on the wellbeing of our teams, to
help support each of our People
professionally and personally
during Covid-19 restrictions and
the transition back to oce life.
Our annual cross-company wellbeing
weeks and celebrations tied to ke
y
wellbeing calendar moments help
our People take care of their mind,
body and spirit.
I’ve been at T
ra
in
li
ne fo
r o
v
er v
e yea
rs
and ha
ve p
rogressed f
rom a
n Ag
ile
Busin
ess Anal
yst t
o a BA M
ana
ger
in th
at ti
me
. I’ve l
o
v
ed bein
g able t
o
carve ou
t m
y own pat
h in m
y time he
re
and cr
eat
e a progress
ion f
rame
wor
k
wit
h m
y tea
m to aid the
ir ca
reer
dev
elopment
. I also
take adv
antage
of ment
ors and the in
credi
ble people
arou
nd me to ensu
re I’
m al
wa
ys
learn
ing a
nd
growing
.
Karen Mar
tin
Business Analyst Manager
T
rainline
Annual Report and Accounts 2022
52
Giving back
Future Frontiers, Ada T
ech School,
onHand and Railway Children are
partners that we are proud to
work with, helping us support
our communities and champion
future talent.
Inspirin
g
T
o do our part in fullling potential
we partnered with the award-
winning charity, Future Fr
ontiers,
to help equip students from
disadvantaged backgrounds with
the information, skills and mindset
to achieve their career aspir
ations.
Since our partnership began, our
teams in London and Edinburgh have
mentored more than 170 secondary
school students, encouraging them to
dream big, explore opportunities and
achieve their career aspir
ations.
Educating
T
ackling gender imbalance and
championing talent within the tech
industry is a core focus for T
rainline.
Women represent only 26% of
professionals in the tech sector, of
which only 11% are in leadership
positions. We believe the k
ey is to
inspire women to choose a career in
tech from an early stage. One of our
partners, the Ada T
ech School in Paris,
enables us to support young people’s
aspirations to become developers.
Supp
or
ting
Across the world many children
are forced to nd refuge in r
ailway
stations. For many years we’ve
partnered with and supported Railway
Children, the charity that pro
vides
safety, protection and opportunity
I’
m real
ly ex
cited abo
ut ho
w much gro
w
th opportuni
ty
there is a
t T
rai
nl
ine
. Since I’ve j
oi
ned, I’v
e been
cont
in
uou
sly lea
r
ni
ng ne
w thi
ngs, b
ui
ldi
ng my sk
il
l-set
and bec
oming more knowledgeable within m
y
f
ield.
Sahid Miah
HR & T
alent A
pprentic
e
for these vulnerable young people.
Through our fundraising activities
we help Railway Children continue
the fundamental work they do for
some of the most vulnerable in
our societies.
We moved quickly to help Ukr
ainian
refugees by launching and
maintaining a help page for refugees
travelling from Ukr
aine to other
countries in Europe which included
advice on where they could access
free transport, accommodation and
support from governments and
charities. We also donated in-product
advertisement space to Unicef and
the Disaster Emergency Committee
in addition to a cash donation to the
Unicef Ukraine Appeal.
Strategic Report
Gover
nanc
e
Financial Statements
53
T
ask F
orce on Climat
e-related
Financial Disclos
ures (‘
T
CFD
’)
Tr
ainline has made strong progr
ess
during the year in setting its
sustainability goals and developing a
strategy to achieve them. T
o a
ch
iev
e
our sustainability goals we recognise
the importance of disclosing climate-
related risks and opportunities
in line with the TCFD and SASB
frameworks so that investors and
other stakeholders have a better
understanding of the climate-related
risks and opportunities that apply
to Tr
ainline. We have structured
this report in line with the four core
themes and the eleven recommended
TCFD disclosures. In implementing
the TCFD framework we have
provided a summary of the actions
we have taken to re
view the key
risks and opportunities arising from
climate change and the transition to
a lower carbon economy and their
potential impacts on Tr
ainline.
Due to the nature of our business,
Tr
ainline has an inherently lower
carbon intensity compared to
other business sectors with the
majority of our greenhouse gas
(‘GHG’) emissions arising from the
use of third-party cloud computing
services. We have limited ability to
inuence the emissions created by
these third parties but we apply
pressure where we can to encour
age
the transition to rene
wable energy
sources and we welcome the net-zero
carbon emission commitments that
have been made. Whilst the GHG
emissions we have direct control o
ver
– predominantly the operation of our
oce spaces – are not substantial we
are taking steps to reduce them.
Gov
ernance
Our governance for climate-related risks and opportunities:
TCFD Rec
ommendation
How we apply t
he recommendation
Describe the Board
’s
over
si
ght o
f cli
mate
-
rel
ate
d ri
sk
s a
nd
oppor
tunities
The Board is ultimately responsible for T
rainline’s strategy and approach to climate-
related risks and opportunities.
During the year the Board discussed the climate-related risks for T
rainline and the
opportunities arising from the transition to a lo
wer carbon economy including the
importance of sustainability to our stakeholders and their particular focuses. The Board
also received an update on our sustainability strategy and discussed its ambitions, goals,
the roadmap for the implementation of sustainability elements into our products and the
sustainability strategy investment plan.
The Board was particularly focused on the steps T
rainline can take to pr
omote the
sustainability of rail and the implementation of the sustainability strategy
. Further
updates on the sustainability programme will form part of the Boar
d’s annual agenda
to enable it to monitor and oversee progr
ess against our sustainability goals.
The Audit and Risk Committee received an update on the inclusion of climate-related
risks into Tr
ainline’s risk management fr
amework as part of the FY2022 risk management
process. This update included all of the risk types identied in tables A1 and A2 of the
TCFD implementation recommendations. The Audit and Risk Committee will continue to
monitor the effectiveness of the risk management process in regar
ds to the appropriate
inclusion of climate-related risks.
The Remuneration Committee will also receive updates on performance on sustainability
measures included in any Executive Dir
ector’s remuneration. See page 89 for further
information on the inclusion of sustainability measures in remuner
ation.
Describe
manageme
nt
’s ro
le
in asse
ssing and
managing climate
-
rel
ate
d ri
sk
s a
nd
oppor
tunities
•
The CEO is ultimately responsible for delivering T
rainline’s sustainability strategy and
reports to the Board on sustainability matters.
•
The CEO is supported by the Sustainability Steering Committee (the ‘Committee
’) which
is responsible for developing and managing delivery of the sustainability str
ategy
and identifying climate-related risks and opportunities. The Committee is chaired
by the Chief Product Ocer and includes senior members of teams that ar
e crucial
to the success of the sustainability strategy
. The Committee provides updates to the
Management T
eam via monthly team meetings.
•
In turn the Sustainability Delivery Group r
eports to the Committee and is responsible
for executing the sustainability str
ategy. The Sustainability Delivery Gr
oup is made up
of representatives fr
om the teams executing the sustainability str
ategy.
T
rainline
Annual Report and Accounts 2022
54
Strat
egy
Our climate-related risks and opportunities:
TCFD Rec
ommendation
How we apply t
he recommendation
Describe the climate-
rel
ate
d ri
sk
s a
nd
oppor
tunities the
organis
ation has
ide
nti
e
d ove
r the
shor
t
, medium and
long term
The transition to a lower-carbon economy will r
equire increasing use of r
ail and coach
which in turn provides opportunities for T
rainline over the short, medium and long term.
Further information on these opportunities is available on page 8.
The Committee has identied and considered a number of climate-related risks that ar
e
relevant to T
rainline, in particular:
Shor
t-term (0
-
5 years)
•
Policy and Legal: policies and legal requir
ements in relation to climate-related matters
continue to develop as the signicance and need for action gro
ws. We operate in
a lower carbon intense industry so we do not currently e
xpect related policy and
legal changes to have a negative material nancial impact on Tr
ainline, however, we
recognise the need to continually monitor developments in this ar
ea to ensure we
remain compliant.
•
T
echnology: no fundamental technology issues arising from climate-related risks have
been identied but we have noted the current market diculties in hiring people with
relevant skills and e
xperience and the potential need to invest further in developing
our technology platform and data to enhance Tr
ainline’s sustainability offering to
our customers.
•
Reputational: as sustainability is a ke
y part of our purpose there is reputational risk to
Tr
ainline that could arise as a result of us failing to live up to our purpose and through
poor execution of our sustainability str
ategy.
Me
dium
-t
er
m (5
-10 years)
•
Market: the tr
ansition to a lower-carbon economy and the resulting r
equirement for
increased use of rail and coach is fundamentally an opportunity for T
rainline, however,
there is the risk of increased competition as the size of the mark
et opportunity
increases, in particular if we fail to ex
ecute our strategy
.
Lon
g
-
te
rm (10
+ yea
rs)
•
Acute and chronic physical risks: risks to T
rainline’s day-to-day operations are minimal
as we operate via a relatively small oce footprint and have a pr
oven ability to
transition to remote working r
apidly when required. Expected increases in e
xtreme
weather events arising from climate change would r
esult in increased disruption or
cancellation of rail services which could cause short-term pressur
e on customer
service capacity. Ho
wever we are well placed to mitigate the impact due to our
investment in simple automated processes that are available to our customers
in our app and website.
The above risks were included in the FY2022 risk management pr
ocess. All were assessed
to have no material potential nancial impact (<1% of annual revenue) or r
equire
additional responses or mitigations at this time. The process to assess climate-r
elated
risks will develop as our ability to analyse them matures in the coming years.
De
sc
rib
e the i
mpa
c
t of
climate
-
related ris
ks
and opportunities on
the organisation
’s
business, strategy
and nancial planning
Our purpose is anchored in environmental sustainability and as a r
esult climate-related
risks and opportunities impact all areas of our business. During FY2022 this included:
•
using a sustainability measure in the FY2023 annual bonus to ensur
e that executives
and senior management are incentivised to achieve our sustainability goals;
•
making sustainability one of our Objectives and Key Results; and
•
using our brand recognition to champion r
ail as the future of sustainable travel.
Strategic Report
Gover
nanc
e
Financial Statements
55
T
ask F
orce on Climat
e-related
Financial Disclos
ures (‘
T
CFD
’)
continued
TCFD Rec
ommendation
How we apply t
he recommendation
Describe the
re
sil
ien
ce of t
he
organisation
’s
stra
tegy
, taki
ng
into consideration
di
erent climate
-
related sce
narios,
including a 2
o
C or
lower scenar
io
When considering the following scenarios the Network Rail Third Adaptation Report and
the Climate Change Committee Independent Assessment of UK Climate Risk were used to
help qualitatively determine the impact of each scenario on Tr
ainline:
The increased use of rail and coach r
equired for the transition to a lo
wer-carbon economy
consistent with a 2
o
C or lower scenario would create a larger and e
xpanded market which
is a strategic opportunity for T
rainline. We closely monitor policy and legal de
velopments
related to rail and fr
equently engage with regulators and policymakers on rail industry
policy so are well placed to understand the impact of developments and identify
opportunities. Whilst there would be risks that arise from this scenario the
y would be
predominantly mitigated through the successful e
xecution of our strategic goals.
A climate-related scenario resulting in a 4
o
C or more scenario in which the modal shift
from cars and planes to rail and coach does not occur would not materially impact
Tr
ainline’s str
ategy as the long-term structural tailwinds for the business would endure,
in particular the transition to online and digital ticketing. Ther
e would be increased
risk of short-term pressure on customer service capacity due to incr
eased disruption
and cancellation of rail services arising from e
xtreme weather events but this would be
mitigated by our investment in simple automated processes that ar
e available to our
customers in our app and website.
Risk manage
ment
Our risk management process for climate-related risks:
TCFD Rec
ommendation
How we apply t
he recommendation
Describe the
organisatio
n’s proce
ss
for identif
ying and
asse
ssin
g climate
-
related ris
ks
The Committee meets to discuss our sustainability strategy and climate-related matters.
These meetings help to identify relevant climate-r
elated risks that are then assessed by
the Committee.
Describe the
organisatio
n’s proce
ss
for managing climate
-
related ris
ks
As part of its assessment of climate-related risks the Committee considers: the probability
and signicance of each climate-related risk identied; and the mitigants in place, their
suitability and appropriate actions where r
equired. The Committee utilises the expertise
of its members and external service pro
viders to determine the materiality of identied
climate-related risks.
If an identied climate-related risk is deemed to have a high probability and/or
signicance, the Committee will consider appropriate actions that can be taken to
introduce optimal controls and/or mitigants. The Committee will then r
eport to the
Management T
eam in line with the wider risk management framework.
Describe how
proc
esses fo
r
identif
ying, assessing
and managing
climate
-
related ris
ks
are integrated into
the organisation
’s
overall ris
k
manageme
nt
A member of the Committee is also a member of the Internal Risk Committee to ensure
the Internal Risk Committee has relevant e
xpertise on climate-related matters. During
FY2022 the risk management framework was updated to help identify risks that included
a climate-related factor so that the Committee could include them in their discussions.
More detail on our risk management framework is available on page 38.
T
rainline
Annual Report and Accounts 2022
56
Metric
s and targe
ts
Our climate-related metrics and targets:
TCFD Rec
ommendation
How we apply t
he recommendation
Disclose the
me
tri
cs u
se
d by th
e
organisation to asse
ss
climate
-
related ris
ks
and oppor
tunitie
s in
line w
it
h it
s st
rat
eg
y
and risk
man
agement
proces
s
Our ability to meet our net-zero commitment is partly dependent on our suppliers
meeting their own net-zero commitments, in particular Amazon W
eb Services’ (‘
AWS’)
commitment to power their operations with 100% r
enewable energy by 2025. Whilst
our ability to inuence AWS is limited we have discussed our e
xpectations of them in
accordance with our supplier code of conduct and will continue to monitor their
progress towar
ds their net-zero commitment.
Disclose Scope 1, Scope
2 and,
if appropri
ate,
Sc
op
e 3 gre
enh
ou
se
gas (‘GHG’
) emissions
and t
he re
lat
ed r
is
k
s
This is Tr
ainline’s thir
d year of Streamlined Energy and Carbon Reporting (‘SECR’)
reporting. In alignment with SECR reporting r
equirements, emissions have been reported
on a ‘like-for-like’ basis with the pr
evious year’s data for comparative purposes.
Global G
HG emis
sions and en
ergy us
e data
Current reporting year
FY2022
Previous reporting year
FY2021
UK
Global
UK
Global
Emissions from activities which the Company owns or controls
including combustion of
fuel & operation
of facilities (Scope
1)/tCO
2
e
5
9
.1
2
2
6
.
41
69.
8
5
41.
8
1
Emissions from purchase of electricity
, heat, steam, and cooling
purchased for
own use (Scope
2, location-based)/tCO
2
e
169
.
4
0
3
.7
1
14
8
.
3
4
2.89
T
otal gross Scope 1 & Scope 2 emissions/tCO
2
e
22
8.
52
3
0
.1
2
2
18
.
2
0
4
4
.71
T
otal energy consumption used to calculate above emissions: /kWh
1
,1
1
8
,
4
5
1
21
2,
59
6
1,
0
16
,
2
0
0
280,8
79
Intensity ratio: tCO
2
e gross
gure based fr
om mandatory elds
above/m² of
oce space
0.05
0
.01
0.05
0.02
Intensity ratio: tCO
2
e gross
gure based fr
om mandatory elds
above/FTE
0.3
5
0.56
0.
3
3
0.89
Emissions from
purchased goods and
services (Scope 3)/tC
O
2
e
1.1
5
0
.1
8
2
.7
8
0.4
6
Emissions from
employee business tr
avel by
rail (Scope
3)/tCO
2
e
1
0
.1
2
0.
47
-
-
Emissions from
employee business tr
avel by
air (Scope 3)/tC
O
2
e
9.4
6
7
7.
0
3
-
-
Emissions from employee business travel b
y passenger vehicle
(Scope 3)/tCO
2
e
1.
2
7
0
.1
9
0.62
-
Emissions from disposal of waste generated in operations
(Scope 3)/tCO
2
e
0.68
0.
02
0.
31
0.
02
Emissions from
energy use in
data centres
(Scope 3)/tCO
2
e
36.
21
4.49
18
.
6
9
5.5
4
Estimate of emissions associated with our workforce working from
home due to
the Covid-19 pandemic
(Scope 3, Cat.7)/tC
O
2
e
3
6
0.7
1
3
7.
4
5
3
69.
2
3
44
.25
Strategic Report
Gover
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Financial Statements
57
T
ask F
orce on Climat
e-related
Financial Disclos
ures (‘
T
CFD
’)
continued
Scope: The data detailed in the table
represents emissions and energy use
for which Trainline is responsible,
including energy use in oces: Gas
(Scope 1); and Electricity (Scope 2).
We have also included emissions
associated with business operations
are also accounted for, including:
purchased goods and services, water
(Scope 3, Category 1); waste sent
for recycling and reco
very (Scope
3, Category 5); business travel for
passenger vehicles, rail and air
(Scope 3, Category 6) and; workforce
working from home due to Covid-19
restrictions (Scope 3, Category 7);
and energy use in data centres
(Scope 3, Category 8).
Methodology: As a large, quoted
company, T
rainline 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.
We have used the main requir
ements
of the Greenhouse Gas Protocol
Corporate Standard to calculate
our emissions, along with the UK
Government GHG Conversion Factors
for Company Reporting 2021 and the
IEA Emissions Factors 2021. The sum
of all emissions included within this
report are for the r
eporting period
1 March 2021 to 28 February 2022.
Calculation: Emission calculations for
energy use in oces (Scope 1 and 2)
are based on conversion of energy
used (kWh) to emissions (tCO
2
e).
Emissions from water consumption
(Scope 3, Category 1) were calculated
based on total water consumed (m3)
with water supply and treatment
emissions factors applied. Emissions
for waste (recycling and reco
very)
were calculated based on total mass
of waste produced (tonnes) with
recycling and reco
very emissions
factors applied accordingly.
Emissions for business travel
(passenger vehicles, rail and air)
were calculated based on distances
derived from departure and arrival
locations (km), distances were then
converted to emissions (tCO
2
e) using
appropriate travel conversion factors.
Emissions for workforce working
from home were calculated using the
EcoAct Homeworking and Commuting
T
ool v3, where emissions are based
upon full-time employees (‘FTE’) and
percentage of FTE working from home
to derive total emissions. Emissions
for energy use in data centres have
been calculated by a third party
, AWS.
These are based on estimates for
Tr
ainline energy consumption with
an ROI grid emission factor applied.
AWS procur
es renewable ener
gy
for use in data centres, therefor
e
although power and computer usage
has increased, emissions from data
centre use have not. Omissions and
Estimates: estimations were made
where no data was provided. Wher
e
gaps were observed in annual single
data sets, estimates were based upon
actual data and extrapolations made.
Where no annual data was provided
estimations were used either based
upon the previous year’s reported
data or calculated using best
available benchmarks for oce
environmental benchmarks.
Energy eciency actions: For
reporting period 1 March 2021 to
the 28 February 2022, we have not
employed any additional energy
eciency actions from the
previous reporting year.
TCFD Compliance Statem
ent
We have set out above our climate-
related nancial disclosures
that are consistent with all four
recommendations and eleven
recommended disclosures from
Section C of the Annex entitled
“Implementing the Recommendations
of the T
ask Force on Climate-related
Financial Disclosures”, published in
October 2021 by the TCFD
.
Reducing our carbon f
ootprint
Oce
We have taken steps to r
educe
the environmental impact of our
workplaces during the year and have
conducted reviews of all suppliers
and products we use across our
oces to ensure we choose more
sustainable options. For example,
we have transitioned to reusable
glass milk bottles – plastic free
catering and recycled toiletry
products, as well as increased waste
separation to impro
ve recycling.
Infrast
ructure
Our extensive use of cloud computing
services is more environmentally
sustainable, up to 88% more energy
ecient according to Amazon Web
Services, than utilising equivalent
on-premises data centres. W
e
intend to continue migrating to
cloud computing services when
opportunities arise to do so.
People
We have educated our People in how
to reduce their environmental impact
by welcoming inspirational guest
speakers to discuss sustainability,
provided guidance and knowledge
via our learning and development
platform and given them opportunities
for direct
action to benet the
environment in our local communities.
We also introduced our sustainable
travel policy which asks our teams to
travel by the most environmentally
sustainable mode of transport.
T
rainline
Annual Report and Accounts 2022
58
S
ustainability Acco
unting Standar
ds Board
(‘SA
SB
’) Disclos
ures
SASB Index 20
22
Tr
ainline is committed to transparent r
eporting to provide our stak
eholders with a comprehensive overvie
w of
the Environmental, Social and Governance (‘ESG’) metrics that ar
e material to our business. As such we have
aligned the below disclosures to the SASB Internet and Media Services standar
ds for the Group, covering our
activities during FY2022.
SASB Acc
ounting Metric
SASB code
T
rainline Disclosure
(1) T
otal energy consumed, (2)
percentage grid electricity
, (3)
percentage renewable
TC-IM-130a.1
1) 1,331,047kWh. 2) and 3) Tr
ainline uses an energy brok
er that
determines our energy supplier based on market rates. T
rainline
therefore does not tr
ack the percentage grid electricity or
renewable energy used b
y our oce suppliers.
(1) T
otal water withdrawn,
(2) total water consumed,
percentage of each in regions
with High or Extremely High
Baseline Water Stress
TC-IM-130a.2
1) 3,154m
3
; 2) Tr
ainline does not track where water is withdr
awn.
Discussion of the integration of
environmental considerations
into strategic planning for data
center needs
TC-IM-130a.3
Environmental considerations ar
e incorporated into our
procurement process. T
rainline has prioritised providers that
have long-term commitments to use 100% renewable energy
and which are able to lever
age economies of scale to
signicantly reduce carbon emissions compared to
typical business infrastructure.
Description of policies and
practices relating to behavior
al
advertising and user privacy
TC-IM-220a.1
Tr
ainline recognises the importance of information security
and privacy for Tr
ainline’s business. The Company has a Chief
Information Security Ocer who oversees dedicated teams
responsible for cybersecurity and privacy
, including the
Data Protection Ocer. In order to pr
epare for and respond
to cybersecurity and privacy issues, Tr
ainline maintains a
programme that is designed to protect and pr
eserve the
condentiality, integrity and availability of all information
owned by
, or in the care of, T
rainline. Trainline does not
have policies relating to behavioural advertising.
Number of users whose
information is used for
secondary purposes
TC-IM-220a.2
Where personal data is processed, T
rainline protects it along
its lifecycle by ensuring appropriate policies and pr
ocesses are
in place. We pro
vide transparency to customers and staff via
published privacy and cookies notices. We use privacy impact
assessments in order to assess any level of risk involved in ne
w
or novel processing activities. As soon as personal data is no
longer required for pro
vision of services offered or for legal or
regulatory requirements that we ar
e subject to, we make sure
it’s either deleted or anonymised. T
rainline does not sell user
data to third parties.
T
otal amount of monetary
losses as a result of legal
proceedings associated with
user privacy
TC-IM-220a.3
Tr
ainline does not disclose this.
Strategic Report
Gover
nanc
e
Financial Statements
59
S
ustainability Acco
unting Standar
ds Board
(‘SA
SB
’) Disclos
ures
conti
nued
SASB Acc
ounting Metric
SASB code
T
rainline Disclosure
(1) Number of law enforcement
requests for user information,
(2) number of users whose
information was requested,
(3) percentage resulting in
disclosure
TC-IM-220a.4
1) 1,305. 2) Tr
ainline does not track this metric. 3) 100%. T
rainline
complies with such requests from law enfor
cement and discloses
the requested information. Each disclosure is consider
ed in
accordance with internal process and disclosures ar
e only
made where there is a lawful basis to do so and it is consider
ed
proportionate in relation to the rights and fr
eedoms of the
affected user, for example for the prevention of suspected fr
aud.
List of countries where
core products or services
are subject to government-
required monitoring, blocking,
content ltering, or censoring
TC-IM-220a.5
Tr
ainline does not operate in countries where cor
e products
or services are subject to government-r
equired monitoring,
blocking, content ltering, or censoring.
Number of government requests
to remove content, percentage
compliance with requests
TC-IM-220a.6
There have been no government r
equests for Tr
ainline to remove
content.
(1) Number
of data
breaches, (2)
percentage involving personally
identiable information
(‘PII’), (3)
number of users affected
TC-IM-230a.1
Tr
ainline was not required to r
eport any data breaches to
regulators over the past year.
Description of approach to
identifying and addressing
data security risks, including
use of third-party cybersecurity
standards
TC-IM-230a.2
Tr
ainline maintains a suite of information security and privacy
related policies, standards, procedur
es, and guidelines,
specically leveraging accepted industry fr
ameworks such as
the PCI security standards. For more information see page 22.
Percentage of employees that
are foreign nationals
TC-IM-330a.1
5% of all employees. T
rainline works closely with external legal
counsel to ensure sponsorship requirements ar
e met for all
visa-holding employees working within the jurisdictions where
Tr
ainline operates.
Employee engagement as a
percentage
TC-IM-330a.2
Tr
ainline conducted an all-employee engagement questionnaire
in which 83% of respondents noted that they wer
e proud to work
at Tr
ainline. Our overall engagement scor
e increased to 65%
(59% in FY2021).
Percentage of gender
and racial/ethnic group
representation for (1)
management, (2) technical
staff, and (3) all other
employees
TC-IM-330a.3
Female representation: (1) management
1
36%; (2) technical 23%;
and (3) all other employees 52%. T
rainline has chosen not to
disclose racial/ethnic group r
epresentation metrics for FY2022
due to legal restrictions on the ability to gather a reliable dataset
of such information.
T
otal amount of monetary losses
as a result of legal proceedings
associated with anti-competitive
behavior regulations
TC-IM-520a.1
Tr
ainline has not been subject to legal proceedings associated
with anti-competitive behaviours and as a result has not suffered
any losses nor has it had to take any actions (such as changes in
operations, management etc).
(1) Data processing capacity
,
(2) percentage outsourced
TC-IM-000.B
Omitted as privileged and condential.
(1) Amount of data storage,
(2) percentage outsourced
TC-IM-000.
C
Omitted as privileged and condential.
1.
A
s de
ne
d in U
K Co
rp
o
ra
te G
ov
er
na
nc
e Co
de 2
018, Pr
ov
i
si
on 2
3
T
rainline
Annual Report and Accounts 2022
60
Stak
eholder engagement
A
t T
rainl
ine
, engaging wi
th our stak
eholders is
in
teg
ral t
o how w
e ach
iev
e our vi
sio
n and stra
teg
y
.
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 stak
eholders; what’s important
to them; how we have engaged with
them directly and through r
elevant
organisations; and highlights of the
results of that engagement during
the nancial year.
Our key stak
eholders and their
signicance to our business
What is important to them
How we engage wit
h them
Highlight
s of our engagement
Our custom
ers
Customer experience is
at the heart of Tr
ainline’s
business. Understanding
our customers’ travel
needs is key to us
delivering and continually
improving our best-in-
class product experience.
Accessing the latest
information on their
planned journey and
understanding its
environmental impact.
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. Our quarterly
customer barometer
programme and our
customer experience
programme help us
understand how well
we’re serving our
customers across their
purchase and travel
experience and where
they want us to impro
ve.
We also undertake
targeted research to better
understand specic issues;
for example, during FY2022
we investigated awareness
of and preferences for
using more sustainable
travel methods.
During FY2022 we
also accelerated our
engagement in Europe.
Launch of Delay Repay
notications in the UK.
Providing and maintaining
a best-in-class customer
experience.
Tr
ainline continues to
be Europe’s leading
independent rail platform,
with a 4.9/5 star app rating.
Strategic Report
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Financial Statements
61
Our key stak
eholders and their
signicance to our business
What is important to them
How we engage wit
h them
Highlight
s of our engagement
2
Our carrier par
tner
s
In order to pro
vide our
customers with the best
possible rail and coach
journey experience, it’s
paramount we establish
and maintain strong
relationships with our
carrier partners. Tr
ainline
also provides white
label services to a
number of carriers.
The opportunity to
increase their reach,
ticket sales and the
number of customers
and corporate travellers
using their services in
their home market or
when expanding into
new liberalised foreign
markets.
Lower cost to serve
customers by transitioning
to digital.
Support by helping
customers nd the right
information for their
planned journeys and
travel safely
.
Access to Tr
ainline’s
operational ex
cellence and
innovation, through our
white label service.
Tr
ainline has carrier
partners in the UK,
across Europe and in
other parts of the world.
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
work 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:
•
integrating ne
w entrants
to European markets into
our product
•
migrating our white label
partners to Platform One
•
aligning closely to adapt
frequently and rapidly as
Covid-19 restrictions
were introduced
•
supporting recovery
through digital
marketing activities when
restrictions were lifted
Introduction of new
ticketing solutions, for
example Flexi Seasons
in the UK.
Partnered with all the new
European high-speed rail
entrants in FY2022 as they
launched their services.
Supporting promotions
to encourage a return to
travel when restrictions
were lifted.
Improved processes to
support fraud prevention
measures in the UK and
allow for targeted re
venue
protection on routes.
Using our expertise
to help the industry
provide better r
eal-time
disruption information
to UK rail passengers.
Providing new points of
sale for European carriers
through our T
ravel Agency/
Tr
avel Management
partners via our Global API.
Stak
eholder engagement
c
onti
nued
T
rainline
Annual Report and Accounts 2022
62
Our key stak
eholders and their
signicance to our business
What is important to them
How we engage wit
h them
Highlight
s of our engagement
3
Gov
ernment and
regulators
Government and
regulatory policy
determine much of the
business environment in
which Tr
ainline operates.
The recovery of the r
ail
industry as we emerge
from Covid-19.
A reduction in
carbon emissions, by
increasing modal shift
to rail from other less
environmentally-friendly
travel modes.
In the UK, implementing
the industry reforms
contained in the Williams-
Shapps Plan for Rail.
In Europe, implementing
the liberalisation of rail
travel, including the
introduction of a variety
of private sector train
operators.
Tr
ainline regularly attends
forum discussions, engages
in consultations and meets
with key policymak
ers,
government representatives
and industry bodies across
the UK and wider Europe.
During the year, our
focus has been on:
•
engaging on GBR
industry reform
•
participating in EU
consultations on
increasing rail use and
encouraging modal
shift from cars and
planes in Europe
In the UK, a commitment to
the ongoing involvement
of independent retailers in
the future UK rail industry
as laid out in the Williams-
Shapps Plan for Rail.
In Europe, the EU Action
Plan for Rail provided
positives for independent
retailers in facilitating the
conclusion of commercial
agreements between
carriers and third-party
ticket sellers, including
level playing eld and
access to data provisions.
4
Our people
Ensuring that we attract,
nurture and retain our
people and focus them on
achieving our strategy is
key to T
rainline’s success.
Tr
ainline’s Boar
d is keenly
aware that the interests
of our people should be
considered when making
decisions that may impact
them and the wider
business.
The ability to develop and
progress at a business that
has an environmentally
sustainable purpose.
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.
The use of OKRs as a goal-
setting tool to provide
transparency
, focus
and alignment.
Every six months we
undertake a Group-wide
engagement survey so
we can evaluate how
our whole team are
doing and measure our
progress against our ke
y
engagement indicators.
Every month all our people
across all our oces
get together at our All
Hands sessions so our
Management T
eam can
bring everyone up to speed
on our latest projects,
the progress towar
ds
our strategy and our
business performance.
Over 70% of our people
contributed to our annual
engagement survey and
our overall engagement
score increased to 65%
(59% in FY2021).
Maintained high levels of
employee satisfaction,
with 83% of our people
saying they ‘
are proud
to work at Tr
ainline’.
Implemented Flexi-First
ways of working and
enhanced support for
working from abroad
following engagement
survey feedback.
Increased promotion of
our sustainability strategy
and provided updates at
All Hands sessions.
All our people have access
to share schemes and over
95% hold an interest in
shares of the Company
.
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Gover
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Financial Statements
63
Stak
eholder engagement
c
onti
nued
Our key stak
eholders and their
signicance to our business
What is important to them
How we engage wit
h them
Highlight
s of our engagement
5
Our shareholders
The Board is accountable
to shareholders.
Tr
ainline 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 Boar
d,
the Management T
eam
and our people.
Understanding the
strategy and operations
of the Group.
Financial performance
and commercial success.
Understanding the
exposure to macr
o-
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.
Despite Covid-19
restrictions the Investor
Relations T
eam, Executives
and Chair of the Board
have continued to meet
regularly with investors
via calls, conferences and
roadshows.
The Company has also held
a face-to-face investor and
analyst presentation for the
Group’s half-year r
esults
announcement.
Met with 341 existing
shareholders and
prospective investors
during FY2022.
Over 91% of our issued
share capital was voted at
our AGM with the majority
of resolutions receiving
over 99% support.
Continued to develop our
sustainability disclosures to
give shareholders insight
into our sustainability
programme at its initiation.
Engaged with our
largest shareholders,
representing 78% of our
issued share capital, on our
proposed remuneration
policy refresh.
Sec
tion 1
72
(
1) statement
Section 172 of the Companies Act 2006 requires a dir
ector 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 benet of its members as a whole.
In doing this s.172 requires a dir
ector 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 envir
onment;
•
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 stak
eholders who
have an interest in our business. We belie
ve that productive business relationships with our suppliers, customers
and other key stak
eholders are key to the success of the Gr
oup and that the interests of rele
vant parties should be
considered when making decisions that may impact them. Though engagement is carried out by those most r
elevant
to the stakeholder or issue in question, the Board r
eceives updates on the engagement that has been undertaken, the
reoccurring questions, concerns raised and the feedback pro
vided by the Group
’s ke
y stakeholders.
When making decisions the Board takes the course of action that it considers best leads to the success of the Company
over the long term, and when doing so also considers the interests of the stak
eholders that we interact with. The Board
acknowledges that every decision made will not necessarily r
esult 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 sur
e its decision
is consistent and predictable.
We set out opposite and on page 71 some examples of ho
w the Directors have had regar
d 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 b
y
them. By considering these matters the Directors have had regar
d to the matters set out in section 172(1)(a) to (f) of the
Companies Act 2006 when performing their duty under section 172.
T
rainline
Annual Report and Accounts 2022
64
International
growth acceler
ation
The Board considered the International gr
owth acceleration plan proposed b
y the Executive Directors, in particular the
forecasted implications on budget, expected additional investment and the wider mark
et context. The Board r
ecognised
that whilst the additional investment required for the International gr
owth plan might impact adjusted EBITDA in the
short term the acceleration in new r
ail entrants in Europe and the r
esulting fragmentation of supply provided a windo
w
of opportunity to grow the International business.
Annual str
ategy review
The Board carries out a re
view of the Company’s strategy on an annual basis. This includes appro
ving the business plan
for the following year and considering future years. In the most r
ecent strategic re
view the Board received pr
esentations
from our Management T
eam which included potential market, product and investment opportunities.
In making its decision to approve the business plan and future str
ategy of the Company, the Boar
d considered the
feedback received from engagement ex
ercises with our stakeholders. As a r
esult of that consideration, the business plan
and future strategy were focused to ensur
e that they aligned with the issues and factors that are most r
elevant to our ke
y
stakeholders where these did not impact the long-term success of the Company or the enhancement of its reputation.
Non-
nancial information s
tatement
The following table sets out where non-nancial information can be found within this Annual Report, further to the
Financial Reporting Directive requir
ements 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 r
equirements.
Reporting requirement
Relevant T
rainline policies and procedures
Where to read more in this report
Pag
e
Business model
N/A
Our business model
18
Non
-
nan
cia
l KP
I
s
N/A
Key performance indicators
33
Principal risks
Tr
ainline risk management process
Principal risks and uncertainties
38
Environment
al matter
s
Environmental policy
Market overvie
w
Sustainability
Global GHG emissions & data
10
08
57
Human rights
Human rights policy
Principal risks and uncertainties
Our people and culture
Stakeholder engagement
38
48
61
Our people
Tr
ainline staff handbook and
accompanying policies and
procedures
Principal risks and uncertainties
Our people and culture
Stakeholder engagement
38
48
61
Soc
ial matte
rs
N/A
CEO's statement
Our people and culture
06
48
Anti
-
co
rruption and
anti
-b
riber
y
Anti-bribery and corruption policy
Principal risks and uncertainties
Report of the Audit and
Risk Committee
38
78
The Strategic Report, which has been prepared in accor
dance with the requirements of the Companies Act 2006, has
been approved by the Boar
d and signed on its behalf.
On behalf of the Board
Martin McIntyre
Company Secre
tar
y
5 May 2022
Strategic Report
Gover
nanc
e
Financial Statements
65
In this
sec
tio
n
Chair’s governance statement
68
Our Board of Directors
72
Report of the Nomination Committee
76
Report of the Audit and Risk Committee
78
Directors’ remuner
ation report and policy
82
Directors’ report
100
Statement of Directors’ responsibilities
105
G
o
v
er
na
nc
e
T
rainline
Annual Report and Accounts 2022
66
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oods
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Financial Statements
67
Strat
egic
Report
Governa
nce
Chair
’
s gov
ernance stat
ement
On beh
alf of the B
oard, I am
please
d to provide an ov
er
view
of the B
oard ac
tivities during
the year
, T
rainline’s corporate
governance and repo
rt
s from
the Bo
ard’s Committees
.
Compan
y purpose
Tr
ainline’s distinct purpose,
empowering people to make greener
travel choices, connecting people
and places, is uniquely suited to
a post-Covid-19 world where the
transition to a net zero economy
is a priority for many.
As the Board is responsible for
promoting the alignment of culture
with purpose, values and strategy we
have taken a keen interest
in Tr
ainline’s
increasing focus on sustainability
and the development and ongoing
execution of the International gr
owth
acceleration plan which began during
the year. You can r
ead more on the
International growth acceleration plan
on page 6 and what sustainability
means to Tr
ainline on page 8.
Board l
eadership
The Board believes that cultur
e plays
a fundamental role in the delivery of
Tr
ainline’s purpose and the successful
execution of its str
ategy. The Board
is ultimately responsible for ensuring
that its activities reflect the culture
we wish to instil in our people and
therefore sets a clear emphasis on
setting the tone from the top and
leading by example.
With the lifting of Covid-19 measures
the Board has been able to spend
more time meeting in person which
has given us the opportunity to once
again be present in our London office
and engage with the workforce in
person. The Board intends to hold
meetings in Tr
ainline’s other significant
offices, Edinburgh and Paris, in the
year ahead to provide the Board with
opportunities to engage with and be
seen by the whole business.
More information on how the Boar
d
has monitored culture and engaged
with the workforce is available on
page 74.
Diversity and inclusion
The Board and the Nomination
Committee recognise the importance
and benefits of diversity and inclusion
and wholeheartedly support all the
work Tr
ainline undertakes to create
a diverse workforce. The Group is
involved in a number of initiatives to
encourage and promote diversity in
technology and leadership positions
which you can read more about on
page 51. In particular we hope that
the appointment of Milena Nikolic
as our CTO, one of the fe
w female
CTOs at a FTSE 250 company, will
inspire more women to consider
careers and leadership roles in
the technology sector.
