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Trainline cutting costs as passenger numbers slide
9th Apr 2020 07:41
(Sharecast News) - Rail and coach travel platform Trainline announced a series of cost-cutting measures on Thursday and said its executive team will take a pay cut amid a decline in passenger numbers due to the Covid-19 outbreak.
The company said that since its IPO last June, it has delivered "strong" growth in net ticket sales, revenue and earnings before interest, tax, depreciation and amortisation, while significantly reducing net debt.
However, given a "significant" fall in industry passenger numbers over the past month as a result of the coronavirus lockdown, it has taken a number of measures to reduce operating costs and cash outflows. These include pausing marketing and other discretionary spend, introducing a recruitment freeze, deferring bonus payments and pay reviews for staff for 2020, and revising payment terms with some of its suppliers.
In addition, the chief executive has decided to take a 50% salary cut for the foreseeable future, while the board of directors and management team will take a voluntary 20% reduction in their fees and salaries respectively, also for the foreseeable future.
The executive directors and management team will defer their 2020 bonus and the company said it plans to furlough certain teams under the Government's Coronavirus Job Retention Scheme.
As a result of these actions, Trainline's cash outflow from operating costs and capital expenditure has reduced to around ?8-9m a month.
The group expects its liquidity headroom will be around ?150m by the end of May.
Chief executive Clare Gilmartin said: "Trainline is a resilient business and we believe that our prudent action now strengthens us for the long term, positioning us well to return to growth once travel restrictions lift."
The company said that since its IPO last June, it has delivered "strong" growth in net ticket sales, revenue and earnings before interest, tax, depreciation and amortisation, while significantly reducing net debt.
However, given a "significant" fall in industry passenger numbers over the past month as a result of the coronavirus lockdown, it has taken a number of measures to reduce operating costs and cash outflows. These include pausing marketing and other discretionary spend, introducing a recruitment freeze, deferring bonus payments and pay reviews for staff for 2020, and revising payment terms with some of its suppliers.
In addition, the chief executive has decided to take a 50% salary cut for the foreseeable future, while the board of directors and management team will take a voluntary 20% reduction in their fees and salaries respectively, also for the foreseeable future.
The executive directors and management team will defer their 2020 bonus and the company said it plans to furlough certain teams under the Government's Coronavirus Job Retention Scheme.
As a result of these actions, Trainline's cash outflow from operating costs and capital expenditure has reduced to around ?8-9m a month.
The group expects its liquidity headroom will be around ?150m by the end of May.
Chief executive Clare Gilmartin said: "Trainline is a resilient business and we believe that our prudent action now strengthens us for the long term, positioning us well to return to growth once travel restrictions lift."