15th Jan 2016 11:10
LONDON (Alliance News) - Experian PLC on Friday posted strong third-quarter revenue growth at constant currency, which helped to boost the stock in early trade, although the strength of the US dollar has continued to exert pressure on its business.
The information services company, known for providing credit checks on consumers and businesses, said total and organic revenue growth of 6% at constant currency was balanced across the regions in which it does business, enabling Experian to leave its guidance for the full year unchanged.
Robin Speakman, an analyst at Shore Capital, said the company delivered a "positive surprise" with the strength of its third-quarter update. "Our organic growth expectation for the group was for 3% for the Q3 period," Speakman said in a note.
Reporting in dollars exposes Experian to currency fluctuations from its activities in Latin America, Europe, the Middle East, and Asia. Total revenue was down 3% at actual exchange rates in the quarter ended December 31.
In the event that current foreign exchange rates prevail, Experian said it expects earnings before interest and tax to suffer an 11% drag in the year ending March 31, followed by a further 3% hit the following financial year.
"While foreign exchange will be a headwind, at constant currency we expect organic revenue growth in the mid-single digit range, to deliver stable margins and to see further progress in benchmark earnings per share," Chief Executive Brian Cassin said in a statement.
Experian's foreign currency woes were most stark at its Latin American operations, where total and organic growth of 7% at constant exchange rates measured up against a 29% drop at actual exchange rates.
Although the Brazilian real has been a big reason for the foreign exchange headwinds, with the currency depreciating amid a weakening economy, Experian said the country helped drive organic revenue growth within credit services in Latin America.
"In Brazil, we benefited from growth across both consumer and business information, including an increasing contribution from delinquency notifications linked to higher volumes of non-performing loans. We also continue to benefit from the addition of new analytics and scores," Experian said.
In fact, North America, billing mostly in dollars, was the only region to show growth at actual exchange rates, achieving a 6% increase.
"In North America Consumer Services, we continue to see underlying improvement in trends and benefited in the quarter from one-off revenue for on-boarding of a new affinity client," Cassin said.
In the UK & Ireland, constant currency growth of 4% measured up against a 1% drop at actual exchange rates, while the Europe, Middle East, Africa & Asia Pacific region's constant currency growth of 7% translated into a 6% drop at actual exchange rates.
Experian will report full-year results on May 11.
Shares in Experian were up 0.6% at 1,139.00 pence on Friday morning, having touched an earlier high of 1,189.00p.
By Samuel Agini; [email protected]; @samuelagini
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