- North America was once again the standout performer in the year to 31 March
- Organic revenue from the group’s consumer services business jumped by 17 per cent
Data services specialist Experian (EXPN) saw its organic revenue rise by 4 per cent in the year to 31 March, as 17 per cent growth in consumer services offset a flat performance from its ‘business-to-business’ (B2B) operations.
Momentum was led by North America, with the B2B segment benefiting from low interest rates and higher mortgage refinancing activity, while the consumer services business gained 9m new members. Together with a strong performance in Latin America, this offset weakness in the UK and Ireland and ‘EMEA/Asia Pacific’ region, keeping adjusted operating profit flat at $1.39bn (£977m).
Looking ahead, Experian is guiding to 7 to 9 per cent organic revenue growth for the current financial year, with 15 to 20 per cent growth in the first quarter.
“Their expectation of double-digit revenue growth and rising profit margins in the current year should be well received by investors,” says Steve Clayton, manager of the HL Select UK Growth Shares Fund (GB00BD5M6140), where Experian is a top holding. “Experian’s record of growth through adversity, with a notable acceleration as economies emerge from the pandemic sets it apart.”
That resilience does come at a price, however, with the shares currently trading at 31 times consensus 2022 earnings. But given the group’s high margins and the long-term structural demand for its data and analytical tools, that valuation isn’t unreasonable. Buy.
| EXPERIAN (EXPN) | ||||
| ORD PRICE: | 2,544p | MARKET VALUE: | £ 23.2bn | |
| TOUCH: | 2,541-2,545p | 12-MONTH HIGH: | 3,192p | LOW: 2,265p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 41 | |
| NET ASSET VALUE: | 337¢* | NET DEBT: | $4.16bn | |
| Year to 31 Mar | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
| 2017 | 4.33 | 1.07 | 92.1 | 41.5 |
| 2018 | 4.58 | 0.95 | 88.8 | 44.8 |
| 2019 | 4.86 | 0.96 | 76.9 | 46.5 |
| 2020 | 5.18 | 0.94 | 74.8 | 47.0 |
| 2021 | 5.37 | 1.08 | 88.2 | 47.0 |
| % change | +4 | +15 | +18 | - |
| Ex-div: | 24 Jun | |||
| Payment: | 23 Jul | |||
| £1 = $1.42, *Includes $7.2bn in intangible assets or 791¢ a share | ||||
Last IC View: Buy, 3,028p, 17 Nov 2020
