16th Jul 2024 15:08
(Alliance News) - Experian PLC on Tuesday delivered a solid update on its first quarter, but failed to wow investors, as it announced the departure of a senior executive.
The Dublin-based consumer credit checker said Chief Operating Officer Craig Boundy will leave on August 20 to become chief executive officer of California-based virus-blocking software firm McAfee Corp.
"It's never welcome news to see executives move on when a business is looking in full flow. But Experian has a great team and strong culture embedded in the business, and COO Craig Boundy moving on to new pastures shouldn't cause any major damage," said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
The announcement came as Experian said revenue increased by 7% in the first financial quarter ended June 30, or 8% at constant exchange rates. Organic revenue growth also was 7%.
The update was evidence of "good market traction", according to Shore Capital research analyst Robin Speakman.
"The growth is led by strength in the North American core and by strong Consumer delivery where South America continues to punch out very high rates of growth," the Shore analyst continued.
However, business-to-business growth in Latin America suffered slightly, growing just 1% organically, amid floods in the region and the timing of deals.
"Latin America was a little weaker than markets are used to seeing...There shouldn't be too much cause for concern; growth in the consumer segment was good, and more normal levels of high growth in the region are expected to return in the coming quarters as conditions normalise," commented HL's Britzman.
Experian CEO Brian Cassin said growth expectations for the full year are unchanged, as the company anticipates organic revenue growth of 6% to 8% and margin accretion of 30 to 50 basis points at constant exchange rates on an ongoing basis.
In financial 2024, revenue from ongoing activities had climbed 7% at constant exchange rates. Revenue from ongoing activities was up 7.8% at actual rates at USD7.06 billion from USD6.55 billion in financial 2023.
Shares in Experian were down 1.8% at 3,575.70 pence each in London by Tuesday afternoon.
In the eyes of AJ Bell analyst Dan Coatsworth, the credit checking firm "didn't deliver the earnings upgrades needed to justify its premium stock rating", leaving investors "a bit miffed".
However, Britzman maintained Experian's valuation was "more than justified" in light of its "combination of sector-leading returns and growth opportunities, with its treasure trove of data and products that are ripe for AI integration".
By Elizabeth Winter, Alliance News deputy news editor, Global services
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