17th Jan 2023 16:47
(Alliance News) - Experian PLC on Tuesday said it delivered a financial third-quarter performance in line with expectations, but analysts warned that the company's shares may struggle in the short term.
The consumer credit checker said organic revenue growth in the three months ended December 31 was 6% from a year prior, and total revenue growth was 7%.
The climbing revenue was due to 16% growth in Latin America and 5% growth in North America. Meanwhile, in UK & Ireland, quarterly organic revenue grew by 6%, while the Europe, Middle East & Africa & Asia Pacific region revenue increased by 1%.
For total revenue at actual exchange rates, Latin America was up 21% and North America was 5% higher, while UK & Ireland revenue was 7% lower, amid a 10% decline in EMEA & Pacific revenue.
Experian said, in Latin America, it benefited from acquisitions in consumer services and new bureaux in Chile and Panama, amid business-to-business revenue growth of 11% in the region.
North America constitutes 68% of the company's revenue, Latin America 14%, UK & Ireland 12% and EMEA & Pacific 6%.
Liberum analysts said: "Experian is a high-quality compounder which is benefiting from investment in new products and data and structural growth in Brazil, which should drive good organic growth over 2023-25E and beyond. We continue to view the group as a core holding which will deliver double-digit returns over the medium-to-long term.
"The shares held up well in 2022, as Experian delivered against its financial guidance, and this was evidenced again on Q3's trading update. However, the shares may drift in the short term, as investors focus on buying stocks which performed worse last year," it continued.
Shore Capital Analysts were also optimistic about the quarter three results, noting that they were in-line with its modelled expectations. It did however add that "pressures in the global economy" remain present.
For financial year 2023, ending March 31, Experian left its expectations for revenue unchanged at growth between 8% and 10%. Shore Capital analysts retained its guidance for full-year organic revenue growth of 7% to 9%.
The company will release its financial year 2023 results on May 17.
Experian shares were 0.5% higher at 2,971.00 pence each in London late on Tuesday afternoon.
Shore Capital rates Experian at 'buy', Liberum also rates the company at 'buy' with a 3,500p target price.
By Sophie Rose, Alliance News reporter
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