Shares in credit-checking giant Experian (EXPN) closed in on record highs after the group reported double-digit revenue growth, including organic growth of 8 per cent. Reported pre-tax profits were hit by a $403m (£252m) movement in financial derivatives, but strip this out and underlying pre-tax profits rose 6 per cent to $563m.
Mature western markets may be slowing slightly, but a focus on emerging markets and new products is still delivering results for the market leader in creditworthiness checking. The fastest growing market remains Latin America, which reported a 17 per cent rise in organic sales to $499m. In the core North American market, accounting for almost half of group turnover, underlying sales increased by 7 per cent to $1.1bn as lending conditions improved and demand for fraud and identity checks grew rapidly. In the UK and Ireland, where consumer credit markets remain tight, sales growth was a more anaemic 3 per cent.
Experian is not immune to the uncertain market conditions and announced an efficiency programme to protect margins, which will cost $110m over the next couple of years to implement and deliver savings of $75m a year by 2015. Analysts at Seymour Pierce expect to downgrade forecasts slightly to reflect currency movements and anticipate full-year adjusted pre-tax profits of $1.25bn and EPS of 88.9¢ (from $1.19bn and 78.9¢ for 2012).
EXPERIAN (EXPN) | ||||
---|---|---|---|---|
ORD PRICE: | 1,055p | MARKET VALUE: | £11bn | |
TOUCH: | 1055-1057p | 12-MONTH HIGH: | 1,096p | LOW: 760p |
DIVIDEND YIELD: | 1.9% | PE RATIO: | 49 | |
NET ASSET VALUE: | 239ȼ* | NET DEBT: | 79% |
Half-year to 30 Sep | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
---|---|---|---|---|
2011 | 2.16 | 351 | 25.6 | 10.25 |
2012 | 2.29 | 76 | -7.1 | 10.75 |
% change | +6 | - | - | +5 |
Ex-div: 2 Jan Payment: 1 Feb *Includes intangible assets of $5.6bn, or 555ȼ a share £1=$1.5953 |