Experian cuts successful as profits rocket

EXPERIAN, the credit information group, yesterday cheered markets by unveiling a bumper 11 per cent jump in net profit to $486m (£313m), aided by an $80m cost cut drive.

The Dublin-based firm upped its cost cutting targets by another $20m to $150m as it announced its results for the year to the end of March, and said it expects to grow profits and maintain its margins this year.

Chief executive Don Robert said: “Experian has stood up very well to the economic challenges and delivered very solid results in extraordinary times.”

But he warned that the group expects little organic growth in the first half of the current year.

He said that while financial services in the key US and UK markets were stabilising this had yet to translate into a “significant change in client behaviour”.

Revenue from continuing operations increased by eight per cent to $3.8bn including organic growth of three per cent. Earnings before interest, tax, depreciation and amortisation registered a healthy eight per cent gain to $939m, versus a consensus forecast of $823m.

But Experian’s credit checking services have been hit by a sharp drop in bank lending in the wake of the global financial crisis. Aside from the cost efficiency drive, it has responded by developing new products aimed at helping lenders manage default risk.

The group’s UK shares rose by 1.4 per cent on the results, closing at 492.75 p.
Deutsche Bank reiterated its “buy” recommendation and 540p price target, stating the results are “solid” and ahead of its expectations.

The group is paying an interim dividend of 13.25 cents, giving a full-year dividend of 20 cents, up eight per cent.