Experian (EXPN) delivered half-year numbers broadly in line with consensus, although its shares were marked down in early trading as markets struggled to digest the surprise election of Donald Trump as the next US president. When the dust settles, shareholders should take encouragement from a 5 per cent constant-currency increase in unadjusted earnings before interest and tax, together with continued solid cash generation. But if you discount fair value assessments and net financing effects, it's still far from clear whether attempts to streamline and refocus the information services provider's business portfolio have started to feed through to the bottom line.
That might seem a little churlish given that the group has just commenced a divestment process for its email and cross-channel marketing business - a non-core area if ever there was one. The sale should free up further capital to reinvest in more profitable businesses within Experian or simply return to shareholders.
US credit services provided the standout performance. The segment delivered 10 per cent revenue growth at constant currencies, driven by a robust lending environment and structural growth in healthcare and business information. Activity at the UK credit and consumer businesses slowed during the second quarter, while the recent pick-up in the Brazilian economy augurs well for Experian's Latin America operations.
Citi gives respective revenue and EPS of $4.7bn (£3.79bn) and 93¢ for the March 2017 year-end (from $4.5bn and 87¢ in FY2016).
| EXPERIAN (EXPN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,453p | MARKET VALUE: | £13.9bn | |
| TOUCH: | 1,452p-1,455p | 12-MONTH HIGH: | 1,606p | LOW: 1,064p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 258¢* | NET DEBT: | 132% | |
| Half-year to 30 Sept | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 2.24 | 458 | 34.3 | 12.5 |
| 2016 | 2.24 | 520 | 42.0 | 13.0 |
| % change | -0.1 | +14 | +22 | +4 |
Ex-div: 29 Dec Payment: 27 Jan £1=$1.24 *Includes intangible assets of $6.02bn, or 628¢ a share | ||||
