13th Jul 2023 10:35
(Alliance News) - Experian PLC could see an acceleration in growth following its reported rise in first-quarter revenue, according to Liberum on Thursday.
Liberum analyst Andrew Ripper commented: "We believe that Experian is better positioned to grow faster going forward than it has done in the past, particularly if [financial 2024] proves to be the low in this credit cycle."
"This reflects the group's investment in new/scaling products and data and the structural benefit of increasing credit penetration in Brazil, supported by positive data," Ripper added.
On Thursday, the Dublin-based consumer credit checker said first-quarter revenue at constant currency increased by 5% compared with a year ago, with a 14% rise in Latin American revenue and an 8% rise in the Europe, the Middle East & Africa/Asia Pacific region.
The firm said it saw 10% business-to-business growth in Brazil during the period, where it is expanding its list of clients and entering new opportunities, and noted that its customer services sector saw revenue grow by 26%.
Meanwhile, North America saw revenue rise by 4% at constant currency and the UK & Ireland saw 1% growth.
"The main negative is the recent strength of GBP, as Experian is a 75% USD earner," Ripper said.
In North America, the firm said it saw positive contributions from its Clarity and buy-now-pay-later clients, as well as from Experian Ascend, offsetting weaker volumes in mortgages and consumer credit origination.
In the UK & Ireland, the company said that all of its business-to-business units grew, in spite of weaker volumes in lending, while consumer services saw a decline in revenue due to " impact of supply contraction in our credit marketplace" and lower revenue from premium subscriptions.
Chief Executive Brian Cassin said: "We delivered good growth in Q1, in line with our expectations. Total revenue growth at actual exchange rates was 5% and also at constant exchange rates. Organic revenue growth was 5%.
"Our growth expectations for the full year are unchanged reflecting the strength and diversity of our business. We continue to expect organic revenue growth of between 4-6% and modest margin accretion, all at constant exchange rates and on an ongoing basis."
Shore Capital analyst Robin Speakerman commented: "Our forecasts assume the US dollar continues to modestly weaken against sterling and the euro. High sustained margins drive strong cash generation and strategic flexibility in delivering shareholder value."
Shore Capital forecasts revenue of USD7.03 billion in 2024, an increase of 6.2% from USD6.62 billion in financial 2023.
Shore Capital, Liberum and UBS all maintained their 'buy' recommendations on Experian. UBS gave Exeperian a price target of 3,300 pence, while Liberum's price target for the firm was 3,600p. Shore did not provide a price target.
Experian shares rose 0.5% to 2,932.00p each on Thursday morning in London.
By Harvey Dorset, Alliance News reporter
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