- Full year tops expectations
- 2025 organic growth of 6% to 8% on expanded margin
- Dividend increased by 7%
Global data services specialist Experian (EXPN) notched-up a new high and led the FTSE gainers after revealing full year revenue growth at the top end of expectations and a strong outlook.
The shares jumped 7% to £37.75 taking gains over the last 12-months to 35%, handsomely outperforming the blue-chip FTSE 100 return of 9%.
Interestingly, chief executive Brian Cassin talked up rising margins and flagged the $1.9 billion of operating cash flow. For full year 2025, Cassin anticipates further strategic progress and expects to deliver organic revenue growth in the range of 6% to 8%. ‘We also expect good margin expansion, in the range of 30-50 basis points, at constant currency.’
GROWTH AHEAD OF MARKET FORECASTS
For the year ended 31 March revenue increased 7% to $7.1 billion and operating earnings were 7% higher at $1.93 billion representing a margin on sales 27.2% compared with 27.1% in 2023.
Organic revenue growth of 6% was ahead of consensus analyst forecasts calling for 5.5%. All regions contributed to growth with Latin America the standout performer achieving double-digit growth.
Adjusted EPS (earnings per share) increased 8% to $1.45, and the business converted 97% of profit into operating cash flow. Experian ended the period with net debt to EBITDA (earnings before interest, tax, depreciation, and amortisation) of 1.7 times.
The full year dividend was increased by 7% to $0.585 per share which is covered 2.5 times by earnings per share.
WHAT ARE THE EXPERTS SAYING?
‘There was a lot to like in Experian’s latest full-year results both from a short- and medium-term perspective’, said AJ Bell investment director Russ Mould. ‘The credit rating group expects a boost from a modest improvement in economic conditions but is also proving a master of its own destiny through innovation.
‘Inevitably, this involves the use of AI but also a full transition towards the cloud which will increase productivity and enable the company to offer customers a greater breadth and depth of insights.’
With spending on the cloud expected to peak over the next couple of years, financial results should benefit thereafter as capital expenditure comes down.
Analyst Robin Speakman at Shore Capital commented: ‘We retain the view that Experian is a strategically valuable business.’
The analyst said that high sustained margins drive strong cash generation and strategic flexibility in delivering shareholder value.
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Martin Gamble) and the editor (Steven Frazer) own shares in AJ Bell.
LEARN MORE ABOUT EXPERIAN