As Chair, I am keenly aware that we are
not currently aligned with the Hampton-
Alexander recommendations for female
representation on the Board due in
part to the relatively short tenure of our
Non-executive Dir
ectors, all of whom
have been appointed for less than three
years following our IPO in 2019. We
have taken steps to address this, which
we have detailed on page 76. I am
focused on ensuring that we align, in
due course, with the upcoming Listing
Rule changes on Board diversity which
build upon the Hampton-Alexander
and the Parker recommendations.
Board e
ec
tiveness
A Board effectiveness revie
w,
externally facilitated by Lintstock Ltd,
was undertaken during the year which
concluded that the Chair, the Board
and its Committees operate effectively
.
A holistic and tailored approach
was taken to ensure the re
view
included the specific complexities and
challenges of the business, the views
of members of senior management
and third-party service providers who
regularly attend Board meetings and
the outcomes and actions from the
internally facilitated review
undertaken in FY2021.
Brian Mc
Bride
Chair
Uni
que
ly su
it
ed to
a post-Covi
d-
19
wo
rld w
here th
e
trans
it
ion t
o a net
zero eco
nom
y is a
priori
ty for
man
y
.
T
rainline
Annual Report and Accounts 2022
68
New external auditor
PricewaterhouseCoopers LLP (‘PwC’)
was formally appointed as external
auditor to Tr
ainline following our
2021 AGM. The Audit and Risk
Committee has closely monitored
the work of PwC and its relationship
with Tr
ainline to promote a smooth
transition process and ensure that
PwC has a sufficient understanding
of the business and systems to
provide suitable challenge to Senior
Management and the Board.
Further information on the
assessments the Audit and Risk
Committee has made when
considering the effectiveness
of the external audit process
and the work of the external
auditor is available on page 80.
Remuneration policy
The Remuneration Committee has
spent considerable time developing
the refreshed remuner
ation policy
being proposed to shareholders at
our upcoming AGM. The proposed
changes will encompass all employees
to encourage retention and includes
stretching targets to incentivise
and drive exceptional performance,
reflecting the Group’
s ambitious
long-term growth targets. Kjersti
Wiklund, Chair of the Remuneration
Committee, has consulted extensively
with our largest shareholders on the
proposed changes and I would like to
pass on my thanks for their pragmatic
and constructive feedback.
I encourage you to read Kjersti’
s
commentary on page 82 and the
proposed remuneration policy on
pages 86 to 92 and hope that we
can count on your support when
you consider how to vote at the AGM.
Annual Ge
neral Me
eting
Following the lifting of Covid-19
restrictions we will be holding our
upcoming AGM at 10am on 30 July
in person at Tr
ainline’s offices at
120 Holborn, London. This will be
the first opportunity for shareholders
to meet the Board in person since
our IPO and I encourage you to
attend and take advantage of this
chance to ask questions of the
Board. Alternatively
, shareholders
may submit questions to the Board
via email to investor@trainline.com
before the AGM takes place. W
e
will maintain a list of responses
to frequently asked questions in
relation to our AGM on our website at
https://investors.thetrainline.com/AGM.
I also wish to strongly encourage
shareholders to submit a pro
xy vote
in advance of the AGM and appoint
the chair of the AGM as your pro
xy
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.
Brian Mc
Bride
Chair
5 May 2022
The positive outcomes of the revie
w
were well received and plans wer
e
agreed for the few areas wher
e
improvements were identified. Details
of the revie
w process, outcomes and
resulting plans are set out on page 75.
Stak
eholder engagement
Tr
ainline has undertaken significant
key stakeholder engagement during
the year, in particular in relation to the
implementation plans for GBR, the
recent UK rail ticketing r
etail revie
w
and with carriers entering newly
liberalised rail markets in Eur
ope.
The Board has discussed the regular
key stak
eholder updates it receives to
ensure we truly understand the views
of our key stak
eholders and so we can
consider their interests when making
decisions that are critical to the long-
term success of the Group. Y
ou can
read more on the highlights of our
stakeholder engagement on page 61.
Accountabilit
y and risk
Tr
ainline has a robust frame
work for
managing strategic and operational
risks in accordance with the Group’
s
risk appetite. As part of its annual
risk revie
w the Board ensured that
the impact of Covid-19 and the
uncertainty resulting from the UK
rail ticketing r
etail revie
w and GBR
implementation were appropriately
considered when revie
wing the
Group’s principal and emer
ging risks.
Our Internal Audit function has
developed significantly during the
year following the appointment of our
Head of Risk and Internal Audit. The
Audit and Risk Committee has been
particularly focused on supporting
the successful implementation
of this function and on the
enhancements made to our
risk management framework.
Financial Statements
69
Strat
egic
Report
Governa
nce
Go
v
ernance st
r
ucture
Audit and Risk Commit
tee
Provides o
versight 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 revie
ws the internal control and risk management system. Revie
ws
whistleblowing, fraud, bribery and other compliance policies and procedur
es.
Remuneration Commit
tee
Develops the Group’
s policy on Board remuner
ation and monitors its ongoing
appropriateness. Oversees workforce policies and takes colleague r
emuneration into
account when setting the policy for Directors’ remuner
ation.
Determines the levels of remuner
ation for Executive Directors, the Chair and the
Company’s senior management.
Nomination Committee
Reviews the composition of the Boar
d and its Committees, including the effectiveness of
its members.
Leads the process for Board appointments, plans for the or
derly succession of Board
and senior management positions and oversees the development of a diverse pipeline.
T
rainline’s Management T
eam
Led by our CEO
, Tr
ainline’s Management T
eam is comprised of the Group’s senior ex
ecutives who
are responsible for developing, informing and monitoring the str
ategy as set by the Board. The
executives o
versee the day-to-day operations of T
rainline and come together to re
view
, assess and
agree on actions to be taken to achie
ve the objectives of the Group. The Management T
eam meets
regularly to discuss the operational and financial performance of the Gr
oup.
A number of sub-committees, chaired by members of the Management T
eam, provide expertise
and oversight on significant matters for the Group. These sub-committees include the Sustainability
Steering Committee, Internal Risk Committee and Disclosure Committee.
T
o see more information about T
rainline’
s Management T
eam, visit: investors.thetrainline.com
Board o
f Direc
tors
Collectively responsible for establishing T
rainline’
s purpose, values and strategy to
enable the long-term success of the Group for the benefit of our shareholders and
stakeholders. Responsible for ensuring that T
rainline achieves its purpose and that the
purposes is embedded at all levels of the business.
Assesses and monitors the Group’
s culture, promoting its alignment with the purpose,
values and strategy
, and ensuring that the Group operates within a frame
work of
effective controls and risk management.
The Board oper
ates with the assistance of three permanent Boar
d Committees and delegates
authority on specific matters to other committees where it considers it appr
opriate to do so.
T
rainline
Annual Report and Accounts 2022
70
The role of t
he Boar
d
The Board is the driving force of
Tr
ainline’s str
ategy, cultur
e and
governance, ensuring that our high
standards are consistent across
the business. It is accountable to
Tr
ainline’s shar
eholders and seeks
to represent the inter
ests of other
stakeholders when setting our long-
term focus, strategy
, culture and
policies, ensuring that the Group
has the right resources, o
verseeing
risk and corporate governance, and
monitoring progress towar
ds meeting
our strategic objectives, sustainability
goals and annual plans.
Our Directors are collectively
responsible for the success of
Tr
ainline. The Non-executive
Directors ex
ercise 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 revie
w
of the Group’s o
verall strategy
. The
CEO, CFO and the Management
T
eam take the lead in developing
our strategy
, which is then reviewed,
constructively challenged and
approved by the Boar
d.
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 T
rainline
operates. The Board also r
eceives
accounting and other management
information about Tr
ainline’s
resources, and presentations
on legal, governance and
regulatory developments.
T
o ensure that the Board has good
visibility of the key oper
ations of
the business, members of the
Management T
eam attend Board
meetings regularly to update the
Board on their specific areas of
expertise and the ex
ecution of
the Group’s str
ategy.
The Board works to ensure that the
Company generates and maintains
value over the long term. By
embodying and promoting T
rainline’
s
culture, the Board works to monitor
and assess Tr
ainline’s objectives in
developing world-class technology
and maintaining Tr
ainline’s r
obust
and scalable business model with
due regard to T
rainline’s customers,
people, carrier partners and other
key stak
eholders.
Division of responsibilities
The role of the Chair, the Chief
Executive Officer and the Senior
Independent Non-executive Dir
ector.
There is a clear division between
executive and non-e
xecutive
responsibilities to ensure
accountability and appropriate
oversight. The roles of Chair and Chief
Executive Officer are separ
ately 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 r
eserved for
Board decision; and
•
demonstrates
objective judgement.
Chief Executive Oc
er
•
develops the Group’s pr
oposed
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.
Senior Independent
Non-
executive Direc
tor
•
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 Dir
ectors,
without the Chair present, to
appraise the performance of the
Chair, taking into account the
views of the Executive Dir
ectors.
Financial Statements
71
Strat
egic
Report
Governa
nce
T
rainline
Annual Report and Accounts 2022
72
Our Board of Directors
Brian McBride
Chair
Committees:
Skills and experience:
Brian has a strong track recor
d
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.
Other appointments:
Non-executive Director at
Abrdn 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.
Jody F
ord
Executiv
e Director and
Chief Executiv
e Officer
Skills and experience:
Prior to Tr
ainline, 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
.
Other appointments:
None
Shaun McC
abe
Executiv
e Director and
Chief Financial Officer
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.
Other appointments:
Non-executive Director
for AO, an online retailer
operation in the UK and
Germany, and Non-ex
ecutive
Director and Chair of the
Audit Committee of boohoo,
an online fashion retailer
with operations worldwide.
Jennifer Duvalier
Senior Independent
Non-executiv
e Director
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:
Non-executive Director and
Chair of the Remuneration
Committee of Mitie plc and
Remuneration Committee Chair
of NCC Group plc. Jennifer is
also a Non-executive Director
and Chair of the Remuneration
Committee of Guardian
Media Group plc and a Non-
executive Director and Chair
of the Sustainability, People
and Diversity Committee of
The Cranemere Group Ltd.
Board composition
Chair
Executive
Independent
Non-executive
Gender split
Male
Female
Length o
f tenure of
Non-
executive Direc
tors
0 - 3 years
3 - 6 years
6+ years
1
2
2
4
5
100
Financial Statements
73
Strat
egic
Report
Governa
nce
Duncan T
atton-Brown
Independent
Non-executiv
e Director
Committees:
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.
Other appointments:
Non-executive Director of
Cazoo Group Ltd, Chair
of Loveholidays.com and
Senior Adviser to Ocado
Group and Non-executive
Director of certain Ocado
Group subsidiaries.
Kjersti Wiklund
Independent
Non-executiv
e Director
Committees:
Skills and experience:
Kjersti has held senior roles,
including Director, Group
T
echnology Operations of
Vodafone, and Chief Operating
Officer of VimpelCom Russia,
Deputy Chief Executive
Officer and Chief T
echnology
Officer of Kyivstar in Ukraine,
Executive Vice President and
Chief T
echnology Officer of
Digi T
elecommunications in
Malaysia, and Executive Vice
President and Chief Information
Officer at T
elenor in Norway.
Kjersti was also a Non-executive
Director of Laird
PLC
in the
United Kingdom, Cxense
ASA
in Norway, Fast Search &
Tr
ansfer ASA
in Norway and
T
elescience 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 T
echnology, Sweden.
Other appointments:
Non-executive Director
of Babcock International
Group plc, Spectris plc,
Zegona Communications
plc and Nordea Bank Abp.
Andy Phillipps
Independent
Non-executiv
e Director
Committees:
Skills and experience:
Andy brings a wealth of
experience in e-commerce
and significant knowledge of
technology and marketplaces
from his previous r
ole as CEO
of Priceline International
and Chair of T
optable.com,
both now part of Booking.
com. Andy is currently an
adviser 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.
Other appointments:
Member of the investment
Committee of iQ Capital,
Non-executive Director of
Thought Machine, Cambridge
Angels and Prodigy Finance,
Fellow at the Judge Business
School at Cambridge University
and regular lecturer at the
London Business School
and INSEAD
(France).
Ke
y
Audit & Risk Committee
member
Remuneration
Committee member
Nomination Committee
member
Denotes Committee Chair
Attendanc
e during the
financial year
Board Member
Meetings
Brian McBride
10/10
Jody Ford
10/10
Shaun McCabe
10/10
Jennifer Duvalier
10/10
Andy Phillipps
9/10
1
Duncan T
atton-Brown
10/10
Kjersti Wiklund
10/10
1
. Andy Phillipps was unable to
attend one meeting due to illness.
Ad hoc meetings were also
convened to deal with specific
matters arising.
Board in action
W
orkforce engagement
The workforce engagement
programme has intensified
during FY2022 with the lifting
of Covid-19 restrictions.
Jennifer Duvalier, designated Non-
executive Dir
ector for Workforce
Engagement, has visited Tr
ainline’s
Edinburgh office in person to meet with
leaders and spend time engaging with
the customer service team. Jennifer also
took part in virtual focus groups during
the year with our teams in Edinburgh,
Paris and London and provided support
for our cultural workshops and People
Led Groups. Key themes identified were
then shared with the Board by Jennifer
following her engagement sessions.
In addition, Kjersti Wiklund,
Remuneration Committee Chair,
has engaged with the People and
T
echnology teams to understand
the wider workforce’s sentiment on
remuneration and support T
rainline in
addressing the challenges identified.
T
o further help understand the views
and concerns of our People, the
Board receives detailed engagement
updates which include metric tracking
against targets, an overview of
comments made in the biannual
employee questionnaires and the
actions being taken to address ar
eas
of improvement. The Boar
d has
valued the candid and constructive
tone of these updates.
The Board uses these and other
sources of insight to assess and
monitor whether the culture and
behaviours the Group strives for
aligns with reality
. Accordingly, the
Board is satisfied that the Group’
s
culture is a positive one and is
conducive to the successful
execution of T
rainline’s
purpose and strategy.
International grow
th
acceleration plan
With domestic competition between
rail carriers in Europe incr
easing
meaningfully, Management proposed
the international growth acceler
ation
plan to significantly scale Tr
ainline’s
business in Europe over the medium
term. The Board discussed in detail
the investment case, impact on
budget and the level of investment
required to deliver the ambitious
targets before appro
ving the plan.
UK rail ref
orm
The Board considers the evolving
UK rail market to be a k
ey strategic
priority for the Group and has closely
monitored the Williams-Shapps
Plan for Rail, the rail retail tick
eting
revie
w and the implementation
plans for GBR.
The Board has received r
egular
updates from members of the
Management T
eam and has utilised
the knowledge and experience of the
Non-executive Dir
ectors to provide
support and guidance on stakeholder
engagement and planning.
C
ovi
d-1
9
re
c
ove
r
y
Throughout the year the Board has
continued to closely monitor the
impact of Covid-19 on the Group,
our People and our stakeholders.
The Board received r
egular updates
on the recovery of the r
ail industry
and the steps Tr
ainline has taken
to encourage travel as Co
vid-19
restrictions were r
elaxed. Various
Covid-19 scenarios were tak
en into
account when considering and
approving the annual budget,
risk revie
w and strategy.
The principal mat
ters co
nsidere
d by the Board during the year were:
Strategy and
performance
The detailed review of the Gr
oup’s strategy and budget, updates on initiatives, discussions of short and long-term
priorities and setting medium-term plans
Tr
ainline’s performance and reco
very throughout the year, in particular Covid-19 reco
very
Operational
Product development and marketing str
ategy
Shareholders and
stakeholders
UK rail reform
Investor relations and key stak
eholder updates
Reporting and risk
management
Annual review of the Gr
oup’s principal and emerging risks, including the impact of Co
vid-19 and the uncertainty
arising from UK rail reform
Specific risk areas that are significant to T
rainline including information security and privacy
Review and appro
val of annual and half-yearly reporting
Leadership and
people
Considered and received updates on the hiring of new Vice Pr
esidents to drive the Board’s str
ategy
Culture and workforce engagement
The impact of remote working on our People, the implementation of new hybrid ways of working
and the feedback received
Governance
,
corporate
responsibility and
sustainability
The results of the Board effectiveness re
view and agreement on the development opportunities identified
Disclosures, including the gender pay gap statement, modern slavery statement and Group tax strategy
Tr
ainline’s sustainability strategy and net-zer
o commitments
T
rainline
Annual Report and Accounts 2022
74
C
omposition, succession and e
valuation
Skills, knowle
dge and experien
ce of the B
oard
High-growth
business
Digital &
ecommerce
Government
&
regulatory
People
Oper
ations
T
echnology
Finance
Risk
management
Andy Phillipps
Brian McBride
Duncan T
atton-Brown
Jennifer Duvalier
Jody F
ord
Kjersti Wiklund
Shaun McCabe
Board c
omposition
and succession
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 (‘INEDs’).
The Board received updates from
Management on succession planning
for the Executive Directors and the
Management T
eam during FY2022.
Skills, knowle
dge and experien
ce
As set out in the table below, each
Director provides a r
ange of skills,
knowledge and experience that is
relevant to the success of the Group
and enables strong independent
judgement and constructive challenge.
Board an
d Commit
tee
ee
ctivenes
s evaluation
In 2021, Tr
ainline engaged Lintstock
Ltd to facilitate a revie
w of Board
performance. The review was
undertaken to comply with the UK
Governance Code and provide the
Board, its Committees and Directors
with an opportunity to reflect on
their operation and effectiveness.
A number of external re
view service
providers were appr
oached, with
shortlisted candidates being subject
to an interview
. The Chair and Senior
Independent Non-executive Dir
ector
discussed the merits of each provider
before agreeing the appointment
with the Board. Lintstock Ltd has not
undertaken a revie
w on behalf of the
Company before, and has no other
connection with Tr
ainline.
The first stage of the review involved
Lintstock engaging with the Chair, the
Senior INED and Company Secretary
to set the context for the evaluation,
and to tailor survey content to the
specific complexities and challenges
of Tr
ainline’s business. The scoping of
the exercise also took into account the
outcomes of the most recent internally
facilitated review
.
All Board members completed an
online survey on the performance of
the Board, its Committees and the
Chair. Members of senior management
and third-party service providers who
regularly attend Board meetings were
also invited to provide feedback on the
performance of the Board.
As well as addressing core aspects of
Board and Committee performance,
the exer
cise had a particular focus on
the following areas:
•
potential implications of the
Williams-Shapp Review
, and
the organisation’s pr
eparations
for any changes that may impact
thebusiness;
•
clarity of Trainline’s str
ategy, and
the main challenges to the delivery
of Tr
ainline’s str
ategic priorities;
•
skills and experience of the
Directors, the geographical
representation amongst
members, and the diversity of
representation more br
oadly;
•
monitoring of colleague sentiment,
diversity & inclusion and culture
throughout the business;
•
views and perspectives of key
external stakeholders including
shareholders, carrier partners,
customers, Government and
regulators; and
•
top priorities for both the CEO
and the CFO, in or
der to best
succeed in their roles.
All feedback in Lintstock’s reports was
presented in anonymous form, to
promote an open exchange of vie
ws.
The reports also provided a comparison
with the Lintstock Governance Index,
which helps to place the performance
of the Tr
ainline Board into context.
Participants were also invited to
privately discuss any matters
with the Chair and/or the Senior
Independent Non-executive Director.
The results of the Revie
w were
positive overall. The Boar
d considered
opportunities for further development
including additional reporting on the
regulatory environment in Eur
ope,
and to reflect on the amount of time
devoted to people and strategy
topics at meetings.
The results of the evaluation
were revie
wed by the Nomination
Committee and individual meetings
were held with Board members to
discuss the results and proposed
actions. The outcome and proposed
actions were recommended to the
Board and accepted in full. In addition
the Non-executive Dir
ectors, led by
the Senior Independent Non-executive
Director, met privately to appraise the
performance of the Chair.
Financial Statements
75
Strat
egic
Report
Governa
nce
R
epor
t of the Nomination Committ
ee
I am pleased to present T
rainline’
s
Report of the Nomination Committee
which provides a summary of the
Committee’s r
ole and activities.
Membership
The Committee comprises five
Independent Non-executive Dir
ectors:
Andy Phillipps, Jennifer Duvalier, Kjersti
Wiklund, Duncan T
atton-Brown, and
myself (Brian McBride)
as its Chair.
The Commit
tee’s k
ey ac
tivities
Key matters discussed by the
Committee during FY2022
included a review of:
•
Trainline’
s diversity and
inclusion programme;
•
the effectiveness of the Board,
its Committees and individual
Directors; and
•
the structure, size and
composition of the Board,
including the skills, knowledge,
independence, experience and
diversity of its members.
The Commit
tee’s k
ey ac
tivities
planned f
or FY202
3
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
.
Due in part to the relatively short
tenure of our Non-executive
Directors,
all of whom have been appointed
for less than three years following
our IPO in 2019, the Committee
recognises that the Board does not
cu
r
re
n
t
ly
align with the upcoming
Listing Rule changes on Board diversity.
In order to address this the
Committee will continue to ensure
that candidates from 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 r
eflect the
diversity at Tr
ainline 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 upcoming Li
sti
ng
R
ule
changes in due course.
Prior to the Committee’s ne
xt report
it intends to undertake the following
key activities:
•
the implementation of the
recommendations arising
from the externally facilitated
Board evaluation;
•
continuing to monitor succession
planning and the development of
a diverse pipeline of talent; and
•
an update on the Group’s strategy
on diversity and inclusion and
progress against objectives.
Brian Mc
Bride
Chair of the Nomin
ation Commit
tee
5 May 2022
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 Management
T
eam positions and oversee
the development of a diverse
pipeline of talent
Brian
Mc
B
ride
Chair of the Nomination
Commit
tee
Committee Member
Meetings
Brian McBride (Chair)
2/2
Jennifer Duvalier
2/2
Andy Phillipps
2/2
Duncan T
atton-Brown
2/2
Kjersti Wiklund
2/2
T
rainline
Annual Report and Accounts 2022
76
One of the pivotal considerations on
any appointment to the Board and
the Management T
eam 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 r
oles. The
Committee believes we have a diverse
Management T
eam which is able to
effectively serve the Group’
s interests.
The Committee revie
wed the Group’s
diversity and inclusion policies during
FY2023, how they link to the Gr
oup’s
objectives and strategy
, how they are
being implemented, and progress
towards achieving diversity and
inclusion objectives.
Tr
ainline is committed to having a
diverse and inclusive workplace and
the Committee supports this goal
and the recommendations set out in
the Hampton-Alexander Revie
w and
the Parker Report wholeheartedly
.
The Committee recognises that
technology is a male-dominated
sector and that despite progress
being made the Group must continue
to strive to achieve its diversity and
inclusivity goals. Further information
on Tr
ainline’s diversity and inclusivity
initiatives is available on page 51.
Compo
sition of the B
oard and
its Co
mmitte
es
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.
The Committee also considers
the Directors to possess the skills,
knowledge, independence and
experience necessary to effectively
fulfil their duties but recognises
that the Board does not currently
align with the upcoming Listing Rule
changes on board diversity which
build upon the Hampton-Alexander
and the Parker recommendations.
Director reappo
intment
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 Committee.
The Committee is satisfied that all the
Directors devote sufficient time to
their duties and demonstrate great
enthusiasm and commitment to
their roles. The Committee applied
particular scrutiny to the performance
of Brian McBride, Duncan T
atton-Brown
and Kjersti Wiklund who are completing
the three-year term of their current
letters of appointment which will be
renewed subject to their r
eappointment
at the AGM.
The Committee revie
wed the
independence of the Non-executive
Directors and confirmed to the Board
that it considers each of the Chair
and the Non-executive Dir
ectors
to be independent in accordance
with the Code.
Succe
ssion planning
The Committee recognises the
importance of developing and
maintaining a diverse talent pipeline
to provide succession options for the
Management T
eam. The Committee
held a private session during FY2022 to
consider and approve the succession
pipeline and welcomed the promotion
of James Hanratty and the appointment
of Milena Nikolic, Mike Hyde and Martin
Sheehan to the Management T
eam.
During FY2023 the Committee will
continue to monitor succession
planning arrangements for the
Board and the Management T
eam
and assess whether the succession
planning arrangements and the
Board appointment process continue
to support the development of a
diverse pipeline of candidates.
K
ey areas of focu
s for the
Nomination C
ommitte
e
during F
Y202
2
Board e
ec
tiveness evaluation
After a careful selection process
involving several pro
viders and in line
with the Financial Reporting Council’s
Guidance on Board Effectiveness,
the Nomination Committee invited
Lintstock Ltd to externally facilitate the
FY2022 Board evaluation. Brian McBride
as Chair of the Nomination Committee
and Jennifer Duvalier as Senior INED
took an active role in working with
Lintstock to ensure questions took into
account the strategy and complexities
of the business. Further information on
the evaluation is available on page 75.
Policy on diversity and inclus
ion
The Committee welcomed the
appointment of Milena Nikolic as
CTO
, one of the few female CTOs at
a FTSE company and notes that with
Jennifer Duvalier as our Senior INED
and workforce engagement NED
we have female representation
in a senior Board position.
Board o
f Direc
tors
Male 71.4%
Female 28.6%
Gen
der balance (actual headco
unt
as at 2
8 Februar
y 20
22)
Managem
ent T
eam and
their
direc
t re
por
t
s
1
Male 64.0%
Female 36.0%
All our People
Male 62.7%
Female 37.3%
5
18
293
493
32
2
1
As defined in the UK Corporate Governance
Code 2018, Provision 23.
Financial Statements
77
Strat
egic
Report
Governa
nce
R
epor
t of the A
udit and Risk C
ommittee
I am pleased to present T
rainline’
s
Report of the Audit and Risk
Committee which provides a summary
of the Committee’s r
ole and activities.
Membership
The Committee comprises four
Independent Non-executive Dir
ectors:
Jennifer Duvalier, Kjersti Wiklund,
myself (Duncan T
atton-Brown) as its
Chair, and with effect from 1 March
2022, Andy Phillipps.
The biography of each member of the
Committee is set out on page 72. The
Board is satisfied that the Committee
as a whole has the competence
relevant to the sector in which the
Group operates and that I have
recent and relevant financial
knowledge and the experience
to be the Chair of the Committee.
Role and work of the
Audit & Risk Commit
tee
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 Commit
tee’s k
ey
activ
ities during F
Y
20
2
2
Key matters undertaken by the
Committee during FY2022 included:
•
the transition of the Gr
oup’s e
xternal
audit
from
KPMG
LLP
(‘KPMG
LLP’)
to PricewaterhouseCoopers LLP
(‘PwC
LLP’);
•
the development of the internal
audit function and approving the
role and mandate of the Internal
Audit function and the Head of Risk
and Internal Audit;
•
considering the going concern
and viability statements;
•
re
viewing the Group’
s accounting
policies, the use of Alternative
Performance Measures, significant
financial reporting issues,
judgements and estimates;
•
considering the FRC re
view of
the FY2021 Annual Report;
•
the integrity of the Financial
Statements of the Group and
all formal announcements relating
to its financial performance;
•
considering 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; and
•
monitoring the adequacy and
effectiveness of the Group’s
internal control systems.
The Commit
tee’s k
ey ac
tivities
planned f
or FY202
3
Prior to the Committee’s ne
xt report
for FY2023 it intends to undertake
the following ke
y activities:
•
monitor the effectiveness
of the external auditor;
•
oversee the continued
development of the internal
audit function; and
•
review the risk management
and internal control systems.
Dunc
an T
at
ton-
Br
own
Chair of the Audit and Risk
Co
mmi
tte
e
5 May 2022
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 re
view the internal
control and risk management
system and internal
audit function
•
Revie
w whistleblowing, fraud,
bribery and other compliance
policies and procedures
Duncan T
at
ton-
Brown
Ch
ai
r of t
he Aud
it a
nd
Risk Co
mmittee
Committee Member
Meetings
Duncan T
atton-Brown
(Chair)
4/4
Andy Phillipps
1
n/a
Jennifer Duvalier
4/4
Kjersti Wiklund
4/4
1
. Joined the Committee
1
March
2022
.
T
rainline
Annual Report and Accounts 2022
78
Internal Audit
A Head of Risk and Internal Audit
was appointed toward the end of
FY2022 with responsibility for the
Group’s enterprise risk management
framework and the implementation
of the Internal Audit function of the
Group. Deloitte LLP was appointed as
the internal audit co-source partner
to provide assistance and r
elevant
subject matter expertise as and
when needed.
Utilising a risk-based audit
programme, the internal audit
function conducts detailed risk
assessments with key stak
eholders
of the Group’s internal contr
ols and
processes to provide an independent
and objective view of the effectiveness
of the Group’s internal contr
ol
environment. The audit plan, which
covers ke
y business processes, is
approved annually by the Committee.
The Committee has received
updates from the Head of Risk
and Internal Audit during FY2022,
including private meetings. The
Committee will continue to monitor
the implementation of the Internal
Audit function and will undertake an
effectiveness revie
w for FY2023.
Going con
cern and
viability a
sse
ssme
nts
The Committee revie
wed and advised
the Board on the Group’
s going
concern and viability statements
included in this Annual Report and
the calculations and reports prepared
by Management in support of such
statements. The external auditor
discussed the statements with
the Committee and revie
wed the
conclusions reached by Management
regarding going concern and viability
.
Accounting judgeme
nts and key
source
s of estima
tion uncer
taint
y
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 contr
ols review
The Board monitors the key elements
of the Group’s internal contr
ol and risk
management framework supported
by the Committee. The Committee
advised the Board on its revie
w of
the effectiveness of the systems
and processes including financial,
operational and compliance controls.
K
ey areas of focu
s for the Audit &
Risk Commit
tee during F
Y
20
22
Ex
ternal audit t
ransition
The Committee conducted a
competitive tender for the provision of
external audit services during FY2021.
The Board accepted the Committee’s
recommendation to appoint PwC LLP
as external auditors and a resolution
for the appointment of PwC LLP
was put to shareholders which was
approved at the 2021 Annual General
Meeting by 99.5% of voted shares.
KPMG LLP did not raise any areas
of concern when confirming its
resignation as auditor following the
completion of the audit of the Group’s
FY2021 Financial Statements.
During the FY2021 audit, PwC LLP
joined Committee meetings as part
of the transition process. The Chief
Financial Officer and Committee Chair
have met with the PwC LLP lead audit
partner, Jaskamal Sarai, on a regular
basis to discuss the transition. The
Committee places great importance
on ensuring that the external audit
is effective and of a high standard
and has therefore received r
egular
updates and met privately with the
PwC LLP lead audit partner to
discuss the transition.
Issue considered
How t
he 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.
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 potential
future impact of Covid-19.
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 at
least 12 months after the approval of these financial statements. This 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 consider
ed appropriate.
Carrying value of International goodwill
The carrying value of International 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 reviewed and discussed Management’
s conclusions around the carrying
value of goodwill, including: the methodology applied; the achievability of the business
plans and how the potential future impact of Covid-19 had been r
eflected in the plans;
considering the appropriateness of discount rates and long-term gro
wth rates applied;
and considering the outcome of sensitivity analysis.
The Committee agreed with Management’s conclusion that the carrying value of goodwill
is supported by the expected future cash flo
ws of the International business.
Financial Statements
79
Strat
egic
Report
Governa
nce
R
epor
t of the A
udit and Risk C
ommittee
continued
FRC review
The Financial Reporting Council
(‘FRC’) undertook a revie
w of
Tr
ainline’s FY2021 Annual Report
as part of their regular re
view
programme for public and large
private companies. In the case of
FTSE 250 companies, annual reports
are revie
wed on a rotational basis.
The FRC revie
w was based solely on
the FY2021 Annual Report and was
conducted by the staff of the FRC who
have an understanding of the relevant
legal and accounting framework
but do not benefit from detailed
knowledge of T
rainline’
s business or
an understanding of the underlying
transactions entered into.
The revie
w of the FY2021 Annual
Report did not raise any questions or
queries, and no substantive response
was required. The FRC pro
vided
suggestions around the clarity and
content of certain disclosures which,
after considering their materiality
and relevance, were incorpor
ated
into this Annual Report.
Financial Statement
s
and repo
rting
The Committee monitored the
financial reporting process for the
Group, which included receiving
reports from, and discussing these
with, the external auditor. The
Committee also considered the areas
of corporate reporting focus for the
FRC and their relevance to the
Group’s r
eporting.
As part of the year end reporting
process the Committee re
viewed
this Annual Report, a management
report on: accounting estimates and
judgements; Alternative Performance
Measures; and Fair, Balanced and
Understandable, 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 revie
wing the significant
accounting issues are ke
y roles
of the Committee. Measures are
in place to provide r
easonable
assurance regarding the r
eliability
of financial reporting. The measures
include: a comprehensive system of
planning, budgeting, monitoring and
reporting; clearly defined policies
for capital expenditure including
revie
ws by senior management; and
frequent monitoring of cash flows
against forecasts. The measures
provide reasonable, though not
absolute, assurance against material
misstatement or loss.
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
.
Assessing the eectiveness of
the ex
ternal audit proce
ss and
the ex
ternal auditor
The Committee recognises that the
transition of the external audit to PwC
LLP creates a risk to the effectiveness
and standard of the external audit.
T
o ensure that PwC LLP is effective
in its role as external auditor the
Committee:
•
invited PwC LLP to join Committee
meetings during the FY2021 audit
as part of the transition process;
•
r
eviewed and appr
oved 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);
•
considered the audit scope and
materiality threshold; and
•
met privately with PwC LLP
without Company Management
present, to discuss its remit and
issues arising from its work.
During FY2022 the Committee
noted that the external auditor had
introduced a new and enhanced,
data driven testing method over
revenue, as opposed to the tr
aditional
sample testing method, using data
techniques, automation and software
integration. The Committee supports
Management’s objective of increasing
the use of technology and automation
in the external audit process.
The Committee considered the
safeguards in place to protect the
external auditor’s independence. PwC
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 PwC remained independent and
objective in relation to the audit. The
Group confirms that it has complied
with the CMA
Order 2014 (Article
7.1).
Non-
audit work carried out by
the ex
ternal 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 e
xternal auditor. The policy
sets out specific considerations around
the provision of non-audit services and
requires appro
val by part or all the
Committee for any proposed services
with an expected fee of more
than £50,000.
T
rainline
Annual Report and Accounts 2022
80
The fees paid for non-audit services
during the year ended 28 February
2022 amounted to £52,000, all
of which relate to audit-related
assurance services for the 31 August
2021 half-year revie
w undertaken by
the external auditor. Further details
of these amounts can be found in
Note 4 of the Financial Statements.
Only certain types of work, as defined
by the FRC, are explicitly permitted
to be provided to the Group which
does not include specific tax advisory
services and internal audit services. A
detailed list of non-permitted services
is included in the Committee’s non-
audit services policy.
Audit
fe
es
The Committee was satisfied that the
level of audit fees payable in respect
of the audit services provided, being
£351,000 of which £43,000 related
to the audit transition fee, were
appropriate and that an effective
audit and transition could be
conducted for such a fee.
Risk
The Group’s risk toler
ance is set by
the Board and is the level of risk it
is willing to accept to sustainably
achieve our strategic objectives.
The Board is supported by the
Int
ern
al
Risk Committee (‘IRC’),
composed
of senior stakeholders, that meets
biannually to review and calibr
ate the
Group’s risk landscape. An enterp
rise
risk management framework pro
vides
a comprehensive risk management
methodology for the conduct of
revie
ws and which is summarised
in the Group Risk Policy
.
These revie
ws provide a robust
assessment of the Group’
s 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.
Further information on the Group’s
principal and emerging risks are
ava
ila
ble
on pages 38 to 47.
Risk manage
ment review
The Committee received updates from
the Head of Risk and Internal Audit,
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 in its annual assessment of the
effectiveness of the enterprise risk
management and internal control
processes, relies on r
eporting by
the IRC, management, compliance
reports and the assurance pro
vided
by the external auditor.
The Committee noted that during
FY2022 the example risks included in
tables 1 and 2 of the T
ask Force for
Climate-related Financial Disclosures
(‘TCFD’) Final Recommendations
Report were considered and rele
vant
climate-related transition and physical
risks were formally integrated
into the Group’
s enterprise risk
managementframework.
The Board discussed and revie
wed the
Group’s risk appetite when r
eviewing
the principal risks and the strategy for
the Group. Regular revie
ws of the risk
appetite ensures that the Company’s
risk exposure remains appr
opriate
and acceptable in enabling the Group
to achieve its strategic objectives.
The Committee considers the Group’
s
risk appetite and principal risks when
considering the effectiveness of the
risk management system.
Further information on the Group’s
risk management framework is
available on page 38.
Over
view of our anti-brib
er
y
, corruption and w
histle
blowing policies an
d proce
dures:
Anti-bribery
Tr
ainline adopts a zero-tolerance approach to bribery and corruption. Any of our people found to have br
eached the
Group’s policies will face disciplinary action which could include dismissal for gr
oss misconduct. These policies are
passed on to our supply chain, where appropriate, as part of our procur
ement and contracting procedures.
Receiving corporate
hospitality and gif
ts
Should be refused if they could influence or appear to influence decisions made on behalf of the Group. Colleagues
are required to update the Gr
oup Gift Register. Substantial physical gifts should be passed onto the Group for
donation to charity or disposal.
Offering corporate
hospitality and gif
ts
Must be fully documented, approved by the r
elevant member of the Management T
eam and recorded in the Gr
oup
Gift Register. Any hospitality above a set value must also be approved b
y the Business Review and Appro
vals Group.
F
acilitation
payments
Are strictly prohibited, no matter the value, even wher
e such payments are perceived as a common part of local
business practice or law. This pr
ohibition also applies to those who work on behalf of the Group.
Whistleblo
wing
If anyone has a concern they wish to raise they can contact an independent r
eporting line for anonymous reporting
of concerns. Promotional activities are undertaken to pr
omote awareness of the whistleblowing policy
. The
Committee and the Board receive reports thr
oughout the year on whistleblowing arrangements and activities.
Corruption
All our people are made aware of the Group
’s Anti-Fraud and Corruption Strategy when the
y 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
81
Strat
egic
Report
Governa
nce
Directors
’ rem
uneration repor
t
Dear Shareholder
,
On behalf of the Board, I am pleased
to present the Directors’ Remuneration
Report for FY2022 and our proposed
Remuneration Policy which
shareholders will be invited to
vote upon at our upcoming AGM.
Ke
y ar
eas of fo
cus for th
e
Remuner
ation Co
mmitte
e
during F
Y202
2
Proposed Remunerat
ion P
olicy
Over the last 12 months the
Committee has spent considerable
time revie
wing how T
rainline’
s
remuneration structure, appr
oved
at the 2020 AGM, can reinfor
ce
Tr
ainline’s ambitious long-term
growth targets and addr
ess how
certain external developments
outside of the Company’s control,
Covid-19’s unpr
ecedented impact,
the Williams-Shapps Plan for Rail,
and the RDG Retail Review
, have
made the roles of the Executive
Directors far more challenging.
