Shares in credit-checking giant
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 $1.19bn and 78.9¢ for 2012).
|ORD PRICE:||1,055p||MARKET VALUE:||£11bn|
|TOUCH:||1055-1057p||12-MONTH HIGH:||1,096p||LOW: 760p|
|DIVIDEND YIELD:||1.9%||PE RATIO:||49|
|NET ASSET VALUE:||239ȼ*||NET DEBT:||79%|
|Half-year to 30 Sep||Turnover ($bn)||Pre-tax profit ($m)||Earnings per share (ȼ)||Dividend per share (ȼ)|
Ex-div: 2 Jan
Payment: 1 Feb
*Includes intangible assets of $5.6bn, or 555ȼ a share £1=$1.5953
Experian's shares have risen almost 30 per cent in the past year and now trade on 19 times forward earnings. That's a premium to both Equifax (17 times) and Dun & Bradsheet (12 times), making the shares no better than a hold.
Last IC view: Hold, 916p, 10 May 2012