Experian plc (LON:EXPN)’s first half underlying revenue came in at $3.2bn. That reflected organic growth of 8%, with Latin America the standout – though, all regions saw growth.
Underlying operating profit rose 8% to $881m, as revenue growth outpaced higher costs.
The group generated free cash flow of $474m, broadly in line with last year. Net debt decreased from $4.3bn to $4.1bn as some debt was paid down and there was a positive benefit from exchange rate moves.
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Full year guidance remains unchanged, with organic revenue growth expected between 7-9%, total revenue growth of between 8-10% and modest margin improvement.
The board has announced a 17 cents per share dividend, up 6%.
Experian’s Earnings
“This was a decent half for Experian who’ve been able to maintain momentum despite consumers and businesses dealing with higher inflation and rising costs.
The threat of a global downturn very much remains, though, but as consumers work through their savings and look to borrowing to finance their lifestyles, Experian’s in a position to get some relief there.
There’s already signs that lenders are looking to perform additional due diligence when lending. Services like additional affordability and customer segment analysis have seen higher demand.
It’s pleasing then, to see Experian’s consumer business still leading the way on organic growth, up 12% over the half despite obvious macro challenges. This division was given some real TLC in recent years and that work has paid off in creating a strong asset with a growing user base.
As people become more financially knowledgeable, with education around personal finance becoming more mainstream, Experian’s primed to benefit.
There’s no escaping the obvious wider challenges, but underlying performance at Experian looks to be moving in the right direction. The robust, cash generative, business model should hold the group in good stead.”
Article by Matt Britzman, Equity Analyst at Hargreaves Lansdown
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