The external developments have
weighed heavily on Tr
ainline’s
share price and have also had a
considerable impact on existing
incentive schemes, as evidenced
by the nil vesting of the FY2020 PSP
grant and the expected nil vesting
of the FY2021 PSP grant. Given the
PSP schemes have a three-year
cliff vesting, this would result in no
long-term incentives being paid out
to participants for a period of at
least five years following T
rainline’
s
IPO in 2019. This would likely result
in remuneration outcomes which
benchmark far below peers and
would leave the CEO with no effective
long-term compensation scheme and
very little shareholding, other than
his own personal share purchases.
The Committee strongly believes
that a refresh of the r
emuneration
structure is requir
ed to reflect the
external developments, ensur
e
that Tr
ainline can attract and retain
talent in what is an extremely
competitive sector, and fully
motivate the Executive Directors to
deliver exceptional performance for
shareholders. We concluded that
the fundamental structure of the
remuneration package is appropriate,
but that some changes are required
to the PSP structure which requir
e
us to propose a new Remuneration
Policy at the 2022 AGM.
We consulted extensively with our
largest shareholders, repr
esenting
78% of our shares, on the proposed
policy and we would like to thank
them for their time and pragmatic
discussions. These discussions helped
us refine our original proposals to
those disclosed in this report, and
gave the Committee confidence that
our investors have strong faith in the
executive team.
I urge you to read the proposed
Remuneration Policy on pages 86
to 92 in full, but an overview of the
revised structur
e follows:
The PSP will comprise a core
award and kicker award, with
vesting continuing to be based
on a three-year performance period,
followed by a two-year post-vest
holding period. The PSP core award
will be increased from 200% to
250% of salary; the PSP kicker award
will provide an e
xceptional award
opportunity but only for delivering
exceptional financial r
eturns and
value for our shareholders, and be set
at 300% of salary in FY2023, reducing
to 100% in FY2024 and FY2025.
Our responsibilities
•
Develop the Group’s policy
on executive remuner
ation
and monitor its ongoing
appropriateness
•
Determine the levels of
remuneration for Executive
Directors, the Chair and the
Management T
eam
•
Revie
w employee remuner
ation
and administer the Group’s
share schemes
Kjersti Wiklund
Chai
r of the Remu
nerati
on
Commit
tee
Committee Member
Meetings
Kjersti Wiklund (Chair)
4/4
Andy Phillipps
4/4
Duncan T
atton-Brown
4/4
Jennifer Duvalier
4/4
Ad hoc meetings were also convened
to deal with specific matters arising.
T
rainline
Annual Report and Accounts 2022
82
The Committee recognises that the
Tr
ainline share price is, at the time
of writing, low relative to historical
levels, and therefor
e considered
the various approaches to ensuring
the PSP structure avoids re
warding
windfall gains and excessive
outcomes, taking into account recent
guidance from major investors in this
area. Consequently, the r
evised PSP
also provides pr
otection against the
rewarding of performance which is
not attributable to the management
team, through the application of
a vest-date value cap which will
be applied to the PSP awards to
be granted under the new Policy
.
Specifically, any value at vest which
is in excess of 2.75 times the value
of the FY2023 grant will be forfeited.
The changes being proposed for
the Executive Directors r
eflect that
which the Company has already
adopted for employees throughout
the organisation, for whom we have
increased PSP award le
vels, and we
expect the vast majority of the value
of the PSP will be delivered to the
population outside the Executive
Directors. In addition all other
employees received SIP Fr
ee Share
and RSU awards with principles and
performance requirements aligned
with the proposed Executive Dir
ector
PSP awards. This reflects the k
ey
principle that value at Tr
ainline
requires all staff to be appr
opriately
motivated and incentivised, not
just the highest echelons.
Given the value cap, and the
toughness of the performance
targets required for full vesting of
the PSP kicker award, our advisers
have estimated that the increase
in the value of the remuneration
package, taking into account the
likely probability of achie
ving these
performance levels, is c.15% for the
Executive Directors.
No other changes are being
proposed to the Policy
.
The Committee has spent
considerable time over the past year
considering various remuneration
structures and consulting with major
shareholders in order to develop
the proposed remuneration policy
.
We strongly belie
ve that the new
remuneration policy will str
ongly
incentivise management and
help resolve hiring and retention
challenges facing Tr
ainline whilst
also creating significant value for
shareholders.
The Committee recognises that the
proposed PSP changes represent a
considerable increase in the awar
d
opportunity available under the PSP
,
and is conscious of the sensitivity of
increases in award opportunity in the
current environment. Howe
ver, we
believe the proposed Remuneration
Policy is in the best interests of
shareholders as the performance
levels requir
ed for full vesting will
be set at exceptionally high le
vels,
and we have sought to mitigate the
potential for excessive outcomes
through the inclusion of the vest-
value cap. We respectfully ask for
your support for the proposed
remuneration policy and the
revised PSP rules at the 2022 A
GM.
The FY2023 PSP performance
measures will be based on a Company
scorecard of financial and strategic
metrics being cumulative EPS,
average Revenue gro
wth, and relative
TSR. The performance level required
for full vesting of the core award will
be at a level which is consistent with
the performance required for full
vesting under a typical FTSE long-
term incentive; the performance level
required for any vesting of the kick
er
award will be extr
emely demanding
as, for each measure, it will be set at
the full vesting level requir
ed for the
core award and will be in e
xcess of
that typically required at other FTSE
companies; the full vesting level for
the kicker award will be higher still,
set at levels which we believe will
translate into considerable value
creation for shareholders.
The performance targets for
each respective measure ar
e
set out on page 99.
The Committee discussed with
investors during the consultation the
possibility of using an ESG metric in
the PSP
, but concluded that the most
appropriate approach, at least for
FY2023, is to include ESG measures in
the annual bonus only, and intr
oduce
science-based targets in the PSP in
FY2024 at the earliest, once a robust
basis for their measurement has
been determined.
Financial Statements
83
Strat
egic
Report
Governa
nce
Remuneration out
comes
f
o
r
F
Y2
0
2
2
The total annual bonus opportunity
was based 75% on core financial
targets (25% each for Group net sales,
Group revenue and Gr
oup adjusted
EBITDA) and 25% for ke
y strategic
and personal targets for the Executive
Directors with a gate requir
ement
that Group adjusted EBITDA must
at least break even for pay-out of
any bonus.
Despite the continued impact
of Covid-19, in particular the
reintroduction of work from home
guidance and travel restrictions in ke
y
markets as a result of the Omicron
variant, Tr
ainline performed very well
in FY2022. Financial performance
exceeded target and was to
wards the
top end of the stretch performance
range with adjusted EBITDA ex
ceeding
the stretch target. The CEO and CFO
also performed strongly against their
non-financial targets, in particular on
their respective employee engagement
and net debt measures. As a result
of this strong performance the
CEO and CFO both achieved
83.4% of their FY2022 Annual
Bonus total opportunity.
Directors
’ rem
uneration repor
t
continued
Due to the unprecedented impact of
Covid-19 over the past two years none
of the threshold performance targets
for the FY2020 PSP granted to the
CFO were achieved and ther
efore the
grant resulted in zero payout.
The Committee considered the
perspective of stakeholders when
discussing the outcomes of the
FY2022 Annual Bonus and FY2020
PSP and determined that they were
a fair reflection of the stakeholder
experience over the r
elevant
performance periods and that no
discretion should be ex
ercised. In
particular the Committee noted
that Tr
ainline did not receive any
government Covid-19 support in the
form of furlough or other schemes
during FY2022 and has repaid all
UK government Covid-19 support
received in prior years.
Wider work
force
Tr
ainline faces intense competition
to attract and retain the best talent.
As a Committee, we engaged
with Tr
ainline’s People and
T
echnology teams to understand
the wider workforce’s sentiment
on remuneration and support the
business in addressing the hiring
and retention challenges identified.
Following this engagement,
the Committee considered the
remuneration arrangements
for employees and supported
management in implementing
changes to encourage the
achievement of T
rainline’
s strategy
,
in particular the issuance of share
awards to all employees for the
period FY2023
-
2025 with principles
aligned with the proposed
Executive Director PSP
.
The Committee considers carefully
the wider employee experience
when making decisions around
senior executive pay
. The Committee
received an update on the Group’
s
reward objectives and wider
workforce remuneration during
FY2022 which provided an o
verview
of employee sentiment on
remuneration that has been collated
through surveys, feedback and any
matters raised through the workforce
engagement mechanism.
Kjers
ti Wiklund
Chair of the Remune
ration
Co
mmi
tte
e
5 May 2022
T
rainline
Annual Report and Accounts 2022
84
R
emuneration at a glance
This sec
tion is a snap
shot of t
he Company’s per
formance over FY202
2 and th
e remuner
ation
rece
ived by our Executive Directors
. Ful
l details can b
e found in the A
nnual Repor
t on Remuner
ation
on page
s 93 to 101
.
FY202
2 re
muneration outc
omes
Annual bonus
The annual bonus was based on a mix of financial (weighted 75% of the total) and strategic (weighted 25%) performance
measures. The performance targets and actual performance are set out belo
w:
Performance targets
Measures
W
eighting
(% of
total bonus)
Threshold
T
arget
Stretch
Actual
FY2022
achievement
Resulting bonus
outcome
(% of total bonus)
Group Net Sales
25%
£
1
,9
56.0m
£2
,4
45.0
m
£
2
,6
8
9.
5m
£2,520.3m
16
.
3
%
Group Revenue
25%
£
13
7.
7
m
£
17
2
.1m
£18
9
.
3
m
£18
8
.
5
m
24.
4%
Group Adjusted EBITDA
1
25%
£
11
.
0
m
£
2
1.
9
m
£
26
.
3m
£3
9.0
m
25
.0%
T
otal
75%
65.8% out of 75%
1
Se
e pa
ge 162 f
o
r th
e de
ni
t
io
n of G
ro
up A
d
ju
s
te
d EB
I
T
DA
.
W
eighting
(%
of to
tal
bonus)
Resulting bonus
outcome
(% of total bonus)
Strategic objectives
25%
Jody Ford
17
.6
% ou
t of 2
5%
Shaun McCabe
1
7
.6
% ou
t of 2
5%
Based on actual outturn as set out above, the CEO and the CFO will receive 83.4% of their maximum bonus, r
epresenting
166.7% and 125.0% of salary respectively
. The amounts earned above 100% of salary
, representing 66.7% of salary for
the CEO and 25.0% of salary for the CFO will be deferred in shares under the Deferr
ed Share Bonus Plan.
PSP awards vesting in F
Y202
2
Due to the unprecedented impact of Covid-19 the thr
eshold performance targets for the CFO’s FY2020 PSP gr
ant were
not achieved which resulted in zer
o payout.
Implementat
ion of the R
emunerati
on Pol
icy i
n FY
202
3
For FY2023 and subject to approval of the pr
oposed remuneration policy
, the Executive Dir
ectors will be remunerated as
summarised in the table below
.
Element of pay
Implementation for FY2023
Fixed remuneration
Base salary
Cur
re
nt
l
y £
575
,0
0
0 fo
r Jo
d
y F
or
d an
d £4
0
0,
0
0
0 fo
r Sh
au
n Mc
C
ab
e. T
he C
om
mi
t
te
e i
nte
n
ds t
o
un
de
r
t
a
ke a re
v
ie
w of C
EO an
d CF
O s
a
lar
y i
n F
Y
202
3 a
nd w
il
l di
sc
lo
se t
h
e re
sul
t o
f th
is re
v
ie
w
in t
he F
Y
20
2
3 A
nn
ual R
ep
o
r
t
.
Pension
The CEO’s pension contributions, at c.5.5% of salary
, align with the broader workforce.
The CFO’s pension contributions will be 10.5% of salary during FY2023 but will reduce to c.5.5% b
y
the end of FY2023 which will be aligned with the broader workforce.
Benefits
A
s p
er F
Y
20
2
2.
V
ariable pay
Annual bonus and DSBP
Aw
ard
s of u
p to 2
0
0
% of s
al
ar
y f
or C
EO an
d 150
% of s
al
ar
y f
or C
FO, b
a
se
d on t
he a
ch
ie
ve
me
n
t
of Gr
ou
p f
in
an
ci
al t
ar
ge
t
s an
d sp
ec
if
ic an
d qu
an
ti
f
ia
b
le s
tr
at
eg
ic (w
ei
gh
te
d 75% of ma
x
im
um)
an
d pe
r
so
nal o
bj
ec
ti
v
es (w
ei
gh
te
d 25%)
. Awa
rd
s ear
ne
d ab
ov
e 100
% of s
ala
r
y wi
ll be d
ef
er
re
d
in s
har
es f
or t
wo y
ea
r
s.
PSP
Awards of 550% of salary for the CEO and CFO based on cumulative EPS, average Revenue gr
owth
and Relative TSR comprising core awards of 250% of salary and additional ex
ceptional awards of
300% of salary based on the achievement of exceptional performance le
vels.
Financial Statements
85
Strat
egic
Report
Governa
nce
This sec
tion of th
e repor
t se
ts out the pr
opose
d 20
2
2 Remuneration Policy which will be p
ut befor
e
shareho
lders fo
r approval at the 20
22 AGM. The C
ommit
tee intends that t
he 20
2
2 Remuneration Policy
will come into ee
ct fr
om that date (30 June 2
02
2) for a pe
riod of up to thre
e years.
The basic elements of the 2022 Remuneration Policy align with the existing Remuner
ation Policy but provide for
greater stretch opportunity in the long-term incentive to fully motivate the Ex
ecutive Directors to deliver ex
ceptional
performance in achieving the Group’
s ambitious growth tar
gets. The 2022 Policy includes two changes from that
approved by shar
eholders at the 2020 AGM:
•
the PSP award opportunity has increased from 250% to up to 550% of salary
, comprising a core award of up to 250%
of salary and a kicker award of 300% of salary in FY2023 r
educing to 100% of salary in FY2024 and FY2025; and
•
a cap of 2.75 times the value of the FY2023 grant will be applied to the PSP vest-date values in FY2025, FY2026 and
FY2027 to ensure that maximum remuner
ation opportunities rewar
d exceptional performance but are not e
xcessive
or as a result of windfall gains. Any vesting of share value o
ver and above the cap would be forfeited.
The Committee consulted extensively with our largest shareholders, r
epresenting 78% of our shares, on the pr
oposed
policy and we would like to thank them for their time and pragmatic discussions. These discussions helped us r
efine our
original proposals to those disclosed in this report, and gave the Committee confidence that our investors have str
ong
faith in the executive team.
The Committee recognises that the proposed PSP changes r
epresent a considerable increase in the awar
d opportunity
available under the PSP
, and is conscious of the sensitivity of increases in award opportunity in the current envir
onment.
However, we believe the pr
oposed Remuneration Policy is in the best interests of shar
eholders as the performance levels
required for full vesting will be set at e
xceptionally high levels, and we have sought to
mitigate the potential for excessive
outcomes through the inclusion of the vest-value cap.
Executive Direc
tors’ Remune
ration Policy table
The table below sets out the individual elements of Executive Dir
ectors’ remuneration, ho
w each element operates, and
the maximum opportunity and any applicable performance measures.
Element
Purpose and link
to strategy
Operation
Maximum opportunity
Performance measures
Salary
T
o recruit
and retain
high-calibre
Executive
Directors.
Salaries are typically revie
wed annually,
on 1 April, though the Committee
reserves the right to make salary
increases from any other time where
considered appropriate.
Base salaries are determined taking into
account a number of factors, including:
•
the individual’s role, r
esponsibilities,
and performance;
•
salary levels at comparable
companies, adjusted to reflect
scale; and
•
salary increases for
the wider workforce.
Whilst there is no maximum salary,
increases will normally be in line
with the average increase for the
wider workforce.
The Committee retains the discretion
to make increases above this le
vel in
certain circumstances, for example
following an increase in responsibility
or scope, or where an individual is
appointed on a below-market salary
.
Not applicable.
Pension
T
o provide
appropriate
retirement
plans.
The Executive Directors currently
participate in the Company’s pension
scheme, and the Company makes
contributions on their behalf.
The Committee retains the discretion
to provide a cash allowance in lieu
of pension contribution during the
term of the Policy.
The Company’s maximum
contributions/cash allowance for
the CEO is aligned with that of the
workforce at 5.5% of salary, and 10.5%
of salary for the CFO but which will
reduce such that alignment with the
broader workforce is achieved b
y the
end of FY2023.
For new appointments to the Board,
the Committee will set a pension
contribution rate which is in line with
the contributions available to the wider
workforce at that time.
Not applicable.
R
emuneration policy
T
rainline
Annual Report and Accounts 2022
86
Element
Purpose and link
to strategy
Operation
Maximum opportunity
Performance measures
Benefits
To ensure
that the
overall
package is
competitive.
Executive Directors receive private
medical and dental insurance for the
individual and their immediate family,
and life assurance.
Other benefits may be provided at the
discretion of the Committee based on
individual circumstances and business
requirements, such as relocation
allowances.
The value of benefits is based on
the cost to the Company and is
not pre-determined.
The Committee retains the discretion
to approve a higher than typical cost
in exceptional circumstances (e.g.
relocation) or
in circumstances driven
by factors outside the Company’s
control (e.g. material increases in
insurance pr
emium).
Not applicable.
Annual
Bonus &
Deferred
Share
Bonus Plan
(‘DSBP’)
T
o incentivise
and
reward the
achievement
of annual
financial and
non-financial
targets, in
line with the
Company’s
strategic
priorities.
T
o directly
align the
interests of
Executive
Directors and
shareholders
and support
retention
through long-
term deferral
in shares.
Performance objectives are revie
wed
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.
Any annual bonus earned above a
threshold of 100% of salary will be
deferred in shares for a period
of two years.
Dividends may accrue over the
deferral period in respect of DSBP
awards that vest.
The maximum bonus opportunity is
200% of salary. The CEO and the CFO
currently have opportunities of 200%
and 150% of salary, respectively
.
For threshold and target performance,
the bonus earned is 0% and up to 50%
of maximum, respectively.
The bonus is
determined based on
annual performance
against financial and
strategic metrics, and
personal objectives.
Performance measures
and weightings will be
determined at the start
of the year to align
with the Company’s
short-term financial
and strategic priorities.
No more than 25% of
the bonus opportunity
will be based on
personal objectives.
Details of the
measures applicable
for the year under
review ar
e provided in
the Annual Report on
Remuneration.
Performance
Share Plan
(‘PSP’)
T
o incentivise
and reward
the delivery
of long-term
shareholder
value and the
achievement
of long-term
financial
targets.
Awards of nil-cost options, market
value options or conditional shares are
made annually, with vesting dependent
on the achievement of performance
conditions. Performance conditions are
reviewed prior to gr
ant to ensure that
the award level, performance measures,
targets and weightings are appropriate.
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 performance
of the business, as well as the value
created for shareholders.
A two-year holding period will apply to
vested PSP awards during which vested
shares may not be sold save to cover
tax liabilities.
Dividends may accrue over the vesting
period in respect of awards that vest.
The maximum annual award level
is up to 550% of salary for FY2023,
comprising a core award of up to 250%
of salary and an additional ‘kicker’
award in FY2023 of 300% of salary
linked to exceptional performance.
The core award will be maintained
at 250% of salary over the three-year
period of the Remuneration Policy but
the additional exceptional kicker awar
d
opportunity will reduce to 100% of
salary in FY2024 and FY2025.
For threshold performance, up to 20%
of the core award vests.
A cap of 2.75 times the value of the
FY2023 grant will apply to the vest-date
values for each of the PSP grants made
in FY2023, FY2024 and FY2025. Any
vesting of share value over and above
the cap would be forfeited.
Performance
conditions and
weightings will be
determined prior
to grant each year
to align with the
Company’s longer-
term strategy.
Details of the
measures applicable
for the year under
review ar
e provided in
the Annual Report on
Remuneration.
Share
Incentive
Plan (‘SIP’)
T
o encourage
employee
share
ownership
and further
support
shareholder
alignment.
The Company operates an HMRC-
approved plan that pro
vides 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.
In line with the award limits set by
HMRC (or any lower limit as determined
by the
Committee).
Not applicable.
Financial Statements
87
Strat
egic
Report
Governa
nce
Notes to th
e Policy table:
Executive Direc
tor shareho
lding guidelines
Shareholding guidelines are in place whereb
y Executive Directors ar
e 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-emplo
yment shareholding guideline. Executive Dir
ectors will normally be expected
to maintain a holding of Tr
ainline shares at a level equal to the lo
wer 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 will be policed through the
holding of vested PSP awards granted after the 2020 AGM and thr
ough the monitoring of shareholdings by the Company
.
Pa
yments from
previ
ously agreed remunerat
ion ar
rangements
The Committee reserves the right to make any r
emuneration payments where the terms of the payment wer
e agreed
(i) prior to the Company’s Listing, or (ii) before the Policy came into effect, or (iii) at a time when the rele
vant individual
was not a Director of the Company and, in the opinion of the Committee, the payment was not in consideration for the
individual becoming a Director of the Company
. This does not apply to pension contributions for new appointments to
the Board. Details of any such payments will be set out in the Annual Report on Remuneration as the
y arise.
Discretion
The Committee may make minor amendments to the Policy (e.g. for regulatory
, ex
change control, tax or administrative
purposes or to take account of a change in legislation) without obtaining shareholder appr
oval for that amendment.
There are a number of specific areas in which the Committee may e
xer
cise discretion, including:
•
To vary the annual bonus and PSP performance measures and weightings each year to r
eflect strategic priorities;
•
To adjust the formulaic annual bonus and PSP outcomes positively or negatively based on a holistic assessment, to
ensure the final outcome is a fair and true reflection of underlying business performance and stakeholder e
xperience;
•
To adjust the performance conditions for in-flight PSP awards in e
xceptional circumstances, pr
ovided the new
conditions are no tougher or easier than the original conditions;
•
To adjust in-flight PSP awards in the e
vent of a variation of the Company’s share capital or a demerger, delisting,
special dividend, rights issue or other event, which may
, in the Committee’s opinion, affect the curr
ent or future
value of awards; and
•
To settle awards in cash (for e
xample, on a termination).
The exercise of any discr
etion will be fully disclosed in the rele
vant Annual Report on Remuneration.
Malus and clawback
Awards under the annual bonus (including deferred awards under the DSBP) and PSP ar
e subject to malus and clawback
provisions. Pr
ovisions apply for a period of two years from date of payment in r
espect of the cash bonus, and for a
period of five years from date of grant in r
espect of awards under the DSBP and the PSP
.
Clawback refers to the reco
very of paid or vested amounts, and may be applied in certain circumstances including
the following:
•
Material misstatement of the Company
’s financial statements;
•
Conduct by the individual resulting in significant reputational damage to the Company;
•
Fraud, negligence or gross misconduct by the individual.
Malus refers to the reduction, including to nil, of unvested or unpaid awar
ds. The Committee is able to apply malus to
awards in the circumstances set out abo
ve.
R
emuneration policy
contin
ued
T
rainline
Annual Report and Accounts 2022
88
Sele
ction o
f per
formanc
e measure
s
The annual bonus is currently based on a combination of financial and strategic measur
es, and personal objectives
which are selected annually to reflect the Gr
oup’s str
ategy. The intention is for the PSP o
ver the policy period to be based
on EPS, revenue and relative TSR metrics, all of which ar
e either ke
y internal metrics for the Company or represent a
key indicator of value for our shar
eholders. A sustainability related metric will also be included when the Committee
determines it is appropriate to do so. Weightings for measur
es will focus on: financial performance; the successful
execution of T
rainline’s strategy; and
creating value for shar
eholders.
The Executive Directors do not curr
ently participate
in the SIP but if an Executive Director wer
e to choose to do so the Committee would ensure the Executive Dir
ector has
the same performance measures required of an emplo
yee participant.
The mix of annual and long-term measures is discussed in further detail in the Annual Report on Remuneration. T
argets
are set taking into account a number of factors including internal and external for
ecasts, and market practice.
The Committee keeps the performance measures, weightings and targets of both the annual bonus and the PSP
under review and r
eserves the right to adjust these if they ar
e no longer considered to be appropriate.
Remuneration arran
gement
s throughout t
he Group
Remuneration arrangements throughout the Gr
oup are based on the same high-level r
emuneration principles as for the
Executive Directors. Annual salary r
eviews tak
e into account personal performance, Group performance, local pay and
market conditions, and salary levels for similar r
oles in comparable companies.
For FY2023 all staff received SIP Free Shar
e awards plus a kicker RSU or PSP awar
d, depending upon their seniority, with
principles and performance requirements aligned with the proposed Ex
ecutive Director PSP grants. Mid-le
vel staff are
also eligible to participate in annual bonus schemes; opportunities and performance measures vary by organisational
level, and an individual’s r
ole. Senior executives ar
e eligible for annual PSP awards on similar terms to Executive
Directors, although award opportunities are lo
wer and vary by organisational le
vel; other staff are eligible to participate
in a restricted stock plan. All UK employees ar
e eligible to participate in the Share Incentive Plan on identical terms and
we also offer similar all-employee share plans to o
verseas colleagues.
Non-
executive Direc
tors’ Remune
ration Policy
The table below sets out details of the Company’s Policy on Non-executive Dir
ectors’ remuneration.
Element
Purpose and link
to strategy
Operation
Maximum opportunit
y
Performance
measures
Fees
T
o recruit and
retain high-
calibre Non-
executive
Directors.
Non-executive Directors ar
e paid a base fee for
membership of the Board, with additional fees
being paid for membership of Committees and
the role of Chair of a Board Committee, to take
into account the additional responsibilities and
workload required.
The Company has the discretion to pay an
additional fee to a Non-executive Director,
should the Company require significant
additional time commitment in exceptional
or unforeseen circumstances. Any such fees
will be time-limited in nature.
Fees are determined based on the responsibility
and time commitment required, and with
reference to appropriate mark
et comparisons.
Fees are normally paid in cash.
The maximum annual aggregate fee
for all Non-executive Directors is
currently £1.5 million. Any proposed
revision to this limit would be
subject to shareholder approval,
as required under the Company’s
Articles of Association.
Not applicable.
Other
payments
T
o have the
flexibility
to provide
additional
fees/benefits,
if required.
Non-executive Directors do not curr
ently receive
any benefits. However, benefits may be pro
vided
in the future if, in the view of the Company
, this
is considered appropriate.
Tr
avel and other reasonable expenses (including
fees incurred in obtaining professional advice
in the
furtherance
of their
duties) incurr
ed
in the course of performing their duties
are reimbursed.
Not applicable.
Not applicable.
Financial Statements
89
Strat
egic
Report
Governa
nce
100%
21%
£4,345
£3,24
5
£945
£445
68%
51%
25%
Fixed P
ay
Annual Bonus
Long-term Incentive
Share price growth
Minimum
100%
20%
£6,503
£4,922
£1,472
£609
64%
24%
49%
On-target
41%
39%
Maximum
Maximum
+5
0%
13%
23%
9%
18%
47%
32%
14%
18%
10%
14%
Fixed P
ay
Annual Bonus
Long-term Incentive
Share price growth
Remuneration Policy for new hires an
d internal promo
tions
The remuneration package for a new Ex
ecutive Director will be set br
oadly in line with the prevailing appro
ved
Remuneration Policy at the time of the appointment. The Committee will ensure that the package is sufficient to attr
act
the appropriate individual, having regard to the calibr
e, skills and experience requir
ed, whilst being cognisant of not
paying more than is appropriate.
The annual bonus and PSP award opportunities will be limited to those detailed in the Remuneration Policy table on
pages 86 to 87. In addition, the Remuneration Committee may offer additional cash and/or share-based awar
ds when
it considers these to be in the best interests of the Company and its shareholders, to tak
e account of remuneration
forfeited when leaving the former employer. Any such buyout awards would r
eflect, as far as practicable, the nature,
time horizons and performance conditions attaching to that remuneration. The Committee will seek to use the curr
ent
remuneration structure in making awar
ds, but in some cases it may be required to use the fle
xibility afforded by Listing
Rule 9.4.2R, if appropriate. Shareholders will be informed of any such awar
ds or payments at the time of appointment.
Where an Executive Dir
ector is required to r
elocate from their home location to take up their r
ole, the Committee may
provide reasonable assistance with r
elocation in line with local market norms for a period of up to two years.
Remunerat
ion opportuniti
es in d
ierent performance scenarios
The charts below illustrate the potential futur
e value and composition of the Executive Directors’ r
emuneration
opportunities in four performance scenarios: minimum, on-target (i.e. in line with the Company’s expectations),
maximum, and maximum plus 50% share price appreciation, a scenario wher
e 50% share price appreciation is included.
The potential remuneration opportunities ar
e based on the proposed 2022 Policy
, applied to the Executive Directors’
salaries as at 1 March 2022. The charts below e
xclude the effect of any Company share price appr
eciation except in
the ‘Maximum+50%’ scenario.
Assumptions:
Performance scenario
Includes
Minimum
Salary,
pension and
benefits (fix
ed r
emuneration)
No bonus payout
No vesting under the PSP
On-target
Fixed remuneration
50% of
maximum annual
bonus payout
(i.e. 100% and 75%
of salary for the
CEO and
the CFO, r
espectively)
20% vesting
of the
core
award
under the
PSP (i.e.
50% of
salary for the CEO
and the CFO)
Maximum
Fixed remuneration
100% of
maximum annual
bonus payout
(i.e. 200% and 150%
of salary for the
CEO and
the CFO, r
espectively)
100% vesting
of the
FY2023 PSP
award (i.e. 550%
of salary
for the
CEO and the CFO)
Maximum +50%
Fixed remuneration
100% of maximum annual bonus payout
100% vesting of the FY2023 PSP award, plus 50% share price appreciation
R
emuneration policy
contin
ued
CFO
£000
CEO
£000
T
rainline
Annual Report and Accounts 2022
90
Executive Direc
tors’ se
r
vice contr
act
s and termination remune
ration policy
The Executive Directors have service contr
acts with an indefinite term, which are terminable by either the Company
or the Executive Director on 12 months’ notice. The service contr
acts make pro
vision, at the Board’s discr
etion, for
early termination involving payment of salary, benefits and pension contributions in lieu of notice. Payment in lieu
of notice can be paid either as a lump sum or in equal monthly instalments over the notice period and will normally
be subject to mitigation.
Effective dates of Executive Director service contr
acts are set out in the table below and ar
e available for inspection at
the Company’s registered office.
Executiv
e Director
Date of contract
Jody Ford
21 September 2020
Shaun McCabe
12 June 2019
The table below summarises how the awar
ds under incentive plans are typically treated in specific cir
cumstances,
with the final treatment remaining subject to the Committee’
s discretion. When considering the use of discr
etion,
the Committee revie
ws all potential incentive outcomes to ensure that any application of discretion is fair to both
shareholders and participants.
Plan
Scenario
Timing and calculation of payment/v
esting
Annual
bonus
All leavers
(except
the cir
cumstances set
out belo
w)
No bonus is paid.
Death; injury, disability or ill-health; the sale of
the participant’s employing company or business,
or in other circumstances at the discretion of the
Remuneration Committee
The Committee may determine that an Executive Director is eligible
to receive a bonus for the year. The Committee will determine the
level of bonus taking into account performance.
Change of control
The Committee will assess the most appropriate treatment for the
outstanding bonus period according to the circumstances.
DSBP
All
leavers (e
xcept the
circumstances set out
below)
Awards lapse.
Death; injury, disability or ill-health; the sale of
the participant’s employing company or business,
or in other circumstances at the discretion of the
Remuneration Committee
Awards will vest on the original vesting date, or, if the Committee so
determines, as soon as practicable after the date of cessation.
Change of control
Awards vest immediately, and will be pr
o-rated for time, unless the
Committee determines otherwise.
Alternatively, participants may choose, or at the discretion of
the Committee may be required, to accept an ex
change for new
equivalent awards in the acquirer.
PSP
All leavers
(except
the cir
cumstances set
out belo
w)
Awards lapse.
Death; injury, disability or ill-health; the sale of
the participant’s employing company or business,
or in other circumstances at the discretion of the
Remuneration Committee
Awards will vest on the original vesting date, or, if the Committee so
determines, as soon as practicable after the date of cessation.
The extent to which awards vest will be determined by the
Committee, taking into account the extent to which the
performance conditions have been satisfied. Awards will be pro-
rated for time based on the proportion of the performance period
elapsed, unless the Committee determines otherwise.
Change of control
Awards vest immediately, subject to the Committee
’s assessment
of performance. Awards will be pro-rated for time based on
the proportion of the performance period elapsed, unless the
Committee determines otherwise.
Alternatively, participants may choose, or at the discretion of
the Committee may be required, to accept an ex
change for new
equivalent awards in the acquirer.
In respect of vested PSP awards that ar
e still subject to a holding period, awards will normally be released at the
end of the holding period, however the Committee has discr
etion to determine otherwise, taking into account the
circumstances at the time.
Financial Statements
91
Strat
egic
Report
Governa
nce
Non-
executive Direc
tor let
ters of app
ointment
The Non-executive Dir
ectors 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 shar
eholders.
The appointment letters for the Non-executive Dir
ectors provide that no compensation is payable on termination,
other than any accrued fees and expenses. The table below sho
ws the appointment and expiry dates for the
Non-executive Dir
ectors.
Non-exec
utive Director
Effective date of appoint
ment
Expiry of appointment
Andy Phillipps
1 January 2021
AGM 2023
Brian McBride
10 June 2019
A
GM 2022
Duncan T
atton-Brown
10 June 2019
A
GM 2022
Jennifer Duvalier
1 October 2020
AGM 2023
Kjersti Wiklund
10 June 2019
A
GM 2022
Conside
ration of wide
r employee views and shareholde
rs
In revie
wing remuneration outcomes for FY2022, the Committee has tak
en into account the internal context, including
the remuneration arrangements that apply for other emplo
yee groups, recent de
velopments in the UK governance
landscape for executive r
emuneration, and the views of our shareholders.
The Committee Chair and the designated Non-executive Dir
ector for Workforce Engagement pro
vide insight on the
wider workforce for the Committee to consider via their direct engagement with emplo
yees on remuneration sentiment.
The remuneration structures and r
eward opportunities for the wider workfor
ce were used when determining the
appropriateness of the proposed Remuneration Policy
.
The Committee is dedicated to ensuring open dialogue with shareholders in relation to r
emuneration. The Committee
Chair consulted with major shareholders during FY2022 on the proposed 2022 Remuner
ation Policy (and its
implementation in FY2023). The Committee took on board the comments received, and commits to further engagement
in advance of any significant changes. Further information on the consultation process is set out on page 82.
Summar
y of de
cision-
making pro
cess
The Committee has spent considerable time re
viewing how T
rainline’s remuneration structur
e, approved at the 2020
AGM, can reinforce T
rainline’s ambitious long-term gro
wth targets and address how certain e
xternal developments
outside of the Company’s control, Covid-19’
s unprecedented impact; the Williams-Shapps Plan for Rail; and the RDG
Retail Review
, have made the roles of the Ex
ecutive Directors far more challenging.
The external developments have weighed heavily on T
rainline’s share price and have also had a considerable impact on
existing incentive schemes, as evidenced b
y the nil vesting of the FY2020 PSP grant and the expected nil vesting of the
FY2021 PSP grant. Given the PSP schemes have a three-year cliff vesting, this would r
esult in no long-term incentives
being paid out to participants for a period of at least five years following T
rainline’
s IPO in 2019. This would likely result
in remuneration outcomes which benchmark far below peers and would leave the CEO with no effective long-term
compensation scheme and very little shareholding, other than his own personal shar
e purchases.
The Committee strongly believes that a r
efresh of the remuner
ation structure is required to r
eflect the external
developments, ensure that T
rainline can attract and retain talent in what is an extremely competitive sector,
and fully motivate the Executive Directors to deliver e
xceptional performance for shareholders.
We consulted extensively with our largest shar
eholders, representing 78% of our shar
es, on this proposed policy
. These
discussions helped us refine our original proposals to those in this pr
oposed policy, and gave the Committee confidence
that our investors have strong faith in the ex
ecutive team.
The Committee ensured that no individual was involved in discussions on their own r
emuneration arrangements to
manage any potential conflicts of interests.
R
emuneration policy
contin
ued
T
rainline
Annual Report and Accounts 2022
92
The following sec
tion se
ts out our Annual Repo
rt o
n Remuneration, out
lines deci
sions made by the
Commit
tee in relation to D
irec
tors’ re
muneration in re
spe
ct of F
Y202
2 and how the C
ommitte
e intends
to apply the pr
opose
d Remuneration Policy in F
Y
202
3 sho
uld it be approved by sharehol
ders at the
A
GM. Th
e Annual Repor
t on Remune
ration will be subje
ct to an advis
or
y shareho
lder vote at the
A
GM to be he
ld on 30 J
une 20
2
2
. Where informatio
n has be
en audited, this ha
s been s
tated.
All other info
rmation in this rep
or
t is unaudited.
Role and res
ponsibilities of t
he Remuneratio
n Commit
tee
Detailed responsibilities are set out in the Committee’
s terms of refer
ence, which may be found at:
www.investors.thetrainline.com.
The Committee currently consists of four independent Non-ex
ecutive Directors. The Committee invites other individuals
such as the Chair of the Board, Chief Executive Officer, Chief Financial Officer, Chief People Officer and e
xternal
consultants to attend its meetings when appropriate. No Director tak
es any part in any decision affecting his or
her own remuneration.
Advisers
Ellason has continued to advise the Committee during FY2022. Ellason was appointed by the Committee in FY2021 as a
result of the lead adviser to the Committee moving to Ellason. Ellason attends Committee meetings, r
eports 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.remuner
ationconsultantsgroup.com). The Committee is satisfied that the advice pro
vided by Ellason is
objective and independent. Ellason was paid fees of £81,920 for its services to the Committee during the year, excluding
expenses and VA
T, in accor
dance with its letter of engagement. Fees are charged on a time and materials basis.
Shareholder v
oting
The table below sets out the voting outcome for the remuner
ation report at the 2021 AGM and the r
emuneration policy
at the 2020 AGM.
V
otes For
V
otes Against
V
otes Withheld
Number of shares
(m)
Perc
entage
Number of shares
(m)
Perc
entage
Number of shares
(m)
Remuneration report
428.8
97.7
10.3
2.3
0.0
Remuneration policy (2020 AGM)
428.7
99.9
0.6
0.2
3.6
Implementat
ion of the Remu
neration P
olicy in FY
202
2
Single gure of t
otal remuneration for Executive Directors (Audited)
The following table sets out the single figure of total r
emuneration for Executive Dir
ectors in FY2022 and FY2021.
Financial
year
Salary
(00
0)
Pension
(00
0)
Benefits
(00
0)
T
otal fixed
(00
0)
Annual bonus
(00
0)
PSP
(00
0)
T
otal variable
(00
0)
T
otal
remuneration
(00
0)
Jody Ford
2
FY2022
£575
£32
£3
£609
£959
£0
1
£959
£1,568
FY2021
£227
£11
£1
£239
£0
£0
1
£0
£239
Shaun McCabe
FY2022
£400
£42
£3
£445
£500
£0
3
£500
£945
FY2021
£377
£41
£3
£421
£0
£0
1
£0
£421
1
No P
SP v
es
t
in
g o
cc
ur
re
d in t
h
e pe
r
io
d.
