Trainline Stock

Hello, everyone, and thank you for joining the Trainline H1 FY 2027 Results Presentation. My name is Lucy, and I'll be coordinating your call today. [Operator Instructions]

It is now my pleasure to hand over to Ian Brown, CEO, to begin. Please go ahead when you're ready.

Good morning, everyone, and thank you for joining us this morning for Trainline's H1 FY 2027 Results Presentation. I'm Ian Brown, CEO of Trainline. I'm joined today by Peter Wood, our CFO. This is my first set of results since joining Trainline, and I'm delighted to be here today.

Before we begin, I just want to say how deeply saddened we all are by last week's tragic rail accident near Toledo in Spain. Our thoughts and prayers are with everyone affected.

Now, let me take you through today's agenda. I'll start with my early impressions of the business and then provide an update on GBR. Peter and I will then cover our financial performance and provide a strategic update, including how AI is improving our products and the way we work.

Then after the presentation, Peter and I will be happy to take your questions. For those of you I haven't yet met, by way of background, I spent the CEO part of my career scaling and transforming consumer and technology businesses. Most recently, I was CEO of Flutter U.K. and Ireland, where I led a collection of brands operating in highly regulated markets. Before that, I was CEO of A&S Group. I spent 6 years at Booking.com, including the CEO of its Trips Business Unit and the CEO of Rentalcars.com. So I know international online travel marketplaces very well. I also created and built out the insurance business of Booking.com. My track record of these businesses has been underpinned by product and commercial innovation. I therefore have a good understanding of what it takes to deliver innovation-led growth and scale as well as to lead businesses through periods of change.

I joined just under 2 months ago, so it's still early days. Nonetheless, I've enjoyed spending time with many colleagues across our London, Edinburgh and Paris offices so far, talking with customers and progressively working my way around our business. As you might expect, I've also been busy meeting with industry partners and carriers as well as meeting key stakeholders and government. I look forward to meeting shareholders on our upcoming roadshow, and I plan to engage broadly with our stakeholders in the coming months.

What I've seen so far in my first 2 months has reconfirmed why I joined Trainline, and I'm genuinely excited about what's ahead. First, our fundamentals are strong and genuinely hard to replicate. We have real scale. We're Europe's most downloaded rail app serving 27 million customers. Our customers' behavior is habitual. Almost 2 million customers use our app every day to plan, book and manage their rail travel. We have deep loyalty and trust. Our app is rated 4.9 stars, and we're the most trusted brand in U.K. rail. We're a leading technology platform built on years of deep rail expertise and investment in technology. The Trainline app or API connects our customers to hundreds of rail and coach carriers across Europe, many of them operating aging legacy systems. That's hard to build and hard to copy.

Our platform sits on an exceptional scaled data asset. AI is increasingly ingrained in our products and across our business processes, making it smarter and faster in how we deliver for our customers and partners. We have an outstanding team. It's innovative and driven with a strong track record of delivery and execution. The opportunity ahead is very real across the U.K., International and our Trainline Solutions business with lot of Trainline well positioned to continue to scale each of them. So Trainline is exactly the kind of business that energizes me. It has some complex challenges to solve in a period of material change, forgive me, but many opportunities ahead.

The underlying strengths I just mentioned, showed in the first half, with the business delivering a robust performance despite multiple headwinds. In the U.K., we improved our proposition and continue to build trust and loyalty. We now have over 3 million digital railcard holders in our app, up 26% year-on-year. In Europe, in a year without major aggregation moments, we rebalanced growth and profitability. International is now profitable for the first time. Our B2B distribution business also continues to scale, led by strong growth from international customers. With broadly flat net ticket sales alongside strong cost management, we delivered 7% growth in adjusted EBITDA and 10% growth in adjusted EPS.

The announcement of a new GBP 100 million buyback in September also reflects both the strength of the underlying cash generation of our business and confidence in our outlook. Now as you know, on the 9th of October, the ORR published its draft Retail Code of Practice for consultation. We see it as an important step forward. For the first time, there will be a regulatory framework governing how GBR interacts with all retail market participants. The overall future rail framework is, of course, wider than just the code. It also includes the GBR business plan, the public service contract and GBR's own operating license.

The draft confirms fair, transparent and nondiscriminatory access to fares, products, systems and the data for third-party retailers in line with the level playing field that the Rail Minister Lord Hendy last week committed to. This reflects our progress to date with government engagement, for example, Delay Repay, where we secured future equivalents earlier this year. The government's fact sheet published alongside the draft code on 9th of October also says GBR must act in a way that does not exclude competitors, distort the online retail market or use a dominant position. And for the first time, an independent regulator, the ORR, will have a statutory responsibility to enforce compliance. These are all positive steps.

However, we believe the framework needs strengthening. In particular, we're seeking stronger mechanisms and oversight to ensure equivalents of treatment with GBR online retail. In other sectors where state-backed entities operate in the market, such as the BBC or BT, there's a clear precedent for strong safeguards on economic equivalents and economic transparency. We're not yet seeing the same here. The government has, however, been clear on the continuing role independent retailers will play and on the need for safeguards.

The government's fact sheet is clear that GBR should compete alongside other retailers in a fair and open online retail market. Indeed, as Lord Hendy told the laws on the 8th of September when asked about the cross subsidy, he said likewise, "GBR will not be overcompensated to deliver retail functions in a way that distort the market." So our focus is on seeing these very clearly stated principles translate into the strongest possible market framework. We continue to engage actively in the consultation process. And more broadly, we maintain our assertive stance.

And with that, I'll hand over to Peter before joining for Q&A at the end of the presentation.

Thank you, Ian, and good morning, everyone. Before I share the group results, let me start by unpacking the performance of each of our business units, starting first with U.K. Consumer. Net ticket sales were up GBP 2.1 billion -- were GBP 2.1 billion, up 0.4%. This reflected both strong underlying rail demand as well as fewer refunds as a result of a change to the industry refund policy in April 2026, which narrowed the window in which refunds could be claimed.

As a reminder, there was no contribution to NTS from inflation in the half given the regulated fare freeze. We continued to face headwinds from train operating companies self-preferencing their own retail channels as well as the expansion of Project Oval. There were also additional headwinds from the very hot weather in the summer months alongside other disruptions to the rail network.

Turning next to International. Net ticket sales were GBP 579 million, down 4% year-on-year. Performance was affected by a number of external factors, including softer foreign travel, reflecting ongoing geopolitical tensions in the Middle East, weaker consumer sentiment in Spain following the tragic rail accidents earlier this year and heat and strike-related disruption in the summer, which affected many parts of the European network.

Performance also reflected our more disciplined approach to marketing as we balance growth and profitability in the half ahead of future aggregation moments. Meanwhile, in Southeast France, net ticket sales grew by double digits, sustaining growth a year off from Trenitalia's expansion into the market. This demonstrates our position as the aggregator of choice ahead of the next wave of carrier competition across Italy and France.

Turning next to Trainline Solutions, our B2B business. Net ticket sales grew 3% to GBP 548 million. Within this B2B distribution, which helps large travel management companies sell train tickets, led the way up 22%, with International B2B continuing to grow very strongly, up 45%, driven by new client wins across Europe. We are on track for International B2B sales to overtake U.K. sales by the end of the calendar year. As expected, this growth was partially offset by the roll-off of 2 white label contracts, including ScotRail, which we stopped providing services to in the half, and the drag from CrossCountry, which ended last November.

Bringing this together, group net ticket sales were GBP 3.3 billion and revenue was GBP 233 million, down 1%. This largely reflected a lower U.K. revenue take rate, which was the result of changes in the industry refund policy. This led to fewer refund transactions and therefore, lower refund fee revenue. Despite lower revenue, gross profit increased 1% to GBP 195 million, driven by an improvement in the settlement rate we paid to payment processes. This was achieved through renegotiated fee rates with our main payment providers. Cost of sales savings also came from lower customer service costs due to WhatsApp and Voice AI handling more contacts.

Turning to costs, where we delivered strong discipline across the business. Total OpEx and CapEx were down 5% year-on-year. In addition to lower cost of sales, we drove marketing costs down, reflecting efficiencies in both the U.K. and International and a more disciplined approach to marketing in International. CapEx was broadly flat, reflecting ongoing investments in our product and tech platform.

We continue to invest in AI and in our products, but we do it in an efficient way. Together, these savings offset an increase in other administrative costs. That increase was driven by inflation, investment in AI and ongoing higher legal and public affairs costs.

As a result of this cost discipline and on a slightly lower revenue base, adjusted EBITDA grew 7% to GBP 100 million. This was driven by the improvement in International, which moved from an EBITDA loss of GBP 8 million last year to a profit of GBP 6 million. That is on a post-transaction fee basis, which means covering the cost of the platform serving these transactions. Furthermore, all of our markets in Internationalwere profitable, another milestone for us. Adjusted EPS grew a little faster at 10% to 13.8p, supported by continued accretion from our share buyback.

Turning to cash. Adjusted free cash flow was GBP 45 million, with the year-on-year movement reflecting the timing of working capital as well as tax payments and leverage at the end of the half was 1.2x. Our capital allocation framework remains consistent to invest in the business at appropriate returns, maintain a strong balance sheet and return surplus cash to shareholders. And in September, we announced a new GBP 100 million share repurchase program. Over the last 3 years, we have returned GBP 356 million to shareholders, equivalent to 28% of our share capital. This highlights both the cash-generative nature of our business and the continued confidence in our outlook.

Before turning to guidance, an update on the CMA's investigation and our booking fees are presented. We operate across multiple regulatory frameworks, each with its own requirements of how rail fares and fees are presented. At the same time, rail tickets are complex in themselves with booking fees varying depending on the choices customers make. We have always engaged actively with the ORR on our fee presentations. Since the CMA letter in November and following the announcement of an investigation in August, we have continued to engage proactively with both the CMA and the ORR and are seeking a swift resolution.

To conclude, I'm pleased with our financial performance. We delivered what we planned and grew earnings despite multiple headwinds. Looking ahead to the full year, we are reiterating our guidance. We continue to expect net ticket sales of between GBP 6.2 billion and GBP 6.45 billion, underlying revenue of between GBP 440 million and GBP 455 million and EBITDA of around 2.9% of net ticket sales, with International Consumer expected to be above breakeven for the full year.

And with that, I'll move on to our strategic progress, starting with the U.K. consumer.

Trainline is the U.K.'s #1 travel app and customers rely on it for the best value, the most accurate information and peace of mind on their rail journey. That position is the result of investing over a number of years to build our technology platform and the best capability in rail. We make U.K. rail simple. Every ticket type, journey combination and fare is searchable in one place quickly and easily. We also offer products that help customers save money, including SplitSave, railcards and Season Tickets.

In the first half, we invested in our U.K. proposition and railcards were a particular highlight. We have made it even easier for customers to buy or renew a railcard with relevant prompts, timely reminders and simpler eligibility checks. We have also grown railcard adoption through partnerships, including Monzo, which offers a free digital railcard to its Monzo Perks subscribers. And railcards give customers real savings, an average saving of GBP 175 per year. The results of these improvements are clear. We now have over 3 million customers with a digital railcard in our app, up 26% year-on-year. We hold over 1/3 of the railcard market, and we grew the number of railcards at over 3 times the rates of the rest of the market.

We're also growing in key categories. In 16 to 30 railcards, shown in light blue in the middle chart, we have 47% of the market. Another example is Network Railcards shown in dark blue, which offer savings across the Southeast. As we have made it easier to discover, buy and use railcards, more people in this part of the network are adopting them and unlocking the benefits. Holding the railcard also builds loyalty. Digital railcard holders transact more than 4 times as often as nonholders and spend more than 3 times more, a competitive advantage that is hard to replicate. Railcards give customers a reason to join us. Our product gives them a reason to stay. Our travel and disruption features help customers along their journey and are unique to Trainline, powered by our data and our technology.

On the left, the live traffic. Maps are now available to all users so you can see your position, your spot and any disruption on your route. In the middle, travel forecast. We predict your arrival time using our own journey data, providing us with a more accurate forecast than the one you would see at the station or in the train. And on the right, when a delay happens, the app knows, eligible customers are redirected to claim Delay Repay from the app and more than half now do, nearly double since January. These features build have it. Today, 91% of eligible travelers see our disruption features, double the level since the start of the half and customers come back month after month. We will continue to iterate and improve this feature set to give customers more -- even more reasons to stay.

In the half, we also added products that give customers more value, flexibility and convenience. Trainline Flex is a new ticket type that combines an advanced ticket with insurance so customers can cancel for any reason. We are also using our scale to build advertising and partnership revenue with relevant discounts and promotions, such as through PayPal, available to customers in the app. Together, insurance advertising helped grow U.K. ancillary revenue by 22%. That diversifies our revenue and gives us new ways to earn more from our large customer base.

Trainline remains the most trusted brand in U.K. rail. In a recent survey, 51% of U.K. respondents said that they -- that we were the brand they would most likely consider for a ticket, well ahead of the competition. Our campaigns in the half widened our reach, particularly among families and new audiences. We launched a podcast series for families traveling with young children on trains, alongside a number of social media campaigns and a sponsorship opportunity of Arthur Fery's team at Wimbledon.

Moving on to International. While there are no major aggregation moments this year, international remains an aggregation story, and Trainline is ready for when each market further opens.

Our business has 3 parts, each at a different stage of aggregation maturity. First, Spain and Southeast France, which are 21% of international net ticket sales. Here, the aggregation story is proven. Southeast France continues to grow at double digits and Spain shows how we can invest to scale the market and then turn profitable. Second, the rest of France and Italy, around 2/3 of international net ticket sales. With no near-term competition, we are balancing spend carefully here, while being ready to invest more ahead of aggregation moments. And third, Germany and the rest of Europe, the remaining 15%.

These are longer term growth opportunities. For now, most of our customers there are traveling cross-border or away from home. We are building a more profitable base in Europe by applying the U.K. playbook. French railcards are growing strongly through upsell and prompts. Railcard sales rose over 70% year-on-year in the half. And that is building a base of loyal French customers who are more likely to travel with Trainline.

Ancillary revenue also grew strongly, led by insurance and hotels. It contributed to a more than 30 basis points increase in the international take rate and makes our revenue in the region more diversified. Carrier competition remains the catalyst for the next phase of growth in Europe. In Spain, the market has gone from one high-speed carrier brand to 4 competing across the 5 largest routes. In Italy, Trenitalia and Italia already compete on the high-speed network.

SNCF is now expected to launch from mid-2028, a year later than we had originally anticipated. In France, Velvet is on track for a summer 2028 launch, having obtained its railway operating license in September. Alongside other entrants, we expect 4 competing carrier brands from mid-2028. On the Channel Tunnel, there has been recent progress with Trenitalia ordering trains and Virgin Trains recently receiving its license to operate. Together, these markets represent GRB 12 billion TAM by 2030, providing us with significant headroom for growth. Foreign travel is a further overlapping opportunity. We estimate the inbound market from the EU and the rest of world at around GRB 5 billion. This is a high margin and our proposition is built for this customer. So international is a large market with clear catalysts. Until further aggregation moments arrive, we will keep deepening customer loyalty, driving engagement and managing profitability.

Now to Trainline Solutions, a business with over GBP 1 billion annualized net ticket sales. Our focus is growing business travel through B2B distribution and branded B2B. European rail is fragmented, leaving travel management companies with a challenge of connecting to more APIs, including aging legacy systems. Our global API aggregates this supply into a single connection.

Demand is building on both sides. Corporates want more rail and carriers want more B2B because business customers spend more per transaction and drive more first-class demand, which helps carriers manage yield.

Sustainability targets, more capacity and more competition are also making rail a genuine alternative to air, both cross-border and domestic. B2B distribution is a large and sticky segment. Our average customer has been with us for 7 years and switching costs are high, which gives us recurring growth. It remains a success story for Trainline. In H1, we won 18 new customers, with 4 of them large travel management companies.

And finally, turning to AI, an area that remains a big opportunity for Trainline and where we continue to make good progress against our 3 pillars. First, AI-powered products, solutions tailored to each customer need. Over 1 million customers used travel assistant and voice AI in the first half, up 20%. They are ROI positive per conversation. We build efficiently, keep the cost to serve low and customers resolve simple issues like refunds themselves.

Second, new AI distribution channels. We are working alongside leading AI companies so customers can reach us wherever they start. We lead in Google AI rail citations in every market except France, and we are live in the ChatGPT app. And while AI referrals remain under 1% of sales today, we are building now and are ready if and as that grows.

