17th Jan 2019 11:28
LONDON (Alliance News) - FTSE 100-listed consumer credit agency Experian PLC retained its full year guidance Thursday after the firm delivered "strong" revenue growth in the third quarter driven by its core North America business.
Experian reported year-on-year total revenue growth of 5% in the three month period to December 31, or 9% at constant exchange rates. Year-on-year organic revenue growth at constant exchanges rates stood at 9% in the quarter.
Experian's organic revenue was driven by a 13% increase in its Decisioning unit and a 10% increase in Consumer Services business. All four of Experian's core businesses - Decisioning, Consumer Services, Data and Business-to-Business - reported organic revenue growth in the period.
"Our performance reflects the success of our strategy to deliver innovative products at scale across our geographies and to build direct relationships with consumers, and our full-year guidance is unchanged," said Chief Executive Brian Cassin.
Geographically, the company's year-on-year total revenue growth in the period was driven by its North America business which saw 12% growth. The growth is the US was attributed to strong core credit volumes, trended data and new product introductions.
In the US, Experian's Clarity Services - which provides credit data - "performed well" as it expanded its core market. The company's flagship Ascend product continues to build a "very strong" pipeline. The Decisioning unit in the US, performed "very well" as it continued to secure new software product wins.
The US business saw a strong performance from its Customer Services unit, with "underlying trends continuing to improve". Experian's free membership base in the US has now reached over 17 million customers.
In North America, Experian's Decisioning, B2B and Consumer Services all reported organic growth of 12%. With the Data unit reporting 11% growth.
Hargreaves Lansdown Select UK Growth Shares fund manager, Steve Clayton commented: "These results show Experian is making strong progress in its core US business. Experian makes most of its money in the US, and reports in dollars accordingly."
"The group's clients in the B2B division tend to be banks, wanting credit data on their customers, or marketers seeking analytics that can help them identify quality sales leads," Clayton added. "With the US economy strong, Experian's data-driven services are enjoying buoyant demand. As more and more commerce moves online, businesses need better and better data to help them market themselves more effectively, putting Experian in a sweet spot."
Clayton continued: "Few businesses offer such exposure to the digital transformation underway in economies globally, and especially in the US which is the largest and most attractive marketplace of all. The business is highly cash generative and robustly financed, leaving it firmly in charge of its own destiny. It's one of the fund's largest holdings and we remain very happy with that position."
In Latin America, Experian suffered an 11% decrease in revenue but 4% organic revenue growth at constant exchange rates.
In Spanish Latin America, Experian said it strengthened its market position and delivered "low-single digit" organic revenue growth in Brazil.
In Brazil Experian said it saw growth across its larger clients including in the Decisioning unit, benefiting from large multi-year contracts with "major" Brazilian institutions. The Decisioning unit's performance offset lower revenue from countercyclical products.
In Latin America, the Decisioning unit reported 16% organic growth with Data increasing 2% and B2B growing 4%.
Experian's UK & Ireland operations suffered a 1% decrease in revenue but saw a 3% growth in organic revenue at constant currency.
The organic revenue growth in the UK & Ireland was driven by new business wins in its Decisioning and B2B units. Consumer Services organic revenue decreased 1% but Experian was "encouraged" by the performance as it represented a lower rate of decline.
Experian's free membership base increased to 5 million consumers in the UK & Ireland. In the UK & Ireland, the Decisioning unit reported organic growth of 9% with B2B increasing 4%.
Experian's EMEA & Asia Pacific business reported revenue growth of 4% in the quarter. The "good progress" made in the region, Experian said, reflects "further success" for its core global products, specifically PowerCurve which saw several new client wins.
In the EMEA & Asia Pacific business, Decisioning's organic revenue increased 19% with B2B increasing 9% but Data suffering a 3% decrease.
Experian is expected to announce its full year results for the year ending March 31 on May 15. The consumer credit agency has guided for a 5% foreign exchange impact to its benchmark adjusted earnings growth rates.
In its 2017 financial year, Experian reported pretax profit of USD994 million on revenue of USD4.66 billion.
Shares in Experian were up 1.8% Thursday at 1,908.50 pence each.
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