Broker snap: Experian off to strong start

15th Jul 2010 12:04

Credit checking firm Experian issued an interim management statement which showed a stronger start to the year than Charles Stanley was expecting."There are a number of positive trends within today's release. One feature we would highlight is the improved performance from North America which accounts for 53% of group revenue and 63% of EBIT [earnings before interest and tax]. Here organic revenue growth was +5% in the first quarter compared to a flat year in FY10 [fiscal 2010]. Growth in North America was driven by strong performances at Interactive (+11%) and in Marketing Services (+11%). This good start to the year has been achieved without much help from the US financial services with North America Credit Services declining by 3%," notes Charles Stanley analyst Tony Shepard.Revenue from credit services remains under pressure but the effects of the financial crisis have been ameliorated by the group's efficiency programme. "Going forward, the performance of Credit Services within the North American and UK divisions will be an important metric to watch. Although the comparatives are weak, there has been some improvement in North American Credit Services," Shepard said, adding that he expects North American credit services to return to growth in the second half of the year."Experian could benefit from some of the austerity measures especially fraud prevention in the public sector," the broker suggests.The broker has retained its "buy"2 recommendation.