And third, using AI to move basket. Lead and cycle times are down 10% and defects are down 18% across the tech team. Where we use AI more heavily, the gains are much bigger, and we expect more to come. Our agent platform is live in our data business, competing workflows, and we are rolling it out across the organization.

Taking a closer look at the next -- at the impact of AI in distribution. Today, over 90% of customers come direct to our app, mostly for everyday repeat purchases where speed matters. However, customers have more options on how to plan their journeys than ever before. They might start in Google, ask ChatGPT or Claude or use an agent such as Meta News.

We have strong SEO and are well connected into these tools through our ChatGPT app and our MCP infrastructure. So whether the buyer is a person or an agent, we can surface the journey options and complete the purchase. But the journey doesn't end when the ticket is sold. 60% of customers fear travel disruption. So after purchase, they need live updates and help when things go wrong. They may need to change a ticket, get a refund or claim Delay Repay. That is where our proprietary data and tools sit and it is the data we own.

Rail is different from most things people plan with AI. It is live as stakes are high when things go wrong and customers need to trust what they are told. Our app is built for rail and nothing else. We make it visual. You check the map, you check the platform and act on it all, all in one place and fast. These are the features that bring customers back.

As we face an ever-changing market, whether it's through AI or GBR, our structural advantages matter more. There are 4 and they reinforce each other. It starts with the foundation. We hold a retail license and direct integrations with every carrier plus the contracts, accreditations and bonding facilities. That position gives us data, every search, booking, journey and aftersales interaction sits in, one place on a leading technology platform built over many years with AI increasingly integrated. Better data builds better, more innovative product because we can see what travelers actually need and build for it and better product builds habit and loyalty, so customers will choose us.

We are the #1 travel app in the U.K. and the #1 rail aggregator in Europe. Active customers in the U.K. transact frequently with us, and it takes just 23 seconds from search to purchase from familiar routes. And that in turn gives us trust and scale. AI strengthens each of these advantages, so the position grows with every journey.

In summary, this was a resilient first half. Net ticket sales were robust, margins improved, and we've continued to return cash to shareholders. In the U.K., we have a stronger proposition with a better travel experience, clearer value for money and more flexibility for customers.

In Europe, in a year without major aggregation moments, we rebalanced growth and profitability with International now profitable, and we are building strong foundations for growth. In AI, we are executing faster and building a deeper competitive moat. Our balance sheet is strong, so we can keep returning cash, while we navigate change and shifting markets, and we are confident in the outlook.

Ian and I are now happy to take your questions. So I'll hand back to the operator.

[Operator Instructions]. The first question today coming from Alastair Reid of Investec.

A couple from me. Firstly, can you expand more on the opportunity you formed the tender to build the GBR app? Is there any scope for the sort of commercial terms of that to impact the government's decisions around the funding mechanisms for GBR, for example? And then secondly, on the topic of pricing more broadly, can you perhaps expand a little bit on the strategy for Trainline Flex and whether you're looking to differentiate pricing more versus train operators? And could you have some bookings be more explicitly linked to whether you have a SplitSave ticket? And I guess the last thing sort of linked to that, do you think the GBR ticketing operations would have the incentive to do SplitSave as well given the lower revenues it would generate for its parent?

Thanks, Alastair. Yes, let me work through those. So first, you asked about the tender opportunity. This we expected earlier in this year. I think it's a complex set of attributes that the government is trying to pull together here, and that's why there's been some delay. There's a chance this will emerge pre-Christmas, although it may also appear earlier in the New Year as well.

In terms of whether the options that Trainline could offer something and how that might fit into the funding, no, I don't really see that as an opportunity here. I think the government has got an idea about what it's seeking to acquire. It's refining those proposals at the moment, we understand. And as I say, they -- we're expecting that to appear imminently. The mechanism for funding, GBR more generally is somewhat separate to that. Of course, there is some look across and they need to ensure that it fits the right envelope. But I don't think there's a role for Trainline to play here. There's quite a clear set of rules around procurement, and I'm not sure that there's any option that you're pointing to here.

And then next, you asked about the Trainline Flex and pricing more broadly. Well, I think we've made really good progress with ancillary products. To start with, it was a question of layering in insurance and hotels often post sales, if you like, as options for the customers to buy. And over time, we found better ways to surface this, targeting the right customer at the right time and have managed to scale this.

And now we're into the second era, which I think is really interesting. Obviously, if you blend these products together, you can create unique inventory, a ticket with different terms and conditions or a package for rail and hotels are things that we are now exploring. And as ever -- and as we have always done, we will test and learn our way into this and see where there is opportunity and where we can exploit things that work for customers, that's really what we'll figure out as we work through that. But we're pleased with the progress we've made so far on that.

And then you asked about SplitSave as well. I don't think that there's a chance that GBR -- well, there's a chance that they'll offer SplitSave. But I'm not sure that's really the approach they want to take. And I think really, this is one of those things that exist because there is yield management in the platform, and they're trying to make sure that they get the loading on trains, the popular ones that are perhaps early in the morning versus the ones later in the day, and that's what really what creates this whole system.

So yes, our working assumption is that they won't offer SplitSave. They may find ways to remove certain splits. But I think overall, and with yield management still a requirement in the system, I don't think there'll be major changes here. Essentially, what they're doing here is keeping the subsidy under control by charging people who are traveling first thing on a Monday morning between Manchester and London, who are able and willing to pay more, and that's able then to subsidize tickets on empty trains or for families traveling at the weekend or such. And I think there's not really the appetite to increase that subsidy. In fact, the government has stated that they want to reduce this subsidy over time.

And I don't think you end up removing some of these things by normalizing prices up either. That's certainly counter to the direction of the travel for the government who really sees train ticket as already quite expensive, and it wouldn't be a popular decision either. So yes, I don't think they'll offer it. I'm sure they'll continue to innovate and reform fares, but I think it will be there for Trainline and others to use in the long run.

The next question comes from Gareth Davis of Deutsche Numis.

Just a couple from me. Firstly, a very useful update on the French liberalization. When Velvet enters and the other players come in, in calendar year '28, do we have any feel yet for kind of regional targets or kind of how extensive their ambitions are in that early phase? Or should we really think of this as a Trainline opportunity in 2029, '30? The second one was really following up just quickly on the SplitSave question. You've been trialing SplitSave fees on the app. Just wondered if there's any sort of feedback in terms of are you seeing that impacting customer purchasing? Or is -- what are the learnings from putting that SplitSave fee in rather than charging a booking fee?

And then finally, just on the travel management business, clearly, 4 large international wins is great in the first half, 18 new customers. Are you kind of there in terms of the opportunity for big international customers? Or can you see further opportunities looking forward? And sort of what is the scale of opportunity across that International Trainline Solutions business? Are there white label opportunities starting to emerge as well?

Great. Thanks, Gareth. Yes, let's go first to liberalization. Yes, I think 2028 looks like it could be an exciting year and kind of a restart, both in Italy with SNCF and then Velvet in France. The routes, I think there are 5 key routes that SNCF is looking to run. It's relatively extensive. And I think the important and exciting thing for us is that the rail traveling public who got used to some degree of juggling 2 apps will have a third to deal with as well on some of these routes. And that does represent an interesting opportunity for us. I think -- again, Velvet is launching in a part of France out to the west of Paris which is not served by any other carriers at the moment. Obviously, down to Lyon and down to Marseille, you've already got some aggregation.

So this is going to be the first time that those customers traveling out that way are faced with more than just the incumbent carrier. And so both of these offer similar, but slightly different options for us. As we get clearer on the launch plans, we'll begin to refine our planning. But typically, what we do, the tickets go on sale ahead of the launch of the services and there's a moment at that point for us to invest in brand and to capture early sales. And then really, you get more momentum as the service launches and as it starts scaling, when people start seeing a different branded train at the station, then it's part of the marketing, if you like, or even awareness of the fact the new service is somewhat visual, if you like. And that's where we'll further lean in and seek opportunity to build.

And I think what we've seen in Southeast France with Marseille is, obviously, there's a good first year for us to get after in acquiring new customers and building sales. But actually, it persists over time and builds momentum. So to your point around '29 and '30, yes, I think we expect that to kind of continue into those years from a good start. We really want to build momentum over time, if you like.

Then you asked about SplitSave fees. Yes. I think we are very mindful of how the world is evolving and ahead of GBR being stood up, we've still got a window to explore. I think we've got a long history of operating -- offering a differentiated service and features that customers love. If you went back, I don't know, what, 5 years or so, you had lifetimes and platform information in the app. And of course, you got the saving by booking in advance and people were willing to pay a fee for that. And we're now layering in quite a lot of new features with travel disruption and make the labor pay notifications and things like this.

I think that kind of -- those features are things that customers are going to continue to love based on the feedback we see now. And we may evolve the fee mechanism over time with that. The SplitSave test is one of those, and there could be other things over time as we look to evolve that model more broadly. But the learnings are good. I think customers understand the proposition. They understand why the value being tied close in really makes sense. So positive signals from that. And yes, we'll continue to iterate overall.

And then finally, yes, it's really great to see momentum, particularly into Europe with the travel management companies. And we're talking to customers who perhaps a few years ago felt that they didn't need Trainline, but eventually came back around because the work and the efforts going to actually integrating these things directly on what are often legacy systems and require nurturing and maintenance. They aren't kind of, "Hey, we connect once and that's done for 5 years." These things are evolving, organizing, if you like. So yes, great to get momentum there.

I think you then talked about white label and whether there was more opportunity. I think it's in the back of our minds, but it's not something that is kind of most obvious and we're actively pursuing right now. It's more that B2B cohort rather than trying to serve new operators with white label businesses. But look, the world is continuing to change. I think as AI washes through and as we embrace that, that might mean that it is a more attractive proposition in years to come. So I'm not shutting it down, just giving some kind of realism in the near term.

The next question is from Andrew Ross of Barclays.

I've got 3, if that's okay. First one is for you, Ian. So welcome, and thanks for the opening remarks as to what attracted you to Trainline. I appreciate you've only been in the business for a relatively short period of time. Wondering if I could ask if you have any early thoughts on if anything needs to change from a strategic perspective, EG levels of investment, the product, the geographic exposure, et cetera? Any additional comments would be very helpful. That's the first one.

But the second one is to ask about the U.K. ticket price into next year. Obviously, there wasn't a regulated increase this year. How are you guys thinking about the likelihood of there being one next year or indeed any other year in this labor government? And then the third question is the UP on the accounting of the CMA study. There's a small exceptional that you've booked. If you could explain what that is? And then you're still referring to underlying revenue. So I guess there's still some uncertainty as to how that may or may not change, but it would be helpful just to get all the context as to how you're thinking of accounting for the potential risks about the study over time?

I'll take the first one then, Pete. Andrew, thanks for the questions. I mean, look, as you said, it's early days. Not that I'm striking them off on the wall or anything, but I think this is day 3 and week 6 in the CEO seat. So as you'd expect, I'm working my way around the business, a broad set of stakeholders, listening to customers and absorbing a lot of stuff and asking a lot of questions. It's too early, obviously, to sort of say we'll be having a change in the strategy.

What I will say is I've been struck by how strong the foundations of the business are. I touched on them earlier, fantastic product, great brand. And the other thing I'd call out is just the strength of the team and the culture here, which I've been very impressed by and I'm proud to be part of.

So look, my focus right now is really 3 areas. One is external engagement, as you'd expect, particularly with the government around GBR. The second is ensuring we continue to execute on the plan well across U.K., International B2B and of course, technology. And then the third, as you'd expect, as I'm sort of working my way around the business and our stakeholders and listening to a lot of people, I'm starting to -- it's early stages, but sort of starting to think with senior team and the Board, what is that next growth card for the business, which will answer your question. So forgive me, I can't give you a direct answer today. But as that takes shape, we'll update you in due course.

Thanks, Ian. And yes, let me take the second question around ticket prices in the U.K. Look, I think the budget didn't provide any clarity, if you like, or didn't announce that there would be a fare freeze or not. I still think that it's a possibility. The last time it was announced further towards Christmas.

But if you take a step back and look at the mood music more broadly, I think the government under Burnham are seeking in many ways to try to relieve pressure from the public and their finances in many ways. And we know that Burnham is close to transport. He's shared a few hypotheses and thoughts around, is there a railcard that could fit between the young persons and the senior. And I think generally, this idea that rail is expensive and they want to make it more affordable against the backdrop of a challenge in the treasury is one that they continue to explore. I think net-net, there will be pressure on fares into next year. That's kind of our planning assumption, if you like. Whether that's through a headline fare freeze or whether that is through other reforms or mechanisms, I think that, that's most likely to persist for the next year.

And then you asked about the CMA accounting and the exceptional charge that we pushed through. So yes, probably worth just clarifying. Obviously, this is an ongoing investigation, and it's about whether we -- how we present fees, not whether we can charge them or not, just to be very clear. This charge is really a kind of accounting interpretation. The application of those standards to the situation we're in, required us to make some judgments. And this was ultimately what the accounting standards led us to, if you like. And it covers the total cost, if you like, the legal aspects, potential fines and things like that.

But if you then go deeper into reading through Note 10, there are still a wide range of outcomes. And please, I don't want you to think that this is the answer or where this number will land. It could be 0. It could be a different number, and we'll have to find out in due course exactly how that plays out. And likewise, to your point around underlying revenue, again, this is really the point that based on how the business is performing today, we've reconfirmed guidance. If there are some indications from the CMA that impact revenue, then those will come on top, but I wanted to provide some visibility about how the underlying business is performing in the meantime.

The next question is from Ed Young of Morgan Stanley.

Two for me, please. First of all, there's been quite a few mentions during the presentation around balancing investment and efficiency. And I know you need only to get drawn on the strategy bit large, but I do wonder if you could between -- you maybe provide some color on how you address that challenge? You've obviously managed to drive EBITDA growth despite flattish top line. So it's clear what you've done this year. Are there more levers to pull next year? And how do you sort of look at that when you've got the prospect of some more opportunities in the business over the next couple of years? And then second of all, on the CMA, you said the next update you expect is January. You said you want to resolve this as quick as possible. Is it possible that is the answer? Or is that just an initial update and we should be expecting a much longer process to get some certainty on the CMA?

Yes. Thanks, Ed. Good question. So just on the first one, I think as we look into next year, and obviously, it's very early days for Ian, who's learning the business very fast. But we've got a process ongoing internally, both on bringing in up to speed and in the loop and also to define what next year and beyond looks like.

I think about it in 2 halves, if you like. There are some pressures that we have in the business from kind of rail-specific pressures, if you like, that I think will persist. We just spoke about the fares in the U.K. and the pressure, I think, will persist into next year there. Of course, we have the tragic accident in Spain, which will undoubtedly result in some longer term headwinds there. We've got a delay in Italy with SNCF launching now in '28 rather than '27, which we had expected. And more broadly with geopolitics and fuel prices, I'm not sure that inbound is set to recover either. So if I look over the next 12 or so months, I think there is a bit of pressure at the top overall.

On the other hand, we look further out, and there is really interesting opportunities for us to chase after. AI, we're already finding -- unlock some real potential, particularly in travel experience at the moment. And that's, I think, an exciting area for us to differentiate. We're obviously starting in the U.K., but over time, that would be something that could be interesting in Europe as well. Obviously, there is more liberalization on the horizon and high-speed rail tailwinds continue to persist. We just spoke about Trainline Solutions and the great momentum we've got there. And that's before we even get beyond Europe because we really want to keep dreaming, if you like. And then finally, ancillary revenues, again, we've spoken about this, and I think there's opportunity there as well.

So then it comes to, well, how do you balance and judge the near-term factors that we need to consider with the longer term opportunity. And in essence, that is exactly what we're doing alongside Ian. And I don't know, Ian, if you have a few things you want to add to that thinking?

Yes, just very briefly, I mean, firstly, I can echo everything Pete just said, but maybe from my perspective, as I look at the business, and you'd expect quite a bit of homework on the business as I went through the processes before saying yes. I'll just say this, so we've got a bunch of things to navigate in terms of uncertainty and external factors and Peter makes that really well. Just from my perspective, as I sit here, I'll say one thing, which is, I'm even more excited about the business today than I was on day 1. And I'd say the medium-term opportunities for the business are much greater than I anticipated as I did my homework from the outside. So I think we both sit here genuinely bullish about the medium to long-term, but recognizing we've got quite a few things we need to navigate in the sort of short-term.

