16th Jul 2015 10:32
LONDON (Alliance News) - Information services and credit reports company Experian PLC on Thursday said it has made an encouraging start to its current financial year, with progress made across the business, even as foreign exchange translation challenges continue.
Shares in Experian were up 1.4% to 1,219.00 pence on Thursday late morning, one of the best performers in the FTSE 100.
The FTSE 100-listed company said it has seen good progress in its software and analytics, fraud and identity management, consumer and business information arms and has seen improved trading in Brazil in the first quarter to the end of June, though its marketing services franchise continues to suffer revenue declines. Total revenue growth for the company in the three months to the end of June was 3% at constant currencies, while organic revenue also rose by 3%.
But foreign exchange translation continues to drag on Experian's performance and its reported revenue from continuing operations declined by 6% in the quarter at actual rates, attributed by the company to the strength of the US dollar. Following recent movements in exchange rates, Experian now expects is earnings before interest and taxation to take a 7% hit from currency translation, should the current rates prevail through the remainder of the financial year.
Experian Chief Executive Brian Cassin said its expectations for the year are unchanged, with organic growth expected to improve over the course of the year. Though it expects foreign exchange to remain a drag on its results, it does expects its full-year margins to be stable and its earnings per share to improve on a constant currency basis.
For its North American business, total and organic revenue growth in the region was flat. Credit Services produced organic revenue growth of 8%, as the consumer lending environment in the region remained strong, with increased credit prospecting and origination volumes across Experian's core consumer bureau.
The group said it is also making progress in business credit as it sales effectiveness increases for large and mid-sized clients, while its healthcare arm is performing well on the back of new business bookings. Experian's automotive business continues to trade well, reflecting the strength in credit volumes and vehicle history reports.
Decision Analytics had a slow start to the year and revenue fell by 1% in the division on an organic basis, though Experian expects trading in the remainder of the year to be boosted by a good performance in its fraud and identity management segment. Organic revenue in Marketing Services also fell, however, down 4%, as growth in cross-channel marketing failed to offset revenue lost from the attrition of legacy email clients.
For Consumer Services, organic revenue declines moderated to 10% as the company made progress on turning around the business and Experian.com revenue grew by 20% as Experian works to mitigate the declines in its legacy base.
In the UK & Ireland, constant currency revenue was up by 5%, with increased volumes in Credit Services and a good performance in Business Information, driven by new products. Decision Analytics revenue was up by 15%, which Experian says may be a somewhat exceptional performance, on the back of growth in fraud and identify management activity.
But Marketing Services again declined in the region, down by 1%, due to phasing in its data quality business, which helped to offset cross-channel growth. Consumer Services revenue did grow, however, on new members added to its direct-to-consumer channel amid demand amongst consumers to better understand their credit profiles.
Experian said its performance in Europe, the Middle East and Asia and Asia-Pacific is improving steadily, though its credit services business did take a hit from the geopolitical issues in countries such as Russia and South Africa and from ongoing economic uncertainty in the eurozone. Organic revenue in Decision Analytics increased 17%, while its Marketing Services unit returned to growth as the cross-channel marketing unit managed to win new clients in the quarter.
In Latin America, the group said that while the macroeconomic environment in Brazil remains weak, it has managed to make progress in the market through initiatives it has put in place. Credit Services revenue growth hit 8%, with good contributions from Brazil and other Latin American countries. Brazil was particularly boosted by a good performance in business information and consumer information, the latter in part due to a higher volume of delinquency notifications.
Organic revenue in Decision Analytics in Latin America was flat, largely due to phasing, but Marketing Services had a weak quarter in the region, with revenue down 26%, as clients cut marketing activity due to the weak conditions in Brazil's economy.
By Sam Unsted; [email protected]; @SamUAtAlliance
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