Wednesday, June 19, 2024

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Experian Delivers Resilient Revenue Growth

Experian plc, the leading global information services company specialising in credit data, marketing and identity services, has today released results for the financial year ending Mar 31 2023. The group reported organic growth of 7% for the year, with Consumer Services revenues leading the way with growth of 11%. B2B revenues rose by 6% and geographically Latin America stole the show, with organic revenues leaping 16%. North America remained the group’s most important region accounting for 67% of revenues and delivering the highest margins of 33.1% compared to the group’s global average of 27.4%.

The group saw operating margins increase modestly and this combined with the revenue uplift led to 9% growth in underlying Earnings Per Share. Cash conversion was very strong at 98% and the group earned a Return on Capital of 16.5%. Overall, the group’s Benchmark earnings rose 9% to US$1,802m.

Steve Clayton, Head of Equity Funds at Hargreaves Lansdown:

“Experian is a key holding in our HL Select funds and these figures demonstrate why. The group’s ability to serve financial service operators, retailers, marketers and consumers with the data they need to make informed decisions is ever more valuable, demonstrated by the group’s strong and rising margins. Next year looks to be another year of progress, according to Experian’s view of the road ahead. Their deep relationships with clients offers them good visibility of future revenues, a key strength in such uncertain times. Even Experian though are talking about likely headwinds ahead.

The market should be relieved that their Consumer division has continued to grow at pace; weakness at rival operator Credit Karma had unsettled nerves ahead of these numbers, but Experian look to have navigated the waters rather better than their rival. The group’s exposure to Latin America continues to boost growth. Their initial acquisition of a stake in a Brazilian credit bureau laid the foundations for what is now almost a billion dollar a year business. With growth there driven by the continuing modernisation of the Latin American financial sector, Experian have created a powerhouse that offers investors a growth exposure hard to find elsewhere in the Footsie.

How well these numbers go down today is another matter. Experian have delivered the growth expected and have painted an outlook which although rosy is, to be honest, no better than that which the market was already expecting them to paint. The group are exposed to the growth of lending appetite amongst US banks, for they sell them the data to identify the best consumers to target with credit offers. So, the recent struggles of US regional banks, following the collapse of SVB could hold Experian back a little in the near term. Short term noise like that can create opportunities for long term investors. Few UK stocks offer such direct exposure to the rising importance of data in the modern economy. In early trade the market looks to be taking a cautious approach, marking the stock down by around 4% at the opening bell.”

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  1. finova Upgrades Award-Winning Origination Platform Apprivo To Drive Operational Efficiency For Clients Amid Rate War Read more
  2. Gilion Appoints Andreas Hedlund as New CFO and Deputy CEO Read more
  3. FINOM Brings Integrated E-Invoicing and Business Banking to Italian SMEs with Launch of Business Accounts and Local IBAN Read more
  4. More Than Two Thirds Of Financial Services Organisations Say Network Security Threats Have Increased In The Last 18 Months, According To New Daisy Research Read more
  5. Monavate and Know Your Customer Collaborate to Reinvent Compliance Across the European Payment Solutions Read more