And then to address your question on the CMA. When the announcement of the investigation started, the timeline was that by January, this investigation would be concluded, and that's really what underpins this timeline. I think as we've got into this, we recognize that there is a certain rhythm to how these investigations unfold. We're working hard and fast to hit the deadlines and make sure that we do everything on our side. But there is a certain rhythm. And as far as I'm concerned, the CMA will still hit the January deadline, maybe we'll hit before. But as I say, it's a live situation, and we'll have to see how it unfolds.

The next question comes from Peter McNally of Stifel.

You mentioned just moments ago that any CMA ruling would come on top of any current guidance. But I guess my question is, when you actually start displaying the booking fee, do you have any expectation on how that might impact bookings? And does your reconfirmed guidance reflect any sort of changes to the presentation of the booking fee given that it's supposed to be coming imminently? And then second question is, you mentioned the phased rollout of single leg pricing in the statement with an impact on lower average transaction value. Just wondering how big of an impact that is? And just a quick third one. Spain and France are 21% of International. Can we carve out Spain specifically of that, please?

That's Peter. So yes, starting with the CMA and the display of fee. So I would say that the funnel that people go through to purchase is clearly -- it's a critical part of our real estate, and we spent years refining and optimizing that. And so, yes, changes to that can have some impact, but we have a skilled team that kind of worked through those changes and maximize the conversion rate, if you like, over time.

That all said, people do know that Trainline has a booking fee. It's kind of -- we have a very high repeat rate. A lot of people are returning customers who love the service we provide and so to some extent, changing the visibility or the presentation in some way, I'm not expecting to have a particularly big effect. We'll need to work through it, any changes that we do make and there will be probably opportunities to refine it over time because with all these things, you never get them perfect the first time out, and we are always running A/B tests on our experience. So yes, I'm not expecting a significant impact, but there might be something, and we'll have to work through it.

And then you asked around single leg pricing. Yes, I think the government has explored various different things, and they have slightly different dynamics on the East Coast mainline, they explored this idea of there being a sort of semi-flex ticket that could move, you could catch the train before or afterward, at least there was a window. And that kind of created different complexities in a way. So sometimes in seeking simplification, they actually introduced more complexity. And that's, I think, one challenge that they face in trying to not create too many losers with the changes they make. Governments typically don't like the kind of winner or loser trade-offs. They're just creating winners overall.

The single leg pricing is another interesting one. What we've really seen here is that transaction count has gone up a bit and average transaction value has gone down a bit. And overall, it kind of washes out. It's relatively neutrally for us, like people are as ever very efficient to trying to find the best form of ticket that's available to them. And net-net, it's kind of priced in a relatively similar way overall, even if the presentation is a bit clearer and ostensibly a bit fair, if you like.

And that sometimes drives certain other mechanisms like the transaction fee that we have in our accounting. Actually, you're seeing more revenue portions out to Trainline solutions than before because we've got a higher transaction count. So the sort of second order effects that we need to keep an eye on. But overall for customers, I don't think a material shift and it's not driving much change at the NTS level for us.

And then finally, yes, you asked about Spain and Southeast France. Yes, 21% for those 2 combined. We don't split Spain out overall, and we're not about to do that now. I think that if you -- it is the smallest of the 3 markets. And of course, it's been -- we hope to create a path of profitability growth in this market over time. We're really going to have to see what unfolds in the coming weeks and months. Obviously, we've only got a few days of data at the moment on the impact here. We'll share more once we have a better understanding. I think if you make assumptions around some reasonable proportion of that being Spain, you won't be too far off. But it's not the majority nor the minority in a sort of 80-20 way. It's probably more balanced than that, I would say, if you want to do some calculations.

The next question comes from Sean Kealy of Panmure Liberum.

Two for me, if I can. First of all, you've taken quite a lot of spend out of marketing in International, which makes sense in the context of delays to carrier competition in Europe. When do you think you're going to get to sort of the minimum level of marketing that you're willing to put in without potentially compromising the brand in markets and then having to spend a bit more later on? Do you think that sort of where we are now is, you wouldn't want to go below that? Or do you think there could be some more you could take out for next year given further delays? Just interested on the trade-off on that point. And then second of all, on inbound foreign travel, I think it's fair to expect that it's been pretty weak or slightly weaker, at least given hot summer, civil unrest in France and so on. What are you seeing at the moment? And could there be some upside to International numbers next year if the Iran war ends and so on and various other bits wash out?

Thanks, Sean. So I think the marketing -- the shift we've taken is definitely the bigger of the moves that we might make. And at this point, we're now into more marginal trimming, which could be up or down as we look ahead. And really, there might be ways to see further efficiencies on the one hand. On the other, the backdrop continues to evolve. You've got Google and the search results page continues to change. You've got the -- more people spending a bit more time with other tools such as ChatGPT and a bit of fragmentation in that space.

And so I think it's -- we're solving against an evolving backdrop, and we'll have to continue to test and learn, which frankly is how we've always operated. You're kind of putting campaigns live in areas that are new, you're trying to hone them and you're trying to balance the overall equation. You've kind of got this seed capital to test and learn and then you put the bulk wherever you're getting the best return overall. So yes, I think we're more or less at the right level. It could go up or down a little bit at this point, but I'm not expecting a more significant shift like the one we've taken so far to unfold.

And then, yes, thank you for your question on inbound. I mean, 2 minds on this one. I think that, yes, if there is a swift resolution to things in the Middle East, then that is undoubtedly going to be supportive next year in terms of travelers. That said, I think there's quite a lot of stress already in the system with regards to fuel prices and futures and things like that. So I don't think this suddenly unwinds. Very difficult to read the kind of broader civil unrest backdrop. I think particularly Americans don't like the idea of there being unrest in Europe and that can put them off planning their travel. We saw that previously when France had some heat in it. And that may also be built into that planning horizon over Christmas, New Year, but that may also impact some of the travel plans that they're making as well. So yes, it's a mixed bag, I would say. But at the moment, I'm probably a bit more cautious looking into next year based on my read of where we are.

The next question comes from Chris Lux of Bank of America.

Just 2 for me, if I can. You just mentioned the balance sheet is strong enough to cash while you never get the change. Could you -- how you're thinking about the pace of the new GBP 100 million buyback program? Execution so far seems fairly measured with the CMA, expected to complete by January, should we expect the pace to pick up if there's more clarity?

And then just the second one that was on the CMA timetable. Maybe Ian, turning to the GBR. You mentioned BBC and BT as examples of strong safeguards, which mechanisms would matter most to you in the final retail code? For example, separate accounts for GBR's retail are more protected, access to the full retail -- full range of fares, including splits? And when do you kind of expect the code to be finalized?

The line was really bad for us. I don't know if others on the call heard it. I think I got the first question, which I can answer. I'm not sure I got the second one, but let me start with the first, and we'll go back around. I think the question was around the pace and the execution of the GBP 100 million tonnes buyback that we put out. Look, I think there are a couple of factors that determine pace. Obviously, the availability of cash is one, and there's no issue on that over the last few months.

One other is when we go to close periods, we take a more prudent start. So if you look back over the last month, we've had a slower rate running here, and that's because we can't touch the order once we've submitted it through a close period. And you should expect that to be readjusted, I guess, in the coming days or so. And then working capital fluctuations is another factor in all of this. We announced it back in September. Nothing has materially changed, and I'm expecting to complete this program over the course of the month through into next September.

And then did anyone in the room catch the... Should I send the GBR one? I think it was around access -- a little bit access to full range of fares and where particularly we needed, what we'll be calling framework to be strengthened. So if that's right, Chris, I'll have a quick crack at that.

Yes, that's correct.

Okay. [indiscernible].

No, that's great. That's perfect.

Okay. So look, on access to sort of products and fares, the Minister Lord Hendy has been sort of very clear in his words on this one. The draft code requires GBR to ensure access to products, providing services and data on fare, transparent and nondiscriminatory terms quite. This is an area we see most of the coming government's words and commitments and assurances reflected in the draft code. Albeit this, we might have a few nitpicks around the old word like sort of products that form a core part of the online customer offer. So that's an example of kind of where we'll be engaging sort of constructively through the consultation process that kind of runs to December 11.

To your sort of second question, why are we're calling for it to be strengthened? Look, I'm going to go back and make 2 points first. The first is GBR formation is an enormously complex thing that it's going to take the government time to get right. And it's really important for all of us as sort of citizens and taxpayers and passengers that the government do get this right, and we're playing an active and constructive part in that, which codes the first part, the draft code. We're going to see the passenger service contract, GBR's own business plan, GBR's own kind of license, all come into view over the coming months. So it's only when we sort of see all of that together, that sort of GBR is kind of fully formed. But nonetheless, the code is an important part of it.

So where are we calling for strengthening are 2 very specific areas. One is around economics and transparency, right? And again, I go back to the government's stated intent and what Lord Hendy said. He says specifically "GBR will not be overcompensated to deliver retail functions in a way that distorts the market." The government's own fact sheets referred to the Great British rail retail market as among the most competitive in Europe. And so they're very clear on that. The gap -- basically, we see a meaningful gap between the government's words and what is currently in the draft code.

So what we specifically want to see here are the mechanisms that ensure equivalent of treatments between GBR online retail and independent online retail. And I'm going to reference BBC and BT as other examples where you've got large state-backed entities that participate in well-functioning competitive contested markets. And they have very clear precedents established over many years for transparency and safeguards for the parts of those entities that compete in competitive markets. So we very much want to see the gap close between the government's repeated and ongoing assurances on the record here versus what we currently see given effect in the draft code.

And then the second piece very briefly is around oversight and the powers of the regulator, kind of the ORR. So we want the ORR to have clear upfront visibility of how GBR's online retail activity is funded. And we want the regulator to be able to hear [indiscernible] and merit-based appeals. So in other words, before a harm occurs, we want the regulator to have the powers to hear those appeals and to be able to bind GBR to outcomes. So in other words, regulators to be able to act swiftly and with confidence where there's an imminent possibility of something that, again, goes against the monster's words and risks distorting the market.

So I'll just close by saying, look, it's a big complex thing in multiple parts. We've seen really positive step forward with the publication of the draft code. We're engaging constructively, proactively. We maintain our assertive stance. And maybe the final point I'd just observe is the government makes clear throughout and it's kind of made clear on the code, the competition law continues to apply, and that's a backstop here.

The next question comes from Giles Thorne of Jefferies.

First question was on competition in Europe and how you see competitive dynamics changing or not at all as a result of the merger of Omio with Europe? And then the second question is a bit more philosophical, but I wanted to test or hear how fragile you think the medium and longer term outlook is in Spain? We've obviously had the event of the crash. But even prior to that, the travel times between Madrid and Barcelona have been extended. Adif or ADIF, however you call it, had been reluctant to give any price cuts to reflect those longer train times. We've seen the low-cost carrier Vueling relaunched service between the 2 cities. So the most recent data points are a fairly negative direction of travel for rail services -- passenger rail services in Spain. And your thoughts there would be useful.

Thank you. So first of all, the kind of merger or the acquisition of Rail Europe by Omio. I think Omio is an entity that they go beyond rail, and so we're somewhat different to them. They offer flights as well, for example. And their focus really is on the foreign inbound market. It's an attractive market in so much that the margins are higher. It's also not nearly as big. Majority of rail journeys taken by people domestically in their home market. So I think it's a natural fit. I'm sure there's a lot of work to be done integrating the 2 together. And -- but I think we also have a strong proposition in this space. We will continue to compete well -- here as well. I don't think it materially changes the backdrop from our perspective.

And then, yes, with your question on Spain, I think the government over the last couple of decades have put a huge amount of investment into the high-speed network. I think it's fairly clear that there are some questions that need asking and certain aspects of that network need to be reconsidered and perhaps adjusted and changed. And there needs to be the work done to restore consumer confidence, and this will take some time, of course. We've not had any indication that there's an issue from the fact that it's a private operator that's been involved in this.

And I think the way the network is run, the same safety standards, the same protocols are applied to all who are operating on the network. So it's an issue whoever's train is running on it overall. So yes, I don't think there's a huge amount more to say at this point. It's obviously very early days from this most recent incident, we'll have to see what unfolds. But I still see a future for rail and the high-speed network in France given the backdrop, notwithstanding some changes that might need to be made.

Is it realistic to think that there could be negative NTS growth in Spain over the next 3 to 5 years?

Well, we're in a significant negative growth right now on the back of the incident and actually through the year, we have been negative on the back of the accidents further earlier in the year. I think, yes, it will remain to be seen how that kind of laps through. And then once you've got a year out from the most recent incident, what kind of confidence there is and how that builds thereafter. So yes, I think for the near term, some negative growth. But in the longer run, I don't think that it's negative forever.

The next question is from Lara Simpson of JPMorgan.

I think most of my questions have actually been covered. But maybe just coming back to U.K. Consumer and the outlook there. Can you remind us where we are on Project Oval? I know we've spoken in the past around GBP 150 million net ticket sales at risk. It feels like that phasing has probably taken a little bit longer. But how much of that have we now cycled and what should be incremental over the next 2 years? And then I guess, with U.K. Consumer, it sounds like we're a bit more downbeat on pricing, still risk around Project Oval. Do you think we can return to a period of growth in FY '28? Or could there be some downside risk expectations there on the U.K. Consumer top line?

And then just on International, it feels like you're quite comfortable with the level of marketing there. You've obviously swung profitability in the first half and are guided to be profitable in H2. Do you think you can hold profitability now on a midterm view even if we look to sort of '29, '30 where carrier competition is expected to intensify and sort of build of profit now? Or is there a risk that you could go back to negative territory as you go after that long-term growth opportunity?

And then sorry, just a last question from me on C&A. It feels like that GBP 3.7 billion provision looks quite low relative to the sale of your booking fee revenue potentially at stake. So I just wanted to check that, that assumption does factor in, I suppose, a probability weighted view on both redress and fines because there are 2 running themes there. If you can just confirm that? And maybe also remind us what your booking fee revenue exposure is? I know it's not something you carve out, but just to try and gauge what the downside scenario could be, if you can give us any context on the exposure, that would be helpful.

Thanks, Lara. So yes, I'll start first with Oval. Look, I think the backdrop here is back in February '25, we had the first 50 or so stations. December '25, we had another 30 or so and then another 20 in March, I think, this year. So particularly those last 2 drops, we're still cycling through some of the impacts. Now I think that has -- we've got a good handle on it. And typically, what happens is on day 1, there's not a huge impact. And then it builds over a period of time as people begin to notice the ability to tap in and then it starts to level out again. And as we've seen, the further out from London that you go, the less dramatic the impact is, but it is still there, if you like. So the final, what, 130 stations, I think, are slated to go early next year. TDC exactly if they stay on track time-wise. But they are further out. And so I think the remaining part of that GBP 150 million is still the best estimate that I can provide to you. But you're right, it has taken longer than we originally anticipated as this has slipped out to the right overall. So yes, still a bit of a headwind there.

And then more broadly to your question around the outlook into next year, obviously, not providing formal guidance for next year at this point. I think the way we're running at the moment net the good work that we're doing on railcards and other things, for example, less the impact of some of these factors, the self-preferencing overall. And then we talked extensively about the kind of price backdrop. I can see it kind of continuing to run at this kind of level into next year. But that's not guidance. That is just joining the dots on what I'm seeing at the moment, and we'll provide more color as we get into next year with guidance.

And then thanks for the question on international marketing. I think we've been clear for a long time that when aggregation comes, that is the moment to invest more. I think we've developed and refined the playbook over time. And really, it depends what exactly gets launched and when as to exactly how much we invest. If these things all come at the same moment, and we think there's good long-term opportunity, then we won't set a floor at the 0 line. We will invest with a view to creating longer term value and building our position out from those moments. That said, it doesn't mean that we will drop below, right? There is a way in which these things are spaced appropriately. We've got underlying momentum and therefore, it's not necessary either. But it's hard to say exactly right now without seeing more clarity on the plans.

And then finally, yes, just to confirm, the provision considers the potential fine, a potential redress and some legal costs as well. So it does cover all those bases. You're not wrong, you don't split out the booking fee. If you look at the overall U.K. take rate, you can remove the commission and blends to roughly the 4.5% that the headline is. And you're left with the residual part. A material part of that is booking fees. We've not split it out. But just to give you some altitude, it is a material part of that residual take rate, if you like. And -- but yes, as I said already, the -- this is an accounting judgment on the situation as it is today. And there's still a variety of outcomes that could unfold. It could be 0 or it could be a different number. So don't please think of this as being the answer.