2
Jo
dy F
o
rd j
oi
n
ed t
he B
o
ar
d as CO
O o
n 21 Se
p
te
mb
e
r 202
0 an
d b
ec
a
me C
EO o
n 1 Ma
rc
h 20
21.
3
Due t
o t
he u
np
re
ce
de
n
te
d im
pa
c
t o
f Cov
i
d
-1
9 th
e th
re
sh
o
ld p
er
fo
r
ma
nc
e t
ar
ge
t
s fo
r t
he C
F
O
’s F
Y
20
20 P
SP g
ra
n
t we
re n
ot a
ch
ie
ve
d w
hi
ch r
es
u
lt
ed i
n
zero payout.
In recognition of the uncertainty generated b
y Covid-19, Shaun McCabe volunteered to tak
e a salary reduction of
20%, which was effective from 20 April 2020 to 1 August 2020 and deferred payment of his FY2020 annual bonus
until October 2020.
Ann
ual repor
t on remuneration
Financial Statements
93
Strat
egic
Report
Governa
nce
Single gure of tot
al remunera
tion for Non
-executive Direc
tors (Audited)
The single figure of total remuner
ation for Non-executive Dir
ectors for FY2022 and FY2021 (audited) was:
Financial
year
Fees
(00
0)
T
axable
benefits
(00
0)
T
otal Fees
(00
0)
Andy Phillipps
1
F
Y
202
2
£60
£0
£60
F
Y
20
21
£10
£0
£10
Brian McBride
F
Y
202
2
£265
£0
£265
F
Y
20
21
£250
£0
£250
Duncan T
atton-Brown
F
Y
202
2
£75
£0
£75
F
Y
20
21
£72
£0
£72
Jennifer Duvalier
2
F
Y
202
2
£70
£0
£70
F
Y
20
21
£29
£0
£29
Kjersti Wiklund
F
Y
202
2
£75
£0
£75
F
Y
20
21
£72
£0
£72
1
Joi
n
ed t
he B
o
ar
d on 1 J
an
ua
r
y 2021.
2
Joi
n
ed t
he B
o
ar
d on 1 O
c
t
ob
e
r 202
0.
In recognition of the uncertainty generated b
y Covid-19, from 20 April 2020 to 1 August 2020, the Chair and the
Non-executive Dir
ectors volunteered a 20% reduction to their base fees.
Notes to th
e tables (Audited)
Base s
alar
y
During FY2022 the annual salaries of the Executive Directors wer
e £575,000 (FY2021: £500,000 for his previous r
ole as
COO) for Jody Ford as CEO and £400,000 (FY2021: £400,000) for Shaun McCabe as CFO
.
Pension
During FY2022, Jody Ford and Shaun McCabe received pension benefits b
y way of cash allowances equal to 5.5% and
10.5% of salary respectively
.
Discretion
No discretion was applied by the Committee to FY2022 r
emuneration outcomes.
Annual bonus (Audited)
The maximum bonus opportunities for FY2022 were 200% of salary for Jody Ford as CEO and 150% of salary for Shaun
McCabe as CFO. The annual bonus is based on the achie
vement 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 belo
w.
Financial element
Measure
Performance targets
Actual
FY2022
achievement
Resulting bonus
outcome
(% of total
bonus)
W
eighting
(% of
total bonus)
Threshold
1
T
arget
2
Stretch
Group Net Sales
25%
£
1
,
956.0m
£2
,4
45.0
m
£
2,
6
89.
5m
£2,520.3m
16.3%
Group Revenue
25%
£
13
7.
7
m
£
17
2
.1m
£18
9.
3
m
£18
8
.
5
m
24.4%
Group Adjusted EBITDA
3
25%
£
11
.
0
m
£
2
1.
9
m
£
26
.
3m
£3
9.0
m
25.0%
T
otal
75%
65.8% out of 75%
1
Achievement results in
0% of maximum
payout.
2
Achievement results in
50% of maximum payout.
3
Se
e pa
ge 162 f
o
r th
e de
ni
t
io
n of G
ro
up A
d
ju
s
te
d EB
I
T
DA
.
Ann
ual repor
t on remuneration
cont
inued
T
rainline
Annual Report and Accounts 2022
94
Strat
e
gic element
CEO - Jody Ford
Measure
W
eighting
(% of total
bonus)
K
ey progress during FY2022
Actual
FY2022
achievement
Resulting bonus
outcome
(% of total
bonus)
Enhance customer
experience & build
demand
10%
Strong Co
vid-19 recovery and an enhanced focus on the
Commuter segment resulted in strong active customer
numbers and increased segment share.
Stretch
7.6%
Grow T
rainline
Partner Solutions
5%
TPS reco
very stepped up in H2 with sales, though continued
to be hampered by slo
wer recovery than other segments.
Key strategic customer wins wer
e made during the year.
T
arget
1.8%
Employee
Engagement
5%
Staff engagement increased during the period, with ne
w
initiatives to ensure the best tech talent is attracted to the
Tr
ainline business and brand.
Stretch
5.0%
Investor
Engagement
5%
Increase in alignment of the investor gr
oup with Tr
ainline’s
sustainability credentials and delivered incr
eased hold
positions from key tar
get investors.
Stretch
3.1%
T
otal
25%
17.6% out of
25%
CFO - Shaun McCabe
Measure
W
eighting
(% of total
bonus)
K
ey progress during FY2022
Actual
FY2022
achievement
Resulting bonus
outcome
(% of total
bonus)
Enhance customer
experience & build
demand
10%
Strong Co
vid-19 recovery and an enhanced focus on the
Commuter segment resulted in strong active customer
numbers and increased segment share.
Stretch
7.6%
Grow T
rainline
Partner Solutions
5%
TPS reco
very stepped up in H2 with sales, though continued
to be hampered by slo
wer recovery than other segments. Key
strategic customer wins were made during the year.
T
arget
1.8%
Net Debt
5%
A significant step down in net debt in the period was achie
ved
as the Company returned to positive cash flow; e
xcess funds
were utilised to repay bank debt and convertible bonds.
Stretch
5.0%
Investor
Engagement
5%
Increase in alignment of the investor gr
oup with Tr
ainline’s
sustainability credentials and delivered incr
eased hold
positions from key tar
get investors.
Stretch
3.1%
T
otal
25%
17.6% out of
25%
Despite the continued impact of Covid-19, in particular the reintroduction of work fr
om home guidance and travel restrictions
in key markets as a r
esult of the Omicron variant, T
rainline performed well in FY2022. Financial and str
ategic performance
exceeded targets and was to
wards the top end of the stretch performance r
ange with adjusted EBITDA ex
ceeding the stretch
target. The resulting bonus outcomes for FY2022 for the Executive Dir
ectors are set out below
.
Annual bonus outcome
(% of maximum)
Annual bonus outcome
(% of salary)
Annual bonus outcome
(00
0)
Jody Ford
83.4%
166.7%
£959
Shaun McCabe
83.4%
125.0%
£500
In line with the FY2020 Remuneration Policy 100% of salary will be paid in cash, and the balance, being £383,609 for the
CEO and £100,144 for the CFO, will be paid in deferr
ed bonus shares under the DSBP
.
PSP awards vesting in F
Y202
2
Due to the unprecedented impact of Covid-19 the threshold performance tar
gets for the CFO’s FY2020 PSP grant wer
e not achieved
which resulted in zero payout. For further information on the FY2020 PSP award see page 71 of the FY2020 Annual Report.
Financial Statements
95
Strat
egic
Report
Governa
nce
PSP awards grante
d in FY202
2 (Audited)
The Executive Directors wer
e granted conditional share awards under the PSP as set out in the table belo
w:
Date of grant
Number of
shares granted
Share price
at grant
Face value
Award as %
of salary
V
esting date
Jody Ford
1 June 2021
490,470
£2.93
£1.44m
250%
2 May 2024
Shaun McCabe
1 June 2021
341,196
£2.93
£1.00m
250%
2 May 2024
The vest period for these awards is three years fr
om grant followed by a two-year post-vest holding period. The awar
ds
were made using the average of the shar
e prices for the seven dealing days immediately preceding 1 June 2021, the date
the shares were awarded. Dividend equivalents will not accrue in r
espect of the awards o
ver the period from the date of
grant to the vesting date.
Vesting of the FY2022 award is based 25% on EPS, 25% on Re
venue and 50% on Relative TSR, with performance
measured over the period 1 Mar
ch 2021 to 29 February 2024. The targets set for each measure are set out belo
w and
are based around a Threshold-Max-Ex
ceptional range which would earn vesting of 16%, 80% and 100% r
espectively of
the award, equivalent to in aggregate 40%, 200% and 250% of salary
. The Exceptional le
vel of performance is judged by
the Committee to be extremely str
etching.
Performance targets
Measure
W
eighting
Threshold
(16% vesting)
Max
(80
% vesting)
Exceptional
(100% v
esting)
EPS in FY2024
1
25%
6.0p
7.5p
9.4p
Revenue in FY2024
25%
£318m
£397m
£496m
Relative TSR vs. FTSE 250
2
50%
Median
Upper quartile
Upper decile
1
Th
e EP
S me
a
su
re i
s Ba
si
c EP
S w
i
th t
he i
mp
a
c
t of s
ha
re
-
ba
se
d p
ay
m
en
t
s e
xcl
ud
e
d.
2
Ex
cl
ud
in
g in
ve
s
t
me
nt t
r
us
t
s
.
The Committee will ensure that any vesting of the FY2022 PSP cycle is consistent with the stakeholder e
xperience 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.
Defe
rred share b
onus plan (‘D
SBP
’) awards to be g
ranted in F
Y
20
23
DSBP awards in relation to the FY2022 annual bonus will be gr
anted in FY2023. Half of the DSBP awards will be subject to
a one-year deferral period and the remaining half a two-year deferr
al period, both of which will be subject to continued
service requirements. No DSBP awar
ds were granted in FY2022.
Payments for loss o
f oce (Audited)
No payments for loss of office were made during the year under re
view.
Payments to past Dir
ec
tors (Audited)
No payments were made to past Directors during the year under r
eview
.
Relative impor
tance of sp
end on pay
The table below shows the change in total emplo
yee pay alongside Revenue and Group Adjusted EBITDA as these ar
e
two key measur
es of Group performance. No dividends or share buybacks have occurred since Listing.
% change
FY2022
FY2021
T
otal gross employee pay
1
20%
£72m
£60m
Revenue
181%
£189m
£67m
Group Adjusted EBITDA
2
257%
£39m
£(25)m
1
Se
e No
te 5 o
f th
e 
nan
c
ia
l s
ta
t
em
en
t
s
.
2
Se
e pa
ge 162 f
o
r th
e de
ni
t
io
n of G
ro
up A
d
ju
s
te
d EB
I
T
DA
.
Ann
ual repor
t on remuneration
cont
inued
T
rainline
Annual Report and Accounts 2022
96
T
o
tal pay ratio
The table below discloses the ratio between the CEO’
s total remuneration and that of the 25th, 50th and 75th per
centile
UK-based employee.
Financial year
Method
25th percentile pa
y ratio
50t
h percentile pay ratio
75th percentile pay ratio
FY2022
A
41.3:1
22.1:1
17.0:1
FY2021
A
14.4:1
8.4:1
6.3:1
FY2020
1
A
32.1:1
19.6:1
14.3:1
1
Th
e g
ur
es f
o
r F
Y
2
02
0 ar
e fo
r th
e 10 mo
nt
hs f
r
om A
dm
is
s
io
n to t
he e
n
d of t
he 
na
nc
ia
l ye
ar.
The 25th, 50th and 75th percentile employees wer
e determined using calculation methodology A which involved
calculating the actual full-time equivalent remuneration for all UK emplo
yees employed on 28 February 2022 for
1 March 2021 to 28 February 2022. From this analysis, thr
ee employees were then identified as r
epresenting the
25th, 50th and 75th percentile of the UK employee population. T
rainline 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 undertak
e
this method.
The Committee has considered the pay data for the three employees identified and belie
ves that it fairly reflects pay
,
reward and pr
ogression for these percentiles amongst our UK workfor
ce taken as a whole. The three individuals identified
were full-time employees during the year. None received an e
xceptional incentive award which would otherwise inflate
their pay figures. Assumptions were made regar
ding 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 total pay ratio is based on comparing the CEO’s pay to that of T
rainline’s UK-based workforce, the largest pr
oportion of
whom work in our T
echnology teams developing and maintaining our platform. Last year, the CEO pay ratio was based on
comparing the former CEO’s pay to that of T
rainline’
s UK-based workforce, and during FY2021 no bonus was payable. The
ratio for the median employee reduced fr
om 19.6:1 in FY2020 to 8.4:1 in FY2021 primarily as a result of no annual bonus
payout being
made for
FY2021 (compared to
a 58% achievement
in FY2020) which
has a
more
significant
impact on
the
CEO’s pay outcomes given the greater weighting on variable pay for our mor
e senior executives. For FY2022 a bonus is
payable and this has had a significant impact on the total pay ratio resulting in the year-on-year increase in the r
atio for the
median employee to 22.1:1. The Committee expects that the ratios will continue to be lar
gely driven by the CEO’s incentive pay
outcomes, which will likely lead to greater variability in pay than that observed for employees at lo
wer levels who, consistent
with market practices, have a greater pr
oportion of their pay linked to fixed components. The Committee tak
es into account
these ratios when making decisions around the Executive Dir
ector pay packages. T
rainline takes seriously the need to ensur
e
competitive pay packages across the organisation and has taken steps during FY2022 to str
engthen the competitiveness of
pay for the wider workforce.
The table below provides additional information r
elating to the CEO’s salary and total r
emuneration and that of the
25th, 50th and 75th percentile UK-based employee.
Y
ear
Met
hod
25th percentile
50t
h percentile
75th percentile
C
EO
FY2022
A
T
otal remuneration (£000)
£38
£71
£92
£1,568
Salary ratio
16.4:1
8.8:1
6.3:1
Salary (£000)
£35
£65
£91
£575
FY2021
A
T
otal remuneration (£000)
£41
£70
£93
£588
Salary ratio
13.3:1
7.4:1
5.7:1
Salary (£000)
£36
£65
£85
£480
FY2020
1
A
T
otal remuneration (£000)
£29
£47
£64
£920
Salary ratio
16.4:1
9.3:1
7.1:1
Salary (£000)
£24
£42
£56
£392
1
Th
e g
ur
es f
o
r F
Y
2
02
0 ar
e fo
r th
e 10 mo
nt
hs f
r
om A
dm
is
s
io
n to t
he e
n
d of t
he 
na
nc
ia
l ye
ar.
Financial Statements
97
Strat
egic
Report
Governa
nce
Ann
ual repor
t on remuneration
cont
inued
Percentage c
hange in Dire
ctor
s’ and employees’ re
muneration
The table below shows the per
centage change in individual Directors’ salary
, benefits and annual bonus compared to the
average percentage change for all employees of the Gr
oup for the same elements of remuneration. T
o provide a more
accurate percentage change the remuner
ation data for FY2020 to FY2021, which repr
esents the 10-month reporting
period following our Listing, has been prorated to a 12-month period.
Salary/
fees (FY % change)
Benefit
s (FY % change)
Annual bonus (FY % change)
2021 to 2022
2020 t
o 2021
2021 to 2022
2020 t
o 2021
2021 to 2022
2020 t
o 2021
Executi
ve Direc
tors
Jody Ford
1
15%
n/a
12%
n/a
100%
n/a
Shaun McCabe
6%
(6)%
2
3%
(3)%
100%
(100)%
Non-
e
xecutive Di
rectors
Andy Phillipps
3
0%
n/a
n/a
n/a
n/a
n/a
Brian McBride
6%
2
53%
2 4
n/a
(100)%
n/a
n/a
Duncan T
atton-Brown
5%
2
(4)%
2
n/a
n/a
n/a
n/a
Jennifer Duvalier
5
0%
n/a
n/a
n/a
n/a
n/a
Kjersti Wiklund
5%
2
(5)%
2
n/a
n/a
n/a
n/a
Empl
oyee
s
3%
6%
26%
2%
100%
(100)%
1
Joi
n
ed t
he B
o
ar
d as CO
O o
n 21 Se
p
te
mb
e
r 202
0 w
it
h a s
al
ar
y of £
5
0
0
,0
0
0 a
n
d be
c
am
e CE
O on 1 M
ar
ch 2
021 w
i
th a s
a
la
r
y o
f £
575
,0
0
0.
2
In re
co
gn
i
ti
on o
f t
he u
nc
er
t
ai
nt
y ge
ne
r
at
ed b
y Co
vi
d
-1
9 th
e Di
re
c
to
r v
ol
un
t
ar
il
y r
ed
u
ce
d th
ei
r s
al
ar
y/
fe
e f
ro
m A
pr
i
l 202
0 to A
ug
u
s
t 202
0.
3
Joi
n
ed t
he B
o
ar
d on 1 J
an
ua
r
y 2021.
4
Br
ian M
c
Br
id
e
’
s fe
e as C
ha
ir o
f t
he B
o
ar
d ha
s no
t ch
an
ge
d
. Th
e p
er
ce
nt
a
g
e cha
n
ge r
ep
re
s
en
t
s hi
s re
v
is
e
d fe
e fo
l
lo
wi
n
g hi
s ch
an
ge i
n ro
le f
r
om
De
pu
t
y Ch
ai
r an
d S
en
io
r In
d
ep
en
d
en
t No
n
-
e
xe
cu
t
i
ve D
ir
ec
t
o
r to C
ha
ir o
f th
e Bo
a
rd o
n 4 No
ve
mb
e
r 20
20.
5
Joi
n
ed t
he B
o
ar
d on 1 O
c
t
ob
e
r 202
0.
Historical T
SR per
fo
rmance and re
muneration outco
mes for th
e CEO
The graph below compares the Company’s TSR against the FTSE 250 Inde
x excluding investment trusts, of which the
Company is now a constituent. Performance, as requir
ed by legislation, is measured by TSR o
ver the period from
commencement of conditional dealing (21 June 2019) to 28 February 2022.
0
06/
2019
02/2020
08/
2020
02/2021
08/
2021
02/2022
20
40
180
160
140
120
100
80
60
T
rainlin
e
F
TS
E 25
0 In
dex
The table below illustrates CEO single figur
e of total remuneration o
ver the same period.
FY2020
1
FY2021
FY2022
Clare Gilmartin
Clare Gilmartin
Jody Ford
Single figure (£000)
920
588
1,568
Annual bonus outcome (% of max)
57.6%
0%
83.4%
PSP vesting (% of max)
n/a
n/a
n/a
1
Th
e g
ur
es f
o
r F
Y
2
02
0 ar
e fo
r th
e 10 mo
nt
hs f
r
om A
dm
is
s
io
n to t
he e
n
d of t
he 
na
nc
ia
l ye
ar.
T
rainline
Annual Report and Accounts 2022
98
Implementat
ion of the Remu
neration P
olicy in FY
202
3
Executive Direc
tor remuner
ation in F
Y
202
3
A summary of how the proposed Remuneration Policy will be applied to Ex
ecutive Director r
emuneration for FY2023 is
set out below
.
Long-term i
ncentive - FY2023 PS
P grant under the propose
d new Remuneration P
o
licy
Subject to the approval b
y shareholders of the new Remuneration Policy at the 2022 A
GM, the intention is for the CEO
and the CFO to receive awards under the PSP comprising a ‘
core’ award of 250% of salary, and a ‘kick
er’ award, rewarding
only truly exceptional performance, of 300% of salary
. Vesting of both awar
ds will be based on several measures as
summarised in the table below
, with performance measured over the three-year period 1 Mar
ch 2022 to 28 February
2025. The performance measures and targets are intended to incentivise or
ganic growth; if a materially significant
acquisition were to take place, the Committee would consider applying discr
etion to adjust the calculation methodology
of the measures in a way that ex
cludes the impact of that acquisition.
The vesting of the award will be based on the following targets:
Performance targets for core award
P
er
formance targets for kicker award
Measure
W
eighting
Threshold
(20% vesting of cor
e award)
Core award max
(100% v
esting of core award)
Kicker award max
(100% v
esting of kicker award)
Cumulative EPS¹
25%
11.9p
14.9p
18.6p
Average annual Revenue
growth
25%
22%
27%
33%
Relative TSR vs. FTSE
250
2
50%
Median
Upper quartile
95th percentile
1
Th
e EP
S me
a
su
re i
s cu
mu
la
ti
v
e Ba
s
ic E
PS w
i
th t
h
e im
pa
c
t o
f sh
ar
e
-
ba
s
ed p
ay
m
en
t
s e
xcl
u
de
d.
2
Ex
cl
ud
in
g in
ve
s
t
me
nt t
r
us
t
s
.
The performance ranges of the kicker award have been set to ensur
e vesting will occur only once the core awar
d has
vested in full in each respective measure e.g. for the cumulative EPS measur
e the kicker award will begin to vest at 14.9p
and fully vests at 18.6p. Full vesting will require a significant incr
ease in our financial performance, as well as delivering
exceptional r
eturns to our shareholders. A cap of 2.75 times the value of the grant will be applied to the PSP vest-date
value with any value over and above the cap to be forfeited.
Base s
alar
y
The current Executive Dir
ector salaries for FY2023 are set out in the table below
. The Committee intends to undertake a
revie
w of CEO and CFO salary in FY2023 and will disclose the result of this re
view in the FY2023 Annual Report. The wider
workforce received on aver
age a 5.3% pay rise for FY2023.
Executiv
e Director
FY2022
FY2023
Jody Ford
£575
,0
0
0
£
575,0
0
0
Shaun McCabe
£400
,000
£400,
000
Pensi
on and benets
For FY2023, the CEO and the CFO will receive pension benefits by way of cash allo
wances of 5.5% and 10.5% of salary
respectively
, in line with the Remuneration Policy
. The CFO’s pension benefit will reduce to 5.5% of salary b
y the end of
FY2023 to be consistent with that offered to the broader workfor
ce.
Financial Statements
99
Strat
egic
Report
Governa
nce
Ann
ual repor
t on remuneration
cont
inued
Annual b
onus
The FY2023 annual bonus will be consistent with that detailed in the Remuneration Policy being proposed to
shareholders for approval at the 2022 A
GM, with maximum opportunities of 200% and 150% of salary for the CEO and
the CFO, r
espectively, and with measures based on a r
ange of financial and strategic metrics, and personal objectives.
The Company considers the targets to be commercially sensitive but intends to disclose them in the FY2023 Annual
Report. The Committee will ensure any payout of the FY2023 annual bonus is consistent with the stakeholder
experience over the period, taking into account perspectives of shar
eholders, employees and customers.
Non-
executive Direc
tor fees in F
Y202
3
Non-executive Dir
ector fees are determined by the Boar
d within the limit approved b
y shareholders in the Articles
of Association, with the exception of the Chair of the Boar
d, whose remuneration is determined b
y the Committee.
Effective 1 March 2022 a Committee Membership fee of £5,000 per committee has been introduced to r
ecognise
the investment in time required b
y committee members. This fee is not in addition to the Committee Chair fee.
Fee at 1 M
arch 2021
Fee from 1 M
ar 2022
Ba
sic f
e
e
Company Chair
£265,000
£265,000
Non-executive Dir
ector
£60,000
£60,000
Additional fees
Senior Independent Director
£10,000
£10,000
Audit and Risk Committee Chair
£15,000
£15,000
Remuneration Committee Chair
£15,000
£15,000
Committee Membership
N/A
£5,000
Ex
ternal appoint
ments
We recognise the opportunities and benefits to both the Company and to the Ex
ecutive Directors of them serving as
Non-executive Dir
ectors of other companies. The Executive Directors ar
e permitted to hold one significant external
appointment and are entitled to retain the fees earned fr
om such appointments. All Directors are r
equired to seek
approval from the Boar
d prior to accepting external appointments.
T
rainline
Annual Report and Accounts 2022
100
Outs
tanding share awards (Audited)
Details of outstanding share awards in the Company’s share schemes gr
anted to the Directors as at 28 February 2022,
are set out in the table below
.
Director
Award type
Date of grant
Number of
shares granted
Share price
of grant
Face value
Award as %
of salary
V
esting date
Jody Ford
PSP
16 Nov 2020
566,358
£3.53
£2.0m
400%
1
22 May 2023
PSP
1 Jun 2021
490,470
£2.93
£1.4m
250%
1 Jun 2024
Shaun McCabe
PSP
22 May 2020
264,476
£3.78
£1.0m
250%
22 May 2023
PSP
1 June 2021
341,196
£2.93
£1.0m
250%
1 Jun 2024
Brian McBride
RSU
26 Jun 2019
28,572
£3.50
£0.1m
38%
26 Jun 2022
2
1
In li
ne w
i
th t
h
e Po
li
c
y an
d t
he r
u
le
s of t
h
e PS
P
, J
od
y F
o
rd
’s i
ni
ti
al P
S
P gra
n
t on j
oi
ni
ng t
h
e Com
p
an
y wa
s fo
r 4
0
0
% of s
a
la
r
y, of w
h
ic
h 35
0
% of s
a
la
r
y i
s
fo
r co
re p
er
fo
r
ma
nc
e wi
t
h up t
o an a
dd
i
ti
on
al 5
0
% of s
a
la
r
y s
t
r
uc
tu
re
d a
s a ki
cke
r b
as
e
d on e
xce
p
ti
on
al E
P
S an
d re
la
ti
v
e T
SR p
e
r
f
or
ma
nc
e.
2
Ves
ti
n
g su
bj
ec
t t
o B
ri
an M
cB
r
id
e
’s c
on
ti
nu
e
d ap
po
i
nt
me
n
t to t
he B
oa
r
d in e
qu
al t
ra
nc
h
es o
ve
r th
e t
hr
ee y
ea
r
s fo
ll
ow
i
ng A
dm
is
s
io
n an
d re
q
ui
re
d to
ho
ld t
h
e ve
s
te
d sh
ar
es s
o l
on
g as h
e re
m
ai
ns a D
ir
ec
to
r of t
he C
om
pa
ny.
Statement of D
irec
tors’ shar
eholding and sh
are interes
ts (Audited)
The table below shows the beneficial interests of Dir
ectors on 28 February 2022 (including the beneficial interests of their
spouses, civil partners, children and stepchildren) in the Or
dinary Shares of the Company
, as well as unvested awards.
Director
Ordinary
Shares held at
1 March 2021
Ordinary
Shares held at
28 Feb 2022
Subject
to deferral/
holding period
Unvested and
subject to
performance
conditions
Shareholding
requirement
as % of salary
Current
Shareholding
as % of salary
1
Shareholding
requirement
met?
E
xecu
ti
ve Di
re
ct
or
s
Jody Ford
69,287
105,354
0
1,056,828
200%
37%
No
Shaun McCabe
2,012,879
2,012,879
0
605,672
200%
1,025%
Ye
s
Non
-
e
xecu
ti
ve Di
re
ct
or
s
Andy Phillipps
74,237
74,237
Brian McBride
57,142
77,540
28,572
Duncan T
atton-Brown
28,571
63,981
Jennifer Duvalier
0
4,587
Kjersti Wiklund
2,142
2,142
1
Ca
lc
ul
at
ed u
si
n
g th
e £
2
.0
36 p
e
r sh
ar
e cl
os
in
g pr
i
ce o
n 28 F
e
br
u
ar
y 20
22 b
e
in
g th
e la
s
t ma
r
ket d
ay o
f F
Y
202
2
.
Approved by the Boar
d on 5 May 2022.
Kjers
ti Wiklund
Chair of the Remune
ration Co
mmitte
e
5 May 2022
Financial Statements
101
Strat
egic
Report
Governa
nce
Directors
’ repor
t
The Directors present their
report
, together with
the audi
ted Fina
ncial S
tatements f
or the y
ear ended
28 Februar
y 2
02
2
.
Complianc
e with the UK C
orporate G
overnance Code 2
01
8
This Annual Report has been prepared with refer
ence to the UK Corporate Governance Code 2018 published b
y the
UK Financial Reporting Council (‘FRC’) in July 2018 (the ‘Governance Code’). During the year the Company applied the
principles and complied with the relevant pr
ovisions set out in the Governance Code. The Dir
ectors note that the pension
contribution for the CFO is due to align with the workforce by the end of FY2023 in or
der to comply with Provision 38.
Details demonstrating how the principles and r
elevant provisions of the Go
vernance Code have been applied can be
found below in the Directors’ Report and thr
oughout the Corporate Governance Report, each of the Board Committee
reports and the Strategic Report. The Corpor
ate Governance Report, each of the Board Committee r
eports and the
Strategic Report for their Corporate Go
vernance disclosures all form part of the Directors’ Report. The Financial
Reporting Council (‘FRC’) is responsible for the publication and periodic re
view of the Governance Code, which
can be found on the FRC website www.frc.or
g.uk.
Diversity and inclusion
Our Diversity and Inclusion policies support managers and employees in creating a diverse and inclusive cultur
e where
everyone is welcome. Our policies demonstrate our commitment to pr
oviding equal opportunities to all employees,
irrespective of age, disability
, gender, marriage and civil partnership, pregnancy or maternity, r
ace, religion or belief,
sex or sexual orientation.
Disclosure of information t
o audit
ors
The Directors who held office at the date of appro
val of this Annual Report confirm that, so far as they are each awar
e,
there is no rele
vant audit information of which the Company’s auditors are unaware; and each Director has tak
en all the
steps that he or she ought to have taken as a Director to mak
e himself or herself aware of any rele
vant audit information
and to establish that the Company’s auditors are aware of that information.
Insuranc
e and indemnities
The Company maintained Directors’ and Officers’ Liability Insurance co
ver throughout the period. The Directors ar
e also
able to obtain independent legal advice at the expense of the Company
, as necessary, in their capacity as Dir
ectors. The
Company has entered into a deed of indemnity in favour of each Board member. These deeds of indemnity ar
e still in
force and provide that the Company shall indemnify the Dir
ectors to the fullest extent permitted b
y law and the Articles,
in respect of all losses arising out of, or in connection with, the ex
ecution of their powers, duties and responsibilities as
Directors of the Company or any of its subsidiaries. This is in line with current mark
et practice and helps us attract and
retain high-quality
, skilled Directors.
Subsidiaries, b
ranche
s and principal ac
tivities
The Company is the holding company for a group of subsidiaries (‘the Group’) whose principal activities ar
e described
in this Annual Report. The Group’s subsidiaries and their locations ar
e set out in Note 22 in the Financial Statements.
In accordance with the Companies Act 2006, the Board confirms that ther
e were no branches of the Company or its
subsidiaries during the financial year.
Ar
ticles of As
sociation an
d powers of the D
irec
tors
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 r
esolution, the business of the Company will be managed by the Board which may e
xercise
all the powers of the Company
, whether relating to the management of the business of the Company or not.
T
rainline
Annual Report and Accounts 2022
102
Share cap
ital
Details of the Company’s share capital including changes during the period are given in Note 16 to the Financial
Statements. There are no r
estrictions on voting rights or the transfer of shares in the Company and the Company is
not aware of agreements between holders of securities that r
esult in such restrictions. No shareholder holds securities
carrying special rights with regards to contr
ol of the Company. The Company had been notified under Rule 5 of the
FCA
’s Disclosure Guidance and T
ransparency Rules of the following interests in voting rights in its shar
es. The latest
information on major shareholders is available via the Regulatory Information Service or on the Company’s Investor
Relations website.
% of total
voting rights as
at 28 Feb 20
22
% of total
voting rights as at
the date of t
his report
T. Ro
we Price Group
15
.
6
6
%
15
.
2
1%
Baillie Gifford & Co Ltd (SC)
11.
9
4
%
10
.
8
2
%
Capital Group Companies Inc
9.
5
4%
9.
5
4
%
FIL Limited
5.9
2%
5.92%
Liontrust Investment Partners LLP (UK)
5
.
3
1%
5
.
3
1%
Jupiter Asset Management Limited (UK)
5.
09%
5.09%
The Company was authorised by shareholders to purchase its o
wn shares in the market up to a maximum of
approximately 10% of its issued shar
e capital. No shares were pur
chased under that authority during FY2022 (FY2021:
£nil). The Company is seeking to renew the authority at the forthcoming A
GM, within the limits set out in the notice of
that meeting and in line with the recommendations of the Pre-emption Gr
oup. Shares held by the Company’s Employee
Benefit Trust (the ‘T
rust’) rank pari passu with the shares in issue and have no special rights. V
oting rights and rights
of acceptance of any offer relating to the shares held in the T
rust rests with the trustees, who may take account of
any recommendation from the Company
. Voting rights are not e
xercisable b
y the colleagues on whose behalf the
shares are held in trust.
Signicant agree
ments
Convertible B
onds due 2
026 lis
ted on t
he unregulate
d open market of th
e Frankfur
t Stock Exchange
(‘F
reiv
erk
ehr’)
The Company issued £150 million of senior unsecured Convertible Bonds due 2026 (the ‘Bonds’) on 7 January 2021. The
net proceeds of the Bonds are used to pr
ovide liquidity and flexibility to invest in possible futur
e 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 ‘Or
dinary Shares’). The initial conversion price shall be £6.6670,
representing a premium of 50% abo
ve the reference shar
e price of £4.444698, being the volume weighted average price
(the ‘VWAP’) of an Ordinary Shar
e on the London Stock Exchange on 7 January 2021. The conversion price will be subject
to adjustment in certain circumstances in line with market pr
actice. Unless previously r
edeemed, 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 T
erms 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 r
edeem
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 r
epurchased and cancelled.
During FY2022 the Company announced that it had repurchased in aggr
egate £35.2 million of the bonds which were
subsequently cancelled. The Company announced the repurchase of an additional £13.7 million of the bonds on 10
March 2022 which were subsequently cancelled. Follo
wing this cancellation £101.1 million in aggregate principal amount
of the Bonds remain outstanding.
Following a change of control of the Company
, the holder of each of the Bonds will have the right to requir
e 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 T
erms and Conditions
relating to the Bonds.
Financial Statements
103
Strat
egic
Report
Governa
nce
Ev
ents af
ter the b
alance she
et date
There have been no balance sheet events since the end of FY2022.
Going con
cern
The UK Corporate Governance Code 2018 r
equires the Board to assess and r
eport on the prospects of the Group and
whether the business is a going concern. In considering this requirement, the Dir
ectors have taken into account the
Group’s for
ecast cash flows, liquidity
, borrowing facilities and r
elated covenant requir
ements including the next covenant
test on 31 August 2022, and the expected operational activities of the Gr
oup. Having due regard to these matters and
after making appropriate enquiries, the Directors have a r
easonable expectation that the Group and the Company have
adequate resources to remain in oper
ation until at least 12 months after the appro
val of these Financial Statements. The
Board has therefore continued to adopt the going concern basis in pr
eparing the consolidated Financial Statements.
Political and charitable donatio
ns
The Group did not make any political donations (FY2021: £nil) or incur any political e
xpenditure during the year (FY2020:
£nil). During the year the Company made charitable donations totalling £53k in addition to charitable donations via
matched funding under the reporting threshold to support the charitable fundraising efforts of our people.
Additiona
l disclosures
Other information which is incorporated by r
eference into this report can be located as follo
ws:
Page
Pa
ge
Likely future de
velopments
2 to 47
Engagement with other stakeholders
6
1 to 6
4
Research and development
24 to 25
Long-term incentive schemes
82 to 101
Group employees
4
8 to 5
3
Directors’ interests in shar
es
101
Directors of the Company
72 t
o 73
Statement of capitalised interest
13
0
Employee engagement
63 & 74
Sustainability
, TCFD, Energy
and Greenhouse Gas Reporting
5
4 to 6
0
Financial instruments and
financial risk management
15
0
t
o
15
2
The Directors’ Report, which has been prepared in accor
dance with the requirements of the Companies Act 2006, has
been approved by the Boar
d and signed on its behalf by:
Martin McIntyre
Company Secre
tar
y
5 May 2022
Directors
’ repor
t
continued
T
rainline
Annual Report and Accounts 2022
104
Stat
ement of Directors
’ responsibilities
Statement of D
irec
tors’
res
pon
sibilitie
s in re
spe
ct
of the Annual Rep
or
t and
the Financial Stateme
nts
The Directors are r
esponsible 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 Par
ent Company
Financial Statements for each financial
year. Under that law they are requir
ed
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
Tr
ansparency Rules to be prepar
ed 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 b
y 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 pr
ofit or loss for that period.
In preparing each of the Group and
Parent Company Financial Statements,
the Directors are r
equired to:
•
select suitable accounting policies
and then apply them consistently;
•
make judgements and estimates
that are reasonable, r
elevant,
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 r
esponsible
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 r
esponsible 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.
Respon
sibility st
atement of
the Dire
ctor
s in respe
ct o
f
the Annual Financial Rep
or
t
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 revie
w 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
.
Shaun McC
abe
Chief Finan
cial O
cer
5 May 2022
Financial Statements
105
Strat
egic
Report
Governa
nce
In this
sec
tio
n
Independent auditor’s report
108
Consolidated income statement
119
Consolidated statement of other comprehensive income
120
Consolidated balance sheet
121
Consolidated statement of changes in equity
122
Consolidated statement of cash flow
123
Notes to the Group Financial Statements
124
Parent Company balance sheet
157
Parent Company statement of changes in equity
158
Notes to the Parent Company Financial Statements
159
Alternative performance measures
162
Fi
n
an
cial
S
tatem
e
nt
s
T
rainline
Annual Report and Accounts 2022
106
NEW
L
y
on P
ar
t-Dieu
15:
18
1
7:14
Paris Gare de L
yon
L
yon Part-Dieu
Thu 5 Ma
y
1 h 56m, Direct
View tickets
Financial Statements
1
07
Strat
egic
Report
Gove
rnanc
e
Financial Statements
Independent au
ditor
’
s repor
t
to the members of T
rainline plc
R
epor
t on the audit of the nancial statements
Opinio
n
In our opinion:
•
Trainline plc’s gr
oup nancial statements and parent company nancial statements (the “nancial 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 2022 and of the
group’s loss and the gr
oup’s cash o
ws for the year then ended;
•
the group nancial statements have been properly prepared in accor
dance with UK-adopted international
accounting standards;
•
the parent company nancial statements have been properly prepared in accor
dance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosur
e
Framework”, and applicable law); and
•
the nancial statements have been prepared in accordance with the requir
ements of the Companies Act 2006.
We have audited the nancial statements, included within the Annual Report and Accounts 2021/22 (the “
Annual
Report”), which comprise: Consolidated and Parent Company balance sheet as at 28 February 2022; Consolidated
income statement, Consolidated statement of other comprehensive income, Consolidated and Parent Company
statement of changes in equity, Consolidated statement of cash o
w for the year then ended; and the notes to
the nancial statements, which include a description of the signicant accounting policies.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International Standar
ds on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the Auditors’ r
esponsibilities for the audit of the nancial
statements section of this report. We belie
ve that the audit evidence we have obtained is sucient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the group in accor
dance with the ethical requirements that ar
e relevant to our audit of the
nancial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public inter
est entities,
and we have fullled our other ethical responsibilities in accordance with these r
equirements.
