Shares in credit-checking specialist Experian (EXPN) went some way to reversing this year's steady decline, with a gain of over 3 per cent on the back of a modest increase in half-year profits. However, significant headwinds remain, principally a stricter regulatory environment and the challenge of becoming a digitally operated business.
Total revenue growth from continuing activities at constant exchange rates was a modest 4 per cent, but organic growth was flat. Consumer services suffered a 12 per cent top-line decline in North America, as the company switched its focus from legacy 'free' brands towards the higher-margin Experian.com model. While revenue at Experian.com grew by 15 per cent, revenue from legacy brands fell by nearly a third. Moreover, progress in the affinity channel, which helps businesses grow relationships with their customers, was held back by new regulatory requirements, which distracted affinity partners from day-to-day marketing concerns.
On a stronger note, operations in Brazil improved during the second quarter as business activity recovered from the disruption created by the World Cup. There was also organic growth of 5 per cent in the UK and Ireland, boosted by a new platform designed to help clients handle more complex digital marketing campaigns.
Prior to these numbers, broker JPMorgan Cazenove was forecasting full-year pre-tax profit of $1.3bn (£0.8bn), giving adjusted EPS of 95¢ (from $1.24bn and 90¢ in 2013-2014).
EXPERIAN (EXPN) | ||||
---|---|---|---|---|
ORD PRICE: | 971p | MARKET VALUE: | £9.61bn | |
TOUCH: | 970-971p | 12-MONTH HIGH: | 1,209p | LOW: 910p |
DIVIDEND YIELD: | 2.5% | PE RATIO: | 18 | |
NET ASSET VALUE: | 301¢* | NET DEBT: | 124% |
Half-year to 30 Sep | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
---|---|---|---|---|
2013 | 2.34 | 480 | 34.2 | 11.5 |
2014 | 2.39 | 534 | 41.8 | 12.25 |
% change | +2 | +11 | +22 | +7 |
Ex-div: 2 Jan Payment: 30 Jan *Includes intangible assets of $6.5bn, or 659¢ a share £1=$1.6 |