Great. I think that's all we have time for today. Thank you, operator. And I thank you all for your questions and for joining us. Just to recap, this was a robust first half. We are executing well and remain confident in the outlook, and I look forward to speaking with you all again soon. Thank you.

Good morning, everyone. Thank you for joining us today for our results presentation. It's great to be here. I'm Jody Ford, CEO of Trainline, and I'm joined by Pete Wood, our CFO.

Let's first go through the disclaimer. On to the agenda for today. I'll give an introduction briefly discussing the progress we've made this year and updating you on the regulatory backdrop in the U.K. Pete will talk you through our financial performance. I'll update you on how we're progressing against our strategic priorities, and we'll finish with an overview of our AI strategy, which is becoming a core part of how we compete. After that, we'll open up to the floor for questions.

Trainline is Europe's #1 rail app built on a market-leading customer experience. Our core purpose is to empower greener travel choices. And each of these 3 business units is a leader in its market segment with clear opportunities to scale.

In the U.K., we are the #1 travel app. We are helping to grow the rail market and increasing the value of our 18 million customer base. In international, we are the largest rail aggregator in Europe. We will deploy our proven aggregation playbook across France, Italy and Spain, markets expected to be worth EUR 23 billion by 2030, including EUR 12 billion on aggregated high-speed routes. And in Trainline Solutions, we have the leading B2B rail platform across the U.K. and Europe, which now generates over GBP 1 billion of net ticket sales. We plan to grow further into the EUR 6 billion business travel opportunity in European rail.

This year, we've made strong progress in each of our business units. In the U.K., we've delivered growth while strengthening customer engagement through new rail disruption features and digital railcards. In international, our aggregation playbook drove positive momentum in the Southeast France following Trenitalia 's expansion. And in Trainline Solutions, B2B sales grew strongly, particularly in Europe. We delivered robust net ticket sales and revenue as well as double-digit growth in profitability. And we've delivered strong EPS growth further accelerated by ongoing share buybacks.

Before I hand over to Pete, let me update you on the U.K. regulatory and industry backdrop. A key focus for investors is the U.K. government's intention to launch GBR Online Retail, its consolidated app and website as well as the design of the future retail market.

In November, the government published the output of its GBR consultation. This included plans to develop, for the first time, a Code of Practice owned and managed by the independent regulator, the ORR. This will codify how GBR should interact with third-party retailers.

In December, the government published pre-tender documentation outlining procurement plans for the launch of GBR Online Retail. It included a stated aim to award a contract by January 2027. However, the tender process has yet to begin. We'll engage positively with both processes and maintain our assertive stance with government to deliver on its commitment to a fair, open and competitive retail market.

Today, there are instances where operators self-reference their own retail channels. Through our sustained engagement, we are making progress to remove these instances. The government has confirmed our access to all temporary fares and granted our ability to advertise in stations and on trains.

Furthermore, in March, they announced that, once GBR is established, passengers will be able to claim Delay Repay compensation from wherever they purchase their ticket, including through Trainline. This was a meaningful step forward. However, it will take some time for this change to come into effect, so Delay Repay remains a pain point for our customers.

Similarly, we remain unable to offer customers access to train operator loyalty schemes. We continue to engage government stakeholders and the wider industry to remove examples where we are discriminated against.

We're also engaging with the industry to protect and grow the U.K. rail market. We are trialing our digital pay-as-you-go technology with East Midlands Railway. Our technology is performing strongly, and we've received excellent customer feedback. The trial is due to end in the summer, and we'll look to update you thereafter.

We continue to take steps to protect industry revenue by blocking fraudulent processes and refunds, and we're sharing data with operators to enhance their revenue protection while assisting their fraud prevention measures.

And with that, I'll hand over to Pete to talk through our financial performance.

Thanks, Jody. Good morning, everyone. Before I step into the financial performance for the group, let's briefly unpack the performance of each of our business units.

Starting first with U.K. Consumer. Net ticket sales grew 6% to GBP 4.1 billion. This reflected market recovery within the commuter segment in the first half as well as growth in leisure travel sales. Growth slowed in the second half, reflecting the impact of Project Oval as well as operators self-preferencing their own retail channels with features such as one-click Delay Repay.

Turning next to International, where we maintained a disciplined focus on our core markets. Net ticket sales grew 3% to GBP 1.1 billion. We saw strong momentum on newly aggregated routes in Southeast France. Growth in Spain moderated, reflecting a more balanced approach to growth and profitability as well as a series of tragic rail accidents, the impact of which is ongoing.

In foreign travel, growth reaccelerated to 5% in the second half as we lapped the headwind from changes to Google's search results page. As a reminder, Google made a series of changes that suppressed organic results while increasing the prominence of paid ads. This disproportionately affected foreign travel sales, which relied more heavily on web acquisition.

Growth rates varied across our international markets as we prioritized marketing investments on routes with carrier competition. Starting with Spain and Southeast France, which together represent 22% of international net ticket sales, growth was up 9%. Elsewhere in France and in Italy, growth was more modest, up 2%. These markets account for around 2/3 of international net ticket sales and are expected to benefit from the expansion of carrier competition in the coming years. Germany and the rest of Europe declined 6% as we prioritized our core markets with these regions representing longer-term growth opportunities.

Overall, our International business is becoming increasingly profitable. It's benefiting from higher-margin foreign travel, strong growth in ancillary revenue and disciplined marketing investments, including in Spain, as we balance growth and profitability. Two years ago, our international business broke even on a pre-transaction fee basis. And in the year ahead, we expect international to break even on a headline post-transaction fee basis.

Now turning to Trainline Solutions. Net ticket sales grew 14% to GBP 1.1 billion. Growth was led by B2B distribution, which grew 36%. This reflected new and expanding travel management company partnerships. It was particularly evident in Europe where B2B sales through our global API grew 58%. Sales growth was partly offset by the loss of Trainline's white label contract with U.K. rail operator CrossCountry, and we expect the loss of our ScotRail contract this year as they seek a different partnership to better align their online and offline sales. In the long run, the rail industry anticipates that operator apps and websites will be replaced by GBR Online Retail.

Bringing this together, group net ticket sales grew 7% to GBP 6.3 billion. Revenue grew 2% to GBP 453 million, given the reduction in the U.K. commission rate. Gross profit was up 6% to GBP 374 million, outpacing revenue growth. This reflected lower cost of sales, given step reductions in U.K. industry costs and group-wide efficiency savings in customer service and payment processing.

We continue to drive strong cost discipline across the business. Our cost-to-income ratio reduced 4 points to 70%. This represents operating leverage, cost optimization in the prior year and ongoing cost discipline. Importantly, these efficiencies have more than offset the impact of the U.K. commission rate reduction. As a result, adjusted EBITDA grew 11% to GBP 177 million, outpacing revenue and net ticket sales growth and landing within our previously upgraded guidance range.

We continue to execute our share buyback program at pace, supported by strong cash generation. Since September 2023, we have repurchased GBP 294 million of our shares, equivalent to 23% of issued share capital. Upon completion of our current GBP 150 million program, we will have returned a total of GBP 350 million to shareholders over a 3-year period. Together with strong earnings growth, this has driven a significant increase in earnings per share. EPS has more than quadrupled over the past 3 years with a compound annual growth rate of 62%.

Altogether, I'm pleased with our performance, particularly the strong earnings growth and cash generation. Looking forward, we see opportunities for growth alongside some near-term headwinds. And in the year ahead, we expect net ticket sales of around $6.2 billion to $6.45 billion, revenue of around $440 million to $455 million and EBITDA of around 2.9% of net ticket sales, which would represent a 10 basis point increase, reflecting the benefit of International Consumer breaking even.

Thank you, and I'll now hand back to Jody.

Thanks, Pete. Let's now talk about the progress we're making against our strategic priorities.

We are the U.K.'s #1 travel app. Our app is designed to meet the everyday needs of rail users. Rail is a high-frequency mode of transport, but booking can be complicated and travelers often face journey disruption. Our app provides end-to-end booking flow and travel companion features that support customers on the go. This has become central to our customer experience and our core customer touch point. In fact, the app is used for over 90% of our customer transactions in the U.K.

Our U.K. customer flywheel is strengthening the competitive position of our app. It focuses on unlocking value, solving customer needs, building loyalty and increasing engagement.

Let's look at some examples from the year. In terms of solving customer needs, this year, we launched AI-powered disruption features in the app, helping customers navigate the rail network. They include Travel Forecast, our AI travel assistant, and Delay Repay notifications. We supported the launch with a targeted brand campaign highlighting a better Way to Train for our customers. I'll talk more about these features later in the AI section.

Trainline has cultivated strong brand affinity with customers over many years. We are the most trusted brand in U.K. rail retailing and our brand consideration significantly outperforms all other rail retailers. This has supported Trainline's continued growth in the U.K. even in the face of strong competition, and it's becoming increasingly important in an AI-driven search world.

We are scaling in-app railcards as a way to drive customer engagement with enhanced upselling within the booking flow, highlighting to customers how much they could save by buying a railcard alongside their ticket. And we've improved the renewals process too. As a result, we now have 2.7 million digital railcard users, up 16%. We're gaining good traction with younger cohorts. Our share of the 16- to 30-year-old railcard segment has now increased to 45%. This is driving greater customer engagement with railcard users transacting 4x more often than non-railcard holders.

We increasingly focus on growing our ancillary products and services. This year, we delivered strong double-digit growth in hotel bookings and insurance sales, having enhanced their prominence within the app. This includes visually engaging placements as well as improved benefit-led copy for our insurance products. We'll continue to broaden our ancillary products, testing adjacent services like car hire and investing behind those we see resonating with our customers.

We are taking steps to enhance advertisements within the app. We are shifting from traditional ad placements to integrated, targeted and contextual advertising through the customer journey. This improves relevance for our customers and effectiveness for our partners.

Now turning to international, where we are positioning ourselves as the aggregator of choice ahead of the next wave of liberalization, increasing our focus on foreign travel and driving improved profitability.

Starting first with Southeast France, where Trenitalia significantly expanded their services this year. As the region liberalized, we rolled out our aggregation playbook. We leveraged our highly rated mobile app to showcase all the fares from high-speed carriers. We launched sponsored search, a paid service that allows carriers to increase their prominence within our search function. And we deployed features to unlock value for customers like TopCombo, which allow customers to stitch together different carriers for return and multi-leg journeys.

We've also resumed brand marketing in Southeast France. Through innovative campaigns and sponsorship deals, we've increased brand awareness to 50% across Paris, Leon and Marseille. As a result, we've grown net ticket sales by 26% in the region.

Our success in Southeast France builds on the aggregation playbook that we refined in Spain over recent years. As a result of our investment, we significantly scaled net ticket sales. This has given us considerable lead versus other market aggregators. While we continue to see runway for further growth in Spain, this year, we evolved our approach to strike more of a balance between growth and profitability. We are normalizing brand investment while placing more emphasis upon customer engagement and monetization. As a result, Spain's EBITDA took a big step towards breakeven in the second half of the year prior to recent rail disruption.

Spain and Southeast France represented the first wave of carrier competition in Europe. We're now preparing for the second wave, which will sweep across Italy and the rest of France. This is set to commence from late '27 with SNCF's entry into Italy, followed by several new entrants launching in France from 2028 onwards. This includes Velvet, Le Train and Ilisto who are due to launch domestic services, and Trenitalia and Virgin Trains who are due to launch services between London and Paris.

The second wave of carrier competition in Europe will open a considerably larger market for Trainline over the coming years. By 2030, the French and Italian rail markets are set to be worth around EUR 20 billion, EUR 10 billion of which will be from aggregated high-speed routes. And the market opportunity for newly aggregated routes may expand further. News flow last week suggested that from 2028, Italian operator, Italo, are planning to launch high-speed services in Germany, one of the largest rail markets in Europe.

Foreign travel represents a large and attractive growth opportunity. It comprises global customers from the U.S., U.K. and the rest of the world traveling in Europe by rail alongside intra-EU cross-border travel. The foreign travel market in Europe today is estimated to be around EUR 4 billion, so offers significant headroom for growth. Foreign travel provides favorable economics with a less price-elastic customer base and a greater skew towards long-distance travel. It's also a higher-margin business, generating double-digit revenue take rates, given higher attach rates for ancillary products and carriers willing to pay higher commission rates for inbound customers.

As a result, foreign travel is a major contributor towards international profitability. We see signals of generative AI playing an increasing role for foreign travel, given its ability to inspire travel plans and compress research time.

Trainline is the early market leader in GEO, which currently contributes around 3% of new foreign travel customers. Foreign travel is an area of competitive advantage for Trainline. We combine broad inventory coverage, including recently wiring on Poland and Ireland alongside helpful travel content to inspire customers' travel plans. And that's delivered through our market-leading user experience, offering a wide range of features tailored to international travelers such as multi-language support, flexible payment options and consistent post-sale support. So foreign travelers can plan, book and manage their journey seamlessly and with confidence.

Moving on to Trainline Solutions, our fastest-growing business unit, which now generates over GBP 1 billion in net ticket sales. Business travel is our main growth opportunity here and represents over 50% of Trainline Solutions sales. This is primarily generated through our B2B distribution business and our own branded channels. B2B distribution allows travel management companies and other business travel platforms to offer rail tickets to their respective customers.

We increasingly support our partners to sell tickets from multiple European carriers as well, diversifying ourselves into a truly international business. They can do all through one simple seamless connection, our global API, rather than tackle the complexity of connecting to multiple different carriers. As a result, international B2B distribution grew 58%.

Trainline-branded business travel also performed well. We invested to improve the experience for users and client companies over the past few years and now serve over 35,000 business customer clients, an increase of 47% year-on-year.

Let's now move on to AI, which is rapidly becoming a core capability for Trainline, powering our product, our distribution and how we operate. Before we start, it's worth spending a minute discussing the barriers to AI disintermediation.

Rail retailing is inherently complex. Customers expect a simple, consistent and reliable user experience with end-to-end transaction capability from search to purchase to post-sales. And that's across multiple carriers with all fares, ticket types and railcards available.

With no GDS for rail, online retailers must deeply integrate into a wide array of carrier APIs to offer full functionality. Those carrier APIs are nonpublic, so the retailer needs commercial relationships and accreditations with those carriers supported by funding obligations. This complexity creates a clear barrier to disintermediation, and that's exacerbated by the relatively low commission rates offered by carrier partners.

In that context, we see AI as less of a threat, more of an opportunity. And we've been on the front foot for a number of years, building our foundational investment in data and our broad application of machine learning. Our strategy centers on bringing AI capabilities to rail around 3 core areas: AI-powered products and features, extending distribution through emerging AI channels and AI-enabled acceleration across the group.

Let's discuss each area in turn. We increasingly use AI together with industry and first-party data to enhance the user experience of our app. This is reflected in our new rail distribution disruption features, which are underpinned by our scalable multi-agent AI system.

To bring our AI disruption features to life, let's take the example of Callum, a Trainline customer who has booked a 9:30 a.m. LNER train from London to Edinburgh. Unfortunately, there's disruption elsewhere on the rail network. Our Travel Forecast feature notifies Callum that his journey is likely to be affected, estimating his train will arrive in Edinburgh an hour later than scheduled. This feature is powered by our proprietary algorithms trained on complex data sets. So as a Trainline customer, Callum gets more accurate real-time insights.

Travel Forecast also provides a map-view interface powered by our Signalbox technology, so customers can see the location of their train in real time. Since launch, Travel Forecast has delivered updates to over 3 million users.

Given the expected delay, Callum consults the AI Travel Assistant, our in-app conversational support feature. It provides real-time travel advice, giving Callum options for alternative trains he can take. It offers agentic refund processing, allowing Callum to get his money back at the click of a button. Our AI system has handled over 2 million conversations since launch, reducing workloads for our customer service team.

Callum decides to stick with his original booking. As predicted, his train arrived in Edinburgh an hour late and Callum receives a Delay Repay notification. Trainline's AI system identifies the delay, calculates he's entitled to compensation of GBP 37 and provides a punchout to LNER's website to complete the claim. Since launch, we've redirected over 1 million customers to complete their claim.

Moving on to emerging AI channels, which present a new way for Trainline to attract customers and drive incremental demand. We've made a strong start, and we are showing clear leadership in GEO. In fact, we're the most cited rail app in Google AI search in all core markets as well as in ChatGPT across all but one core market. This reflects our strength in SEO and the power of our brand.