T
o the best of our knowledge and belief, we declare that non-audit services pr
ohibited by the FRC’
s Ethical Standard were
not provided.
Other than those disclosed in the Report of the Audit and Risk Committee, we have provided no non-audit services to the
parent company or its controlled undertakings in the period under audit.
Our audit a
pproach
Co
ntex
t
Tr
ainline is an independent rail and coach travel platform, pr
edominantly operating in the UK, but also with a gro
wing
presence in Europe. The Group focuses on the sale of tr
ain tickets in the UK and Europe, as well as pr
oviding retailing
capabilities for carriers,
businesses and travel
sellers. The Gr
oup’s
consolidated nancial statements
are primarily
an
aggregation of two legal entities; T
rainline.com Limited, the UK trading entity
, and T
rainline SAS, the European tr
ading
entity. As T
rainline.com Limited makes up approximately 90% of the group’
s revenue, our audit work focused on this entity
.
Our audit was underpinned by 2022 being our rst year as external auditors of the Gr
oup. As part of our audit
transition, we performed specic procedures o
ver opening balances by shadowing the prior year audit undertak
en by
the predecessor auditor, which consisted of being present at Audit and Risk Committee meetings when the r
esults of
the work of the previous auditor wer
e presented and the signicant judgements discussed, revie
wing the predecessor
auditor’s working papers and risk assessment, and re-evaluating their conclusions in respect of k
ey sources of estimation
uncertainty in the opening balance sheet at 1 March 2021. We performed pr
ocess walkthroughs to understand and
evaluate the ke
y nancial processes and controls across the Gr
oup. Following this work, we performed early audit
procedures in advance of the year-end. The objective of this audit work was: – to perform initial testing in r
elation to
the design and operating effectiveness of the controls we planned to place r
eliance on; – to ensure that we had a clear
plan as to what work needed to be done when and where at year-end; – to perform initial substantive testing, including
T
rainline
Annual Report and Accounts 2022
108
the use of digital audit testing; and – to enable early consideration of the ke
y sources of estimation uncertainty before
the year-end. The audit transition, half year re
view and pre year-end audit work wer
e important in determining our
FY22 Group audit scope, areas of focus and detailed testing appr
oach. As we undertook each phase of this rst year
audit, we regularly reconsider
ed our risk assessment to reect audit ndings, including our assessment of the Group’
s
control environment and the impact on our planned audit appr
oach. In terms of risk assessment: the Covid pandemic
introduced volatility into the environment faced b
y Tr
ainline during both FY21 and FY22 and as a consequence there
have been signicant changes to the levels of re
venue and protability; we therefor
e identied Recoverability of
international Goodwill (group) and Company’s investment in subsidiary undertakings (parent) as ke
y audit matters.
We also included a ke
y audit matter on the Inappropriate capitalisation of intangibles (group) due to the magnitude
of costs capitalised and the potential for fraud and error in determining whether internal emplo
yee costs meet the
requirements of IAS 38 ‘Intangible Assets’.
As part of our audit we also made enquiries of management to understand the process they have adopted to assess
the potential impact of climate change on the nancial statements. Management considers that the impact of climate
change does not give rise to a material nancial statement impact in the current year and we used our knowledge of the
Group and the industry to evaluate management’s assessment. W
e particularly considered the impact on future cash
ow forecasts used both in going concern and impairment assessments, including the potential for disruption caused
to the rail industry by unusual weather e
vents as set out in the T
ask Force on Climate-Related Financial Disclosur
es, and
the potential increase in demand as a result of people looking for a gr
eener way to travel.
Ove
r
v
ie
w
Audit scope
•
We identied one trading entity within the Group which, in our view
, requir
ed a full scope audit based on its
contribution of revenue to the gr
oup. In addition, we determined that specic audit procedures were r
equired at a
further three legal entities to address specic risk char
acteristics and provide sucient o
verall Group co
verage of all
material consolidated nancial statement line items
•
All work was undertaken by the Group team who also performed procedur
es over several differ
ent nancial
statement line items, including complex and judgemental areas pr
epared by the head oce nance function, to
provide sucient o
verall Group cover
age. In addition, the consolidation and nancial statement disclosures were
also audited by the Group team.
•
The balances on which we performed audit procedures accounted for 92% of Group re
venue, 85% of Group loss
before tax and 98% of Group total assets. Our audit scope pr
ovided sucient appropriate audit e
vidence as a basis
of our opinion on the Group nancial statements as a whole.
Key audit matters
•
Recoverability of international Goodwill (group)
•
Inappropriate capitalisation of intangibles (group)
•
Company
’s investment in subsidiary undertakings (parent)
Materiality
•
Overall group materiality: £1,700,000 based on 1% of average re
venue for the last 3 years being FY20, FY21 and FY22.
•
Overall parent company materiality: £19,000,000 based on 1% of total assets.
•
Performance materiality: £1,275,000 (group) and £14,250,000 (parent company).
The scop
e of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
nancial statements. In particular, we looked at where the dir
ectors made subjective judgements, for example in
respect of signicant accounting estimates that involved making assumptions and considering future e
vents that
are inherently uncertain.
Ke
y audit matter
s
Key audit matters are those matters that, in the auditors’ pr
ofessional judgement, were of most signicance in the
audit of the nancial statements of the current period and include the most signicant assessed risks of material
misstatement (whether or not due to fraud) identied by the auditors, including those which had the gr
eatest effect on:
the overall audit str
ategy; the allocation of resources in the audit; and dir
ecting the efforts of the engagement team.
These matters, and any comments we make on the results of our pr
ocedures thereon, were addr
essed in the context of
our audit of the nancial statements as a whole, and in forming our opinion thereon, and we do not pro
vide a separate
opinion on these matters.
This is not a complete list of all risks identied by our audit.
109
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Financial Statements
K
ey audit matter
How our audit addressed t
he key audit matter
Reco
verability of international
Goodwill (group
)
The Group holds a signicant amount of
international goodwill (£66.1m) on the
balance sheet. This goodwill primarily
arose from the acquisition of Capitaine
Tr
ain SAS (now T
rainline SAS), with a
small contribution from the acquisition
of Tr
ainline.com. The carrying value of
international goodwill is dependent on
the overall valuation of the international
business, based on forecast discounted
cash ows to determine a value in
use. This business is in a growth phase
incurring losses as it establishes itself in
these markets. In the prior period the
assessment concluded that the carrying
value was greater than the discounted
present values of the future cash o
ws
and accordingly an impairment of £25m
was recorded in the prior year.
In accordance with the IAS 36
’Impairment of assets’ the Group
performs an annual impairment
assessment to determine whether an
impairment of the carrying value of
international goodwill is required. An
impairment had been recognised in
the previous year. In the curr
ent year
this assessment has been performed
which has concluded that no further
impairment is required.
The impairment assessment includes
the following estimates:
•
The 3 year Board approved for
ecast
cash ows
extrapolated for
a further 2
years including the estimated growth
rates for
Net Ticket Sales
(‘NTS’),
Revenue and
Cost of Sales (CoS);
•
The growth rate to extr
apolate forecasts
beyond the 5 year forecast; and
•
The discount rate applied to futur
e
cash ows.
These matters are complex and involve a
high degree of estimation and judgement
which means future performance of
the business
could vary
signicantly.
Accordingly,
our audit devoted
signicant
resources to assessing the validity of
the models used by the directors and
obtaining evidence to inform our view on
the reasonableness of the assumptions
and disclosures that the directors
have made.
Please refer to note 10 of the
consolidated nancial
statements.
Management has performed the impairment assessment at a CGU level,
with the International businesses being treated as separate CGU
. No
change was made to the level at which impairment testing was performed
compared to the prior periods. We consider management’s assessment to
be appropriate
and have not identied
any instance of
management bias.
We critically challenged the assumptions made by the dir
ectors and
sought to obtain evidence which contradicts or corr
oborates these. We
have applied professional scepticism throughout and considered whether
there is evidence of management bias applied to the assumptions. W
e
have performed the following procedures o
ver the value in use model
which supports the impairment assessment.
•
Evaluating management’s future cash o
w forecasts by obtaining the
model prepared by management and:
•
T
esting the mathematical accuracy and integrity of the models;
•
Agreeing the amounts used in the model to the Boar
d
approved forecasts;
•
Assessing the reliability of cash o
w forecasts by comparing past
performance to previous forecasts;
•
Identifying assumptions and inputs within the model, which mainly
comprise of the following:
•
Month on month growth in NTS, Revenue and CoS: We compar
ed
management’s assumptions to industry benchmarks including market
trends and market share, as well as pr
e Covid level performance.
•
Gross margin for
ecast: We compared this assumption to historical
margins and understood the reason for any material differences.
•
Long term gro
wth rate: We compared the r
ate used to long term
ination projections for the countries in which the international
business CGU operates. In addition, our specialists r
eviewed the
rate used to ensure that it was within our e
xpected range.
•
Discount rates: comparing key inputs, where r
elevant, to externally
derived data or data for comparable listed organisations. We used
our specialists to calculate a range of possible values for the discount
rate used by management which included comparing ke
y inputs
used in management’s calculation to externally derived data or
data for comparable listed organisations. As a result of this testing,
management increased the discount rate used in the calculations.
We did not nd any material ex
ceptions in these tests other than where
highlighted above. In addition, to these specic procedur
es, we also
performed a stand back assessment to determine whether the conclusion
of our ndings were appropriate, this involved:
•
Evaluating the sensitivity of the outcomes to reasonably possible changes
to the key assumptions and assessing whether the Group
’s disclosures
about the
sensitivity of
the outcomes were
reective of the
risks and
uncertainties surrounding the valuation of international goodwill.
•
Considering whether any factors Tr
ainline had not considered indicated
that an impairment trigger existed at the year end that would require an
updated impairment assessment and concluded that there were none.
Based on the results of the procedur
es described above, we consider that
the carrying amount of the international goodwill is materially accurate.
We have assessed the related disclosur
es in the consolidated nancial
statements, including signicant estimates and the sensitivities provided
and consider them to be appropriate.
Independent au
ditor
’
s repor
t
co
nti
nued
to the members of T
rainline plc
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rainline
Annual Report and Accounts 2022
11
0
K
ey audit matter
How our audit addressed t
he key audit matter
Inappropriate capitalisation
of intangibles (group
)
The Group has signicant capital
expenditure on intangibles (FY22:
£25.1m, FY21: £24.1m), which gives
rise to the risk of both fraud and error
that the costs are inappropriately
capitalised. All of the expenditure in
the year was on software development,
the majority of which comprise internal
spend on employees through payroll
and payroll related costs.
The risk arises due to the magnitude
of costs capitalised and the judgement
required in determining whether
internal employee costs meet the
requirements of IAS 38. Further, ther
e
could be considered an incentive to
capitalise costs which do not meet
the criteria of IAS 38, in order to
improve adjusted EBITD
A, being a key
performance indicator for the business.
After capitalisation, if there are
indications that the carrying value
of the intangible software assets will
no longer be recover
able then an
impairment assessment would be
performed. As intangibles do not have
a clear market price to assist with their
valuation, and the ongoing judgement
involved as to whether previously
capitalised costs continue to meet
the requirements of IAS 38 such as
whether a project remains technically
feasible, we have considered there to
be a risk that the balance in relation
to the intangibles could be subject to
potential impairment.
Please also refer to note 10 of the
consolidated nancial statements.
We have performed the following procedur
es to gain sucient and
appropriate evidence over capitalisation of intangible softwar
e additions:
•
Understood, evaluated and tested the contr
ols in place to ensure that
only those costs that meet the criteria of IAS 38 are capitalised.
•
Performed testing over additions thr
ough to underlying support to
ensure that the amount capitalised accurately r
eects a cost incurred
by the business and meets the capitalisation criteria of IAS 38. This
included discussions with the Company’s developers to understand
the nature of the assets being capitalised.
•
Understood the expected tr
ansaction ow for capitalised additions
and performed journals testing for transactions that do not follow
this expected ow
.
In addition, we obtained management’s assessment to determine
whether any previously capitalised assets should be tested for
impairment. We have also considered e
xternal data including regulatory
changes, technological advancements, behavioural changes and Covid-19
to consider if there are any e
xternal indicators of impairment.
Based on the results of the procedur
es described above we did not nd
any material exceptions in these tests, and ther
efore we consider that
the carrying amount of the intangibles to be materially accurate.
We have assessed the related disclosur
es in the Group nancial
statements and consider them to be appropriate.
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K
ey audit matter
How our audit addressed t
he key audit matter
Company’
s investment in subsidiary
undertakings (parent)
The Company holds a signicant
investment in its subsidiary
undertaking (£1,892m). In accordance
with FRS 101, this asset is subject to
impairment testing when a triggering
event or change in circumstances
indicates that the carrying value
may not be recover
able.
The carrying value of Investments is
dependent on the overall valuation of
the company to which the investment
relates and is therefor
e dependent on
the higher of the value of fair value
less costs to sell or, based on forecast
discounted cash ows, the value in use.
As a result of the signicant fall in the
share price in the last 12 months, the
market capitalisation of the group no
longer exceeds the carrying value of
the investment, we determined there
to be a heightened risk in respect of
the impairment assessment of this
balance. Management used a value in
use model to perform an impairment
assessment of this balance.
No impairment charge has been
recorded against the Company’s
investment in subsidiary undertakings
in the current year.
Our audit focused on the risk that the
carrying value of the investment in
subsidiaries could be overstated.
Please also refer to note 2 of the Parent
Company nancial statements.
We have performed the following procedur
es to test the
impairment assessment:
We evaluated management’s assessment of whether any indication
of impairment existed, and conrmed that there was an impairment
indicator by comparing the carrying value of the investments in
subsidiary undertakings to the market capitalisation of the Group as
at 28 February 2022 and in the period subsequent to the year end.
In order to assess whether an impairment was requir
ed we have tested
Management’s calculation of the Value in use of the investments.
Evaluating management’s future cash ow for
ecasts by obtaining
the model prepared by management and:
•
T
esting the mathematical accuracy and integrity of the models;
•
Agreeing the amounts used in the model to the Boar
d
approved forecasts;
•
Assessing the reliability of cash o
w forecasts by comparing
past performance to previous forecasts;
•
Identifying the ke
y assumptions applied in the model, which namely
comprise of the following
•
Month on month gro
wth in NTS, Revenue and CoS: We
compared management’s assumptions to industry benchmarks
including market trends and market shar
e, as well as pre Covid
level performance.
•
Gross margin for
ecast: We compared this assumption to historical
margins and understood the reason for any material differences.
•
Long term gro
wth rate: Our specialists re
viewed the rate used to
ensure that it was within our expected r
ange.
•
Discount rates: comparing k
ey inputs, where rele
vant, to externally
derived data or data for comparable listed organisations.
Our specialists revie
wed the discount rates to ensure that
management’s estimates were within our expected r
ange.
We did not nd any material ex
ceptions in these tests. In addition, to
these specic procedures, we also performed a stand back assessment
to determine whether the conclusion of our ndings were appropriate,
this involved:
•
Conrming that the forecast performance of these entities is in
line with the underlying performance that is used in the Group’
s
forecast results.
•
Our other audit procedur
es performed on the value in use model
which supports the impairment assessment are described in the
‘Recoverability of International Goodwill’ k
ey audit matter above.
Based on the results of the procedur
es described above, we consider
that the carrying amount of the investment in subsidiaries is materially
accurate. We have assessed the r
elated disclosures in the consolidated
nancial statements, including signicant estimates and the sensitivities
provided and consider them to be appropriate.
Independent au
ditor
’
s repor
t
co
nti
nued
to the members of T
rainline plc
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rainline
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2
How we tailored the audit sc
ope
We tailored the scope of our audit to ensur
e that we performed enough work to be able to give an opinion on the
nancial statements as a whole, taking into account the structure of the group and the par
ent company, the accounting
processes and controls, and the industry in which the
y operate.
The Group’s accounting pr
ocess is structured around a Gr
oup nance function located across London and Edinburgh,
who maintain accounting records and controls for the majority of the gr
oup, and a local nance function at the Group’
s
reporting unit in France.
In establishing the overall Gr
oup audit strategy and plan, we determined whether for each legal entity within the group
we required an audit of its complete nancial information (‘full scope audit’), or whether specic audit procedur
es to
address a certain risk characteristic or nancial statement line item would be sucient. The main tr
ading entity of the
Group, T
rainline.com Limited, is the only entity that is considered to be individually nancially signicant and ther
efore
the only reporting unit where a full scope audit was r
equired. In addition, we determined that specic audit procedures
over certain account balances were r
equired in a further three legal entities to addr
ess specic risk characteristics and
provide sucient o
verall Group cover
age. In addition to procedures performed on specic r
eporting entities, work was
performed over the consolidation, including consolidation entries relating to equity and goodwill, and o
ver nancial
statement disclosures. All of the audit procedur
es are performed by the Group audit engagement team with no use of
component auditors.
Specically we used data audit testing, where possible, to obtain more audit e
vidence than would have been obtained
from sample based substantive testing. We ar
e able to use these techniques as part of our audit of commission fee
income from UK rail tick
et sales and to select journal entries for testing.
The Group team also performed audit procedures o
ver the Company’s nancial position and results.
In aggregate, our audit procedures co
vered 92% of Group r
evenue; 85% of Group loss befor
e tax and 98% of Group
total assets. In addition, the Group audit team performed analytical re
view procedur
es over the remaining, untested,
legal entities within the Group. This included an analysis of year-on-year movements, at a le
vel of disaggregation to
enable a focus on higher risk balances and unusual movements. Those not subject to analytical re
view procedures
were individually
, and in aggregate, immaterial. This gave us the evidence we needed for our opinion on the nancial
statements as a whole.
11
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Gove
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Financial Statements
Materialit
y
The scope of our audit was inuenced by our application of materiality
. We set certain quantitative thresholds for
materiality. These, together with qualitative consider
ations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit pr
ocedures on the individual nancial statement line items and disclosures and in
evaluating the effect of misstatements, both individually and in aggregate on the nancial statements as a whole.
Based on our professional judgement, we determined materiality for the nancial statements as a whole as follows:
Financial statements
-
group
Financial statements -
parent company
Overall materiality
£1,700,000.
£19,000,000.
How we determined it
1% of average re
venue for FY20,
FY21 and FY22
1% of total assets
Rationale for benchmark
applied
Based on the benchmarks used in the
annual report, revenue is one of the
nancial statement line item of key focus
for investors and management. Further,
the primary measure of performance
of the business through the Covid-19
pandemic has been revenue, and
therefore we considered r
evenue to be
the appropriate basis for materiality
.
As a result of the volatility in business
performance due to the pandemic in both
FY21 and FY22, we have used a 3 year
average benchmark versus a single year
benchmark as the nature of the Group’
s
business has not changed.
We believe that total assets is the primary
measure used by the shareholders in
assessing the performance and position
of the entity and reects the Company’s
principal activity as a holding Company.
For each component in the scope of our group audit, we allocated a materiality that is less than our over
all
group materiality
. The range of materiality allocated across components was between £1.6m and £1.4m.
We use performance materiality to reduce to an appr
opriately low level the pr
obability that the aggregate of
uncorrected and undetected misstatements ex
ceeds overall materiality
. Specically, we use performance materiality
in determining the scope of our audit and the nature and extent of our testing of account balances, classes of
transactions and disclosures, for e
xample in determining sample sizes. Our performance materiality was 75% of
overall materiality
, amounting to £1,275,000 for the group nancial statements and £14,250,000 for the par
ent
company nancial statements.
In determining the performance materiality, we consider
ed a number of factors – the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls – and concluded that an amount at the upper
end of our normal range was appropriate.
We agreed with the Audit and Risk Committee that we would r
eport to them misstatements identied during our audit
above £0.09m (group audit) and £0.1m (par
ent company audit) as well as misstatements below those amounts that, in
our view
, warranted reporting for qualitative reasons.
Our Conclusions relating to going concern
Our evaluation of the directors’ assessment of the gr
oup’s and the parent company’s ability to continue to adopt the
going concern basis of accounting included:
•
Obtaining from management their assessment which supports the Board’s conclusions with respect to going concern
basis of preparation of the nancial statements;
•
Testing the mathematical integrity of the cash ow for
ecasts and the models and reconciled these to the Board
approved budgets;
•
Identifying the key assumptions applied in the base case scenario, which comprises growth in Net tick
et sales
and the associated Revenue and Cost of sales gro
wth. We evaluated these ke
y assumptions by: – Comparing
management’s assumptions to external factors including market tr
ends, Tr
ainline’s mark
et share and pre-Co
vid-19
levels of performance. – Comparing gross margin for
ecasts to historical margins.
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ditor
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t
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nued
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•
Identifying and assessing management’s alternate downside scenarios, and considering whether these were
reasonable and appropriate scenarios, particularly in the light of uncertainty surr
ounding Covid-19 and possibility of
new variant infections globally
, impacting customers ability and condence to resume travelling.
•
Considering the availability of additional mitigating actions, in particular assessing the reasonableness of potential
mitigating actions based on historical execution and feasibility
.
•
Examining the debt agreements in place to understand the terms and conditions of these borrowings,
including associated covenants, so as to ensure these wer
e appropriately considered in management’s
going concern assessment
•
Conrming all the borrowings to third party evidence as at 28 February 2022 and consider
ed the Group’
s available
nancing and maturity prole.
•
Assessing the completeness of the going concern disclosures; and
•
Assessing the reliability of cashow forecasts by comparing actual performance to for
ecasts, specically performing
look back testing over the forecast r
esults of FY22.
Based on the work we have performed, we have not identied any material uncertainties relating to events or conditions
that, individually or collectively
, may cast signicant doubt on the gr
oup’s and the
parent company’s ability to continue as
a going concern for a period of at least twelve months from when the nancial statements are authorised for issue.
In auditing the nancial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the nancial statements is appr
opriate.
However, because not all futur
e events or conditions can be predicted, this conclusion is not a guar
antee as to the
group’s and the par
ent company’s ability to continue as a going concern.
In relation to the directors’ r
eporting on how they have applied the UK Corpor
ate Governance Code, we have nothing
material to add or draw attention to in relation to the dir
ectors’ statement in the nancial statements about whether the
directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the dir
ectors with respect to going concern are described in the r
elevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the nancial statements and our
auditors’ report thereon. The directors ar
e responsible for the other information, which includes reporting based on the
T
ask Force on Climate-related Financial Disclosur
es (TCFD) recommendations. Our opinion on the nancial statements
does not cover the other information and, accordingly
, we do not express an audit opinion or, e
xcept to the e
xtent
otherwise explicitly stated in this report, any form of assur
ance thereon.
In connection with our audit of the nancial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the nancial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency
or material misstatement, we are requir
ed to perform procedures to conclude whether there is a material misstatement
of the nancial statements or a material misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are r
equired to report that
fact. We have nothing to report based on these r
esponsibilities.
With respect to the Strategic r
eport and Directors’ report, we also consider
ed whether the disclosures required b
y the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requir
es us also to report certain
opinions and matters as described below.
Strategic re
por
t and Dire
ctor
s’ rep
or
t
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic r
eport
and Directors’ report for the year ended 28 February 2022 is consistent with the nancial statements and has been
prepared in accordance with applicable legal r
equirements.
In light of the knowledge and understanding of the group and parent company and their envir
onment obtained in
the course of the audit, we did not identify any material misstatements in the Strategic report and Dir
ectors’ report.
11
5
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egic
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rnanc
e
Financial Statements
Directors’ Remunerat
ion
In our opinion, the part of the Directors’ remuner
ation report to be audited has been properly prepar
ed in accordance
with the Companies Act 2006.
Corporate go
v
ernance stat
ement
The Listing Rules require us to r
eview the dir
ectors’ statements in relation to going concern, longer-term viability and
that part of the corporate governance statement r
elating to the parent company’s compliance with the provisions of the
UK Corporate Governance Code specied for our r
eview
. Our additional responsibilities with respect to the corpor
ate
governance statement as other information are described in the Reporting on other information section of this r
eport.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the nancial statements and our kno
wledge obtained
during the audit, and we have nothing material to add or draw attention to in relation to:
•
The directors’ conrmation that they have carried out a robust assessment of the emerging and principal risks;
•
The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify
emerging risks and an explanation of how these ar
e being managed or mitigated;
•
The directors’ statement in the nancial statements about whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their identication of any material uncertainties to the group’
s
and parent company’s ability to continue to do so over a period of at least twelve months from the date of appr
oval
of the nancial statements;
•
The directors’ explanation as to their assessment of the group
’s and parent company’s pr
ospects, the period this
assessment covers and why the period is appropriate; and
•
The directors’ statement as to whether they have a reasonable e
xpectation that the parent company will be able to
continue in operation and meet its liabilities as they fall due o
ver the period of its assessment, including any related
disclosures drawing attention to any necessary qualications or assumptions.
Our revie
w of the directors’ statement regarding the longer-term viability of the gr
oup was substantially less in scope
than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement;
checking that the statement is in alignment with the relevant pr
ovisions of the UK Corporate Go
vernance Code; and
considering whether the statement is consistent with the nancial statements and our knowledge and understanding
of the group and parent company and their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements
of the corporate governance statement is materially consistent with the nancial statements and our kno
wledge
obtained during the audit:
•
The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for the members to assess the gr
oup’s and parent
company’s position, performance, business model and strategy;
•
The section of the Annual Report that describes the review of effectiveness of risk management and internal contr
ol
systems; and
•
The section of the Annual Report describing the work of the Audit and Risk Committee.
We have nothing to report in r
espect of our responsibility to report when the dir
ectors’ statement relating to the parent
company’s compliance with the Code does not properly disclose a departure from a r
elevant pro
vision of the Code
specied under the Listing Rules for revie
w by the auditors.
Responsibil
ities for the nanc
ial statements and the aud
it
Respon
sibilities of the dire
ctors f
or the nancial s
tatement
s
As explained more fully in the Statement of Dir
ectors’ responsibilities, the directors ar
e responsible for the prepar
ation
of the nancial statements in accordance with the applicable frame
work and for being satised that they give a true
and fair view. The dir
ectors are also responsible for such internal contr
ol as they determine is necessary to enable the
preparation of nancial statements that ar
e free from material misstatement, whether due to fr
aud or error.
In preparing the nancial statements, the directors ar
e responsible for assessing the group’
s and the 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 the directors either intend to liquidate the group or the par
ent company or to cease
operations, or have no realistic alternative but to do so.
Independent au
ditor
’
s repor
t
co
nti
nued
to the members of T
rainline plc
T
rainline
Annual Report and Accounts 2022
11
6
Auditors’ resp
onsibilities for t
he audit of the nan
cial stateme
nts
Our objectives are to obtain reasonable assur
ance about whether the nancial statements as a whole are free fr
om
material misstatement, whether due to fraud or error, and to issue an auditors’ r
eport that includes our opinion.
Reasonable assurance is a high level of assur
ance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fr
aud or error and are
considered material if, individually or in the aggregate, the
y could reasonably be expected to inuence the economic
decisions of users taken on the basis of these nancial statements.
Irregularities, including fraud, are instances of non-compliance with laws and r
egulations. We design procedur
es in line
with our responsibilities, outlined above, to detect material misstatements in r
espect of irregularities, including fraud.
The extent to which our procedur
es are capable of detecting irregularities, including fraud, is detailed belo
w.
Based on our understanding of the group and industry
, we identied that the principal risks of non-compliance with laws
and regulations related to legal and go
vernance requirements of T
rainline operating as a publicly listed company, and
we considered the extent to which non-compliance might have a material effect on the nancial statements. W
e also
considered those laws and regulations that have a dir
ect impact on the nancial statements such as UK tax legislation
and the Companies Act 2006. We evaluated management’s incentives and opportunities for fr
audulent manipulation
of the nancial statements (including the risk of override of controls), and determined that the principal risks wer
e
related to manipulation of the nancial statements to overstate r
evenue through the posting of inappr
opriate journal
entries, or EBITDA through manipulating expense classication or inappr
opriately capitalising costs to intangibles. Audit
procedures performed by the engagement team included:
•
Identifying and testing of journal entries based on our risk assessment criteria, in particular any journals with
unusual account combinations which inate revenue or EBITD
A;
•
Evaluation of controls designed to prevent and detect irregularities;
•
Reviewing board minutes throughout the nancial year and post year end to identify any unusual items such as
suspicious activity, non-compliance, br
eaches of laws or potential litigation;
•
Review of nancial statements disclosures for compliance with Companies Act 2006;
•
Assessing compliance with the tax legislation through our audit work over the payroll, V
A
T and corporation tax;
•
Performing enquiries of the Directors, management and legal counsel and inspection of regulatory and legal
correspondence; and
•
Incorporating unpredictability into our audit plan;
•
Performing testing over the intangible asset additions in the period to ensure that there is no evidence of
inappropriately capitalised costs; and
•
Challenging assumptions made by management in determining signicant accounting estimates and judgements.
This has included testing signicant accounting estimates and judgements to supporting documentation,
considering alternative information where available.
There are inherent limitations in the audit pr
ocedures described above. W
e are less likely to become awar
e of instances
of non-compliance with laws and regulations that are not closely r
elated to events and transactions r
eected in the
nancial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from err
or, as fraud may involve deliberate concealment by
, for example, forgery or intentional
misrepresentations, or thr
ough collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, r
ather than testing
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics.
In other cases, we will use audit sampling to enable us to draw a conclusion about the population fr
om which the sample
is selected.
A further description of our responsibilities for the audit of the nancial statements is located on the FRC’s website at:
www.frc.or
g.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
11
7
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egic
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rnanc
e
Financial Statements
Use of this report
This report, including the opinions, has been prepared for and only for the par
ent company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these
opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is sho
wn or
into whose hands it may come save where expr
essly agreed by our prior consent in writing.
O
ther required reporting
Companies Act 200
6 ex
ception reporting
Under the Companies Act 2006 we are requir
ed to report to you if, in our opinion:
•
we have not obtained all the information and explanations we require for our audit; or
•
adequate accounting records have not been kept by the par
ent company, or returns adequate for our audit have not
been received from branches not visited b
y us; or
•
certain disclosures of directors’ remuneration specied b
y law are not made; or
•
the parent company nancial statements and the part of the Directors’ remuneration r
eport to be audited are not in
agreement with the accounting recor
ds and returns.
We have no ex
ceptions to report arising from this r
esponsibility.
Appointment
Following the recommendation of the Audit and Risk Committee, we wer
e appointed by the members on 8 September
2021 to audit the nancial statements for the year ended 28 February 2022 and subsequent nancial periods. This is
therefore our rst year of uninterrupted engagement.
O
ther matter
As required by the Financial Conduct Authority Disclosur
e Guidance and T
ransparency Rule 4.1.14R, these nancial
statements form part of the ESEF-prepared annual nancial report led on the National Stor
age Mechanism of the
Financial Conduct Authority in accordance with the ESEF Regulatory T
echnical Standard (‘ESEF RTS’). This auditors’ report
provides no assurance o
ver whether the annual nancial report has been prepar
ed using the single electronic format
specied in the ESEF RTS.
Jaskamal Sarai (Senior Statutory Auditor)
for and on behalf of P
ricewaterhous
eCoopers LLP
Chartered Accountants and Statut
ory Auditors
Reading
5 May 2022
Independent au
ditor
’
s repor
t
co
nti
nued
to the members of T
rainline plc
T
rainline
Annual Report and Accounts 2022
11
8
C
onsolidated income statement
F
or the year ended 28 F
ebr
uary 2022
Notes
2022
£’000
2021
£’000
Continuing operations
Net ticket sales
2,520,272
783,084
Reven
ue
3
188,513
67,084
Cost of sales
(35,717)
(18,408)
Gross prot
152,796
48,676
Administrative expenses
(163,109)
(148,380)
Adjusted EBITD
A
39,046
(24,904)
Depreciation and amortisation
10,11
(42,576)
(41,199)
Share-based payment charges
15
(6,783)
(7,093)
Exceptional items
6
–
(26,508)
Operating loss
(10,313)
(99,704)
Finance income
7
3,950
578
Finance costs
7
(9,179)
(7,636)
Net nance costs
7
(5,229)
(7,058)
Loss before tax
(15,542)
(106,762)
Income tax credit
8
3,637
15,458
Loss after tax
(11,905)
(91,304)
Earnings per share (pence
)
Basic and Diluted
2
9
(2.49)
p
(19.10)
p
1
Non
-
G
A
A
P me
as
ur
e – se
e a
lt
er
n
at
i
ve p
er
fo
r
ma
nc
e me
as
ur
es s
e
c
t
io
n on p
a
ge 162
.
2
As t
h
e Gr
ou
p ha
s in
c
ur
re
d a l
os
s in F
202Y
2 an
d F
Y
202
1 th
e im
pa
c
t o
f it
s p
o
te
nt
ia
l di
lu
t
iv
e o
rd
in
ar
y sh
ar
es h
av
e be
e
n ex
cl
ud
ed a
s t
he
y wo
ul
d
be anti-
diluti
ve.
The notes on pages 124 to 156 form part of the Financial Statements.
119
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egic
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rnanc
e
Financial Statements
Notes
2022
£’000
2021
£’000
Loss after tax
(11,905)
(91,304)
Items that ma
y be reclassied to t
he income statement:
Remeasurements of dened benet liability
17
10
27
Foreign ex
change movement
(1,393)
876
Other comprehensive (loss
)/income, net of tax
(1,383)
903
T
otal comprehensive loss
(13,288)
(90,401)
The notes on pages 124 to 156 form part of the Financial Statements.
C
onsolidated statement of other
comprehensiv
e income
F
or the year ended 28 F
ebr
uary 2022
T
rainline
Annual Report and Accounts 2022
120
Notes
2022
£’000
2021
£’000
Non-current assets
Intangible assets
10
69,794
81,379
Goodwill
10
417,360
419,457
Property, plant and equipment
11
24,877
25,871
Deferred tax asset
8
12,565
5,083
524,596
531,790
Current assets
Cash and cash equivalents
68,496
36,575
Tr
ade and other receivables
12
48,314
16,994
Current tax receivable
8
1,599
7,522
118,409
61,091
Current liabilities
Tr
ade and other payables
13
(227,729)
(37,990)
Loan and borrowings
14
(4,914)
(4,167)
(232,643)
(42,157)
Net current assets/(liabilities)
(114,234)
18,934
T
otal asset
s less current liabilities
410,362
550,724
Non-current liabilities
Loan and borrowings
14
(149,996)
(266,369)
Provisions
(873)
(850)
(150,869)
(267,219)
Net assets
259,493
283,505
Equity
Share capital
16
4,807
4,807
Share premium
16
1,198,703
1,198,703
Foreign ex
change reserve
16
1,455
2,848
Other reserves
16
(1,136,661)
(1,124,992)
Retained earnings
191,189
202,139
T
otal equit
y
259,493
283,505
The notes on pages 124 to 156 form part of the Financial Statements.
These Financial Statements were appro
ved by the Board of Directors of T
rainline plc (registered number 11961132)
on 5 May 2022 and were signed on its behalf by
Jody F
ord
Shaun McCabe
Chief Executiv
e Officer
Chief Financial Officer
5 May 2022
5 May 2022
 
C
onsolidated balance sheet
A
t 28 F
ebruar
y 2022
121
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rnanc
e
Financial Statements
Notes
Share
capital
£’000
Share
premium
£’000
Preference
shares
£’000
Other
reserves
£’000
Foreign
exchange
reserve
£’000
Retained
earnings
£’000
T
otal
equity
£’000
Balance as at 1 March 2021
4,807
1,198,703
–
(1,124,992)
2,848
202,139
283,505
Loss after tax
–
–
–
–
–
(11,905)
(11,905)
Other comprehensive income
–
–
–
–
(1,393)
10
(1,383)
Acquisition of Tr
easury Shares
–
–
–
(16,600)
–
–
(16,600)
Share-based payments
15
–
–
–
5,876
–
–
5,876
Tr
ansfer between reserves
–
–
–
(945)
–
945
–
Balance as at 28 F
ebr
uary 2022
4,807
1,198,703
–
1,136,661
1,455
191,189
259,493
F
or the year ended 28 F
ebr
uary 202
1
Notes
Share
capital
£’000
Share
premium
£’000
Preference
shares
£’000
Other
reserves
£’000
Foreign
exchange
reserve
£’000
Retained
earnings
£’000
T
otal
equity
£’000
Balance as at 1 March 2020
4,807
1,198,703
50
(1,125,755)
1,972
293,136
372,913
Loss after tax
–
(91,304)
(91,304)
Other comprehensive income
–
–
–
876
27
903
Preference share r
edemption
–
–
(50)
–
–
–
(50)
Acquisition of Tr
easury Shares
–
–
–
(4,123)
–
–
(4,123)
Share-based payments
15
–
–
–
5,166
–
–
5,166
Tr
ansfer between reserves
(280)
280
–
Balance as at 28 F
ebr
uary 2021
4,807
1,198,703
–
(1,124,992)
2,848
202,139
283,505
The notes on pages 124 to 156 form part of the Financial Statements.
C
onsolidated statement of changes in equity
F
or the year ended 28 F
ebr
uary 2022
T
rainline
Annual Report and Accounts 2022
122
Notes
2022
£’000
2021
£’000
Cash ows from op
erating ac
tivities
Loss before tax
(15,542)
(106,762)
Adjustment for non-cash items:
Depreciation and amortisation
10,11
42,576
41,199
Goodwill impairment
10
–
25,195
Net nance costs
1
7
5,229
7,058
Share-based payment charges
15
6,783
7,093
39,046
(26,217)
Changes in working capital
Tr
ade and other receivables
(33,562)
33,021
Tr
ade and other payables
189,683
(128,058)
Cash generated from operating activities
195,167
(121,254)
T
axes refunded/(paid)
4,439
159
Net cash generated from operating activities
199,606
(121,095)
Cash ows from investing activitie
s
Purchase of intangible assets
(24,787)
(25,096)
Purchase of property
, plant and equipment
(4,557)
(1,239)
Net cash ow from inv
est
ing activities
(29,344)
(26,335)
Cash ows from nancing a
ctivities
Purchase of treasury shares
(16,600)
(4,123)
Proceeds from Revolving Cr
edit Facility
97,000
95,000
Repayment of Revolving Credit Facility and other borr
owings
(177,116)
(137,184)
Proceeds from issuance of convertible bonds
–
150,000
Issue costs and fees
(110)
(2,690)
Buyback of convertible bonds
(31,307)
–
Payments of lease liabilities
(3,794)
(2,676)
Payment of interest on lease liabilities
(477)
(536)
Interest paid
(5,103)
(4,940)
Net cash ows from nancing activities
(137,507)
92,851
Net decrease in cash and cash equivalents
32,755
(54,579)
Cash and cash equivalents at beginning of the year
36,575
92,120
Effect of foreign exchange on cash
(834)
(966)
Closing cash and cash equivalents
68,496
36,575
1 In
cl
ud
in
g ga
in o
n co
nv
e
r
t
ib
le b
o
nd b
u
yb
a
ck a
s di
s
cl
os
ed i
n N
ot
es 7 a
nd 14.
