By Philip Stafford
Shares in Experian, the world’s largest credit checking company, slipped after it revealed its UK and Ireland business had contracted in the second half.
The decline came in spite of a pick up in the pace of organic growth at its main North American business in the period.
Experian cautioned that its UK and Irish business remained constrained by the lack of available credit, consolidation in the financial services sector and clients delaying spending on Experian’s customer analytics’ products. Total revenue and organic revenue were down 2 per cent in the second half at constant exchange rates compared with a flat figure at the interim period.
“The general sentiment is more positive than three months ago. It’s not shown through to the numbers yet but we are feeling more positive,” said Mr Brooks. “We see some stabilisation in the main and expect to see slow, gradual recovery from there”.
Shares in the group fell 2.6 per cent to 617p on the update.
However the Dublin-based group recorded total revenue growth of 3 per cent at constant exchange rates in the six months to March 31. Organic revenue growth rose 2 per cent in the period, with the final quarter of the year seeing a rise of 3 per cent, the group said in a statement on Thursday.
That represented an overall improvement from the first half, when both total revenues and organic revenue growth rose just 1 per cent as Experian continued to be hit by the slowdown in its main financial services markets.
To diversify its earnings, Experian has been aggressively moving into other areas in the past 18 months, including government services such as driver licensing checks, the telecoms market and the US healthcare payment system.
The main driver of growth in the US was its Interactive division, where customers can look at their credit history online, but Paul Brooks, chief financial officer, said there had been improvements across all of its businesses in North America.
“Some of our healthiest clients have been targeting new credit cards at prime and superprime customers,” he said.
The Latin American business saw organic growth at constant exchange rates of 17 per cent. The division has been Experian’s star performer in the last 18 months while western European and US markets have been hit by the financial crisis.
Experian is due to report full year results on May 19.
Financial Times