Building on this progress, we've recently integrated the Trainline app within ChatGPT. Users can now seamlessly search for routes and compare options, all within a conversational interface before completing their booking with Trainline. While we've made good early progress, GEO still represents relatively low levels of sales traffic, making up less than 1% of new customers within international. As mentioned earlier, though, it's playing more of a role in foreign travel.

Moving on to AI-enabled acceleration, driving faster execution, greater agility and more scalable innovation across the group. Our software development teams increasingly use AI to code as well as to accelerate auxiliary tasks like updating documentation, generating tests and reviewing code. Their focus is increasingly shifting towards AI agents, moving from experimentation to scaling agent capabilities.

In marketing, AI agents now generate around 20% of our in-house studio content. Creating and applying imagery and copywriting that's aligned to Trainline brand has enabled us to scale the production of performance marketing ads to 19x our previous output using traditional design methods.

And in customer service, we will soon roll out voice AI in partnership with ElevenLabs to progressively automate inquiry handling. We've also introduced Zendesk, a new CRM system providing AI agent tools and language translation. Taking all of this together, AI is enhancing our products, expanding our distribution and increasing the velocity of which we execute.

Before we open the floor for questions, let me summarize the key takeaways from today's presentation. This year, we have delivered a robust operating performance, double-digit growth in EBITDA and a significant increase in earnings per share. We've maintained our assertive stance with the U.K. government to deliver on their commitment to a fair, open and competitive retail market. And we've made strong progress against our strategic priorities.

In U.K. Consumer, we are strengthening our app proposition while deepening engagement with our 18 million customers. In International Consumer, we are positioning ourselves as the aggregator of choice ahead of the next wave of liberalization, increasing our focus on foreign travel, and driving improved profitability with the business set to breakeven this year. And in Trainline Solutions, we continue to grow business travel sales within B2B distribution, enabling partners to expand their rail offering across Europe. Finally, we're increasingly leveraging AI to power our products and services, extend our distribution and accelerate our execution.

Thank you very much for listening. I'll now open the floor for questions. [Operator Instructions]

It's Tim Ramskill from Bank of America. I'm going to try and tackle 3, if that's okay. So just firstly, in terms of the guidance for 2027 and specifically with regards to NTS, there's obviously a lot of moving parts, whether that's overall self-preferencing kind of dynamics. I guess if you think about it long term, you've pretty much always grown ahead of the market, but it's likely that in 2027, that might not be the case. So just your observations around how much of that kind of guidance you think is a reflection of known factors like overall versus kind of that slippage in market share?

Secondly, in terms of international, obviously, very encouraging to see the guidance around breakeven. What do you think the key drivers of that are going to be to get from the EUR 11 million of loss to flat. How much of that is likely to be marketing expenses or other cost actions versus growth in revenues?

And then thirdly, you obviously referenced the kind of the TopCombo product in international, which I guess is effectively the same as SplitSave. Just interested to know are the kind of consumer saving opportunities kind of very similar to what we'd see here in the U.K. or do they do differ?

Great. Thank you very much for the questions. I think we'll be teaming up through these ones. Pete, do you want to start with the guidance upfront, and then I'll take the other 2?

Yes, certainly. Inevitably, U.K. Consumer is a significant driver in the overall guidance. And the way I think about it is there are some nearer-term headwinds that will affect this year. And we've been talking about them for a while. but they unwind over time.

So the expansion of Oval will eventually cease. There's a little bit more to go. We're halfway through or so. The rail fares have been frozen this year. Our base case is that, that won't extend beyond March 2027. So that will again provide some uplift going forward.

And then finally, the self-preferencing. I think the Delay Repay announcement that we had a month ago or so is clearly a good step forward. We don't have that API available today, so we aren't able to wire it in. But the direction of intent is clear, and I do think we will resolve these issues that we've flagged. So those all unwind.

And then looking beyond that, there will be a moment when we are seeing the GBR shutting down other websites and apps, and that will present an opportunity for us to acquire customers that are then in the market. And of course, with digital pay-as-you-go, we've also created a seed here that could flourish as well. So in the longer term, I do see opportunity for further growth, but these headwinds remain with us in the meantime.

Great. Thanks, Pete. And just to kind of add there, I mean, in terms of where the question is going, absolutely see these things over the next couple of years, they lap through, and then we're pretty well positioned going forward vis-a-vis the competition and we're sort of picking that up. We don't see particular growth from those third-party players in terms of the market. And our sort of primary competition effectively remains the 14 different top operators where a number of those, as we've discussed, have got this self-referencing, which will be phased out and then we'll be competing on a kind of level playing field with them.

Coming to your second question on international profitability. Look, I think the drivers there really have been this very strong growth we have seen over the last 3 or 4 years, which is great. As we look forward there, part of that story is foreign travel, which continues to be a nice growth driver, temporarily impacted by what's going on in the kind of Middle East right now, but that's a relatively small part. But we see the kind of appetite for cross-border travel increasing, and you can see new services launching. And we see opportunity there, which helps drive profitability going forward as scale does.

And then where we're going on sort of the marketing point here, I think the way to sort of frame this around Spain is we have a launch period. And as a reminder, we were starting from zero brand awareness in Spain. And that ultimately meant that we had to come out with a strong kind of above-the-line campaign supported by the usual below-the-line to get our brand awareness at the point that we had all operators launching on all routes over a pretty short period of time. And having kind of worked through that, we're now, by distance, the #1 third-party player, and we've moved to this kind of position of optimization of that [ Spain ] having got our leadership position.

In France and Italy, we already have that leadership position. We already have -- we shared strong brand awareness, and we will invest going forward as it makes sense in a kind of hub-and-spoke way. In France, of course, we'll invest in Paris, but we'll also invest in the cities where the new operators are going, for example, Bordeaux when Velvet launches. But that will be much more targeted than it was in Spain where we come into the whole country at once.

And so we'll kind of keep discipline around that. If really big opportunities arise, we said before, we would lean in behind those as is required. But for now, we've kind of got this transition year where we think we're in pretty good shape.

And then to your question -- the final question on TopCombo versus SplitSave in the U.K. Yes, they're slightly different in that SplitSave is really arbitraging, if you like, the U.K. rail pricing system. TopCombo is really doing kind of a level above that by taking 2 different operators and putting those pricing together. But you're right, the spirit is helping the customer find value through the inherent complexity of rail. And the more carriers that launch, the more of those kind of opportunities become available and the more railcards we wire on in these markets and the more we're able to kind of support an advanced purchase and help customers understand how to navigate, the more we see value for growth in those markets.

So yes, and we keep finding those new areas to invest behind. And bringing TopCombo to life has been one of the kind of compelling points for our customers. Thanks for the questions.

Just wanted to clarify. I mean on the point around international breakeven, I recognize you want to kind of keep options open in terms of what comes next, but are you confident that once you get to breakeven, you'll stay above that level?

I think our position is the current -- in the current setup, we would say that's right. But if a new opportunity comes in, in France, and we see multiple carriers launch and it makes sense in that year to kind of go harder with top line marketing, then we would go and invest behind it. We're not constrained by that. But the underlying market, which I think is where the underlying business -- where the question is going, we feel good about where that's headed. Yes.

Gareth Davies, Deutsche Numis. Just following on really from the guidance question again. trying to dig a little more on self-preferencing. If we were to sort of hit the bottom end of the guidance range on revenue, does that assume a meaningful kind of pickup in the impact of self-preferencing? And just trying to really get a context of how big a headwind you're facing from that and what your sort of fear is there.

And then secondly, just on white label, the pre-close flagged a couple of white labels sort of rolling off. Can you just talk around any potential time line for other roll-offs or possible roll-offs? And in the international white label, what kind of opportunity, if any, are you seeing there at the moment?

Pete, do you want to pick up the first?

Yes. So as ever at a group level, there are a number of factors for the guidance range and self-preferencing is one moving part, but there are others. If I think about the foreign travel impact that we are seeing, it's unclear at the moment how the macro backdrop will evolve and what impact there might be. I think we've got first order effects, which are about travel plans and their disruption, particularly from travelers coming from East towards West. But if there are impacts on jet fuel availability and prices, then that could extend to Western or South American travelers into Europe as well.

And then Spain is another moving part here. We had, after these accidents, a significant dip in demand. That has somewhat recovered and moderated, but it's still, year-on-year, negative. And so that's exactly how that unfolds and rolls forward. So it's not just the U.K. that is driving this. There are other factors as well.

Do you want to -- briefly, you want to speak to the white label?

Yes, certainly. Look, we've had these 2 white label contracts, each with their individual backdrop. One was around the group -- owning group wanting to consolidate their supply base. And then ScotRail, as I said, are looking to consolidate their online and offline and wanting a different partnership for that. Our base case on the go forward is that these will run until the point at which the government turns off these websites and apps. And at that point, of course, the contract will cease. So yes, that's how I am thinking about it.

And then international point?

Yes. I think on international, that's not a focus for us at the moment. There aren't really the same sort of size operators that we have in the U.K., which we're uniquely positioned for. So that's a priority. However, I would say we are seeing, within Solutions business, very strong demand, as I outlined in the speech, around our broader distribution business, and that is ramping up very, very nicely with quite a lot stacked back that we can see over the next few years. This is not kind of a one-off coming through as further businesses will integrate and then we grow them once they are integrated.

Ed Young from Morgan Stanley. Two questions. First, sorry to labor on NTS growth guidance. On international, you mentioned there the moving parts. But I wonder if you could be specific about the assumptions you've embedded in recovery in Spain and in international travel, given you mentioned that some of those lines just reopened [indiscernible], the impact has been significant. International has obviously uncertainty in terms of forecasting. So are you expecting this to recover this year fully, within the year? How are you thinking about it within the guidance construct?

And then second of all, with digital pay-to-go, you were probably given the most complex trial area. How is that going? Can you give some color on it? And how should we think about the next steps following this round of trials ending in the summer?

Great. I'll take the second one first and give some thoughts on the first and pass to Pete. Digital pay-as-you-go trial is going -- performing very well. We've been really impressed with the technology and kind of proven to ourselves and the industry that we can stand up. And with the feedback from customers, from the media and from the kind of industry/government has been really encouraging. I think we're putting the government in a place now where they can understand what this technology can do. It's really groundbreaking and for them to begin to work through how they would want to take it forward.

Look, I don't think it'd be crazy to expect the trial potentially would continue as the government think through how it might want to expand it. So we're feeling good there. We'll kind of come back, post-trial, and explain where we've got to on that.

And then let me give you the high level on kind of international and recovery, and Pete can speak to any specific points on guidance. Spain, obviously, those tragic incidents, we saw a very significant jump off in the sort of weeks after that. And we're now seeing that still down, but more kind of contained. And so I would expect to see a full recovery within -- probably by the end of the year, but it's obviously kind of hard to gauge that.

And then just to speak to the broader point on international travel, we obviously don't know what the inbound piece looks like. There's a number of scenarios, and I think Pete spoke to kind of within the jaws of -- to be able to handle those off guidance. But underlying, it's very encouraging. We spoke kind of a year or so ago about some of the headwinds we have within Google Search. We are seeing those headwinds have effectively stopped and to some degree, a little bit of a tailwind there. And then we spoke to what that looks like within the kind of the more broader LLM platform and we're seeing just a little bit of goodness there coming through and it speaks to our opportunity there if they do indeed grow going forward.

Pete, do you want to add anything on the kind of guidance specific?

Only really to frame this somewhat as a transitional year. You heard Jody talk about wave 1 of aggregation has completed. There is a wave 2 on the horizon, and that will come. The trains are bought and the safety certificates are being processed, if you like. But at the moment, it's adjusting our playbook for the landscape we find pulling back a little bit, focusing a bit more on profitability. And of course, there's a balance on growth.

Alastair Reid, Investec. A couple for me. Obviously, you talked about the expansion of the Project Oval. I think there's been some indications that TfL might be looking at introducing barcodes. Talk about the opportunity potentially for you to get into the Oyster zone and how you might think about the opportunity that you have, if that was to happen?

And then secondly, you touched on it in a couple of areas when you touched on ancillaries and really strong growth in business clients. How do you think about the future runway for both of those areas?

Yes. Look, I think early days to speculate on barcodes in Oval, we kind of noticed that as well. I think we think the future is ultimately the kind of digital pay-as-you-go scheme. And if those gatelines ultimately allow barcodes, then that would realize or allow the realization of that vision. It's probably quite a long way before that will actually happen and reasonable amount of CapEx spend on TfL part. So I won't speculate now, but I do think, as we look at the future of what this could hold, that's an important part of the jigsaw to come through. So it's good to see that it's being talked about.

And then I think on the ancillary products, I'll give quick thoughts and then pass to Pete. I think the high level, what we're seeing is that we have a very -- 18 million customers in the U.K. and they are interested in buying other things, and that's what we've proved to ourselves over the last couple of years. Hotels, insurance are the obvious places. And we're seeing that we're getting really good kind of endemic ads and the quality of the ad partners that we've got now is really premium top tier. And they are -- we need to -- as ever, this is a playbook that others have done over the last 10-plus years. We need to develop the placements and the targeting that allow them to realize their campaigns and allows us to push up the value we get from them. And so we're encouraged by where that goes. So that's very encouraging.

I don't know, Pete, you want to speak to any specifics on businesses more broadly?

Yes. Alastair, the ancillary is certainly an opportunity even within, say, insurance, like fine-tuning, exploring what other products might work. We are testing out this idea of a Trainline flex product, which combines the tickets that are available with some flexibility in the insurance around it and how we package that up. So I still think there's optimization to do in these areas and further to expand. So yes, it's interesting to explore that.

And then you also asked about the kind of business customer and how we serve them. Look, I think their challenges are much the same as a consumer traveler and we continue to explore how we can best solve some of those. At the moment, the API is principally around the transaction and delivering a ticket. But that doesn't mean that, over time, we can't package up other aspects of our proposition in some way or other and to find ways to serve them.

And in particular, in Europe, the growth is fundamentally driven by the fragmentation of the supply and trying to draw that together. And again, as a traveler, not only to buy your ticket, there are opportunities to explore that. So yes, I think that's an interesting customer set to further explore.

It's Lara Simpson from JPMorgan. I also just want to come back to the guidance and the outlook on profitability. Obviously, we're getting more upgrades, which is driven by international. But it feels like there's a small inherent downgrade in the U.K. Consumer profitability outlook. So could you just talk a bit about incremental costs that you're expecting to see from cost around GBR public affairs there? Are we likely to see a step-up in marketing in the U.K. as we move to GBR standard? So just the moving parts there, I think would be helpful.

And then maybe one just on capital allocation. I know we still have some way to go on the buyback, GBP 150 million share buyback, but maybe on a 12- to 18-month view, how are you thinking about organic [indiscernible] business or any inorganic opportunity to start to think about? Otherwise, could we expect to see a reload on the share buyback from the midterm perspective?

Great. Thanks, Lara, for the question. Let me sort of talk more broadly about GBR and then we can -- Pete can pick up on specific guidance and capital allocation. In terms of time lines of what GBR -- how we expect that to play out, I think from the kind of point of view or the delivery of that, the procurement process hasn't started yet. So it begins to look ambitious that, that would be awarded before kind of spring '27 perhaps and then whoever wins it to actually bring the GBR app to life. It's probably early '28, probably the earliest and these things do have a habit of slipping. And then we expect there to be dual running if there's 14 different top apps that need to be consolidated, that's likely to happen through '28. We're obviously -- we've got lots of time here.

Very well understood in terms of the opportunity we see into where you're going on the marketing question. At the right moment, yes, look, if we feel it's appropriate, we potentially will spend up to acquire what we think is quite a potential uplift in number of customers, which is pretty interesting to us because the old app will turn off and the new app will come on. So we'll look pretty hard at that, and we've got time for [indiscernible].

Pete, do you want to speak to any specific guidance points on capital allocation?

Yes. No, I think you've got the right ingredients there. We are certainly taking a step forward in profitability in international that supports the group overall. Our cost optimization program that we delivered 18 months ago, I guess now, that's washed through. But yes, there are some additional costs. This is a once-in-a-generation shift for GBR really changing the backdrop of the U.K. industry. And it's important that we are appropriately advised as we engage with the government and other stakeholders through this transition.

So those costs, there were some last year, there will be some this year. At some point, they will drop away, and there will be a kind of a new landscape that will be there, and we'll take the benefit when we reach that point.

And then you asked about capital allocation as well. Certainly, on the organic side, we will ensure that we're well funded. We have the cash flows to do this. And as Jody articulated, there will be moments potentially in the U.K., potentially in international where we'll lean further in on the marketing side.