The notes on pages 124 to 156 form part of the Financial Statements.
C
onsolidated statement of cash o
w
F
or the year ended 28 F
ebr
uary 2022
123
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egic
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Financial Statements
1. Signicant acc
ounting policies
a)
Ge
neral
information
Tr
ainline plc (the ‘Company’) and subsidiaries controlled by the Company (together, the ‘Group’) ar
e Europe’
s leading
independent rail and coach travel platform selling r
ail and coach tickets worldwide. The Company is publicly listed on
the London Stock Exchange (‘LSE’) and is incorporated and domiciled in the United Kingdom. The Company’s register
ed
address is 120 Holborn, London EC1N 2TD
.
The Group Financial Statements for the year ended 28 February 2022 were appr
oved by the Dir
ectors on 5 May 2022.
On 31 December 2020, IFRS as adopted by the European Union at that date was br
ought into UK law and became
UK-adopted International Accounting Standards, with future changes being subject to endorsement by the UK
Endorsement Board. T
rainline plc transitioned to UK-adopted International Accounting Standar
ds in its Group
Financial Statements on 1 March 2021. This change constitutes a change in accounting frame
work. However, ther
e is
no impact on recognition, measurement or disclosur
e in the period reported as a result of the change in fr
amework.
The Group Financial Statements of T
rainline plc have been prepar
ed in accordance with UK-adopted International Accounting
Standards and with the requirements of the Companies Act 2006 as applicable to companies r
eporting under those standards.
b
) B
asis of consolidation
The Gr
oup 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 fr
om 1 March 2021 to 28 February 2022.
(i) Subsidiarie
s
Subsidiaries are entities controlled b
y the Group. The Group controls an entity when it is e
xposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those r
eturns through its power o
ver
the entity. The Financial Statements of subsidiaries ar
e included in the Consolidated Financial Statements from the date
on which control commences until the date on which control ceases. Contr
ol is achieved when the Group: (i) has po
wer
over the investee; (ii) is exposed, or has rights to variable r
eturns from its involvement with the investee; and (iii) has the
ability to use its power to affect the returns.
(ii) T
rans
actions eliminat
ed on consolidation
Intra-Group balances and transactions, and any unr
ealised income and expenses arising from intr
a-Group transactions,
are eliminated.
c
) Basis of measurement
The Financial Statements are prepar
ed on the historical cost basis except for the follo
wing:
•
Non-current assets are stated at the lower of the carrying value and the reco
verable amount
•
Derivative nancial 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) Fu
nctio
nal and pres
entation currency
The Financial Statements are presented in sterling, which is the functional curr
ency of the Parent Company
. All amounts
have been rounded to the nearest thousand, unless otherwise indicated.
e
) Going conc
ern
The Consolidated Financial Statements have been prepared on a going concern basis, which assumes that the Gr
oup
will be able to meet its liabilities as they fall due over at least the ne
xt 12 months from the date of the appro
val of these
Financial Statements (the ‘going concern assessment period’) including consideration of the co
venants associated with
the Group’s Re
volving Credit Facility at the ne
xt covenant test dates on 31 August 2022 and 28 February 2023, being the
two relevant dates in this period.
The UK Corporate Governance Code r
equires the Board to assess and report on the pr
ospects of the Group and whether
the business is a going concern. The Directors have undertaken a rigor
ous assessment of going concern and liquidity,
taking into account nancial forecasts, ke
y uncertainties and sensitivities, including the prolonged impact of Covid-19
on the future performance of the Group, borro
wing facilities and covenant requir
ements.
Notes t
o the Group F
inancial S
tatements
T
rainline
Annual Report and Accounts 2022
124
Following strong reco
very as Covid-19 tr
avel restrictions were lifted, ther
e have been material improvements in
Tr
ainline’s net tick
et sales and protability during FY2022. Performance has impro
ved as restrictions lifted and
public condence in travel returned to
wards pre-pandemic demand levels.
Although protability continued to be impacted by Co
vid-19 in FY2022, the Group has returned to positive adjusted
EBITDA, reduced its net debt, and generated positive cash o
ws. Positive adjusted EBITDA of £39 million was earned in
the period (FY2021: £25 million EBITDA loss) and net debt at 28 February 2022 was £90 million (FY2021: £241 million).
For the duration of FY2022 the Group had in place a co
venant waiver with a minimum liquidity requirement which was
obtained during FY2021. The covenant waiver period ended on 28 February 2022, and the Group is no longer subject to
the £75 million minimum liquidity requirement for the dur
ation of the going concern assessment period. The Group is
next subject to its net debt to adjusted EBITDA co
venant test on 31 August 2022.
As at 28 February 2022 the Group was in a net current liability position of £114 million driven b
y the negative working
capital cycle (FY2021: £19 million net current asset position). Despite the net current liability position, the Gr
oup has
access to £274 million additional funds under its revolving cr
edit facility. As such the Gr
oup has sucient liquidity to
easily cover the net current liability position.
The Directors performed a detailed going concern revie
w using Board appro
ved forecasts (the ‘base case’) as well as
considering two severe but plausible do
wnside scenarios, without any mitigations, and their potential impact on the
Group’s for
ecast, specically considering varying degrees of prolonged impact fr
om Covid-19. Two se
vere but plausible
downside scenarios were modelled: (1) permanent r
eduction in the size of the rail market, primarily manifesting as a
25-30% reduction in the size of the UK rail segment versus FY2020; and (2) ongoing winter r
estrictions in December
2022 and January 2023, based on actual performance from December 2021 and January 2022 which were impacted b
y
the UK Government’s ‘Plan B’ restrictions (including asking people to work fr
om home if they were able to) and similar
restrictions across Eur
ope.
In the base case and both severe but plausible do
wnside scenarios the Group is able to continue in operation and meet
its liabilities as they fall due. This includes complying with the net debt to adjusted EBITDA co
venant requirement at the
31 August 2022 and 28 February 2023 test dates.
Following the assessment described above, the Dir
ectors are condent that the Group has adequate resour
ces to
continue to meet its liabilities as they fall due and to remain in oper
ation for the going concern assessment period.
The Board has therefore continued to adopt the going concern basis in pr
eparing the Consolidated Financial Statements.
f) C
os
t of sales
Cost of sales include costs in relation to
the provision of r
ail tickets, ancillary services, settlement
and fullment costs and
are recognised as incurred (at the point of sale).
g) Foreign currency trans
actio
ns
Tr
ansactions in foreign currencies ar
e translated to the respective functional curr
encies of Group companies at ex
change
rates applicable on the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies ar
e translated to the functional currency at e
xchange
rate at the reporting date. Non-monetary assets and liabilities that ar
e measured at fair value in a foreign curr
ency
are translated to the functional curr
ency at the exchange rate when the fair value was determined. For
eign currency
differences arising on translation are gener
ally recognised in the income statement. Non-monetary items that ar
e
measured based on historical cost in foreign curr
ency 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 e
xpressed in sterling using exchange r
ates prevailing at the r
eporting period
date. Income and expense items and cash ows ar
e translated at the average e
xchange rates for each month and
exchange differences arising ar
e recognised directly in other compr
ehensive income.
h
) Use of judgem
ents and es
timates
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 revie
wed on an ongoing basis. Revisions to estimates are r
ecognised prospectively
.
125
Strat
egic
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Gove
rnanc
e
Financial Statements
1. Signicant acc
ounting policies (
continued)
The following estimate is deemed signicant as it has been identied by Management as one which could r
esult in a
material adjustment in the next nancial year:
•
Note 10 – Goodwill impairment test: key assumptions underlying reco
ver
able amounts
The Group tests goodwill for impairment annually by comparing the carrying amount against the r
ecoverable
amount. The recoverable amount is the higher of the fair value less costs of disposal and value in use. Ther
e is
judgement in estimating the future cash ows, the time period o
ver which they will occur, and in arriving at an
appropriate discount rate to apply to the cash o
ws as well as an appropriate terminal gro
wth rate. As part of the
impairment revie
w for the year ended 28 February 2022, the prolonged impacts of Covid-19 have been tak
en into
account in the forecasting. Each of these assumptions have an impact on the over
all value of cash ows expected
and therefore the headroom between the cash o
ws and carrying values of the cash-generating units.
i) New standard
s and interpretatio
ns adopte
d
A number of new standards are effective fr
om 1 March 2021, but they do not have a material effect on the Gr
oup’s
Financial Statements.
The following adopted IFRSs have been issued but have not been applied by the Gr
oup in these consolidated Financial
Statements. Their adoption is not expected to have material effect on the Financial Statements unless otherwise
indicated:
•
Amendments to IAS 37: Onerous Contracts – Cost of Fullling a Contract (effective date to be conrmed);
•
Amendments to References to the Conceptual Framework in IFRS 3 (effective date to be conrmed);
•
Amendments to IAS 16: Property, Plant and Equipment – Proceeds befor
e Intended Use
(effective date to be conrmed); and
•
Annual Improvements to IFRS Standards 2018-2020 (effective date to be conrmed).
In April 2021 the IFRS Interpretations Committee nalised their agenda decision regar
ding conguration and
customisation costs in Cloud Computing Arrangements (Software as a Service, ‘SaaS’) under IAS 38. The Gr
oup has
assessed costs incurred associated with the implementation of SaaS noting that all material costs incurred in the past
have been expensed on the basis that they wer
e determined to be related to services pro
vided during the relevant
period. As such, the agenda decision has no material effect on the Group’
s Financial Statements.
2. Op
erating seg
ments
In accordance with IFRS 8 Operating Segments the Gr
oup determines and presents its operating segments based
on internal information that is provided to the Boar
d, who is the Group’
s chief operating decision maker (‘CODM’).
The Group has three operating and r
eportable segments which are considered:
•
UK Consumer
1
– Tr
avel apps and websites for individual travellers for journeys within the UK;
•
UK Trainline Partner Solutions (‘TPS’)
1
– Branded travel portal platforms for corpor
ates and travel management
companies and white label ecommerce platforms for T
rain Operating Companies within the UK; and
•
International – Travel apps and websites for individual travellers for journe
ys outside the UK.
1
UK Co
ns
um
er a
n
d UK Trai
nl
in
e Pa
r
t
ne
r S
ol
ut
i
on
s ar
e co
ll
ec
ti
v
el
y r
ef
er
r
ed t
o as t
h
e UK
.
The Group’s global oper
ating model means that investments in platform technology and central o
verheads are
leveraged across the business, and ar
e reported to the CODM at the Gr
oup 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 tick
et sales, revenue and gr
oss margin;
•
Results split by UK and International at the level of net ticket sales, re
venue, gross margin, and contribution
(as shown in this disclosure); and
•
No results at a loss before/after tax or in relation to the statement of nancial position are r
eported to the
CODM at a lower le
vel than the consolidated Group.
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
126
Segm
ental analysis for th
e year ended 2
8 Februar
y 20
2
2:
UK
Consumer
£’000
UK T
rainline
Partner
Solutions
£’000
To
t
a
l
UK
£’000
International
£’000
To
t
a
l
Group
£’000
Net ticket sales
1,
8
11,715
29
0,08
2
2
,
1
01
,797
418
,
4
7
5
2,520,2
72
Reven
ue
152
,
5
3
8
15
,
2
4
5
16
7
,7
8
3
20,
730
18
8
,
51
3
Cost of sales
(2
3
,
9
0
9)
(4
,
4
5
3)
(2
8
,
3
6
2)
(
7,
3
5
5
)
(
3
5
,
7
17
)
Gross prot
12
8
,
6
2
9
10
,7
9
2
13
9,
4
2
1
13
,
3
7
5
152
,7
9
6
Direct administrative e
xpenses
(
4
1
,1
1
2
)
(22
,
03
0)
(
6
3
,1
4
2
)
Contribution
98,309
(8
,
65
5)
89,6
5
4
Central administrative e
xpenses
(50
,608)
Adjusted EBITD
A
39,
0
4
6
Depreciation and amortisation
(4
2
,
5
7
6
)
Share-based payment charges
(6
,7
8
3)
Exceptional items
–
Operating loss
(10
,
3
13)
Net nance costs
(5
,
2
2
9)
Loss before tax
(15
,
5
4
2
)
Ta
x
3,637
Loss after tax
(11
,
9
0
5
)
Segm
ental analysis for th
e year ended 2
8 Februar
y 20
21:
UK
Consumer
£’000
UK T
rainline
Partner
Solutions
£’000
To
t
a
l
UK
£’000
International
£’000
To
t
a
l
Group
£’000
Net ticket sales
4
72,808
75
,
476
54
8,28
4
234,800
783,0
8
4
Reven
ue
4
3
,7
9
8
12
,
0
8
7
55,885
11,1
9
9
6
7,
0
8
4
Cost of sales
(9,8
8
5)
(
3
,
8
4
3)
(
13
,
7
2
8
)
(4
,
6
8
0
)
(18
,
4
0
8
)
Gross prot
3
3
,
9
13
8
,24
4
4
2
,1
5
7
6
,
519
4
8
,
676
Direct administrative e
xpenses
(
2
1,
5
4
0
)
(
1
0,986)
(32
,5
26)
Contribution
2
0
,
617
(
4,46
7)
1
6,
1
50
Central administrative e
xpenses
(4
1,
0
5
4
)
Adjusted EBITD
A
(2
4
,9
0
4
)
Depreciation and amortisation
(
4
1
,1
9
9
)
Share-based payment charges
(
7,
0
9
3
)
Exceptional items
(26,508
)
Operating loss
(99,70
4)
Net nance costs
(
7,
0
5
8
)
Loss before tax
(10
6
,
76
2
)
Ta
x
15
,
4
5
8
Loss after tax
(91
,
3
0
4)
127
Strat
egic
Report
Gove
rnanc
e
Financial Statements
3. Revenue
Accoun
ting po
licy
Con
sumer
Commission revenue is earned fr
om carriers on net ticket sales and service charges billed to customers. Each sale or
refund transaction repr
esents a separate performance obligation, and the related r
evenue is recognised at the time
of the sale or refund. The Group acts as an agent in these tr
ansactions, as it does not control the services prior to
transferring them to its customers.
T
rainline Partner Solutions
Revenue earned from branded tr
avel portal platforms is recognised in three k
ey elements repr
esented by bespoke
feature builds, monthly maintenance, and commission and service fees earned per transaction pr
ocessed. Each of
these elements represent a separ
ate performance obligation. Revenue is recognised over time for bespok
e feature
builds and at point in time for maintenance and commission and service fees earned per transaction processed.
The Group’s oper
ations and main revenue str
eams are those described in these Financial Statements. The Group
’s
revenue is derived fr
om contracts with customers and are disaggregated b
y primary geographical market and timing
of revenue recognition.
2022
£’000
2021
£’000
Timing of revenue recognition
At point in time
1
8
7,1
6
6
6
4
,
516
Over time
1,
3
47
2,56
8
T
otal
revenue
18
8
,
513
6
7,
0
8
4
Ge
ographic informatio
n
In presenting the below information based on geography
, revenue is based on the geographical location of the customers.
This differs from Note 2 which discloses revenue based on the geogr
aphical location of the journey undertaken.
2022
£’000
2021
£’000
UK
166
,74
6
54,643
Rest of the world
21,
76
7
12
,
4
4
1
T
otal
revenue
18
8
,
513
6
7,
0
8
4
Contr
act balan
ces
The Group’s contr
act balances consist of trade receivables, contr
act assets and contract liabilities. T
rade receivables are
disclosed in Note 12.
The contract assets primarily relate to the Group
’s rights to consideration for services pr
ovided but not invoiced at the
reporting date. The contract assets are tr
ansferred to receivables when invoiced. The Gr
oup’s contr
act assets amounted
to £2.8 million
(FY2021: £1.9 million) which
are included
in Note 12.
The contract liabilities primarily relate to the advance consider
ation received from customers, for which r
evenue
is recognised when the services are deemed to be pr
ovided. The contract liabilities amounted to £0.2 million
(FY2021: £0.2 million) which are included within deferred r
evenue in Note 13.
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
128
4. Auditor remune
ration
This note details a breakdo
wn of the auditor remuneration recognised acr
oss the Group.
During the year, the Group obtained the following services fr
om its auditor
1
:
2022
£’000
2021
£’000
Audit of these Financial Statements
3
51
285
Audit of Financial Statements of subsidiaries pursuant to legislation
80
73
Audit-related assurance services
52
40
Other non-audit services
–
10
T
otal auditor remuneration
483
408
1 In F
Y
20
22
, a
ll a
mo
un
t
s ot
h
er t
ha
n £
3
4
k pa
i
d to K
PM
G in r
el
at
i
on t
o th
e s
t
at
u
to
r
y a
u
di
t of Trai
nl
in
e S
A
S (
F
Y
2
021: £
39
k in r
el
a
ti
on t
o th
e s
t
at
u
to
r
y a
u
di
t
of Trai
nl
in
e Fr
an
ce S
A
S an
d Train
li
ne S
A
S) w
e
re p
ai
d to m
em
b
er 
rm
s o
f P
w
C, b
e
in
g th
e G
ro
up
’
s au
di
to
r f
or t
hi
s n
an
c
ial y
ea
r. In F
Y
20
21, all a
mo
u
nt
s
we
re p
ai
d to K
P
MG
, b
ei
ng t
h
e Gr
ou
p
’s p
re
d
ec
es
s
or a
ud
i
to
r
.
5. Emplo
yee benet e
xpenses
Staff costs presented in this note reect the total wage, tax, pension and shar
e-based payment cost relating to
employees of the Group. These costs ar
e allocated between administrative expenses, cost of sales or capitalised wher
e
appropriate as part of software development intangible assets. The allocation between these ar
eas is dependent on the
area of business the employee works in and the activities the
y have undertaken.
Av
erage numbe
r of full-time equivalent e
mploy
ees
2022
Number of
employ
ees
2021
Number of
employ
ees
Sales and marketing
95
10
3
Operations
13
5
12
6
T
echnology and product
348
3
19
Management and administration
112
111
T
otal number of employ
ees
690
6
59
Emplo
yee benets e
xpense
2022
£’000
2021
£’000
Wages and salaries
55,3
80
4
5
,
2
15
Social security contributions
7,
6
8
6
5,
889
Contributions to dened contribution plans
2
,
3
13
1,
8
4
9
Share-based payment expense
6
,78
3
7,
0
9
3
T
otal employee benets
7
2
,1
6
2
60,0
4
6
Details of Directors’ remuneration ar
e disclosed in Note 23 under T
ransactions with ke
y management personnel of the Group.
6. Excep
tional items
Exceptional items are oper
ating costs or credits that, by virtue of their natur
e and incidence, have been disclosed
separately in order to impr
ove a reader’s understanding of the Financial Statements. Exceptional items ar
e one-off in
nature or are not consider
ed to be part of the Group’s underlying tr
ade. There were no e
xceptional items in FY2022.
Res
truc
turin
g cos
ts
Restructuring costs incurred as part of a strategic/management r
eorganisation.
Go
odwill im
pairme
nt
This is the impairment charge on the goodwill on the International CGU. Refer to Note 10 for disclosur
e.
129
Strat
egic
Report
Gove
rnanc
e
Financial Statements
6. Excep
tional items
continued
2022
£’000
2021
£’000
Restructuring costs
–
1,
3
13
Goodwill impairment charge
–
25,
1
95
Net ex
ceptional costs
–
26,508
7
. Financ
e income an
d nance cos
ts
Net nance costs comprise bank interest income and interest e
xpense on borrowings and lease liabilities, as well as
foreign exchange gains/losses and gains/losses on the r
epurchase of convertible bonds.
Accoun
ting po
licy
Interest income and expense is r
ecognised as it accrues in the income statement, using the effective interest method.
Foreign ex
change gains and losses are recognised in the income statement in accor
dance with the policy for foreign
currency transactions set out in Note 1g. Convertible bonds bought back and cancelled ar
e derecognised from non-
current liabilities as set out in Note 14, with any gains and losses arising recognised in nance income and nance costs.
2022
£’000
2021
£’000
Bank interest income
36
22
Gain on convertible bond buyback
3
,
9
14
–
Foreign ex
change gain
–
556
Finance income
3,950
57
8
Interest and fees on bank loans
(5
,777)
(6
,7
2
9
)
Foreign ex
change loss
(92
7
)
–
Loss on interest rate swap
–
(6
)
Interest and fees on convertible bonds
(1,
8
7
8)
(
18
9
)
Interest on lease liability
(59
4)
(69
4)
Other interest
(3)
(
18
)
Finance costs
(
9
,1
7
9
)
(
7,
6
3
6
)
Net nance costs recognised in the inc
ome statement
(5,
2
2
9)
(
7,
0
5
8
)
8
.
Ta
x
a
t
i
o
n
This note analyses the tax income for this nancial year, which includes both current and deferred tax. It also details tax
accounting policies and presents a reconciliation between loss befor
e tax in the income statement multiplied by the rate
of corporation tax and the tax credit for the year.
The deferred tax section pro
vides information on expected future tax charges and sets out the assets and liabilities held
across the Group.
Accoun
ting po
licy
Income tax expense/credit comprises curr
ent and deferred tax. It is recognised in the income statement e
xcept to the
extent that it relates to a business combination, or items r
ecognised directly in equity or in other comprehensive income.
(i) Current ta
x
Current tax comprises the expected tax payable or r
eceivable on the taxable income or loss for the period and
any adjustment to tax payable or receivable in respect of pr
evious years. It is measured using tax r
ates enacted or
substantively enacted at the reporting date.
(ii) Deferre
d tax
Deferred tax is recognised in r
espect of temporary differences between the carrying amounts of assets and liabilities
for nancial reporting purposes and the amounts used for taxation purposes. Deferred tax is not r
ecognised for:
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
130
•
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 prot or loss;
•
temporary differences related to investments in subsidiaries, to the extent that the Gr
oup can control the timing of
the reversal of the tempor
ary differences and it is probable that the
y will not reverse in the for
eseeable future; and
•
taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are r
ecognised for unused tax losses, unused tax credits and deductible temporary differ
ences to the
extent that it is probable that futur
e taxable prots will be available against which they can be used befor
e their expiry
.
Deferred tax assets are r
eviewed at each reporting date and ar
e reduced to the extent that it is no longer pr
obable that
the related tax benet will be realised.
Amounts will be recognised rst to the extent that taxable tempor
ary differences exist and it is consider
ed probable that
they will re
verse and give rise to future taxable prots against which losses or other assets may be utilised befor
e their
expiry
. Assets will then be recognised to the extent that for
ecasts or other evidence support the availability of future
prots against which assets may be realised.
Deferred tax is measured at the tax rates that ar
e expected to be applied to temporary differ
ences when they re
verse,
using tax r
ates enacted or substantively
enacted at the
reporting date.
The measurement
of deferred
tax reects
the tax
consequences that would follow from the manner in which the Group e
xpects, at the reporting date, to reco
ver or settle the
carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset only if certain criteria are met.
Amounts recognised in
the income statemen
t
2022
£’000
2021
£’000
Current tax charge/(
credit)
Current year corporation tax
315
(
3,
205)
Adjustment in respect of prior years
3,
444
(2,
6
0
8)
T
otal current tax charge/(credit)
3,75
9
(
5
,
8
13
)
Deferred tax (
credit)/
charge
Current year
(
1
,364
)
(
1
1
,777)
Adjustment in respect of prior years
(3,948)
1
,
511
Effect of change in tax rates
(2
,0
8
4)
621
T
otal deferred tax credit
(
7,
3
9
6
)
(9,6
45)
T
ax credit
(3,63
7)
(
15
,
4
5
8
)
Corporation tax was calculated at 19% (FY2021: 19%) of the taxable prot for the year. T
axation for territories outside of
the UK was calculated at the rates pre
vailing in the respective jurisdictions. The total tax credit of £3.6 million (FY2021:
credit of £15.5 million) is made up of a current corpor
ation tax charge of £3.8 million (FY2021: credit of £5.8 million)
arising in the UK, and a deferred tax credit of £7.4 million (FY2021: £9.6 million).
A current tax prior period adjustment has been recognised to adjust the Gr
oup’s tax receivable, as the Gr
oup’s Financial
Statements in FY2021 included an expected tax repayment for a loss carry back claim to taxable pr
ots in FY2020 which
was not claimed on submission of the UK tax returns, instead carrying these losses forward to utilise against e
xpected
future prots. A corresponding deferr
ed tax prior period adjustment has also been recognised in respect of those losses
which were not carried back.
The Group has continued to recognise a deferred tax asset on unutilised losses carried forwar
d. This is on the basis
that it is probable that future taxable pr
ot will be available against which the unutilised tax losses and credits can be
set against. This is supported by the Group’
s latest prot and cash ow for
ecasts approved b
y the Board, which show
improved trading performance follo
wing market reco
very from the impact of Covid-19. The deferr
ed tax credit in FY2022
also includes the unwind of deferred tax liabilities arising on acquired intangibles and deferr
ed tax on equity-settled
share-based payment charges issued during the period, where tax r
elief is obtained in the year the shares vest. The
release of these deferred tax assets and liabilities ar
e accounting adjustments and do not impact the corporation tax
payable or receivable by the Gr
oup.
The Group has remeasured its deferr
ed tax asset to take into account the future change in the r
ate of UK corporation tax
from 19% to 25%, as substantively enacted in May 2021. This has given rise to a one-off deferred tax cr
edit in FY2022.
1
31
Strat
egic
Report
Gove
rnanc
e
Financial Statements
8
.
Ta
x
a
t
i
o
n
c
ontinued
Amounts recognised in
the income statemen
t
continued
2022
£’000
2021
£’000
Loss before tax
(15
,
5
4
2
)
(10
6
,
76
2
)
T
ax on loss at standard UK rate of 19% (FY2021: 19%)
(2
,
9
7
1)
(20,
28
5)
Effect of:
Expenses not deductible/income not deductible
1
,1
4
7
4
,
8
49
Amounts not recognised
1
1
,1
4
8
924
Effect of changes in tax rates
(2
,
626)
621
Adjustment in respect of prior years
(50
4)
(
1,
0
9
7
)
Difference in overseas tax r
ates
2
19
Deferred tax credited to equity
85
–
Losses utilised
–
(48
9
)
Other
82
–
T
otal tax credit
(3,63
7)
(
15
,
4
5
8
)
Eective tax rate
2
3%
14
%
1
Pri
ma
r
il
y re
la
te
s t
o un
re
co
gn
is
e
d lo
ss
e
s wh
i
ch a
re e
it
h
er n
ot e
x
pe
c
t
ed t
o be r
e
cov
er
ab
l
e or u
t
il
is
ed i
n t
he s
ho
r
t t
er
m a
nd t
he
re
f
or
e no
t re
co
g
ni
se
d as
deferred
t
ax ass
ets.
The effective tax rate is higher than the UK corporation tax r
ate of 19% (FY2021: lower) which primarily reects the
remeasurement of deferred tax balances for the incr
ease in the UK corporation tax rate to 25%.
T
ax de
btor per t
he cons
olidated balanc
e shee
t:
2022
£’000
2021
£’000
Current tax receivable
1
1,
5
9
9
7,
5
2
2
1
Re
e
c
t
s th
e c
ur
re
n
t ta
x c
ha
rg
e
/cre
d
it f
or t
h
e ye
ar, les
s a
ny co
r
po
ra
t
io
n t
ax p
a
ym
e
nt
s o
n ac
co
un
t ma
de d
ur
i
ng t
h
e yea
r, les
s t
he R
es
ea
rc
h an
d
De
ve
l
op
me
nt e
x
p
en
di
t
ur
e cr
ed
it (
‘
RD
EC
’
). T
h
e F
Y
202
2 c
ur
re
n
t t
ax r
ec
ei
v
ab
l
e ba
la
nc
e re
ec
t
s a £1.6 mi
ll
io
n R
DE
C. N
o co
r
po
ra
t
io
n t
ax w
as p
a
ya
bl
e by
th
e G
ro
up i
n F
Y
2
02
2
. (F
Y
20
21: Cur
re
nt t
a
x re
ce
i
va
b
le o
f £7.5 m
il
li
on m
ad
e up o
f £
2.
0 mi
ll
io
n R
DE
C pl
us £
5
.
5 mi
ll
io
n of c
ur
r
en
t t
a
x cre
d
it
.)
Defe
rred tax a
sset a
s at 28 Februar
y 2
02
2
:
Acquired
intangible
assets
£’000
T
angible
assets and
other
£’000
Share-based
payments
£’000
Losses
carried
forward
£’000
To
t
a
l
£’000
At 1 March 2021
(4
,
3
6
5
)
(1,
5
6
0
)
1,
2
2
7
9
,78
1
5
,083
Effect of increased tax rate on opening balance
(63
6)
(4
41)
174
2,98
7
2
,0
84
Adjustment in respect of prior years
–
(1,
6
0
0)
–
5,5
4
8
3,94
8
Adjustments posted through equity
–
(9)
94
–
85
Credit/(charge) to consolidated income statement
1,
3
4
6
232
(2
58)
45
1,
3
6
5
At 28 F
ebruar
y 2022
(3
,65
5)
(
3
,
3
78)
1,
2
3
7
18
,
3
61
12
,
5
6
5
Defe
rred tax a
sset
/(liability
) as at 28 Februar
y 2
02
1:
Acquired
intangible
assets
£’000
T
angible
assets and
other
£’000
Share-based
payments
£’000
Losses
carried
forward
£’000
To
t
a
l
£’000
At 1 March 2020
(5
,
29
8)
(5
0
8)
1,
4
61
–
(4
,
3
45
)
Adjustments posted through equity
–
37
(
25
4)
–
(
2
17
)
Credit/(charge) to consolidated income statement
933
(1,
0
8
9
)
20
9,781
9,6
45
At 28 F
ebruar
y 2021
(4
,
3
6
5
)
(
1,
5
6
0
)
1,
2
2
7
9,781
5
,08
3
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
132
9. Earnings per share
This note sets out the accounting policy that applies to the calculation of earnings per share, and how the Gr
oup has
calculated the shares to be included in basic and diluted earnings per share (‘EPS’) calculations.
Accoun
ting po
licy
The Group calculates earnings per share in accor
dance with the requirements of IAS 33 Earnings Per Share.
Four types of earnings per share are r
eported:
(i) Basic earnings per share
Earnings attributable to ordinary equity holders of the Group for the period, divided b
y the weighted average number of
ordinary shares outstanding during the period.
(ii) Diluted earnings per share
Earnings attributable to ordinary equity holders of the Group, divided b
y the weighted average number of shares
outstanding used in the basic earnings per share calculation adjusted for the effects of all dilutive ‘potential or
dinary
shares’.
(iii) Adjusted basic earnings per share
Earnings attributable to ordinary equity holders of the Group for the period, adjusted to r
emove the impact of
exceptional items, gain on pur
chase of convertible bonds, share-based payment charges, amortisation of acquired
intangibles and the tax impact of these items; divided by the weighted average number of or
dinary shares outstanding
during the period.
(iv) Adj
usted dilut
ed earnings per share
Earnings attributable to ordinary equity holders of the Group for the period, adjusted to r
emove the impact of
exceptional items, gain on r
epurchase of convertible bonds, share-based payment charges, amortisation of intangibles
and the tax impact of these items; divided by the weighted average number of shar
es outstanding used in the basic
earnings per share calculation adjusted for the effects of all dilutive ‘potential or
dinary shares’.
2022
No. shares
2021
No. shares
Weighted aver
age number of ordinary shar
es:
Weighted average number of ordinary shar
es
4
80,
680,508
4
80,68
0,5
08
Weighted average number of treasury shar
es
(3
,
0
9
6
,7
3
3)
(
2
,
6
7
8
,111
)
W
eighted av
erage number of ordinary shares
1
4
77
,583,
775
4
78,0
02,
397
1
As t
h
e Gr
ou
p ha
s in
c
ur
re
d a l
os
s in F
Y
2
02
2 an
d F
Y
202
1, the i
mp
ac
t of i
t
s p
ote
n
ti
al d
il
ut
i
ve o
r
di
nar
y s
ha
re
s ha
s be
e
n ex
cl
ud
e
d as t
he
y wo
u
ld b
e an
t
i-
dilutive.
2022
£’000
2021
£’000
Loss after tax
(11
,
9
0
5
)
(91,
30
4)
Earnings attributable to equity holders
(11,
9
0
5
)
(91,3
0
4)
Adjusted earnings
1
(3
,
8
4
4)
(5
1
,678)
2022
pence
2021
pence
Loss per share
Basic
(2.49)p
(19.10)p
Diluted
2
(2.49)p
(19.10)p
Adjusted loss per share
Basic
(0.80)p
(10.81)p
Diluted
2
(0.80)p
(10.81)p
1
R
ef
e
r to t
he a
lt
e
rn
at
i
ve p
e
r
f
or
ma
nc
e me
as
ur
e
s se
c
t
io
n fo
r t
he c
a
lc
ul
at
io
n of a
d
ju
s
te
d ea
r
ni
ng
s.
2
As t
he G
r
ou
p ha
s in
cu
r
re
d a lo
s
s in F
Y
20
2
2 an
d F
Y
2
021, th
e im
p
ac
t o
f i
t
s po
te
nt
i
al d
il
ut
i
ve o
rd
in
ar
y sh
ar
e
s ha
s be
e
n exc
l
ud
ed a
s t
he
y wo
ul
d b
e an
ti
-
di
lu
ti
v
e.
133
Strat
egic
Report
Gove
rnanc
e
Financial Statements
10. Intangible a
sset
s and goo
dwill
The consolidated balance sheet contains a signicant goodwill carrying value which arose when the Group acquir
ed
subsidiaries and paid a higher amount than the fair value of the acquired net assets. Goodwill is not amortised but is
subject to an annual impairment revie
w. Impairment re
views of goodwill make use of estimates (see Note 1h).
Other intangible assets predominantly arise on acquisition of subsidiaries or are internally de
veloped. These intangible
assets are amortised and tested for impairment when an indicator of impairment exists.
Accoun
ting po
licy
(i
) G
oo
dwill
Goodwill is initially measured at cost, being the ex
cess of the aggregate of the consideration tr
ansferred and the amount
recognised for non-controlling inter
ests, and any previous interest held, o
ver the net identiable assets acquired and
liabilities assumed. If the fair value of the net assets acquired is in ex
cess of the aggregate consideration tr
ansferred,
the Group reassesses whether it has corr
ectly identied all of the assets acquired and all of the liabilities assumed and
revie
ws the procedures used to measure the amounts to be r
ecognised at the acquisition date. If the reassessment still
results in an ex
cess of the fair value of net assets acquired over the aggr
egate 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-gener
ating units that are expected to benet fr
om the combination, irrespective of whether other assets
or liabilities of the acquired business are assigned to those units.
(ii) Sof
t
ware development costs
Expenditure on research activities is r
ecognised in the income statement as incurred.
External and internal development expenditur
e is capitalised only if the expenditure can be measur
ed reliably, the
product or process is technically and commer
cially feasible, future economic benets are pr
obable, and the Group
intends to and has sucient resources to complete de
velopment and to use or sell the asset. Otherwise, it is recognised
in the income statement as incurred. Subsequent to initial recognition, de
velopment expenditure is measur
ed at cost
less accumulated amortisation and any accumulated impairment losses. Internal development expenditur
e is managed
by the development team and the amount capitalised is monitor
ed through time charged to projects.
(iii) Brand and customer list
s
Brand and customer lists that are acquir
ed by the Group have nite useful lives and ar
e measured at cost less
accumulated amortisation and any accumulated impairment losses.
(iv
) Subsequent e
xpendit
ure
Subsequent expenditure is capitalised only when it incr
eases the future economic benets embodied in the asset to
which it relates. All other expenditur
e, including expenditure on internally gener
ated goodwill and brands, is recognised
in the income statement as incurred.
(
v
) Amor
tisation
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
3–5 years
Brand valuation
10 years
Customer lists
5–7 years
Amortisation methods, useful lives and residual values are r
eviewed at each r
eporting date and adjusted if appropriate.
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
134
Intangible as
sets an
d goodwill as at 2
8 Februar
y 2
02
2
:
Software
development
£’000
Brand
valuation
3
£’000
Customer
lists
3
£’000
Goodwill
£’000
To
t
a
l
£’000
Cost:
At 1 March 2021
13
2
,7
5
5
51,
7
3
8
92
,6
90
444,
65
2
721
,835
Additions
1
25,0
90
–
–
–
25,0
90
Disposals
(10,
4
3
5
)
–
–
–
(10
,
4
3
5
)
FX
2
–
–
–
(2
,0
97
)
(2
,09
7)
At 28 F
ebruar
y 2022
1
4
7,
4
1
0
51,
7
3
8
92
,6
90
4
42
,555
734,393
Accumul
ated amortisation and impairment:
At 1 March 2021
(7
4,328)
(30
,800)
(90,676)
(
2
5
,1
9
5
)
(220
,999
)
Amortisation
(
2
9,
59
5)
(
5
,1
6
7
)
(1,
9
13)
–
(3
6,6
75)
Disposals
10,
4
3
5
–
–
–
10
,
4
3
5
At 28 F
ebruar
y 2022
(93
,
4
8
8)
(35,967)
(92
,
5
8
9)
(
2
5
,1
9
5
)
(
2
4
7,
2
3
9
)
Carrying amounts:
At 28 F
ebruar
y 2022
53,922
15
,7
7
1
101
4
1
7,
3
6
0
4
8
7,1
5
4
1
T
otal additions include £24.
2 million
of internally developed intangible asset
s.
2
Ef
f
ec
t
s of f
or
ei
gn e
xc
ha
n
ge r
at
e ch
an
ge
s
.
3
At F
Y
2
02
2
, th
e re
m
ai
ni
ng u
se
f
ul e
co
n
om
ic l
if
e wa
s t
hr
ee y
ea
r
s fo
r br
an
d v
al
ua
ti
on a
n
d 
ve y
ea
rs f
o
r cu
s
to
me
r li
s
t
s
.
Intangible as
sets an
d goodwill as at 2
8 Februar
y 2
02
1:
Software
development
£’000
Brand
valuation
3
£’000
Customer
lists
3
£’000
Goodwill
£’000
To
t
a
l
£’000
Cost:
At 1 March 2020
10
8
,
6
21
51
,7
3
8
92,69
0
4
43
,
357
69
6,
4
0
6
Additions
1
2
4
,13
4
–
–
–
2
4
,13
4
FX
2
–
–
–
1,
2
9
5
1,
2
9
5
At 28 F
ebruar
y 2021
13
2
,
7
5
5
51,
7
3
8
92,69
0
444,
6
5
2
7
2
1,
8
3
5
Accumul
ated amortisation and impairment:
At 1 March 2020
(
4
6
,1
8
1
)
(25
,6
3
3)
(
8
7,
6
8
0
)
–
(15
9
,
4
9
4
)
Amortisation
(
2
8
,1
4
7
)
(
5
,1
6
7
)
(
2
,9
9
6
)
–
(36,
31
0)
Impairment charge
–
–
–
(25,
1
95)
(25,
1
95)
At 28 F
ebruar
y 2021
(
74
,
3
2
8
)
(30,800)
(
90,676)
(25,
1
95)
(22
0,
999)
Carrying amounts:
At 28 F
ebruar
y 2021
58
,427
2
0
,93
8
2
,
0
14
419
,
4
5
7
50
0,8
36
1
T
ot
al a
dd
i
ti
on
s of £
24
.
