Broker snap: Cash flow a pleasant surprise at Experian

20th May 2009 12:36

Credit checking group Experian's own credit-worthiness is looking better after the company surprised the market with the amount of cash it generated in the second half of its financial year.Broker Charles Stanley said the pre-tax profits of $843m were ahead of market consensus of $805m, but 'the big beat is in cash flow with net debt falling by $0.6bn to $2.1bn. The strong cash generation in the second half of the year is what we want to see from Experian.'Experian was also $10m ahead of plan on its cost savings, which came to $80m in the year to end-March 2009, and has raised its estimated of total annualised savings from fiscal 2010 onwards by $20m to $150m p.a.The broker is expecting the strong cash generation to continue in 2010 and reckons the shares look attractively priced. 'Overall, we were impressed with the strong cash generation and this opens up the possibility of higher dividends or a share buyback in 2010,' the broker said.