From an inorganic perspective, we do the homework. There aren't that many opportunities out there, though. And so not expecting that -- we won't necessarily see that much there, but we will keep that under review. And thereafter, returning capital to shareholders, we've really favored the buyback to date. We like the flexibility it offers. Nothing new to announce right now. I expect this program to run through to September, all other things being equal, and we'll provide more color then.

Sean Kealy from Panmure Liberum. Jody and Pete, I've got just a couple today. First of all, Jody, you mentioned Italo potentially launching in Germany from 2028. I was wondering if you could just remind us of what the landscape currently looks like in Germany. I think you had that legal case in the past with Deutsche Bahn. I'd just appreciate an update on how things stand there.

Secondly, I think at the back of -- or partway through the RNS, you talked about the proposed mobility package in Europe and that this may force talks to sell each other's cross-border tickets. And I appreciate it's all really nebulous at this stage. It's just a proposal from the European Commission. You've got the tripartite, lots of bodies that get to weigh in. Can you just maybe give us a bit more color on how you're expecting that to unfold, time line? And maybe even if you have any detail on what level of support that currently has with the other bodies as well?

And then thirdly, just -- this is probably a small question. I think it's the first time U.K. rail fares have been frozen in some time. Are you guys -- or have you seen so far any level of sort of volume stimulation from that price freeze? I appreciate the price freeze means the price just hasn't changed, but would you normally expect a small drop-off or something like that? I'm just interested on that.

Sure. Thanks for all of the questions there. So starting with Italo in Germany, I think that's hopeful speculation is the way I'd frame it at the moment. Germany is a pretty interesting rail market for us. It's the same scale, if not slightly larger than the U.K. and France. As we said, Italy and France are very much the next 3 years where we're preparing for. I'd be surprised if Italo are able to actually launch trains in 2028, great if they can, and we can support that.

As a reminder, in the German market, we don't have the brand awareness that we do in France or Italy or now Spain. However, we do have significant inbound traffic, which is our sort of secret sauce, if you like, of working with the operators because we aggregate that from all the other markets in Europe and around the world. And we obviously also have inbound B2B. And these are the sort of pump-priming customers that make our entry into those sorts of markets pretty interesting for the operators and ourselves to start with. And over time, should that happen in Germany, which I absolutely expect it will, at some point, we'd be able to deploy our sort of playbook on marketing and so forth.

And so I think I take this as the next 3 years really about the markets identified, but it gives us real conviction that what we said will happen throughout Europe, well, and Germany is clearly the next most important market. So it's encouraging to see that speculation.

Yes. Then in terms of the broader point around various proposals, whether they be in Brussels or in other national markets in France as well, the potential for some form of policy that sort of, if you like, forces or instructs that incumbent operators need to show inventory from other operators -- from the challenger brands. I think our expectation there is that these things take real time. And who knows quite how it will play out. Some of those proposals actually have pretty interesting pieces on the commission that we would get paid like a [ FRAN ] proposal, which would be very helpful if that part came through.

Exactly how they will come through, no one really knows yet. The best we can point to is what's happening in Germany with DB, where they need to show [indiscernible] train. And that means that they show the train service, but they don't show and you can't transact. You actually buy the ticket but it doesn't show the pricing. That we think is actually pretty helpful in terms of bringing visibility to customers that they have choice and then they can come to Trainline to buy the ticket. If it was to go in a direction of actually allowing the purchase, where we get to on that is the complexity inherent in providing multiple other carriers and all of their tickets and all of their railcards, and that's what we do, and it's taking a long time.

And is the incentive structure aligned that they would do it in a way that customers would trust them? I think it's kind of pretty unlikely we'll get to that point. But look, we keep an eye on that, and we're very focused on France and how we bring that to life.

And then finally, in terms of U.K. rail fares and volume simulation, it's pretty hard to assess at this early stage what that looks like. And it wasn't particularly -- the timing of it meant there wasn't a huge amount of marketing. There's a small amount of marketing on that, but I don't think we would yet say we're seeing any kind of volume increase there.

Yes. The only add I'd put is that many journeys are not discretionary, and so you don't really get signal from those. And I agree with Jody. It's pretty early days to see anything on the discretionary journey. Of course, there are more other pressures on household wallets as well, and that's evolving and changing over time as well. But yes, no clear signal at this point.

If I may, one extra. Feels not been enough to talk about AI. It's great to sort of hear some of your thoughts around sort of the difficulties of disintermediation and the like. Can you perhaps just dig into that a little bit more? I mean, in a world where there's just GBR sort of existing as the sort of the train operator, how hard sort of really is it for generically some form of sort of agentic AI to try and get some accreditation to be able to talk to the train operator directly and not go through yourselves or even their sort of ticket retailing app? And sort of how hard is it really to sort of replicate things like your Signalbox technology and the like?

So I think the way we think about it, and I outlined it to some degree, the kind of moats we've got. We've got the sort of 2 moats here, which I think actually make it quite hard. There's the platform moat, which when you think and look at that, the money that is being moved up, whether it's GBP 4-plus billion in the U.K., coupled with doing all of the carrier integration and the sort of the full stack platform, not just sort of showing the availability of tickets, but actually processing the ticket, issuing the ticket in real time so that people can use it and then providing customer service, that's a pretty complex set of things that any sort of challenger would need to do AI or not.

And then from a customer point of view, I think the 18 million customers is a heck of a distribution moat to start with in terms of brand and scale and trust that we have there, where we're increasingly layering over a kind of verticalized AI in terms of doing that. But what I'd really call out, right, we've had Uber competing in this market for [ 4 ] years where they're effectively giving 10% back to Uber One customers. I think at the launch, it was 5% to any other customer and their market share has remained around 2% or below.

So look, our job and the way we framed it internally is to use AI to drive our competitive advantage because we have scale, because we're not just doing it in the U.K., we're learning across all markets and to do it in a way that the customers get benefit from that. And look, we're going to be competing against GBR. And I think we would back ourselves to kind of outcompete GBR kind of ultimately government-sponsored rail app where we've got the talent and the scale, and we've got basically what will end up being a 4- or 5-year head start on their jump there. So we think AI will ultimately be something very much as part of our advantage in that market.

It's James Lockyer from Peel Hunt. One of the points that GBR might play on is potentially being able to offer better pricing if they're somehow able to, say, not charge a booking fee or to do some equivalent split sale. Historically, you've focused on your tech being best-in-class as well as incumbency, and that's why you hope to continue to win there. But I wonder if you ever thought about your ability to actually be cheaper -- to, like, wholesale be cheaper, for example, if someone books a hotel to then not charge them the booking fee, for example, or even, given your ability to forecast demand, even taking ticket inventory risk in advance at lower prices and then offering those to customers on the day at a bigger discount?

Sure. Just to speak to the high-level part of the question. we expect GBR to launch without a booking fee. I think we've proven and using the [ Vibra ] example why the vast majority of customers in the U.K. have seen real value in Trainline, helping them find the cheapest ticket for what they want to do, helping them have a UX that supports them and increasingly disruption features they are prepared to pay for. Expect us to sort of test and experiment around fee structure and what that might look like and where we're adding value, how can we kind of go there and support. So I think that will be an area of innovation going forward, but we're very confident in our premium position and what that will look like.

And then in terms of the things that you kind of offer there in terms of how we might look at pricing, I think those are very interesting areas, particularly the area around kind of hotels and putting packages together. That's an area where there's lots of innovation in other industries outside of rail, and it would seem very natural for us to do that. I think the kind of buying volume ticket and taking inventory is pretty unlikely and certainly in the short, medium term for us. So I think that's how we're kind of approaching it.

Pete, any adds you want to make?

Yes. I think Trainline Flex, like using insurance product is probably -- and it's not necessarily cheaper per se as a headline price, but that ability to give customers a more expanded choice where the rail ticket is at the heart of it, but there are other flexibility options that we could build in, that could be an interesting vector that we explore further.

Sorry, it might be a bit of a downer to finish on. I guess just a couple of numbers of these things. There was quite a big working capital outflow. Again, just Pete, maybe just some sense as to might that reverse and what's driving that? And then also, you touched on kind of the regulatory spend, the cost in the U.K. Again, just looking at H1, H2, admin expenses in the U.K. were, I think, GBP 8 million greater in the second half, having been pretty flat in the first half. So is that really all to do with that regulatory sort of factors at play? Or is there anything else you want to call out?

I'll take the second one first. There was a balance sheet cleanup, which also fell into H2 mid-single-digit million. So that's another part of the equation to consider. On working capital, yes, it's a good question to end. The year ended on a Saturday, and so the credit card creditors were building. Next year is going to end on a Sunday, so it's going to be compounded again, but it is simply down to the timing effects.

Great. We'll finish there. Thanks. That's all we've got the time for today, but thanks for all the questions and for attending today's presentation. To recap, we've had another strong year. We're making really good progress against our strategic priorities for growth, and we remain confident for the long-term growth opportunity. I look forward to speaking to you again soon. Thanks, everybody.

Hello, everyone, and welcome to the Trainline HY 2026 Results. My name is Emily, and I'll be coordinating your call today. [Operator Instructions] I will now hand over to CEO, Jody Ford, to begin. Please go ahead.

Good morning, everyone. Thank you for joining us today for our half year results presentation. I'm Jody Ford, CEO of Trainline, and I'm joined by Pete Wood, our CFO. Let's first go through the disclaimer.

On to the agenda for today. I'll give an introduction, briefly discussing the progress we've made in the first half. I'll recap on the opportunity ahead and update on the regulatory backdrop in the U.K. Pete will talk you through our financial performance. I'll then update you on how we are progressing against our strategic priorities and finish with an overview of our digital pay-as-you-go trial, which we recently launched in the U.K. After that, we'll hand back to the operator for questions.

As a reminder, we are Europe's #1 rail app, delivering a market-leading user experience for our customers. We aggregate all major carriers and fares, offering a comprehensive range of value-saving products and features. We focus on making the booking experience as seamless as possible. And we use machine learning and AI to supercharge the experience to get customers from A to B. It's our combination of value, convenience and innovation that sets us apart. And that is evident in our scale today with far more app downloads than any of our peers.

The strength of our customer proposition is reflected across the group with all 3 of our business units leaders in their respective markets. In U.K. Consumer, we have the #1 travel app in the U.K. In international consumer, we are the largest rail aggregator in Europe. And in Trainline Solutions, we have the leading B2B rail platform across the U.K. and Europe, which now generates over GBP 1 billion of annualized net ticket sales.

Looking ahead, we see significant headroom to scale all 3 business units. In U.K. Consumer, we will deepen our competitive moat while increasing the lifetime value of our 18 million strong customer base. In International Consumer, we will deploy our proven aggregation playbook across France, Italy and Spain. By 2030, these markets together should represent a TAM of around EUR 23 billion, including EUR 12 billion generated on aggregated high-speed routes. And in Trainline Solutions, we will scale into the EUR 6 billion business travel opportunity across rail.

Our performance in the first half demonstrates the progress we are making against this headroom opportunity. In the U.K., we delivered robust growth, reflecting continued strength in leisure travel alongside the ongoing digitization of rail ticketing. In international, we delivered positive early momentum on the French Southeast high-speed network with sales up 34% following Trenitalia's expansion of services over the summer. And in Trainline Solutions, B2B sales grew strongly, particularly in Europe with international B2B distribution up 55%. Operating leverage amplified our top line growth and the benefits of our cost optimization exercise last year, driving a 14% increase in EBITDA.

As a result, we have today increased our profitability guidance for the year, as Pete will discuss shortly. This follows our announcement in September of an enhanced share buyback program, underpinned by our strong cash generation. The enhanced buyback implies we will repurchase 350 million of shares over 3 years. That's around 1/3 of our market cap.

Before I hand over to Pete, let me update you on the regulatory backdrop in the U.K. This morning, the government published the outcome of its consultation on the Railways Bill with primary legislation to follow later today. This will allow for the establishment of GBR as an organization as well as the appointment of its key leaders. Since our full year presentation in May, we have maintained an assertive stance with government, pushing them to deliver on the commitment to an open, fair and competitive future retail market.

While in parallel, we've sought to resolve existing examples where train operating companies self-preference today. Self-preferencing is where talks offer features within the apps, but we are prevented from offering and market them in ways that we are not allowed to do. This undermines the fair and open competition. We've consistently put forward the case that these practices be rectified. We're making progress. As you can see on the left-hand side of this slide, Previously, Trainline was prevented from offering some temporary fares that could be found on operator websites, and we were blocked from advertising in almost all stations and trains.

Following our sustained engagement, the government confirmed earlier this year on both fronts, independent retailers should not be discriminated against. This is a clear step forward. However, we still face blockers and obstacles when it comes to advertising at the station. Furthermore, notable examples of self-preferencing continue to persist. We are prevented from offering train operator loyalty schemes within our app, and we are unable to provide automated delay repay, a major pain point for our customers.

We continue to engage with government stakeholders in the wider industry to remove these restrictions and in turn, level the playing field. At the same time, we are innovating to extend our market-leading user experience and cement the loyalty and engagement of our customers. With that, I'll hand over to Pete to talk through our financial performance.

Thanks, Jay, and good morning, everyone. Before I step into the financial performance for the group, let's briefly unpack the performance of each of our business units.

Starting first with U.K. Consumer, net ticket sales grew 8% to GBP 2.1 billion, reflecting continued strength in leisure travel and ongoing digitization of rail ticketing. Growth was supported by further market recovery, increased industry rail fares and lapping strikes the year before. As anticipated, growth was partly offset by the first phase of Transport for London's Project Oval expansion, which launched in February and will expand further in H2.

Turning next to international, where net ticket sales grew 2% year-on-year to GBP 594 million. Growth was led by domestic customers, particularly on newly aggregated routes such as the high-speed network in Southeast France. This was offset by a 2% decline in foreign travel sales, primarily given changes to Google search results page and a leveling off of inbound demand from the U.S. for European rail travel. I'll now step through the underlying drivers in more detail.

This slide breaks down the different market segments across our international business with each segment including domestic and foreign travel sales. You can see that the growth rates vary, reflecting how we are actively managing marketing investments and prioritizing routes with carrier competition.

Turning first to Spain and Southeast France. We grew 11% across both markets as we positioned ourselves as the aggregator of choice, partly offset by downward pressures on Spanish rail fares. These markets now represent 22% of international net ticket sales. Elsewhere in France and in Italy, growth was more modest at 3%. Within these markets, which account for 2/3 of international net ticket sales, we continue to manage marketing spend as we await further carrier competition.

In Italy, that's expected to happen from early 2027 with [ SECF ] granted slots to run high-speed rail services last month. And in the rest of France, carrier competition is set to expand shortly thereafter, which Jody will discuss later. Germany and the rest of Europe were down 16%. While these markets represent longer-term growth opportunities for Trainline, we are actively prioritizing the markets that have liberalized or are set to liberalize.

While changes to Google search results page remained a drag on growth in H1, we are seeing encouraging early signs of traffic building from generative engines. We are the #1 cited rail app in ChatGPT across almost all our core markets, and we are leading in citations from Google's AI overview module, significantly ahead of our other rail aggregators. As a result, sales from generative engines have grown exponentially, increasing 13-fold since Q3 last year, albeit from a low base.

Let's move next to Trainline Solutions. Net ticket sales grew 18% in the half to GBP 529 million. Growth was led by B2B distribution and our fastest growing subsegment up 36%. This reflected growing demand from corporate shifting to rail travel as well as our enabling travel management companies to scale their ticket sales in Europe, including the likes of Novan and SAP Concur. Jody will talk shortly in more detail about the strong momentum this business is generating.

Bringing this together, top line growth for the group was towards the upper end of our full year expectations. Group net ticket sales grew 8% to GBP 3.2 billion. Revenue grew 2% to GBP 235 million, with growth slower than net ticket sales given the previously announced reduction in the U.K. commission rate. Gross profit was up 6% to GBP 193 million, with growth outpacing revenue given lower cost of sales.

Turning to costs. We delivered a reduction of GBP 11 million across cost of sales and other admin expenses, more than offsetting the impact of the commission rate cut in the U.K. Cost of sales were down GBP 6 million, reflecting a reduction in the industry costs in the U.K. Other admin costs reduced by GBP 5 million, given the successful execution of our cost optimization plan in H2 last year. These savings enabled Trainline to deploy more marketing to Southeast France as carrier competition expanded.