1 mi
ll
io
n al
l re
la
te t
o in
te
r
na
ll
y de
v
el
op
e
d in
t
an
gi
bl
e a
ss
e
t
s.
2
Ef
f
ec
t
s of f
or
ei
gn e
xc
ha
n
ge r
at
e ch
an
ge
s
.
3
At F
Y
2
021, th
e r
em
ai
ni
ng u
se
f
ul e
co
n
om
ic l
if
e wa
s f
ou
r ye
ar
s f
or b
ra
nd v
a
lu
at
io
n an
d s
ix y
ea
r
s fo
r cu
s
to
m
er l
is
t
s
.
Of the amortisation charge for the year £7.1 million (FY2021: £8.2 million) related to the amortisation of intangible
assets which were recognised on the Gr
oup’s acquisition of T
rainline.com Limited and Trainline SAS, while £29.6 million
(FY2021: £28.1 million) related to internally developed and pur
chased intangible assets recognised at historical cost.
Disposals in the year of £10.4 million (FY2021: £nil) fully amortised internally developed software assets and £2.8 million
of fully amortised software development assets.
135
Strat
egic
Report
Gove
rnanc
e
Financial Statements
10. Intangible a
sset
s and goo
dwill
continued
Go
odwill im
pairme
nt tes
ting
The Group tests goodwill annually for impairment by r
eviewing the carrying amount against the r
ecoverable amount of
the investment. The recover
able amount is the higher of fair value less costs of disposal and value in use. However, in
line with IAS 36 Impairment of Assets, fair value less costs of disposal is only determined where value in use would
result in impairment.
Goodwill acquired in a business combination is allocated on acquisition to the cash-generating units (‘C
GUs’) that are
expected to benet from that business combination. Management monitors goodwill no lo
wer than the geographical
operating segments, hence, CGUs are the same as the geogr
aphical operating segments.
The Group has gross goodwill balances totalling £442.6 million (FY2021: £444.7 million) which comprise:
i.
£336.4 million (FY2021: £336.4 million) fr
om the FY2016 acquisition of T
rainline.com
ii.
£106.2 million (FY2021: £108.3 million) from the FY2017 acquisition of T
rainline SAS (formerly Capitaine T
rain SAS)
The majority of goodwill arising from the acquisition of T
rainline.com was attributed to the UK Consumer CGU with a
small proportion allocated to the International CGU
. The goodwill related to the Capitaine T
rain SAS acquisition was
mostly attributed to the International CGU, with the r
emainder allocated to the UK Consumer CGU. The carrying amount
of goodwill has been allocated as follows:
CGU
2022
£’000
2021
£’000
UK Consumer
35
1
,
271
3
51,
2
7
1
UK Tr
ainline Partner Solutions
–
–
International
66,0
89
6
8
,1
8
6
T
otal goodwill
4
1
7,
3
6
0
4
19
,
4
5
7
For all CGUs the reco
verable amount was determined by measuring their value in use (‘VIU’).
Assumption
s
The key value in use assumptions wer
e:
2022
UK
Consumer
2021
UK
Consumer
2022
International
2021
International
Pre-tax discount rate
1
9.7
%
11
.
6
%
12
.
0
%
18
.
6
%
T
erminal growth r
ate
2
2
.
5%
1.
5
%
2
.
5%
1.
0
%
Number of years forecasted before
terminal growth r
ate applied
5
5
5
5
1
Th
e pr
e
-
t
ax d
is
co
u
nt r
at
e is b
as
e
d up
on t
h
e we
ig
ht
ed a
ve
r
ag
e co
s
t of c
ap
i
t
al r
e
e
c
t
in
g sp
e
ci
c pr
in
ci
p
al r
is
k
s an
d u
nc
er
t
ai
nt
ie
s
. Th
e d
is
co
un
t ra
te
t
ake
s in
to a
cc
ou
nt t
h
e ri
sk-
f
re
e ra
te o
f re
t
ur
n
, th
e ma
r
ket r
i
sk p
re
mi
um a
nd b
e
t
a fa
c
to
r.
2
Th
e te
rm
in
al g
ro
w
t
h r
at
e re
e
c
t
s t
h
e ex
p
ec
te
d gr
ow
th i
nt
o pe
r
pe
t
ui
t
y of t
he b
us
in
e
ss
, t
a
ki
n
g in
to a
cco
u
nt t
he c
ur
r
en
t ma
rk
et a
nd s
e
c
to
r r
is
k
s
.
There has been no impairment charge for any CGU during the year (FY2021: UK Consumer C
GU £nil, International CGU
£25.2 million).
The Group
prepares cash
ow for
ecasts using ve-year
projections which
are e
xtrapolated fr
om the Boar
d appro
ved three-
year plan. The
forecasts have been
used in the
VIU calculation along
with risk-adjusted discount
rates. Cash
ows be
yond
the ve-year period
are extr
apolated using a
terminal gro
wth rate.
The forecasts
reect management’s
expectations
and best estimates for each CGU. Where costs or assets in the for
ecast are not reported to the C
ODM at a CGU level, as
disclosed in Note 2, a reasonable and consistent allocation basis is applied for the purposes of impairment testing.
Forecasts used for the purposes of the impairment re
view as at 28 February 2022 remain impacted b
y the long-term
effects of Covid-19. T
rading assumptions are based on estimates of mark
et size, estimates of market share and long-
term economic forecasts.
As the International CGU is currently loss-making, the cash o
ws are more sensitive to a change in assumptions in the
initial ve-year forecast period than the UK Consumer CGU
. T
o reect the higher level of uncertainty in the International
forecasts, a premium is applied to the discount r
ate.
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
136
Sensitivity analysis
The Group has conducted sensitivity analysis for reasonably possible changes to k
ey assumptions on each CGU’
s value
in use. This included either increasing the discount rates, r
educing the terminal growth rate, or r
educing the anticipated
future cash ows through changes to r
evenue or costs in each of the years through to the terminal year. The sensitivity
assumptions applied to the value in use calculations are set out in the table below
.
2022
UK
Consumer
2021
UK
Consumer
2022
International
2021
International
Increase in discount rate
1p
t
1p
t
1p
t
1p
t
Reduction in long-term growth r
ate applied in terminal year
0.
5pts
0.5pt
s
0
.5pt
s
0.
5pt
s
Decrease in Adjusted EBITDA forecast in each year
15%
15
%
20%
20%
None of the individual reasonably possible scenarios listed above r
esulted in an impairment charge to any of the CGUs.
11. Prope
r
ty
, plant an
d equipment
This note details the physical assets used by the Gr
oup in running its business.
Accoun
ting po
licy
Items of property
, plant and equipment (‘PPE’) are measured at cost less accumulated depr
eciation 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 o
ver their estimated useful lives and is generally recognised in the income
statement. The estimated useful lives of property
, plant and equipment are as follows:
Plant and equipment
3–7 years
Leasehold improvements
3–10 years/remaining lease length if shorter
Right-of-use assets
Lease length
The Group tests the carrying value of assets including right-of-use (‘ROU’) assets for impairment if there is an indicator
of impairment. PPE is included in the carrying value of the Group’
s CGUs and have been included in the CGU impairment
assessments (see Note 10). There were no additional indicators of specic impairment identied during the year r
elating
to PPE (FY2021: no indicators).
Proper
t
y
, plant and e
quipment as at 2
8 Februar
y 2
02
2:
Plant and
equipment
£’000
Leasehold
improvements
£’000
Right-of-use
assets
£’000
To
t
a
l
£’000
Cost:
At 1 March 2021
9,6
71
4,448
26,8
6
1
40,98
0
Additions
1,7
7
1
2
,53
6
60
0
4
,907
Disposals
(4
,
0
6
3)
–
–
(4
,
0
6
3
)
At 28 F
ebruar
y 2022
7,
3
7
9
6,984
2
7,
4
6
1
41,
8
2
4
Accumul
ated depreciation and impairment:
At 1 March 2021
(
7,
3
6
2
)
(1,
8
9
0)
(5,
857
)
(
1
5
,1
0
9
)
Depreciation
(
1
,
511
)
(62
5
)
(3
,76
5
)
(5
,
9
0
1)
Disposals
4,0
63
–
–
4
,0
63
At 28 F
ebruar
y 2022
(
4,81
0)
(
2
,
515
)
(9,62
2)
(16
,
9
4
7
)
Carrying amounts:
At 28 F
ebruar
y 2022
2,5
69
4
,4
69
1
7,
8
3
9
24,877
137
Strat
egic
Report
Gove
rnanc
e
Financial Statements
11. Prope
r
ty
, plant an
d equipment
c
ontinued
Proper
t
y
, plant and e
quipment as at 2
8 Februar
y 2
02
1:
Plant and
equipment
£’000
Leasehold
improvements
£’000
Right-of-use
assets
£’000
To
t
a
l
£’000
Cost:
At 1 March 2020
8
,278
4,4
48
17,
6
9
2
3
0
,
418
Additions
1
,
4
11
–
4
,9
4
8
6
,
3
59
Disposals
(18
)
–
–
(18
)
Lease extensions
1
–
–
4
,
2
21
4
,
2
21
At 28 F
ebruar
y 2021
9,671
4,4
4
8
2
6
,
8
61
4
0,9
8
0
Accumul
ated depreciation and impairment:
At 1 March 2020
(6,
075
)
(
1,
4
4
5
)
(
2
,
7
14
)
(
1
0,234
)
Depreciation
(1
,
3
0
1)
(4
4
5
)
(
3
,1
4
3
)
(
4,889)
Disposals
14
–
–
14
At 28 F
ebruar
y 2021
(
7,
3
6
2
)
(
1,
8
9
0
)
(
5,
857
)
(
1
5
,1
0
9
)
Carrying amounts:
At 28 F
ebruar
y 2021
2,3
09
2,
558
21
,004
2
5
,
871
1
Rel
at
e
s to l
ea
se e
x
t
en
si
on
s w
hi
ch d
o no
t co
ns
t
i
tu
t
e a ne
w le
a
se a
dd
i
ti
on p
ur
s
ua
nt t
o IF
R
S 16.
12
. T
rade and ot
her re
ceivables
Tr
ade and other receivables include amounts due from cr
edit card companies for consumer ticket sales and amounts
due from business customers and T
rain Operating Companies on account.
Receivables are held with the objective to collect the contractual cash o
ws and are therefor
e recognised initially at
fair value and subsequently measured at amortised cost using the effective interest r
ate method, less provision for
impairment. A provision for the e
xpected loss on trade receivables is established at inception. This is modied when
there is a change in the credit risk. The amount of the e
xpected loss is considered immaterial for the Group.
2022
£’000
2021
£’000
Tr
ade receivables
3
7,
5
8
0
9,
0
4
3
Other receivables
2
,
9
15
59
0
Prepayments
5,03
3
5,4
34
Contract assets
2
,7
8
6
1,
9
2
7
T
otal trade and other receivables
4
8
,
3
14
16
,
9
9
4
There is no material difference between the carrying value and fair value of tr
ade and other receivables. See Note 19 for
more detail on the trade and other r
eceivables accounting policy.
13
. T
rade an
d other p
ay
ables
Tr
ade 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 deferr
ed revenue.
2022
£’000
2021
£’000
Tr
ade payables
1
9
0
,
6
61
2
1,
9
0
8
Accruals
34,043
1
5
,1
3
3
Other creditors
2,800
615
Deferred revenue
225
334
T
otal trade and other pay
ables
2
2
7,
7
2
9
3
7,
9
9
0
There is no material difference between the carrying value and fair value of tr
ade and other payables presented.
See Note 19 for more detail on the trade and other payables accounting policy
.
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
138
14. L
oans and borr
owings
This note details a breakdo
wn of the various loans and borrowings of the Group. It also pr
ovides the terms and
repayment dates of each of these.
Accoun
ting po
licy
Borrowings are r
ecognised initially at fair value less attributable transaction costs incurr
ed. Subsequent to initial
recognition, interest-bearing borro
wings are stated at amortised cost using the effective inter
est method. At the date
borrowings are r
epaid any attributable transaction costs are r
eleased as an exceptional nance cost.
2022
£’000
2021
£’000
Non-current liabilities
Revolving Credit Facility
1
21,
8
0
0
10
0
,
4
17
Convertible bonds
2
112
,
6
6
3
1
4
7,
3
7
8
Other term debt
37
2
16
Lease liabilities
15,
4
9
6
18
,
3
5
8
T
otal non-current liabilities
14
9
,
9
9
6
266
,
3
69
Current liabilities
Accrued interest
1,4
2
5
8
31
Lease liabilities
3,48
9
3,336
T
otal current liabilities
4,
9
14
4
,1
6
7
1.
In
cl
ud
e
d wi
t
hi
n th
e Re
v
ol
v
in
g Cr
e
di
t Fac
il
i
t
y i
s th
e pr
i
nc
ip
al a
m
ou
nt o
f £
2
5.
0 mil
li
o
n (F
Y
20
21: £
104
.9 m
il
li
on) an
d d
ir
ec
t
l
y a
t
t
ri
bu
t
a
bl
e tr
an
s
ac
ti
on
co
s
t
s of £
3
.
2 mi
ll
io
n (F
Y
2
021: £4
.
5 mi
ll
io
n).
2.
In
cl
ud
e
d wi
t
hi
n th
e co
nv
e
r
t
ib
le b
o
nd
s is t
h
e pr
in
ci
p
al a
mo
un
t of £11
4
.
8 mi
ll
io
n (
F
Y
2
021: £1
50
.0 mi
ll
io
n) an
d di
re
c
t
l
y at
tr
i
bu
t
ab
l
e tr
an
s
ac
t
i
on co
s
t
s
of £
2
.1 mill
io
n (F
Y
2
021: £2
.6 m
il
li
on)
. D
ur
in
g F
Y
202
2 t
he G
r
ou
p bo
u
gh
t ba
ck a
n
d ca
nc
el
l
ed £
3
5.
2 m
il
li
on (
fa
ce v
al
ue) o
f i
t
s ow
n co
nv
er
ti
b
le b
on
d
s fo
r
£
31.3 m
il
li
on
, r
es
ul
t
in
g in a g
ai
n of £
3
.9 mi
ll
io
n p
re
se
nt
e
d on t
he i
nc
om
e s
t
a
te
me
nt w
i
th
in 
na
n
ce in
co
m
e.
T
erms and repa
yment schedul
e
Agreement
Interest rate
Y
ear of
maturity
Fac
e value
£’000
Carrying
amount
£’000
Revolving Credit Facility
LIBOR/SONIA
1
+ 1-2%
202
4
25,
000
2
1,
8
0
0
Convertible bonds
1.00%
2
026
1
1
4,800
112
,
6
6
3
Lease liabilities
Various
2
Var
io
u
s
20,
2
81
18
,
9
8
5
Other term debt
0.0%
202
2
37
37
T
otal borrowings
16
0
,11
8
1
53,
485
1
Th
e in
te
re
s
t ra
te a
pp
l
ic
ab
l
e to t
he R
ev
ol
v
i
ng C
re
di
t Fa
ci
li
t
y w
as L
IB
OR p
l
us 2
% un
ti
l 31 D
ec
em
b
er 2
021. Fo
ll
ow
i
ng t
h
e ce
ss
a
ti
on o
f L
I
BO
R
, t
he i
nt
er
es
t
ra
te a
pp
li
c
ab
le t
o th
e R
ev
ol
v
in
g Cr
e
di
t Fac
il
i
t
y w
as S
ON
I
A p
l
us c
re
di
t a
dj
us
t
me
n
t sp
re
ad p
lu
s 1-2% f
r
om 1 J
an
ua
r
y 2
02
2
.
2
Th
e av
er
ag
e in
te
r
es
t r
at
e of l
ea
s
e lia
bi
li
t
ie
s is 4
.
0
%.
The following are the r
emaining contractual maturities of nancial liabilities at the reporting date. The amounts ar
e
gross and undiscounted, and include estimated future interest payments, so will not necessarily r
econcile to amounts
disclosed on the statement of nancial position.
T
otal
contractual
cash ows
£’000
Less than
1 year
£’000
Between
1 and 2 years
£’000
Between
2 and 5 years
£’000
Over
5 years
£’000
Revolving Credit Facility
26,456
51
0
625
25,
321
–
Convertible bonds
119
,
2
1
3
1
,1
4
8
1
,1
4
8
11
6
,
9
17
–
Lease liabilities
20,
2
81
3,9
40
9,
32
3
6,0
81
93
7
Other term debt
37
37
–
–
–
T
otal cash ows
16
5,
9
8
7
5,635
11
,
0
9
6
14
8
,
3
19
93
7
139
Strat
egic
Report
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rnanc
e
Financial Statements
14. L
oans and borr
owings
continued
Revolving Cre
dit Facilit
y
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 co
ver bank guarantees. At 28 February 2022 the cash dr
awn amount is £25.0
million (FY2021: £104.9 million), the non-cash bank guarantee drawn amount is £51.3 million (FY2021: £21.9 million) and
the undrawn amount on the facility is £273.7 million (FY2021: £223.2 million).
The Group’s Re
volving Credit Facility is secur
ed by a xed and oating charge o
ver certain assets of the Group. Interest
is payable on a margin of 1.0% to 2.0% above LIBOR until 31 December 2021, and on a margin of 1.0% to 2.0% abo
ve
SONIA plus credit adjustment spread fr
om 1 January 2022.
The Group is subject to certain bank covenants under this facility
, howe
ver, those nancial covenants were waived by the
Group’s loan syndicate until and including February 2022, to support the business thr
ough the Covid-19 pandemic and
the related impact on trading. The Gr
oup was in compliance with bank covenants on 28 February 2022, albeit with the
covenant waiver remaining in place on this date. As part of the waiver, the Gr
oup was required to maintain a minimum
liquidity headroom of £50 million on a monthly basis from April 2020 to December 2020. This r
equirement was increased
to £75 million on a monthly basis subsequent to the issuance of the convertible bonds in January 2021 and until
February 2022. The Group was in compliance with the liquidity requir
ement throughout all applicable periods.
Conv
ertible bonds
On 7 January 2021, Tr
ainline 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 ve-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% abo
ve share price on 7 January 2021 (£4.4447).
The bonds were accounted for as a liability of £150.0 million upon issuance. Directly allocable fees wer
e offset against
the liability and will be unwound over the lifetime of the instrument. The bonds were accounted for as a liability as
certain terms within the terms and conditions attached to the bonds meant Tr
ainline plc has an unavoidable obligation
to settle in cash.
During FY2022, the Group bought back and cancelled £35.2 million (face value) of its own convertible bonds for £31.3
million, resulting in a gain of £3.9 million presented on the income statement within nance income. As at FY2022,
the Group had convertible bonds with a principal amount of £114.8 million in issuance (FY2021: £150.0 million).
15. Share-
based pay
ments
During the year the Group has operated a number of equity-settled shar
e-based payment schemes.
Accoun
ting po
licy
Equity-settled share-based payment schemes are initially measur
ed at fair value at the grant date and recognised
as a charge in the income statement over the vesting period based on the Group
’s estimate of the share that will
eventually vest and adjusted for the effect of non-market vesting conditions. A corr
esponding increase in reserves
is also recognised in equity
.
Share
-ba
sed payment char
ges re
cognis
ed within administ
rative cost
s
2022
£’000
2021
£’000
Share-based payment schemes
6
,78
3
7,
0
9
3
T
otal income statement impact
6
,78
3
7,
0
9
3
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
14
0
The Group operates the follo
wing equity-settled share-based payment schemes with a £nil ex
ercise price:
Share Inc
entive Plan
The Share Incentive Plan (‘SIP’) was offered to all UK Company staff emplo
yed 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 and all emplo
yees that have not
opted out or left the business between 26 June 2019 and 31 July 2022 will be entitled to shares in T
rainline plc worth
£3,600 at grant date.
International Shar
e Incentive Plan
The International Share Incentive Plan (‘International SIP’) was offered to all non-UK Company staff emplo
yed 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 and
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 T
rainline plc worth £3,600 at grant date.
Restric
ted Shar
e Plan
The Restricted Share Plan (‘RSP’) awards Restricted Shar
e Units (‘RSUs’) to certain members of the executive team and
senior management. The majority of awards vest evenly in thr
ee tranches over a thr
ee-year period. All participants that
have not left the business on the vesting date will be entitled to RSUs which each represent the right to r
eceive one
ordinary share in T
rainline plc.
Perfo
rmance Shar
e Plan
The Performance Share Plan (‘PSP’) award is offer
ed to certain members of the Board and ex
ecutive team. Awards
vest three years after the grant date and ar
e subject to the Group meeting specied performance conditions. Only
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 shar
e in Tr
ainline plc.
Spe
cic RSU Award
In addition to the above schemes and as detailed in the prospectus, one member of the Boar
d received a grant of RSUs
with a grant date value of £300,000 (calculated by r
eference to the offer price) vesting subject to continued appointment
to the Board in equal tranches o
ver the three years following Admission.
Matchi
ng Sha
res
From 20 April 2020, all Company employees wer
e entitled to one free matching share for e
very one partnership share
they purchase under the Share Incentive Plan (‘SIP’), subject to r
emaining employees for the thr
ee-year vesting period.
The Group operated two additional equity-settled shar
e-based payment schemes with a £nil exer
cise price in FY2021:
1,00
0 RSU IP
O Award
The 1,000 Restricted Share Unit (‘RSU’) IPO award was offer
ed to all Company staff employed on 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
had not opted out or left the business between 26 June 2019 and 31 July 2020 were entitled to 1,000 RSUs which each
represented the right to r
eceive one ordinary share in T
rainline plc.
12
-month RS
U IPO Award
The 12-month RSU IPO award was offered to certain members of the e
xecutive 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 r
eceive one ordinary share in T
rainline plc.
1
41
Strat
egic
Report
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rnanc
e
Financial Statements
Key assumptions used in valuing the share-based payments wer
e as follows:
15
. Share
-ba
sed payments c
ontinued
1,000
RSU IPO
award
1
Share
Incentive Plan
International
Share
Incentive plan
12-month
RSU IPO
award
Annual
RSU award
Annual
PSP award
Specic
RSU award
Matching
Shares
Exit date
31 July
2020
31 July
2022
31 July
2022
26 June
2020
3 years
after grant
date
3 years
after grant
date
26 June
2020
2
3 years
after grant
date
Attrition
rate
17%
36%
36%
23%
26% - 35%
20% - 30%
30%
41%
Weighted
average fair
value
428p
420p
420p
350p
367p
396p
350p
366p
1
Sc
he
me f
u
ll
y ve
s
t
ed i
n F
Y
2
021. Ke
y as
su
mp
t
io
ns r
e
e
c
t t
he 
na
l as
s
um
pt
io
n
s us
ed i
n F
Y
202
1.
2
Ex
i
t da
te f
or 
r
s
t tr
an
c
he a
nd t
h
en a
nn
ua
ll
y f
or f
ol
lo
w
in
g t
w
o ye
ar
s
’ a
wa
rd
s
.
Carry
ing value and fair value of share
-base
d 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 shar
e-based payments is £6.8 million (FY2021: £7.1 million), including the
relevant emplo
yer’s social security contributions.
2022
£’000
2021
£’000
1,000 RSU IPO Award
–
1
,11
5
Share Incentive Plan
199
486
International Share Incentive Plan
36
54
12-month RSU IPO Award
–
2
,1
2
0
Restricted Share Plan
2,7
0
5
2
,29
4
Performance Share Plan
3
,7
3
2
89
0
Specic RSU Award
15
10
9
Matching Shares
96
25
T
otal income statement impact
6
,78
3
7,
0
9
3
The movements in share awar
ds are summarised as follows:
Outstanding
1,000 RSU
IPO Award
number
Share
Incentive
Plan number
International
Share
Incentive
Plan number
12-month RSU
IPO Award
number
Restricted
Share Plan
number
Performance
Share Plan
number
Specic
RSU Awar
d
number
Matching
Shares
At 1 March 2020
52
5
,
000
4
0
7,
9
3
2
43
,70
7
1,
5
0
0
,7
5
5
42
2,
493
1,
5
4
1,9
2
5
8
5
,
7
14
–
Granted
–
–
–
–
5
74
,
8
9
8
2,
5
4
3
,0
91
–
5
2
,1
9
1
Lapsed
(36,000)
(84,843)
(
5
,1
3
9
)
(2
8
,
82
3)
(
1
5
4
,
4
11
)
(
1
,
4
8
7,
8
1
9
)
–
(
4
,13
6
)
Exercised
(
4
89
,000
)
–
–
(1,
4
7
1,
9
3
2
)
(8
4
,
527
)
–
–
(1,
0
8
0
)
At 28 F
ebruar
y 2021
and 1 March 2021
–
323,0
89
38,568
–
758
,4
53
2
,
5
9
7,1
9
7
8
5
,
714
4
6,975
Granted
–
–
–
–
1,9
3
3
,
6
2
9
3,53
3,470
–
74
,
0
9
3
Lapsed
–
(67
,703)
(
1
4
,1
9
5
)
–
(20
8,0
02)
(
1,8
13
,806)
–
(11
,
3
17
)
Exercised
–
–
(2
,
9
4
8)
–
(8
6
5,
5
4
8)
–
(
5
7,1
4
2
)
(
2
,
8
9
1)
At 28 F
ebruar
y 2022
–
255,386
2
1,
4
2
5
–
1
,
618
,
5
3
2
4,31
6,86
1
28,5
72
10
6
,
8
6
0
The weighted average share price at the date shar
e options were exer
cised was 299p (FY2021: 355p).
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
142
16
. Capital and rese
r
ves
Share cap
ital
Share capital repr
esents the number of shares in issue at their nominal value.
Ordinary shares in the Gr
oup are issued, allotted and fully paid up. The holders of ordinary shares ar
e entitled to receive
dividends as declared from time to time and ar
e entitled to one vote per share at meetings of the Company
.
Shareh
olding at 28 Februar
y 2
02
2 and 2
8 Februar
y 2
02
1
Number
£’
000
Ordinary shares – £0.01
480,680,508
4,807
Share pr
emium
Share premium repr
esents the amount over the nominal value which was received b
y the Group upon the sale of the
ordinary shares. Upon the date of listing the nominal value of shar
es was £1.00 but the initial offering price was £3.50.
Share premium is stated net of any dir
ect costs relating to the issue of shares.
Retained earning
s
Retained earnings represents the prot the Gr
oup makes that is not distributed as dividends. No dividends have been
paid in any year.
Foreign exchange
The foreign exchange r
eserve represents the net differ
ence on the translation of the statement of nancial position
and income statements of foreign operations fr
om functional currency into reporting currency o
ver the period such
operations have been owned by the Gr
oup.
Other reser
ves
Merger
reserve
£’000
T
reasury
reserve
£’000
SBP
1
reserve
£’000
T
otal other
reserves
£’000
At 1 March 2020
(
1
,12
2
,
2
1
8
)
(10
,
8
9
7
)
7,
3
6
0
(1
,
1
25,755)
Addition of treasury shares
–
(
4
,12
3
)
–
(
4
,1
2
3
)
Share-based payment charge
–
–
5,420
5
,420
Allocation of treasury shares to full shar
e-based payment
–
7
,268
(7
,268
)
–
Deferred tax on share-based payment
–
–
(
25
4)
(2
5
4)
Tr
ansfer to retained earnings
1
–
–
(28
0)
(2
8
0)
At 28 F
ebruar
y 2021
(
1
,12
2
,
2
18
)
(
7,
7
5
2
)
4
,9
78
(
1
,12
4
,
9
9
2
)
Addition of treasury shares
–
(1
6
,
6
0
0
)
–
(16
,
6
0
0
)
Share-based payment charge
–
–
5,98
4
5,
98
4
Allocation of treasury shares to full shar
e-based payment
–
2
,621
(2,823
)
(202)
Deferred tax on share-based payment
–
–
94
94
Tr
ansfer to retained earnings
1
–
–
(9
4
5)
(9
4
5)
At 28 F
ebruar
y 2022
(
1
,1
2
2
,
2
1
8
)
(2
1,7
3
1)
7
,
288
(
1
,1
3
6
,
6
6
1
)
1
T
r
an
s
f
er t
o re
t
ai
ne
d ea
r
ni
ng
s re
la
t
es t
o th
e di
f
fe
re
nc
e be
t
w
e
en t
he s
ha
re p
r
ic
e at g
ra
nt d
at
e of t
h
e exe
r
ci
se
d sh
ar
e
s an
d th
e ac
tu
al c
os
t o
f th
e
tr
ea
su
r
y s
ha
re
s p
ur
ch
as
ed t
o f
ul
l th
e sh
ar
e
-
b
as
ed p
a
ym
e
nt
.
Merger reser
ve
Prior to the initial public offering (‘IPO’) the ordinary shares of the pr
e-IPO top company, Victoria Investments S.
C.A.,
were acquired by T
rainline plc. As the ultimate shareholders and their relating rights did not change as part of this
transaction, this was treated as a common contr
ol transaction under IFRS. The balance of the merger reserve r
epresents
the difference between the nominal value of the reserves fr
om the Victoria Investments S.C.A. Gr
oup and the value of
reserves in T
rainline plc prior to the restructur
e.
14
3
Strat
egic
Report
Gove
rnanc
e
Financial Statements
16
. Capital and rese
r
ves
continued
T
reasur
y reserve
Tr
easury shares reect the value of shar
es held by the Group’
s Employee Benet T
rusts (‘EBT’).
At 28 February 2022 the Group’
s EBT held 8.0 million shares (FY2021: 2.1 million) which have a
historical cost of £21.7 million (FY2021: £7.8 million).
Share-based payment reserve
The share-based payment reserve is built up of charges in r
elation to equity-settled share-based payment arrangements
which have been recognised within the prot and loss account.
17
. O
ther emplo
y
ee benets
This note explains the accounting policies governing the Gr
oup’s pension schemes and details the calculations and
actuarial assumptions related to these.
The majority of the Group’
s employees are members of a dened contribution pension scheme. Additionally
, the Group
operates one dened benet pension plan which is closed to new entr
ants.
For dened contribution schemes, the Group pays contributions into separate funds on behalf of the emplo
yee and
has no further obligations to employees. The risks associated with this type of plan are assumed b
y the member.
Contributions paid by the Group in r
espect of the current year are included within Note 5.
The dened benet scheme is a pension arrangement under which participating members receive a pension benet
at retirement determined b
y the scheme rules, salary and length of pensionable service. The income statement charge
for the dened benet scheme is the current/past service cost and the net interest cost which is the change in the net
dened benet liability that arises from the passage of time. The Group underwrites both nancial and demogr
aphic
risks associated with this type of plan.
Accoun
ting po
licy
(i) Short-
ter
m emplo
yee benets
Short-term employee benets are e
xpensed as the related service is pro
vided. A liability is recognised for the amount
expected to be paid if there is a pr
esent legal or constructive obligation to pay this amount as a result of past service
provided by the emplo
yee and the obligation can be estimated reliably
.
(ii) Dene
d contribut
ion plans
Obligations for contributions to dened contribution plans are expensed as the r
elated service is provided. Pr
epaid
contribution is recognised as an asset to the extent that a cash r
efund or a reduction in future payments is available.
(iii) Dened benet plans
The Group participates in a dened benet scheme which is closed to new members. The assets of the scheme ar
e
held separately from those of the Gr
oup. Pension scheme assets are measured using market values.
The Group’s net obligation in r
espect of dened benet plans is calculated separately by estimating the amount of
future benet that employees have earned in the curr
ent and prior periods, discounting that amount and deducting
the fair value of any plan assets.
The calculation of dened benet obligations is performed every period end by a qualied actuary using the
projected unit credit method and discounted at the curr
ent 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 benets available in the form of any futur
e refunds
from the plan or reductions in future contributions to the plan. T
o calculate the present value of economic benets,
consideration is given to any applicable minimum funding requir
ements.
The scheme is subject to an asset ceiling, meaning when the scheme is remeasured and sho
ws a net asset position
an ‘asset ceiling’ is applied equal to this amount, meaning the Gr
oup recognises no asset on its statement of nancial
position. This is because the Group does not have an irre
vocable right to the surplus of the scheme. If the scheme is
in a net decit the Group would recognise the liability
.
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
14
4
Remeasurement of the net dened benet liability
, which comprise actuarial gains and losses, the return on plan
assets (excluding inter
est) and the effect of the asset ceiling (if any, e
xcluding interest), ar
e recognised immediately
in other comprehensive income. The Group determines the net inter
est expense (income) on the net dened benet
liability (asset) for the period by applying the discount rate used to measur
e the dened benet obligation at the
beginning of the annual period to the then-net dened benet liability (asset), taking into account any changes in
the net dened benet liability (asset) during the period as a result of contributions and benet payments. Net
interest expense and other e
xpenses related to dened benet plans are recognised in the income statement.
When the benets of a plan are changed or when a plan is curtailed, the resulting change in benet that r
elates
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 dened benet plan when the settlement occurs.
(iv) T
ermination benets
T
ermination benets are expensed at the earlier of when the Gr
oup can no longer withdraw the offer of those
benets and when the Group recognises costs for a restructuring. If benets ar
e not expected to be settled wholly
within 12 months of the end of the reporting period, then they ar
e discounted.
Dened benet pension plan
(
a) The Scheme
Qjump Limited, a subsidiary of the Group, operates a dened benet pension scheme which is closed to ne
w
entrants. The Qjump Shared Cost Section of the Railways Pension Scheme (‘the Scheme’) is a funded scheme and
provides benets based on nal pensionable pay
. The assets of the Scheme are held separately fr
om those of the
Company and are managed by RPMI. As the Scheme is curr
ently in an asset position no contributions are expected
from the Group in the coming year, apart fr
om to cover the Scheme administration costs.
T
riennial valuation
The most recent published actuarial valuation was carried out by the Scheme Actuary as at 31 December 2019.
IAS 19 Employee Benets valuation
The IAS 19 valuations of the dened benet pension scheme have been updated at each period end, the latest being
28 February 2022 by qualied independent actuaries Willis T
owers Watson Ltd. The main nancial 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 r
eporting date (expressed as weighted aver
ages).
2022
% pa
2021
% pa
Discount rate
2
.65
2.20
Price ination (RPI measure)
3.50
3.05
Increases to deferred pensions (CPI measur
e)
3
.1
0
2.6
0
Pension increase (CPI measure)
3
.1
0
2.6
0
Salary increase
n
/a
n
/a
Assumptions regarding future mortality have been based on published statistics and mortality tables. The curr
ent
longevities underlying the values of the dened benet obligation at the reporting date wer
e as follows:
2022
years
2021
years
Longevity at age 65 for current pensioners
Males
19.
8
19
.
9
Females
2
2
.7
2
2
.7
Longevity at age 65 for current members aged 45
Males
21.
2
2
1.
3
Females
24.2
24.
3
14
5
Strat
egic
Report
Gove
rnanc
e
Financial Statements
17
. O
ther emplo
y
ee benets
continued
Assumptions used are best estimates from a r
ange of possible actuarial assumptions, which may not necessarily be
borne out in practice.
Given the net position is not signicant, changes in assumptions are not likely to impact the valuation signicantly
.
When dened benet funds have an IAS 19 surplus, they are r
ecorded at the lower of that surplus and the future
economic benets available in the form of a cash refund or a reduction in futur
e contributions. Any adjustment
to the surplus is recorded in other compr
ehensive income.
2022
£’000
2021
£’000
Liability
Deferred members
(
3
,7
0
6
)
(3
,6
8
8)
Pensioner members (including dependents)
(1,
0
8
8)
(1,14
4
)
To
t
a
l
(4
,7
9
4
)
(4,832
)
Value of assets at end of year
5,2
32
4
,9
4
6
F
unded status at end of year
438
11
4
Adjustment for the member’s share of surplus
(17
5
)
(4
6
)
Effect of asset ceiling
(2
6
3)
(6
8)
Net dened benet at end of year
–
–
2022
£’000
2021
£’000
Employer’s share of administration cost
11
27
T
otal employer’s share of service cost
11
27
Employer’s share of net interest on net dened benet
(1)
–
Employ
er
’
s share of pension expense
10
27
(ii) Other comprehensiv
e income (
‘OCI’)
2022
£’000
2021
£’000
(Gain)/loss due to the liability expense
(77)
10
5
Loss due to the liability assumption changes
25
61
Adjustment for the members’ share
13
6
43
Return on plan assets greater than discount rate
(28
7)
(
269)
Change in effect of the asset ceiling
19
3
33
T
otal gain recognised in OCI
(10)
(
27)
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
14
6
(b
) Movements in net dened b
enet asse
t
/liability
The following table shows the r
econciliation from the opening balances to the closing balances for net dened benet
liability/asset and its components.
2022
£’000
2021
£’000
Dened benet obligation
Opening balance
4,832
4,6
33
Interest cost
10
5
85
Dened benet obligation
4,93
7
4
,
7
18
Actuarial gain arising from:
Financial assumptions
30
12
1
Experience adjustment
(77)
10
5
Demographic adjustment
(5)
(60)
(52)
16
6
Other
Benets paid
(
9
1)
(52)
Closing balance
4
,7
9
4
4,832
Reconciliation of value of assets:
2022
£’000
2021
£’000
Opening value of Scheme assets
4
,94
6
4,6
89
Interest income on assets
10
8
86
Return on plan assets greater than discount rate
287
269
Employer and employee contributions
–
–
Actual benet payments
(9
1)
(5
2)
Administration costs
(18)
(4
6
)
Closing value of Scheme assets
5,2
32
4
,9
4
6
(
c) P
lan assets
Plan assets comprise:
2022
£’000
2021
£’000
Growth assets
1
3
,
0
17
3
,117
Government bonds
1,
2
9
5
1,
2
4
0
Non-government bonds
919
57
8
Other assets
1
11
T
otal plan assets
5,2
32
4
,9
4
6
1
I
ncludes funds
with a g
rowth focus, predominantly comprising
global equit
y securities and
infrastruc
ture assets.
All equity securities and government bonds have quoted prices in active markets.
147
Strat
egic
Report
Gove
rnanc
e
Financial Statements
17
. O
ther emplo
y
ee benets
continued
(
d) Risk exposure
Through its dened benet pension plans, the Group is exposed to a number of risks, the most signicant 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 dened benet obligation. The Scheme holds a pr
oportion of growth assets, which are
expected to outperform corporate and government bond yields in the long term, but give e
xposure 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
dened benet obligation, although this will be partially offset by an increase in the value of the Scheme’
s
corporate bond holdings.
•
Ination risk: The majority of the Scheme’s dened benet obligation is linked to ination, where higher ination
will lead to a higher value being placed on the dened benet obligation. Some of the Scheme’s assets ar
e either
unaffected by ination or loosely correlated with ination (e.g. gr
owth assets), meaning that an increase in ination
will generally increase the decit.
