- H1 revenues up 7%, underlying profit up 8%
- Full-year guidance reiterated despite tougher economy
- Dividend increased 6%
Global information services company Experian (EXPN) said it delivered a ‘strong’ first half performance with revenues and profit growing at 7% and 8% respectively.
While the company expects tougher macroeconomic headwinds in the second half and strong comparatives in the third quarter, it is sticking with full-year guidance.
This pleased investors, sending the shares up 2.5% to £29.23.
Experian shares have fallen 19% year-to-date compared with a 4% drop in the FTSE 100 on concerns that an economic slowdown would dampen consumer confidence and demand for the group’s credit rating services.
STICKING WITH GUIDANCE
Chief executive Brian Cassin commented: ‘We expect organic revenue growth of between 7%-to-9%, total revenue growth of between 8%-and-10% and modest margin accretion, all at constant exchange rates and on an ongoing basis.
‘With many households and businesses facing a difficult period of rising costs in the coming months, we will also continue to push ahead with our mission to help millions of people improve their financial health and save money.’
Shore Capital analyst Robin Speakman left his forecasts unchanged but sees opportunities to upgrade.
Speakman said: ‘To our minds, the full year performance is likely to come out at the top-end of the range on the current trajectory with improvement coming through in the weaker regions and counter-cyclical service demand rolling. The balance sheet remains an opportunity.’
RESILIENT FIRST HALF
First half revenues increased 7% to $3.23 billion driven by new products and business wins as well as consumer expansion.
Organic growth was 8% with acquisitions taking total growth to 9% at constant exchange rates.
The company saw ‘significant’ expansion in Latin America which grew revenues by 18% while North America registered 8% growth.
Underlying EBIT (earnings before interest) grew 8% representing a margin against sales of 27.3%, slightly better than the prior year 26.9%. Currency tailwinds added 0.7%.
Experian increased the first half dividend by 6% to $0.17 per share.
STRONG BALANCE SHEET
Experian ended the period with underlying net debt to EBITDA (earnings before interest, taxes, depreciation, and amortisation) of 1.9 times while 90% of current debt is fixed for the next two years, shielding the firm from the global rise in interest rates.
Speakman notes the leverage ratio is well below the company’s ‘comfort efficiency range’ of above two times which means the business is ‘well capitalised to continue to deliver growth’.