Our profit grew strongly, outpacing net ticket sales with adjusted EBITDA up 14% to GBP 93 million. This tracked above our previously stated guidance range for the year of between 6% and 9%, and it translated into strong earnings growth with adjusted earnings per share up 27% to GBP 0.126. Underlying free cash flow generation in the half was GBP 79 million. The strength of our cash generation underpins our enhanced share buyback program of up to GBP 150 million, which we announced in September.

This is our fourth consecutive program. Over the last 2 years, we have bought back GBP 250 million worth of shares, equivalent to 15% of shares issued at IPO. With the addition of our enhanced program, it would equate to GBP 350 million of capital return to our shareholders over a 3-year period, reflecting our confidence in our outlook and the strength of our business.

Altogether, I'm pleased with our performance in the first half, particularly our strong earnings growth and cash generation. Looking ahead to the full year, we continue to expect net ticket sales growth of 6% to 9% and revenue growth of 0% to 3%. Given our profitability performance in the first half, we now expect adjusted EBITDA to grow between 10% and 13% for the full year, above our originally stated guidance of 6% to 9%. Thank you. And I'll now hand back to Jay.

Thanks, Pete. Let's now talk about the progress we're making against our strategic priorities, starting with our U.K. consumer business.

As the U.K.'s #1 travel app, our scale and user experience is unmatched. This provides Trainline with a competitive moat, which we are deepening, strengthening the loyalty and engagement of our customer base. First, we'll unlock value for customers through products like SplitSave and price prediction. Second, we solve for our customers' travel needs, including the launch of our new rail disruption features. I'll give you more details on this shortly. Third, we build trust and loyalty, scaling products like digital railcards. And fourth, we increase customer engagement, for example, expanding ancillary services we offer our customers.

Let's discuss some of these in more detail. Starting with solving customer needs where we are rolling out a set of new rail disruption features. The features will support customers when navigating disruption on the rail network, leveraging the power of our AI and data tools. It will include travel forecast, which provides personalized notifications to customers in advance if their train is likely to be delayed or canceled. Customers will be able to see the location of their train in real time with a map interface powered by a signal box technology.

Our forecasting capabilities will continuously improve, leveraging real-world data sources, including our base of 18 million customers transversing the rail network. Delay repay notifications, which alert customers when they are entitled to compensation. These will be an interim solution until the industry allows third-party retailers to offer fully automated delay repay. Our notifications will provide estimates of what each customer is owed plus a punch out to the relevant top website to complete their claim. Our beta test over the summer enabled the processing around GBP 1 million in compensation claims.

And finally, our AI travel assistant, which offers customers a live native chat experience with real-time travel information personalized to their specific journey. Since launch, we've been selective in deploying the AI system within the app, yet it's already done strong levels of customer engagement. So far, it's had over 1 million conversations with customers, almost 1/3 of repeat users. And it's answering most queries with less than 10% handed off to customer service representatives. We'll soon to deploy the assistant more widely across the app, increasing the opportunity for customers to engage with it while also expanding its breadth of real-time knowledge capabilities.

Let's watch a short video that brings to life our suite of rail disruption features.

[Presentation]

Comes to building trust and loyalty of our customers Trainline has cultivated strong brand affinity over many years. In fact, we are the most trusted brand in the U.K. rail. And our brand consideration is at record levels, significantly outperforming all other retailers. This has supported Trainline's continued growth in the U.K., particularly when faced with notable competition, and it will become increasingly important in an AI-driven search world.

One example of how we're building customer loyalty is through digital railcards. We've enhanced our selling within the booking flow, highlighting to customers how much they could save by buying a railcard alongside their ticket. This has scaled our user base 12% to 2.5 million in H1. By doing so, we are enhancing retention of highly engaged customers who transact 4x more often than non-railcard holders. And we're gaining particularly good traction with younger cohorts. Our share of the 16 to 30-year-old railcard segment has now increased to 44%.

We're increasing the opportunity for customers to engage with Trainline, broadening our range of ancillary products and services and growing additional revenue streams. These include hotel bookings and insurance sales, which grew strongly in the first half. At the same time, we are optimizing how we monetize our existing products and services. For example, this year, we are focusing on enhancing advertising revenue and in the first half, improved the positioning of ad placements within the app. Likewise, we are currently running tests for a SplitSave fee. This could present a long-term option to supersede the booking fee where SplitSave applies.

Now turning to our international business. We continue to position ourselves as the aggregator of choice as European markets liberalize. Over the summer, carrier competition expanded on the EUR 1 billion high-speed corridor in Southeast France. In June, Trenitalia launched 5 return services a day between Paris and Marseille. This is already having a noticeable impact with average fares down 27% on the route.

In addition, Trenitalia almost doubled their operations between Paris and Lyon to 9 services a day, and that's due to increase again to 14 services a day from December. We are positioning ourselves as the aggregator of choice on the French Southeast high-speed corridor. We are leveraging our highly rated mobile app to showcase all the fares from all the high-speed carriers with features that help unlock value for customers like TopCombo, which allows customers to stitch together different carriers for return and [ multi-leg ] journeys.

At the same time, we're positioning ourselves as the partner of choice for carriers, driving customer demand and in turn supporting their growth. As you know, we paused brand marketing in France a couple of years ago. With Trenitalia's recent expansion, we resumed our efforts to grow our awareness in the Southeast. We are sponsoring Lyon-based football team Olympique Lyonnais, and we are running large campaigns in online video and [ out of home ] at stations and transport hubs around Paris, Lyon and Marseille.

We already have good levels of brand awareness across France at around 28%. Our focus on Southeast France has significantly increased brand awareness in the region. Across Paris, Lyon Marseille, our blended awareness score was up 12 points this year to 48%. That's supporting strong net ticket sales growth on the Southeast network, including sales between Paris-Lyon and Paris-Marseille, up 34% in the second quarter.

France is a huge rail market worth about EUR 11 billion today. It is expected to grow to around EUR 14 billion or EUR 15 billion by 2030, of which around EUR 7 billion will come from aggregated high-speed routes. We see the Southeast network as a gateway for growth elsewhere in France as carrier competition expands over the coming years. This includes Proxima, who will operate under the Velvet brand. They will run trains between Paris and cities in Western France. This will include Paris de Bordeaux, France's second busiest rail route.

In addition, Le Train, ilisto and Renfe are all due to launch domestic services in France too, while cross-border carrier competition is set to arrive in 2030 with Virgin Trains set to launch.

In Spain, we're evolving the balance between growth and profitability. Spain has been an ideal market to hone our aggregation playbook, while carrier competition expanded across its EUR 1.5 billion high-speed rail market. We invested behind our user experience and our brand awareness. In turn, we have scaled our net ticket sales, giving us a considerable lead versus other market aggregators, and we continue to see runway for further growth. At the same time, we're increasing our focus on driving profitability in Spain. We are normalizing marketing spend while placing more emphasis upon customer engagement and growth of transaction frequency.

Likewise, we are finding new ways to help carriers to grow. We recently launched Sponsored Journeys, a paid service that allows carriers to increase their prominence within our search function. We launched our first pay campaign with [ Durion ], which has been a real success, notably increasing customer demand.

Across our international consumer business, increasing ancillary revenue remains a growth opportunity. Having made good progress in hotels last year, in H1, we bolstered our insurance offering with the launch of our new trip insurance product. Often alongside our existing Cancel for Any Reason product, this drove a material increase in insurance revenues.

Moving on to Trainline Solutions, our fastest-growing business unit and now generating over GBP 1 billion in net ticket sales. Business travel is our main growth opportunity here and represents around 50% of Trainline Solutions sales. This is generated through our own branded channels as well as through our B2B distribution business. B2B distribution allows travel management companies and other business travel platforms to offer rail tickets to their respective customers.

Primarily a U.K. business, we increasingly support our partners to sell tickets from multiple European carriers as well. They can do that all through one simple seamless connection on global API rather than tackle the complexity of connecting to multiple different carriers. As a result, international B2B distribution grew 55% in the first half. This business has good momentum. Many of the world's largest TMCs and travel platforms are now connected to our global API and trying to grow ticket sales. And in September, we expanded our partnership with the world's largest travel management company, Amex GBT, giving us confidence in our future growth.

Finally, let's discuss our Digital Pay-as-you-go solution and its new trial in the U.K. As a recap, pay-as-you-go travel provides a convenient option for short distance journeys, also known as contactless or tap in, tap out. It's well established in cities like London where it is frequently used by commuters. However, prepaid ticketing generates most of the passenger revenue for the U.K. rail industry supported by price discrimination. It's far more suitable for long-distance trains where passengers tend to book in advance to get cheaper fares and reserve their seat, and we don't expect that to change.

As you know, we've developed an in-app pay-as-you-go solution called digital pay-as-you-go. It leverages our geolocation technology from Signal Box and offers capabilities way beyond traditional tap in tap out systems. For customers, this includes real-time pricing, integrated railcard discounts and the ability to buy group and family tickets. For the industry, it requires no dating infrastructure, reducing the CapEx outlay and the time needed to deploy pay-as-you-go networks.

We, therefore, see digital pay-as-you-go as a better solution, which when rolled out can increase our scope to serve commuters and travelers booking on the [ day ]. In September, digital pay-as-you-go trial went live on the East Midlands rail network. This represents a strategic opportunity to test our solution and demonstrate the benefits of digital pay-as-you-go in a live environment. Of the 4 trials awarded by RGG, the East Midlands trial is the most complex given it encompasses 3 different cities, Derby, Nottingham and Leicester. While it's still early days, we are learning fast and feedback that it worked flawlessly is highly encouraging.

Before we wrap up, let me play a video showing our digital pay-as-you-go trial in action.

[Presentation]

Before I hand over to the operator for questions, let me summarize the key takeaways from the [ heart ]. We have delivered a robust operating performance, improved profitability and strong cash flow, underpinning our enhanced share buyback announcement. And today, we've increased profit guidance for the year, reflecting our disciplined approach to cost management. Looking ahead, I see sizable growth opportunities for our 3 business units, all of which are leaders in their respective markets.

In U.K. consumer, we are deepening our competitive moat, launching new rail disruption features and scaling digital railcards. In International Consumer, we are positioning ourselves as the aggregator of choice in Spain and Southeast France as carrier competition increases.

While in Training Solutions, we are supporting B2B travel partners as they expand their rail travel sales across Europe. And finally, as you've just seen, we're off to a great start with our digital pay-you-go trial in the U.K., increasing our scope to grow sales of commute and short distance travel.

So thank you very much for listening. I'll now hand over to the operator for questions. When asking please state your name and organization.

[Operator Instructions] Our first question today comes from Gareth Davies with Deutsche Numis.

Just -- First one from me, probably the obvious in terms of PBR consultation document this morning. At face value, it appears to tick a lot of boxes in terms of sort of level playing field and operating in a fair and transparent way on an ongoing basis. Would just be really interested to get your sort of headline thoughts on the key points that are in there and possibly anything you felt should have been covered and isn't.

The second one is on the digital pay-as-you-go trial. It sounds like that's going well. Just wondering, is there any scope for that trial to be expanded and you to be allowed to use your own app and go beyond the sort of 1,000 customers that are currently doing it with East Midlands?. And then final one, just on the -- Google was obviously a headwind, particularly salient in the international business. Just wondered, now that we're lapping comps, presumably that is becoming less of an explicit headwind. Can you just give us a little update around how that's evolved? I mean, taking on board that GEO is going very well. But clearly, Google is still pretty important for international inbounds.

Thanks very much, Gareth. Yes, let me start at the top there with the GBR question. And look, there's been lots of news flow over the last sort of few months and an important day today. Let me go kind of right back up to the top and just sort of state that, look, I do think we're actually many years away from a GBR app launching and the 14 different sort of top existing apps ultimately closing down and those customers having to make a choice potentially to go to the GBR app.

I think what's driving this is clearly the government's desire to consolidate from a customer point of view to take 14 apps into one and also to improve from a kind of cost base point of view. And then look, just to say right upfront for everyone, we look forward to that moment when it happens. We back ourselves to compete with whatever comes. And I think if you remember where we were 3 years ago with Uber launching, there was concerns and questions, a company that had huge backing that threw a lot of money at the sort of discounting tickets and massive kind of marketing campaigns. And I think 3 years later, you can see kind of how customers have reacted in terms of the strength of the Trainline offering. So sort of to set that out right at the front.

Look, as you say, what we're seeing and as I mentioned earlier, principally today is about the launch of GBR primary legislation, which is about the creation of GBR. This sort of has to happen for the government to stand up GBR because of the sort of legal, financial, operational, health and safety and indeed organizational questions that need to be answered. And so that's a lot of the sort of priority for the government and GBR.

As you also referenced the consultation document that was published this morning. Look, let me share a few thoughts on that. I think overall, we do actually see that, as you suggest, there's a sort of significant step forward, both in the context and direction of travel for the government. So let me sort of pick a few parts out where it's I think are encouraging. And I just upfront for those who've not had a chance to read that yet, it talks about the creation of a GBR retail unit within the overall GBR. And I think that's important to kind of note, and the elements within that, that I think are helpful. First is it talks about within that GBR retail unit, a separation of the industry management functions from the sort of commercial functions, where the former would be a lot of the RDG existing kind of organization and managing the relationship with -- amongst other third-party retailers like Trainline, whereas the latter of the commercial arm would clearly be the arm responsible for sort of standing up the app and the website and ultimately, we would compete with them. And I think that separation is really important and very helpful.

Secondly, it talks about the establishment of a code of practice of how GBR interacts with all participants, obviously, third-party retailers being really important there. And that code of practice, and indeed, we've been pushing for a codification, right, of how this would operate. And I think that will be a really important step and the fact that, that will exist is really important and ultimately enforceable under GBR's license, future license. And then finally, what we get today is sort of laying out that there's the ability for -- if we felt that GBR weren't living up to or live in that code of practice for us to challenge GBR working with through the ORR and really to effectively ensure GBR do indeed operate within an open and fair market.

So I think those elements are really helpful. And it's just worth noting these set of, if you like, safeguards don't exist today. And so that feels like very helpful. I think in terms of what we still need to see and it is somewhat self-evident, like this code of practice is not yet defined. And so I would anticipate, but don't have a clear time line, that work would begin on that in the early next year. And our understanding is it would be led by the ORR working with the DFT. And I would anticipate that the CMA would have significant input into that process along with obviously ourselves and other third-party retailers.

So I think all of that together provides reassurance. And I think in the way you asked the question, that's I'm encouraged by kind of all of the above with important questions still to answer. What I would just note is this all relates to future design. And as I said, I think this is sort of multiple years kind of from fruition. What's also important in the interim is, as I just laid out in the presentation that we see kind of resolution on areas like delay repay in the interim so that kind of Trainline customers have access to that kind of one-click service. And so that's gone pretty deep on kind of retail and I just spend a minute then talking about the reality of what that means for the app, which is where a lot of the questions end up going. Why do I think it's potentially multiple years away? I think there will -- the next phase and the details of this will be some form of exercise that most likely is a procurement exercise from the government around working out what they want to procure. There would then be that process complete, and there would then be a build phase to develop what would be a relatively important app that would have to sort of handle a lot of different scenarios. It can't just do what [ LNER ] does on long distance or what Northern does on regional or some of the use cases of Southeastern coming in on community.

It has to serve all of those. And so what I anticipate and I'm somewhat speculating here is that there would be a period of dual running. So even once the app was created, there would be a GBR app, which will be an important political win. But ultimately, that would dual run alongside the existing top apps and at various points, they would begin to fold those apps into GBR and the customers would then have to kind of restart on the new app. And to my very first point, we're excited for that opportunity. If you kind of think forward a few years and sort of the innovation we're laying out today and think forward another 3 years, I get pretty excited about where we'll be and GBR will kind of be just starting, if you like there.

So that's sort of a bit of a state of the nation, right, in how we see all of the GBR points there. And to come to your second question, digital pay-as-you-go trial. Look, of course, I hope there is scope to expand and ultimately be able to put it into our B2C app. I think at this stage, we don't have visibility of that. This trial runs through to the summer. I think it's kind of early days. The government is learning. But I'm really encouraged just to underline like how well we have brought this to life. I think there have been apps that have kind of done the fare capping and the tapping now. But no one has really brought this all together with the route planning and the pricing and I think -- and the kind of UX. And so ultimately, if the government kind of wants -- or any government across Europe wants to sort of bring this to life at scale, having in the U.K., 18 million customers to help bring this to life, I do see that ultimately, it could be in the government's interest to see the third-party retailers offering this type of functionality.

