14th Jul 2016 10:36
LONDON (Alliance News) - Information services group Experian PLC on Thursday reported organic revenue growth for the first quarter but said exchange rates, if they remain at current levels, will take a toll on its full-year results.
The FTSE 100-listed group said revenue, at constant exchange rates, grew 5.0% on an organic basis in the quarter to the end of June, with 9.0% growth in its Europe, Middle East and Africa/Asia-Pacific unit and 8.0% growth in Latin America. Revenue in North America grew 5.0% organically and UK & Ireland organic revenue grew 1.0%.
However, total revenue for the group, which reports in dollars, grew just 1.0% in the quarter. EMEA/Asia-Pacific revenue was up 8.0% and North American revenue up 5.0%. But total revenue fell 6.0% in Latin America due to the weakness of the Brazilian real, and UK & Ireland revenue fell 5.0% because of the weaker pound.
If current exchange rates prevail through the current financial year to the end of March 2017, Experian said it anticipates this would have a negative 1.0% impact on its earnings before interest and tax, weighted to the first half.
Chief Executive Brian Cassin said the company is "closely monitoring" the potential implications of the UK's exit from the European Union, but has seen "no significant adverse impact" to trading in its UK business from the Brexit decision. "As a global business with a diverse portfolio, we have a good track record of adapting to changing market conditions," he said.
"Looking ahead, our guidance for the full year is unchanged. At a group level and at constant currencies, we expect organic revenue growth in the mid single-digit range and to deliver stable margins as we invest for growth," Cassin added.
In North America, Experian said underlying market conditions continued to prove positive for its Credit Services clients, boosting demand for credit marketing and new loan origination services in the division. The group's Health unit has continued to win clients and expand its client base and its Decision Analytics arm won new software deals in the first quarter, which will deliver benefits through the balance of the financial year to March 2017.
Experian added its Marketing Services arm in North America saw good growth in cross-channel marketing sales, which helped to offset attrition in traditional email business. Consumer Services sales grew, boosted by its premium membership service and by new product launches, which have helped to offset declines in its legacy customer base.
Experian's Latin American business, meanwhile, delivered good organic revenue growth despite market conditions remaining tough in the first half. Market share gains were made in its Credit Services arm in Brazil in the quarter and that unit was further strengthened by growth for its counter-cyclical delinquency notification products.
Decision Analytics and Marketing Services sales grew in Latin America, part of a push by Experian to grow its business in the region beyond its Credit Services arm.
In the UK, the softer organic growth in comparison to other regional operations was caused by a strong comparative in Experian's Decision Analytics arm, reflecting a lapping of a very strong quarter the year earlier, which included the roll-out of a new verification service for the UK public sector, and by anticipated weakness in UK Consumer Services as Experian transitions its business model.
For UK Consumer Services, Experian is launching a series of new products, including a credit-matching service and mobile applications for consumers. The shift in emphasis here and tough comparatives in Decision Analytics sapped overall growth, with Credit Services having performed well on new business wins and with a strong performance in Experian's Marketing division, helped by growth in digital marketing activity.
In the EMEA/Asia-Pacific business, Experian said it is seeing a growing pipeline of potential opportunities, particularly in its Decision Analytics unit, due to demand for credit decisioning and fraud prevention products, and in Marketing Services, thanks to cross-channel marketing and data quality services.
Shares in Experian were down 0.4% to 1,457.00 pence on Thursday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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