Experian crosses $3bn in revenue as consumer services drive post-lockdown recovery
Experian has upgraded its guidance with revenues rising 23 per cent and operating profits soaring 29 per cent in the first six months of the year.
The credit reporting company has been boosted by a recovering economy with its consumer services enjoying standout growth.
The firm’s half-year results showed that overall revenues reached $3.06bn while earnings per share increased from 36.7c to 56.5c.
First interim dividends are also up 10 per cent to 16c per ordinary share.
Operating profits have climbed to £702m, up from £546m the previous year.
Its improved first half performance was driven by strong growth in its consumer services business, which grew by 27 per cent.
The group now benefits from 122m free members, which is an increase of 26m year-on-year across its three principal markets.
Experian has 47m free members in the USA, 65m in Brazil and 10.4m in the UK.
Meanwhile, the company’s benchmark EBIT margin was 26.3 per cent.
This is an increase 70 basis points at constant exchange rates and up 20 basis points at actual exchange rates.
Consequently, it has raised its guidance for organic revenue growth to 11-13 per cent from 9-11 per cent for the full year and total revenue growth of 15-17 per cent.
Brian Cassin, CEO, said: “Our growth is being enabled by a successful innovation-led strategy which has financial inclusion at its heart. Our aim is to empower consumers and businesses globally, improving financial health for all by using our capabilities as a force for good to transform lives and power opportunities.”
Despite its positive half-year report card, shares tumbled 3.82 per cent on the FTSE 100 by Wednesday afternoon.
Hargreaves Lansdown described its recovery since the pandemic as “remarkable”, but raised concerns about the large amount of personal data the company holds and for its “stubbornly flat” margins.
Equity analyst Nicholas Hyett said: “We suspect regulatory costs are one reason margins have remained stubbornly flat for years. That might be changing, but we remain cautious for now – especially given the company’s PE ratio is some 61 per cent ahead of its long run average. Experian has guided for ”strong” operating margin this year and the group needs to deliver to justify its valuation.”
Last year the company was rapped on the knuckles for trading people’s data without their knowledge.