So look, that is obviously the aspiration. It's probably too early to speak with any precision on that yet. And then look on kind of Google headwinds and where we're at there. And I think if we sort of stand back on the international results, it's a portfolio of businesses. And as we reported over the last couple of years, we initially kind of Google trains and then we saw this expansion of the page as kind of the AI features coming in and so forth, and we did talk about that as a headwind. I think the way to think about that is that actually impacted different GEOs at different points. And I would say in the very earliest GEOs, we are, as you suggest, beginning to see that headwind turn into a tailwind and I begin to see some green shoots in some of our GEOs coming through as we've kind of entered the half, which is helpful.

We don't actually begin to fully lap all of those GEOs and some of the domestic European GEos to later in this half. And so we don't yet see that. But look, I am encouraged in the spirit of the question that I do think that headwind turns into a little bit of a tailwind. So we'll keep close to that. Thanks, Gareth, for the questions.

Our next question comes from Alastair Reid with Investec.

A couple from me as well, sort of following up on some of those things. I guess, firstly, with the consultation today, with sort of GBR ticketing not being sort of structurally and commercially separated out, do you have any sort of concerns it could lead to potentially commission rates being reduced or the ticketing having sort of less need to cover its own costs, not being sort of overtly self-funding?

And secondly, I think you touched on this already. Can you give us any examples you've seen in the past where talks have changed from one provider to another and kind of what share gains you have made in those switching moments?

And then lastly, just on the topic of your sort of moats that protect the business from theoretically being disintermediated by sort of agentic AI. Can you talk about is the underlying market data in the industry sort of freely and easily available to all tech firms? And, Yes, I'll leave with that.

Thanks very much. Let me pick up on the first one and then you can perhaps take the second one and come back on the third. So in terms of the broader consultation and how we see the structure of that, I think kind of the direction of the question is going to the very nature of the open and fair retail. Look, we absolutely anticipate that we will be retailing on a fair basis with GBR. And I think where you're going really is the code of practice and how that is defined and we're going to have to engage and wait to see that to come through.

I think what I take kind of comfort from is this statement of the value of third-party retailers and the value they've driven in terms of innovation and driving up standards for passengers. So I think that's where we now need to see that kind of actually codified out. And look, the CMA is still involved, and they will be involved going forward and they've really committed to a level playing field. But those are areas that we'll be engaged with over the coming kind of months. Pete, do you want to pick up on the second question, the provider change?

Yes. We've had a couple of examples in the past, Southwest Trains becoming Southwestern Rail, Virgin becoming Avanti were both kind of moments where there were shifts, and kind of as Jody outlined, there is this moment where customers have to make a choice. And from a traffic perspective, which doesn't fully represent sales necessarily, there's been quite significant shifts in the initial kind of period of time. So look, maybe around 30%, 40% in the first 6 weeks or so is something that we have seen in the past. So yes, it really does represent an opportunity for us as these things unfold.

Great. And then to come back to the point on U.K. moats and I think the role of the agentic AI. Look, what I'll do is I'll go up a level. And if I haven't answered the question, please come back because there's quite a lot potentially in that.

We think about AI within the business in sort of 3 different areas. The first is how we productize AI and into the Trainline app that really speaks to things like the AI assistant and going forward. We talk about the ecosystem where it's a way to get traffic kind of another surface and then we talk about kind of productivity. I think you're really picking up on that middle one around the broader ecosystem. But just to say we're excited for the first point on productizing. Really feel like that AI is giving us kind of ability to solve new customer problems as it relates to disruption, not just around an AI assistant, but the data sets and predicting travel patterns and potential delays.

That's kind of cool stuff. And I think speaking to the kind of moat point here, I just don't believe that there's many other players who can have the data and the dataset the kind of data smart and AI capabilities in our organization and the ability to invest behind it. So we're really pretty excited for where that's going. Then to the ecosystem point. And look, I'll give you my perspective on this, which is I've been doing this for well over a couple of decades now and watch various players enter the market over that period of time and work with them to develop -- as they develop sort of as traffic sources. And I think we're at that phase. And I think the announcements we have seen from ChatGPT, for example, increasingly give me that sense that they really want to ultimately send traffic to us and find a way over time to monetize it, which we think is a good thing, right, because it's much better to have 3 players kind of Google, Meta and let's say, ChatGPT that we're effectively buying qualified high-quality traffic from rather than having a single player or 2 players. And look, I do think that's going to take some time. These things, whilst we see and we spoke to the growth, it still represents less than 1% of our total traffic. And so I think it's -- I think we're talking years for these ad products to develop. I don’t think it's happening in the next few months.

And so that's kind of how we view it evolving. And then I think you specifically asked about moats. And I kind of break our moat into 2 sets. We've got what I call our consumer moat and our platform moat. And you were pushing on the platform moat. But just as a sort of reminder, we have a very strong consumer moat. And I think in many things transversing technology change, the consumer moat really stands and is hugely important. And that's about the quality of our brand. It's about the sentiment that exists towards it. It's about our really deep vertical UX. And it's about the app installed base, like the fact we have 18 million users in the U.K. or 27 million across Europe means we have this really strong engaged base that will want to keep using us.

And I think when you extract out and say open AI would have to develop a great vertical UX, not just in trains, but in hotels. in planes, in cars, but also in black dresses and selling drones. So it gets very complicated. And so they will definitely work with the great brands and the great UXs that exist out there. And I think that's part of the moat. And then finally to finish, in terms of that platform moat, yes, we have a huge number of data feeds that go back to the industry all over Europe. And these are kind of complex and difficult to develop, and that's part of the moat. And then we have huge commercial agreements because as you know, we're basically selling billions of pounds worth of tickets every year, and that requires bonding and obviously, a lot of due diligence. You can't just initiate these things. It's not like we're selling a few thousand pounds worth. And so that is also a moat, which makes it incredibly difficult to just start a business and then even if you were to, to make it work at scale becomes even more challenging given the sort of size of the numbers we're talking about. Thank you for the question. I hope that picked it all. The next question operator.

Our next question comes from Ed Young with Morgan Stanley.

I've got 2 on numbers, please, and then one on strategy. So on the EBITDA guidance upgrade, you've laid out some of the drivers of the stronger EBITDA outlook. But I wonder if you can help us understand what changed specifically since you gave the guidance in September? Is it fair to say that stronger top line has endured into H2? Or is there other moving parts that led to your change in posture there?

Second of all, free cash flow growth was suppressed by working capital movement a bit in H1. Should that reverse in H2? And so should free cash flow growth mirror profit growth for the full year? And then finally, on Spain, I know you touched on it in the presentation, but I'd love to hear a bit more color about why now is the right time to move to this more balanced posture for growth versus profitability in Spain?

Great. I'll let Pete pick the first 2 up and come back around on Spain again.

Yes. Thanks, Ed. Yes, let me talk with the top line and then get to EBITDA. And if I think about the U.K. business, we've had a robust first half performance. And there were a few benefits, as I've kind of highlighted, lapping strikes and finally get those behind us kind of supported that figure somewhat. And we do have the headwind of over expanding as the year further unfolds. We've obviously had the first 47 stations which dropped in February. There are another 50 or so which are expected either in December or in January, and there are more later in the year.

So there's a kind of headwind that's building. And I think net-net of that, I would expect H2 to be growing at a slower rate overall versus H1. Nonetheless, the EBITDA has performed well in H1 and that confidence we're kind of taking forward into H2. Of course, there will be drop-through from that performance at the top line. I think the other thing of note really is how we are thinking about marketing spend in international. In H1, as Jody outlined, we put more into supporting the expansion of the France and the Southeast corridors there. And that will somewhat persist into H2, where there's more services being run by Trenitalia. So we'll keep pushing there.

But in Spain, we're kind of balancing growth and profitability. And look, if I take a real step back here, we started what, 3, 4 years ago when aggregation in Spain was clearly going to be this kind of big all-in-one go moment and we had a very small footprint there. And so we really pushed hard to build brand awareness to make the most of this kind of very dynamic moment for the rail traveling public in Spain. And we pushed hard on the marketing spend, and we've been really pleased with the strong growth that we've seen there.

What we've now reached though is a point of kind of evolution where we're developing the next bit of the playbook. We're thinking about how we balance the profitability and the growth. And so we should -- you should expect marketing in international as a result of that to step down a bit in H2 and net-net will be also additive to delivering on the EBITDA guidance that we have shared today.

And then your question on free cash flow growth and the working capital movement. Yes, this is always a slightly tricky one because the day of the week and the slightly odd 13 periods of 4 weeks that the settlement process in the U.K. rail industry means that we get some oddities on the 2 points in the year that you see it. Fundamentally, there is a good guide here for cash from a working capital perspective. It is typically a bit better at August than it is in February just because of the cycle of these things. But, when it's a Monday or a Tuesday, that can impact it all as well.

So net-net, I don't think you should pay too much attention to the kind of puts and takes that we see at the different points in time, just believe that there is a goodness that lies underneath. And it's normally around the kind of GBP 15 million to GBP 20 million across the year that we would see on average even if that's not at that particular point in the year.

Thanks, Pete. And I think Pete mostly answered the third question around Spain, but let me just give you a little bit of a strategic overlay there. As Pete said, this was a moment in time when we saw what was happening in Spain. It was -- we were almost a 0% market share. We were in a position where all the lines and all the competitors were launching in a kind of 12-month window, and we knew we had to show up there with Trainline not really having a footprint to date.

And through those 3 years, we've got to having double-digit market share. And I think importantly, we are now the #1 domestic operator by a distance, significantly ahead of [ Trez ], of Omio, of Uber and any of the other players and the kind of go-to place for aggregation. And so really, we're moving to what I would call balanced growth. We're still leaning forward into Spain and invest in that, but we just don't need this kind of launch level marketing spend. And as you've seen us over the last few years, we sort of play the overall portfolio. And we're now moving, if you like, that firepower into France as that launches to ensure that we become and remain, frankly, in France, the #1 domestic operator, and it's just a moment in time. And look, you have heard as it relates to Italy, we see a huge opportunity there in 2027, and we will think about marketing there again. But we have to kind of balance the overall portfolio and have these kind of launch phases and then what I call more balanced growth phases. Thanks for the questions, Ed. Should we take another? Operator?

Our next question comes from Andrew Ross with Barclays.

I've got 3, if that's okay. The first one is to follow up on Alastair's question on commission rates. Is it completely ruled out that there will be no review of commission rates for the industry as part of the detail of how GBR kind of comes together for next year? Or kind of more broadly, where are we at on that as we kind of transition from RDG into GBR around the industry commission rate? That's the first question.

The second one is on pay-you-go and I guess, scenarios as to when a kind of nationwide contract may be awarded or how this might look and kind of what it might mean for you if you were or weren't to get it? And I guess I'm thinking about kind of the incremental take rate you might achieve if you were to kind of get a broader contract and any kind of cannibalization risk to your core business that you think may or may not happen, I think maybe not given the solution will be portable into your app, as I understand it.

Third question is on Agentic AI. Kind of taking your view, Jody, that it's more likely for OpenAI partner with kind of a vertical specialist like yourself, which I agree with. Do you worry about any risk to kind of time spent based monetization, things like cross-selling hotels, ads, that type of thing if we move into a world of kind of agentic transactions and booking trains?

Thanks, Andrew. Look, on that first point, this is -- we've discussed kind of many times, I guess, the idea of commission rates. Look, I'll give you the overall kind of answer here. They have been reviewed, I think, 3 times in the last 20 years every time they've essentially come back and concluded we were at the right commission rate apart from, as you know, at the last time where it was a net 25 basis points impact. We feel that the commission rate is absolutely at the right level and multiple independent players, every time this has been looked at, everyone has concluded we're at the right level. And so I think that's what gives us confidence the way we operate, we have a number of years, kind of 3-plus years of confidence in our commission rate. Look, it's never off the table forever, right? But there is no discussion of that. And so I look forward, as I've always done, believing we're set at the right commission rate. Pete, do you want to pick up on the second one.

Yes. I think just as a reminder, the trials that we have are kind of the first step forward. And quite deliberately, the government is testing different technologies and really seeking to learn what those technologies offer, how customers engage and relate with the different aspects of what's being tested. So we're kind of really quite early on. And whilst we see some real political support for finding a solution for this, and there's mention of this in the [ condoc ]. So that kind of gives you an indication of the direction of travel. There's a lot of detail that still needs to be worked out in terms of how this will be implemented. And as we said in the presentation, I think whilst one route might be a kind of nationwide contract, we don't think this technology is particularly helpful or is likely to be implemented for long distance travel, right? So perhaps a nationwide contract might enable a series of different cities to pick it up. But even that's not a given at the moment as to the way forward, it could be rolled out more regionally. So there's still a lot to see there.

Likewise, the commercials that would sit alongside this would need work. I think it is fair to say that on the basis of kind of fair and open, we would expect if there is some sort of national implementation that even if our technology wasn't chosen, there would be some way for us to partake and offer that to customers. So anyway, a lot of details still to be worked out. We're really pleased about the progress we're making and the political support for continuing down this path. We'll have to see how it goes.

And then let me pick up on this sort of Agentic AI and the sort of role of transactions. If I understood, the question was, would we lose other services if it was kind of the transaction occurred within, let's say, text interface in a ChatGPT app or something. Whilst I do see that as a use case and one could imagine certain trains being booked that way, I think we have to assume the core use case is kind of what happens on Google and on Meta. If they fully want to realize the value of that customer, then ultimately, there needs to be a high quality conversion rate. And the best way to do that is for the customer to go into, in our case, a Trainline user experience or it could be any other shopping or commerce user experience where if you think about the pages we show and the clarification of which fare you want and the flexibility of it and frankly, what [ time ] train you want and the ability then to get customer support and to get your ticket and your barcode, that's clearly better done within our app or some experience that is effectively our app.

So I still envisage a world where the full experience arrives and they have given us very qualified traffic. Worth knowing that we are absolutely developing and have developed the kind of frameworks of the MCP piece to allow the AI system to engage. And you could imagine the early stuff happening, if you like, within ChatGPT, where we work with ChatGPT, if you like that and then popping into our experience to actually make the transaction come to life. But look, we're all hypothesizing of how this will look. And just to say again, it's less than 1% of traffic right now in our most sort of forward GEOs. And so I kind of feel pretty good. We've got time, I think, for just one more question, and then we'll bring to [ a close ].

Our final question comes from James Lockyer with Peel Hunt.

I'll just ask 2 at this stage, based on AI. So it's good that you've spoken about 1 million conversations or over 1 million handling customer queries but less than 10% being handed over. Based on the types of questions that are being asked versus the typical questions that your human agents are getting, once mature, where might that 10% land? And what level of cost savings might you be able to realize?

And secondly, can you talk about how much -- how you're using AI internally? You mentioned that you are, but it would be good to hear about what we're doing there and what’s companies thinking they'd be able to grow the top line without growing headcount as fast as they might have done without AI. Is that something you're finding too? So any ROI productivity or hiring stuff you can provide there would be useful.

Sure. And given we're kind of at the top of the hour, brief answers, I guess, I'd say overall, the types of questions, what it's allowing is customers to get reassurance, things that they kind of like just didn't know how to -- is this ticket valid on this train? And they would then go and try and find station staff or ask a friend or start reading very detailed conditions. And AI is doing a really great job of that. It wasn't that they were necessarily going to customer service. But where you're going is right, I do think it allows efficiency. It allows our customer service teams to work on the higher value questions, if you like, because it filters out a lot of the ones that can easily be handled by AI. And I think, yes, where you're pushing right, it does lead to kind of greater productivity.

As it relates to what we're doing internally, the lots of good stuff and yes, in terms of using the kind of copilot style tools, in terms of helping engineers code and that is definitely seeing kind of productivity improvements. And I think the spirit is to be able to do more with our existing employee base is absolutely how we're looking at it. And then just allowing other things here, we have an experimentation GPT, right, which has got now all of the experiments that we've kind of almost ever done over the last few years in one place, which can be accessed by a UX or a product or an engineering or commercial really quickly versus having to frankly call 9 different people and try and find out, which is what happens in most companies up to this point. And so we're increasingly finding those use cases, which are driving a more cohesive workforce and allowing us to kind of better pull that knowledge and be quicker in the development. So I think again where you're going, delivering more with our existing base is very much how we're thinking about it.

Thank you very much for the questions, James, and thank you all for listening today. That's all we've got time for. To recap, we've had a strong first half, delivering a robust operating performance and improving profitability. And in turn, we have today improved our guidance for the full year and see sizable growth opportunities across all 3 of our business units. And I look forward to speaking to you all again soon. Thank you.