•
Life expectancy: An increase in life expectancy will lead to an increased value being placed on the Scheme’
s dened
benet obligation. Future mortality rates cannot be pr
edicted with certainty.
(
e
) Sensitivit
y analysis
A quantitative sensitivity analysis for signicant assumptions as at 28 February is as shown below:
Approximate change in
dened benet obligation
2022
£’000
2021
£’000
Discount rate
0.25% decrease
2
51
270
0.25% increase
(2
3
4)
(
2
51)
Price ination (
CPI measure
)
0.25% decrease
(22
6)
(
246)
0.25% increase
234
26
4
Life expectancy
Decrease by 1 year
18
6
18
5
Increase by 1 year
(1
8
6
)
(18
5
)
(
f
) Fundi
ng arrangeme
nts
Under the UK’s scheme-specic funding regime, contributions ar
e payable in line with the Schedule of Contributions
from the most recent formal actuarial valuation. Ther
e are no contributions expected for ne
xt year.
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
14
8
18
. Changes in liabilities arising fr
om nancing ac
tivities
The table below details changes in liabilities arising from nancing activities, including both cash and
non-cashchanges.
Loans &
borrowings
(c
urrent &
non-
current)
£’000
Lease
liabilities
£’000
To
t
a
l
£’000
Balance at 1 March 2021
24
8
,
8
41
21,
6
9
5
2
70,5
36
Changes from cash ows
Interest paid
(
5
,1
0
3
)
(47
7
)
(5,
58
0)
Issue costs and fees
(11
0
)
–
(110
)
Buyback of convertible bonds
(
3
1,
3
0
7
)
–
(
3
1,
3
0
7
)
Proceeds from Revolving Cr
edit Facility
97
,000
–
97
,000
Repayment of Revolving Credit Facility and other borr
owings
(1
7
7,1
1
6
)
–
(
1
7
7,1
1
6
)
Repayment of lease liability
–
(
3
,7
9
4)
(
3
,7
9
4
)
T
otal changes from nancing cash ows
(11
6
,
6
3
6
)
(4
,
2
7
1)
(
12
0
,
9
0
7
)
Changes in fair value
–
–
–
Other changes
Capitalised borrowing cost r
eleases
1,
9
11
–
1,
9
11
Net interest expense
5,7
2
2
59
4
6
,
316
Gain on convertible bond buyback
(3,91
4)
–
(3,914
)
Remeasurement of lease liabilities
–
9
67
967
Balance at 28 F
ebr
uary 2022
13
5
,
9
2
4
18
,
9
8
5
15
4
,
9
0
9
Loans &
borrowings
(c
urrent &
non-
current)
£’000
Lease
liabilities
£’000
To
t
a
l
£’000
Balance at 1 March 2020
141,
7
5
4
1
5,346
1
5
7,1
0
0
Changes from cash ows
Interest paid
(4
,9
4
0)
(536)
(
5
,
476)
Issue costs relating to loans and borro
wings
(2
,69
0)
–
(2,69
0)
Proceeds from issuance of convertible bonds
1
50
,000
–
1
50
,000
Proceeds from Revolving Cr
edit Facility
95,000
–
95,0
0
0
Repayment of Revolving Credit Facility and other borr
owings
(
1
3
7,
1
8
4
)
–
(
1
3
7,1
8
4
)
Repayment of lease liability
–
(2
,
676
)
(
2
,
676
)
T
otal changes from nancing cash ows
1
0
0
,1
8
6
(
3
,
21
2)
9
6
,
9
74
Changes in fair value
–
–
–
Other changes
Capitalised borrowing cost r
eleases
1,
4
2
8
–
1,
4
2
8
Interest expense
5,
47
3
69
4
6
,1
6
7
Additional lease liabilities
–
4
,
6
31
4
,
631
Remeasurement of lease liabilities
–
4
,
2
61
4
,
2
61
Foreign ex
change revaluation
–
(2
5)
(25)
Balance at 28 F
ebr
uary 2021
2
4
8
,
8
41
2
1,
6
9
5
270,
53
6
149
Strat
egic
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Gove
rnanc
e
Financial Statements
19. Financial inst
ruments
Financial instruments comprise nancial assets and nancial liabilities. The fair values and carrying amounts are set out
in the table below
.
Accoun
ting po
licy
Categorisation within the hierarchy
, measured or disclosed at fair value, has been determined based on the lo
west level
of input that is signicant to the fair value measurement as follows:
•
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 Level 1
•
Level 3 – valued by reference to valuation techniques using inputs that ar
e not based on observable market data
Measurement
level
2022
£’000
2021
£’000
Cash and cash equivalents
1
68,
496
3
6,
575
Tr
ade and other receivables
2
4
0,
495
9,
63
3
T
otal nancial asset
s
10
8
,9
91
4
6
,20
8
Tr
ade and other payables
2
(19
3
,
4
61)
(
2
2,
5
2
3)
Loans and borrowings
2
(13
4
,
5
0
0
)
(248
,01
1)
Lease liabilities
2
(18
,
9
8
5
)
(21
,695)
T
otal nancial liabilities
(34
6,94
6)
(292,
2
2
8)
There have been no transfers between le
vels in any of the years. Other non-current liabilities are valued using mark
et
established valuation techniques.
Accounting de
nitions
Financial assets
The Group classies its non-derivative nancial assets into the following categories: cash and cash equivalents and tr
ade
and other receivables. The classication depends on the purpose for which the assets are held. The classication is rst
performed at initial recognition and then re-e
valuated at every reporting date for nancial assets other than those held
at fair value through the income statement.
(i) Cash and ca
sh equivalents
Cash and cash equivalents comprise cash balances and call deposits.
The carrying value of cash in the statement of nancial position is valued at amortised cost.
(ii) T
ra
de and other receivable
s
Tr
ade and other receivables are initially r
ecognised at fair value. Subsequent to initial recognition, they ar
e measured
at amortised cost using the effective interest method, less any impairment losses. T
rade and other receivables ar
e
presented in current assets in the statement of nancial position, e
xcept for those with maturities greater than
one year after the reporting date.
Tr
ade and other receivables, classied as nancial assets, ex
clude prepayments and contract income.
Fina
ncia
l liabili
ties
The Group classies its nancial liabilities into the following categories: tr
ade and other payables, loans and borrowings,
other non-current liabilities and lease liabilities.
(i) T
rade and other payables
Tr
ade payables and accruals, which include amounts owed to carriers in respect of tick
et sale monies that the Group has
collected on their behalf and amounts due to other suppliers for general business expenditur
e, are initially recognised at
fair value less any directly attributable transaction costs. Subsequent to initial r
ecognition, these liabilities are measured
at amortised cost using the effective interest method.
Tr
ade and other payables are classied as nancial liabilities, ex
cluding deferred re
venue and accruals.
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
150
(ii) Loans and b
orrowings
The nancial liabilities recognised in this category include secured loan facilities, convertible bonds and pr
eference
shares held by the Gr
oup and are presented in borro
wings in both current and non-current liabilities in the statement
of nancial position.
Borrowings are r
ecognised initially at fair value less attributable transaction costs incurr
ed. Subsequent to initial
recognition, interest-bearing borro
wings are stated at amortised cost using the effective inter
est method.
(iii
) Le
ase
liabilitie
s
The Group recognises lease liabilities for leases within the scope of IFRS 16 Leases.
Financial risk manag
ement
The Group’s activities e
xpose it to a variety of nancial risks: market risk (including inter
est rate risk), credit risk and
liquidity risk. The Group’
s overall risk management frame
work seeks to minimise potential adverse effects on the
Group’s nancial performance.
(i) Risk management framework
The Group’s Dir
ectors have overall r
esponsibility for the establishment and oversight of the Group
’s risk
management framework.
The Group’s risk management policies ar
e established to identify and analyse the risks faced by the Gr
oup, to set
appropriate risk limits and controls and to monitor risks and adher
ence to conditions and the Group’s activities. The
Group, through its training and management standar
ds and procedures, aims to maintain a disciplined and constructive
control environment in which all emplo
yees understand their roles and obligations.
(ii) Market risk
The Group is exposed to mo
vements in LIBOR (up to 31 December 2021) and SONIA (from 1 January 2022) on its variable
rate Revolving Cr
edit Facility (see Note 14) and the Group has transactional for
eign currency exposur
es, which arise
from sales and purchases by the r
elevant segment in currencies other than the Gr
oup’s functional curr
ency. Based on
sensitivity analysis performed, an increase in the interest r
ate of 100 basis points would have increased FY2022 loss after
tax by £0.9 million (FY2021: increase b
y £2.2 million), and a decrease in the interest r
ate of 100 basis points would have
decreased FY2022 loss after tax by £0.9 million (FY2021: decr
ease of £2.2 million).
(iii)
Cre
dit ri
sk
Credit risk is the risk of nancial loss to the Group if a customer or counterparty to a nancial instrument fails to
meet its contractual obligations and arises principally from the Gr
oup’s r
eceivables from customers. T
rade receivables
are assessed for risk of default by customers on a periodic basis and terms of tr
ade are adjusted accordingly
. T
rade
receivables are insur
ed on risk and cost grounds.
Under the terms of the Group’
s retail licences, carriers requir
e certain security arrangements with the Group in order to
mitigate its credit risk under the payment and settlement procedur
es outlined in the licences. The Group satises these
security arrangements through letters of cr
edit from the Group’
s lenders. The letters of credit are pr
ovided under the
Group’s £350 million Re
volving Credit Facility
, details of which are included in Note 14.
Debt is revie
wed on a weekly basis and any customers who fall overdue ar
e chased immediately; if payment is not
received, the account is put on hold until pre
vious debts are cleared.
(iv) Liquidity risk
Liquidity risk is the risk that the Group will encounter diculty in meeting the obligations associated with its nancial
liabilities that are settled by delivering cash or another nancial asset. The Gr
oup’s appr
oach is to ensure, as far as
possible, that it will have sucient liquidity to meet its liabilities when they are due, under both normal and str
essed
conditions, without incurring unacceptable losses or risking damage to the Group’
s reputation.
The Group maintains a daily cash forecast in or
der to ensure that it has sucient liquidity to cover all e
xpected cash
ows including scheduled repayment of debt.
1
51
Strat
egic
Report
Gove
rnanc
e
Financial Statements
19. Financial inst
ruments
continued
In addition, a Revolving Credit Facility under which the Group is able to dr
aw down cash of up to £350 million is in place.
Of the £350
million, £34.9 million (FY2021:
£8.2 million) was
utilised by
a guarantee
provided
to the Rail
Settlement Plan
Limited. A further
£15.9 million (FY2021: £13.2
million) was utilised
by guar
antees pro
vided to Eur
opean T
rain Oper
ating
Companies and £0.5
million (FY2021: £0.5 million)
for other guar
antees. The r
emaining headroom
on the Re
volving
Credit Facility
at 28 February 2022
was £273.7 million
(FY2021: £223.2 million).
This is available
to draw
in cash or
bank
guarantees.
Under the Revolving Credit Facility
, the Group’
s covenant requir
es the ratio of consolidated net debt to consolidated
Adjusted EBITDA to be no more than 3.75x. This co
venant ratio is tested on a semi-annual basis. As disclosed in Note 14,
this nancial covenant was waived by the Gr
oup’s loan syndicate until and including February 2022. The Gr
oup was in
compliance with the bank covenant on 28 February 2022, despite the covenant waiver r
emaining in place on this date.
As part of the waiver, the Group was requir
ed to maintain a minimum liquidity headroom of £50 million on a monthly
basis from April 2020 to December 2020. This requir
ement was increased to £75 million on a monthly basis subsequent
to the issuance of the convertible bonds in January 2021 and until February 2022. The Group was in compliance with the
liquidity requirement thr
oughout all applicable periods.
Capital managem
ent
The Group denes capital as equity
, borrowings (Note 14) and cash and cash equivalents. The Gr
oup’s policy is to
maintain a strong capital base that ensures nancial stability and pr
ovides a solid foundation for ongoing development
of business operations and maintains investor and creditor condence. The Gr
oup’s objectives when managing capital
are to ensure the Gr
oup’s ability to continue as a going concern in or
der to provide returns for shar
eholders and benets
for stakeholders. The Group currently has sucient capital for its needs.
The Group has requirements under the Re
volving Credit Facility of how dr
awn amounts can be used. This RCF agreement
states drawings should be used for nancing or renancing for general corpor
ate purposes and working capital
requirements, including capital e
xpenditure and acquisitions.
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
152
20. Leases
Accoun
ting po
licy
At inception of a contract, the Group assesses whether or not a contr
act is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to contr
ol the use of an identied asset for a period of time in exchange for
consideration. When a lease is recognised in a contr
act 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 dir
ect costs incurred and an
estimate of costs to dismantle and remove the underlying asset or to r
estore 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 str
aight-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 ar
e not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that r
ate cannot be readily
determined, the Group’s incr
emental borrowing r
ate based on the rate of interest that the Gr
oup paid on
borrowings at the date of lease inception.
The lease liability is measured at amortised cost using the effective interest method. It is r
emeasured when there is a
change in future lease payments arising from a change in an inde
x or rate, or if the Group changes its assessment of
whether it will exer
cise a purchase, extension or termination option. If ther
e is an extension on the lease term that is
not considered a new lease, the lease liability is r
emeasured using re
vised payments and a revised discount r
ate at
the date of the modication. A corresponding adjustment is made to the right-of-use asset.
The Group presents right-of-use assets in pr
operty, plant and equipment and lease liabilities in loans and borr
owings in
the statement of nancial position.
The Group leases assets including land and buildings that are held within pr
operty, plant and equipment. Information
about leases for which the Group is a lessee is presented belo
w.
153
Strat
egic
Report
Gove
rnanc
e
Financial Statements
20. Leases
continued
(
a) R
ight
-
of
-use asset
s
Details of right-of-use assets are disclosed in Note 11.
(b
) Lease liabilit
ie
s in the statement of nancial position
2022
£’000
2021
£’000
Current liabilities
3,489
3
,
337
Non-current liabilities
15,
4
9
6
18
,
3
5
8
18
,
9
8
5
2
1,
6
9
5
The maturity analysis of lease liabilities is disclosed in Note 14.
(
c
) A
mounts charged in the income s
tatement
2022
£’000
2021
£’000
Depreciation expense of right-of-use assets
3
,76
5
3
,1
4
3
Interest expense in lease liabilities
594
69
4
4,
359
3
,8
37
(
d) Cash outow
2022
£’000
2021
£’000
T
otal cash outow for leases
4,
2
71
3
,
2
12
21. G
overnment grants
Accoun
ting po
licy
Government grants are r
ecognised when there is reasonable assur
ance that the grant will be received and all attached
conditions will be complied with. Government grants that compensate the Gr
oup for expenses incurred are r
ecognised
in the prot or loss in the periods in which the expenses ar
e recognised and are pr
esented as a deduction from the
related expense.
UK government grants
There were no grants r
eceived from the UK government in FY2022.
During FY2021, the Group participated in the UK government’s Cor
onavirus Job Retention Scheme (‘CJRS’). The Group
received a grant aggregating to £0.5 million. Ther
e were no unfullled conditions or contingencies attached to the gr
ant.
The Group voluntarily repaid all amounts claimed under the CJRS in February 2021.
Frenc
h gover
nment gran
ts
During FY2022 the Group participated in a scheme introduced b
y the French government to support certain eligible
businesses amidst the Covid-19 pandemic and received gr
ants aggregating to £0.3 million (FY2021: £1.3 million).
There are no unfullled conditions or contingencies attached to any of the gr
ants.
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
154
22
. Lis
t of subs
idiaries
The Group holds/held, directly or indir
ectly, share capital in the follo
wing companies:
Name of
company
Country of
incorporation
Ownership
Registered
address
Nature of
business
Victoria Intermediate T
opco Limited
1,2
Jersey
100%
b
In liquidation
Victoria Investments Finco Limited
United Kingdom
100%
a
Holding
Victoria Investments Intermediate Holdco Limited
United Kingdom
100%
a
Holding
Victoria Investments PIKCo Limited
2
United Kingdom
100%
a
In liquidation
Victoria Investments Midco Limited
2
United Kingdom
100%
a
In liquidation
Victoria Investments Bidco Limited
2
United Kingdom
100%
a
In liquidation
Victoria Investments Newco Limited
1,2
Jersey
100%
b
In liquidation
Tr
ainline Investments Holdings Limited
2
United Kingdom
100%
a
In liquidation
Tr
ainline International Limited
United Kingdom
100%
a
Holding
Tr
ainline France SAS
France
100%
c
Holding
Tr
ainline SAS
France
100%
c
T
rading
Tr
ainline Group Investments Limited
2
United Kingdom
100%
a
In liquidation
Tr
ainline Junior Mezz Limited
2
United Kingdom
100%
a
In liquidation
Tr
ainline Holdings Limited
2
United Kingdom
100%
a
In liquidation
Tr
ainline.com Limited
United Kingdom
100%
a
T
rading
Qjump Limited
United Kingdom
100%
a
T
rading
Tr
ainline Rail Enquiry Services Limited
2
United Kingdom
100%
a
In liquidation
Tr
ainline Short Breaks Limited
2
United Kingdom
100%
a
In liquidation
Tr
ainline Italia S.R.L
Italy
100%
d
Holding
Tr
ainline España, S.L.
Spain
100%
e
Holding
Railguard Limited
United Kingdom
100%
a
Trading
Tr
ainline Holdco Limited
United Kingdom
100%
a
Holding
Victoria Investments S.C.A
3
Luxembourg
100%
f
In liquidation
Victoria Manager S.a.r.l
3
Luxembourg
100%
f
In liquidation
1
Vi
c
t
or
ia I
nv
es
t
m
en
t
s Ne
w
co L
im
it
ed a
n
d V
ic
t
or
ia I
n
te
rm
e
dia
t
e T
op
co L
im
i
te
d ar
e in
co
rp
o
ra
te
d in J
e
rs
e
y bu
t t
a
x do
mi
ci
le
d i
n th
e UK
.
2
Denoted
subsidiaries went into
liquidation on 26
F
ebruar
y 2021
.
3
Denoted
subsidiaries went into
liquidation on 28
Februar
y 2022.
Registered a
ddress key:
a
120 Holborn, London, EC1N 2TD
b
47 Esplanade, St Hellier, Jersey, JE1 0BD
c
20 rue Saint Georges, 75009 Paris
d
Corso Vercelli, 40 20145 Milan, Italy
e
Carrer d’
Avila 112, 08018, Barcelona, Spain
f
2, rue Edward Steichen, L-2540 Lux
embourg
The following subsidiaries are e
xempt from the Companies Act 2006 requir
ements relating to the audit of their individual
accounts by virtue of Section 479A of the Act as the Company has guaranteed the subsidiary companies under Section
479C of the Act:
Victoria Investments Finco Limited registered no. 09394939
Qjump Limited registered no. 04124436
Railguard Limited register
ed no. 09621101
Tr
ainline Holdco Limited registered no. 12098773
Victoria Investments Intermediate Holdco Limited registered no. 09451259
155
Strat
egic
Report
Gove
rnanc
e
Financial Statements
23
. Related par
ties
During the year, the Group entered into tr
ansactions in the ordinary course of business with related parties.
T
ran
sac
tions with key management p
ersonn
el of the G
roup
Key management personnel are dened as the Boar
d of Directors, including Non-executive Dir
ectors.
During the period key management personnel have received the follo
wing compensation: short-term employee
benets £2,499,799 (FY2021: £1,545,336); post-employment benets £73,625 (FY2021: £136,795); and ongoing
share-based payment schemes £889,234 (FY2021: £419,856). No other long-term benets or termination benets were
paid (FY2021: £nil). The highest paid Director received: short-term emplo
yee benets £1,152,611 (FY2021: £380,090);
post-employment benets £31,625 (FY2021: £40,647); and ongoing share-based payment schemes £586,982
(FY2021: £202,676). There were two Dir
ectors to whom retirement benets ar
e accruing under dened
contribution schemes (FY2021: two).
Information on the emoluments of the Directors who served during the year, together with information regar
ding the
benecial interest of the Directors in the or
dinary shares of the Company is included in the Directors’ Remuner
ation
Report on pages 82 to 84.
At 28 February 2022 key management personnel held 2,340,720 shar
es in Tr
ainline plc (FY2021: 9,947,734 shares).
24
. Capital commitme
nts
This note details any capital commitments in contracts that the Group has enter
ed into which have not been recognised
as liabilities on the balance sheet.
The Group’s capital commitments at 28 February 2022 ar
e £nil (FY2021: £2.4 million).
25
. Post balanc
e shee
t events
There have been no material post balance sheet events between 28 February 2022 and the date of the appr
oval of these
Financial Statements.
Notes t
o the Group F
inancial S
tatements
continued
T
rainline
Annual Report and Accounts 2022
156
Notes
2022
£’000
2021
£’000
Non-current assets
Investments
2
1,
8
92
,
4
0
9
1
,888,364
Deferred tax asset
3
1,
5
7
0
9
81
1
,893,979
1
,889
,345
Current assets
Cash and cash equivalents
2
,
016
1,9
7
2
Tr
ade and other receivables
1
,
2
51
1,
0
5
3
Amounts owing from subsidiaries
4
10,
8
0
4
3
7,
7
6
9
14
,
0
7
1
4
0
,7
9
4
Current liabilities
Tr
ade and other payables
(
2
,1
2
6
)
(83
6)
Amounts owing to subsidiaries
4
(10
3
,
3
7
5)
(
14
,
0
6
3
)
Loan and borrowings
5
(1,
414
)
(
8
3
1)
(10
6
,
9
15
)
(15
,
7
3
0
)
Net current assets
(92
,
8
4
4
)
25,0
64
T
otal asset
s less current liabilities
1,
8
0
1,
13
5
1,9
14
,
4
0
9
Non-current liabilities
Loan and borrowings
5
(13
4
,
4
6
3
)
(
2
4
7,
7
9
5
)
(13
4
,
4
6
3)
(
2
4
7,
7
9
5
)
Net assets
1,666,67
2
1,
6
6
6
,
614
Equity
Called up share capital
6
4,807
4,807
Share premium account
6
1
,1
9
8
,
7
0
3
1
,19
8
,
7
0
3
Retained earnings
6
4
5
5
,
8
74
4
5
8
,1
2
6
Share-based payment reserve
6
7
,288
4
,9
78
T
otal equit
y
1,666,67
2
1,
6
6
6
,
614
The notes on pages 159 to 161 form part of the Financial Statements.
These Financial Statements were appro
ved by the Board of Directors of T
rainline plc (registered number 11961132)
on 5 May 2022 and were signed on its behalf by:
Jody F
ord
Shaun McCabe
Chief Executiv
e Officer
Chief Financial Officer
5 May 2022
5 May 2022
P
arent C
ompany balance sheet
A
t 28 F
ebruar
y 2022
157
Strat
egic
Report
Gove
rnanc
e
Financial Statements
Share
capital
£’000
Share
premium
£’000
Preference
shares
£’000
Retained
earnings
£’000
SBP
reserve
£’000
To
t
a
l
equity
£’000
At 1 March 2021
4,807
1
,1
9
8
,
7
0
3
–
4
5
8
,1
2
6
4
,978
1,666,61
4
Loss after tax
–
–
–
(
3
,1
9
7
)
–
(
3
,1
9
7
)
Share-based payments
–
–
–
–
3
,2
55
3,
255
Tr
ansfer between reserves
1
–
–
–
945
(9
4
5
)
–
Balance as at 28 F
ebr
uary 2022
4,807
1
,1
9
8
,
7
0
3
–
4
5
5
,
8
74
7
,288
1,66
6,672
1
T
r
an
s
f
er b
e
t
we
e
n re
se
r
ve
s re
la
te
s to t
h
e di
f
f
e
re
nc
e be
t
w
ee
n t
he s
ha
re p
r
ic
e at g
ra
nt d
at
e of t
he e
xe
rc
is
e
d sh
ar
es a
nd t
h
e ac
tu
al c
os
t o
f th
e tr
ea
su
r
y
sh
ar
es p
ur
ch
as
e
d to f
ul
l th
e s
ha
re
-
b
as
e
d pa
y
me
nt
.
For the year ended 2
8 Februar
y 20
21
Share
capital
£’000
Share
premium
£’000
Preference
shares
£’000
Retained
earnings
£’000
SBP
reserve
£’000
To
t
a
l
equity
£’000
At 1 March 2020
4,807
1,1
9
8
,
7
0
3
50
4
62,68
4
–
1
,666,244
Preference share r
edemption
–
–
(5
0)
–
–
(50)
Loss after tax
–
–
–
(4,838
)
–
(4,838
)
Share-based payments
–
–
–
–
5,25
8
5,258
Tr
ansfer between reserves
1
–
–
–
28
0
(2
8
0)
–
Balance at 28 F
ebr
uary 2021
4,807
1
,1
9
8
,
7
0
3
–
4
5
8
,12
6
4
,97
8
1,
6
6
6
,
614
1
T
r
an
s
f
er b
e
t
we
e
n re
se
r
ve
s re
la
te
s to t
h
e di
f
f
e
re
nc
e be
t
w
ee
n t
he s
ha
re p
r
ic
e at g
ra
nt d
at
e of t
he e
xe
rc
is
e
d sh
ar
es a
nd t
h
e ac
tu
al c
os
t o
f th
e tr
ea
su
r
y
sh
ar
es p
ur
ch
as
e
d to f
ul
l th
e s
ha
re
-
b
as
e
d pa
y
me
nt
.
The notes on pages 159 to 161 form part of the Financial Statements.
P
arent C
ompany statement of changes in equity
F
or the year ended 28 F
ebr
uary 2022
T
rainline
Annual Report and Accounts 2022
158
1. Ba
sis of prep
aration
The Financial Statements are presented in pounds sterling, r
ounded to the nearest thousand, unless otherwise stated.
These Financial Statements were prepar
ed in accordance with Financial Reporting Standard 101 Reduced Disclosur
e
Framework (‘FRS 101’). In pr
eparing these Financial Statements, the Company applies the recognition, measurement and
disclosure requirements of International Accounting Standar
ds in conformity with the requirements of the Companies
Act 2006 (‘
Adopted IFRSs’), but makes amendments where necessary in or
der to comply with the Companies Act 2006
and has set out below where advantage of the FRS 101 disclosur
e exemptions has been tak
en.
These Financial Statements have been prepared on a going concern basis. Further details ar
e given in the Going
Concern Statement on pages 124 to 125. After due consideration the Directors consider that the Company has adequate
resources to meet its liabilities as the
y fall due and remain in operation for the going concern assessment period.
Accordingly the Board ar
e satised that it is appropriate to adopt the going concern basis of accounting in preparing
these Parent Company Financial Statements.
As permitted by FRS 101, the Company has taken advantage of the disclosur
e exemptions available under that
standard in relation to shar
e-based payments, nancial instruments, capital management, presentation of comparative
information in respect of certain assets, presentation of a cash o
w statement, standards not yet effective, impairment
of xed and intangible assets and certain related party tr
ansactions. Where required, equivalent disclosur
es 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 pr
esented.
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
. Inv
estm
ent in subsidiaries
Investments in subsidiaries are stated at cost less any pro
vision for impairment. The investment relates to the
Company’s investment in Tr
ainline Holdco Limited.
2022
£’000
2021
£’000
Opening balance
1,888
,364
1,
7
5
9
,
3
0
6
Capital contribution
4,0
45
12
9
,
0
5
8
Closing balance
1,
8
9
2
,
4
0
9
1
,888,364
During FY2022, the Company made a capital contribution not remunerated b
y shares to Victoria Manager S.a.r.l.
During FY2021, the Company made an additional capital contribution to Tr
ainline Holdco Limited in exchange for ne
w
shares issued to the Company
.
Notes t
o the P
arent C
ompany Financial Stat
ements
159
Strat
egic
Report
Gove
rnanc
e
Financial Statements
Asse
ssmen
t of carr
ying value of inv
estm
ents in subsidiarie
s
The carrying value of investments in subsidiaries have been tested for impairment in accordance with IAS 36 Impairment
of Assets. The carrying value is compared to the asset’s reco
verable amount and has been assessed by r
eference to value
in use. The value in use has been calculated upon a discounted cash ow methodology using the most recent for
ecasts
prepared by management of the T
rainline Group.
The Group prepares cash o
w forecasts using eight-year projections which ar
e extrapolated fr
om the Board appro
ved
three-year plan. The forecasts have been used in the VIU calculation along with risk-adjusted discount r
ates. Cash ows
beyond the eight-year period are e
xtrapolated using a terminal growth r
ate.
The key assumptions for the value in use calculation ar
e the discount rate and terminal gro
wth rate. The discount rate is
based on the weighted average cost of capital reecting specic principal risks and uncertainties, taking into account the
risk-free rate of r
eturn, the market risk premium and beta factor. The rate used to discount the cash o
ws is 9.7% pre-tax
(FY2021: 11.6% pre-tax). The terminal gro
wth rate of 2.5% (FY2021: 1.5%) reects the e
xpected growth into perpetuity
of the business, taking into account the current market and sector risks. As a r
esult of this analysis, the Directors have
determined that no impairment charge is required.
3. De
ferred ta
x asse
t
The Company has continued to recognise a deferred tax asset on unutilised losses carried forwar
d. This is on the basis
that it is probable that future taxable pr
ot will be available against which the unutilised tax losses and credits can be
set against. This is supported by the latest prot and cash o
w forecasts approved b
y the Board, which show impr
oved
trading performance following market r
ecovery from the impact of Co
vid-19.
4. Am
ounts owing from and to subsidiarie
s
Amounts owing from and to subsidiaries is comprised of inter
company loans with companies within the Group.
IFRS 9 expected credit losses have been assessed as immaterial in r
elation to these balances.
5. Loan
s and borrowings
Loans and borrowings relate to the Re
volving Credit Facility and the convertible bonds. Please r
efer to Note 14 of the
Consolidated Financial Statements for details.
6. Capital and r
eser
ves
Share cap
ital
Share capital repr
esents the number of shares in issue at their nominal value.
Ordinary shares in the Company ar
e issued, allotted and fully paid up. The holders of ordinary shares are entitled to
receive dividends as declared fr
om 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 prefer
ence shares for a total consideration of £50,000,
with 1 ordinary share to be issued. The pr
eference shares were r
edeemed in full on 20 August 2020.
On 26 June 2019, the Company allotted 449,095,131 ordinary shares as part of a shar
e for share ex
change in
consideration for: the transfer of the entir
e issued share capital of Victoria Investments S.
C.A to the Company; the
acquisition of the Convertible Preferred Equity Certicates (‘CPECs’) and r
elating interest held by Victoria Investments
S.C.A; and the acquisition and e
xtinguishment of the liability relating to T
racker shar
es held by Victoria Investment S.
C.A.
The nominal value of these shares was £1.00 and the consideration per shar
e was £3.50.
Notes t
o the P
arent C
ompany Financial Stat
ements
continued
T
rainline
Annual Report and Accounts 2022
160
On 26 June 2019, the Company issued 31,526,093 ordinary shares in its primary listing. The nominal value of these shares was
£1.00 and the consideration per share was £3.50. Share pr
emium is stated net of directly attributable fees of £3.0 million.
On 26 June 2019, the Company issued an additional 59,284 ordinary shares. The nominal value of these shar
es was £1.00
and the consideration per share was £3.50.
Following a reduction in capital the nominal value of or
dinary 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
.
Shareh
olding at 28 Februar
y 2
02
2 and 2
8 Februar
y 2
02
1
Number
£’000
Ordinary shares – £0.01
480,680
,508
4,807
Share pr
emium
Share premium repr
esents the amount over the nominal value which was received b
y the Company upon the sale of the
ordinary shares. Upon the date of listing the nominal value of shar
es were £1.00 but the initial offering price was £3.50.
Share premium is stated net of any dir
ect costs relating to the issue of shares.
Retained earning
s
Retained earnings represents the prot the Company mak
es that is not distributed as dividends.
Share-based payment reserve
The share-based payment reserve is built up of charges in r
elation to equity-settled share-based payment arrangements
which have been recognised within the prot and loss account.
The Company allocates the share-based payment charges to the entities in which the employees’ emplo
yment contracts
sit through the amounts owing from/to subsidiaries.
When assessing and discussing nancial performance, certain alternative performance measures (‘
APMs’) of historical
or future nancial performance, nancial position or cash ows ar
e used which are not dened or specied under IFRS.
APMs are used to improve the compar
ability 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 r
eported in accordance
with IFRS.
APMs are not uniformly dened by all companies. Accor
dingly, the APMs used may not be comparable with similarly
titled measures and disclosures made b
y 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 Gr
oup.
1
61
Strat
egic
Report
Gove
rnanc
e
Financial Statements
Net ticket sal
es
Net ticket sales repr
esent the gross value of ticket sales to customers, less the value of r
efunds issued, during the
accounting period. The Group acts as an agent in these transactions. Net tick
et sales do not represent the Gr
oup’s
revenue.
Management believe net ticket sales ar
e a meaningful measure of the Group’
s operating performance and size of
operations as this reects the value of tr
ansactions processed on the Group’
s platform. The rate of gro
wth in net
ticket sales may differ to the rate of gr
owth in re
venue due to the mix of commission rates and service fees.
Adjuste
d EB
ITDA
The Group believes that adjusted EBITD
A is a meaningful measure of the Group’
s operating performance and debt
servicing ability without regard to amortisation and depr
eciation methods which can differ signicantly.
Adjusted EBITDA is calculated as prot/(loss) after tax befor
e net nancing income/(expense), tax, depreciation and
amortisation, exceptional items and shar
e-based payment charges.
Exceptional items are e
xcluded as management believe their natur
e could distort trends in the Group’
s underlying
earnings. This is because they are often one-off in natur
e or not related to underlying trade. Shar
e-based payment
charges are also ex
cluded as they can uctuate signicantly year on year.
A reconciliation of operating pr
ot to adjusted EBITDA is as follows:
Notes
2022
£’000
2021
£’000
Operating loss
(10
,
3
13)
(9
9,70
4)
Adjusting items:
Depreciation and amortisation
1
0
,11
4
2
,
576
4
1,1
9
9
Share-based payment charges
15
6
,7
8
3
7,
0
9
3
Exceptional items
6
–
26,508
Adjusted EBITD
A
39,
0
4
6
(
2
4
,9
0
4)
Adjus
ted e
arning
s
Adjusted earnings are a measure used by the Gr
oup 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 e
xpenses and
nance costs, exceptional costs, gain on r
epurchase of convertible bonds and amortisation of acquired intangibles
added back, together with the tax impact of these adjustments also added back.
Alternativ
e per
formanc
e measur
es
T
rainline
Annual Report and Accounts 2022
162
Exceptional items are e
xcluded as management believe their natur
e could distort trends in the Group’
s underlying
earnings. This is because they are often one-off in natur
e or not related to underlying trade. Shar
e-based payment
charges are also ex
cluded as they can uctuate signicantly year on year and are a non-cash char
ge to the business.
Amortisation of acquired intangibles is a non-cash accounting adjustment relating to pr
evious acquisitions and is not
linked to the ongoing trade of the Gr
oup.
A reconciliation from the loss after tax to adjusted earnings is as follo
ws:
Notes
2022
£’000
2021
£’000
Loss after tax
(11
,
9
0
5
)
(91,3
0
4)
Earnings attributable to equity holders
(
11
,
9
0
5
)
(91,3
0
4)
Adjusting items:
Exceptional items
6
–
26,508
Gain on convertible bond buyback
7
(3,914
)
–
Amortisation of acquired intangibles
1
10
7,
0
8
3
8,
563
Share-based payment charges
15
6
,7
8
3
7,
0
9
3
T
ax impact of the above adjustments
(1,
8
9
1)
(2
,
53
8)
Adjusted earnings
(
3,
8
4
4)
(5
1
,678)
1
Th
is co
n
si
s
t
s of t
he a
m
or
ti
s
at
io
n of b
ra
n
d va
lu
at
io
n o
f £5
.
2 mi
ll
io
n (
F
Y
2
021: £5
.
2 mi
ll
io
n), c
u
s
to
me
r va
lu
a
ti
on o
f £1.9 mill
io
n (
F
Y
2
021: £3
.0 m
il
li
on) a
nd
so
f
t
wa
re d
ev
el
o
pm
en
t of £
ni
l (
F
Y
2
021: £0.
4 mi
ll
io
n).
Net deb
t
Net debt is a measure used by the Gr
oup to measure the over
all debt position after taking into account cash held by
theGroup.
The calculation of net debt is as follows:
Notes
2022
£’000
2021
£’000
Loan and borrowings
1
14
(15
8
,
8
2
1)
(
2
7
7,
6
8
1
)
Cash and cash equivalents
68,49
6
3
6,
575
Net debt
(9
0,
32
5
)
(
2
4
1
,1
0
6
)
1
Th
is a
mo
un
t is t
h
e ag
gr
eg
a
te am
o
un
t of l
oa
n
s an
d bo
r
ro
wi
n
gs a
s di
sc
l
os
ed i
n No
te 14 am
o
un
ti
ng t
o £153.
5 m
il
li
on (
F
Y
2
021: £2
70
.
5 mi
ll
io
n) an
d th
e
ca
p
it
a
li
se
d 
na
nc
e ch
ar
ge
s am
ou
n
ti
ng t
o £
5.
3 m
il
li
on (
F
Y
202
1: £7
.1 mil
li
on)
.
16
3
Strat
egic
Report
Gove
rnanc
e
Financial Statements
Oper
ating free c
ash ow
The Group uses operating free cash o
w as a supplementary measure of liquidity
.
The Group denes operating free cash o
w as cash generated from oper
ating activities adding back cash exceptional
items, and deducting cash ow in relation to pur
chase of property, plant and equipment and intangible assets, e
xcluding
those acquired through business combinations or trade and asset pur
chases.
The calculation of operating free cash o
w is as follows:
2022
£’000
2021
£’000
Cash generated from/(used in) operating activities
1
9
5
,1
6
7
(12
1,
2
5
4
)
Cash exceptional items
–
1,
3
13
Purchase of property
, plant and equipment and intangible assets
(2
9,
3
4
4)
(
26,
3
35)
Operating free cash ow
165,823
(
14
6
,
2
7
6
)
Liquidity
The Group uses liquidity as a measure of available funds. Liquidity headr
oom is cash and cash equivalents plus the
undrawn, unencumbered balance on the Revolving Cr
edit Facility.
2022
£’000
2021
£’000
Cash and cash equivalents
68,49
6
3
6,
575
Undrawn balance on the Revolving Cr
edit Facility
27
3
,6
76
2
2
3
,1
5
2
Liquidity headroom
3
4
2
,1
7
2
2
5
9,7
27
Alternativ
e per
formanc
e measur
es
continued
T
rainline
Annual Report and Accounts 2022
164
CBP00019082504183028
T
rainline
 
Annua
l Repo
r
t and Ac
count
s 20
22
tr
ai
n
li
n
e.
com
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