Experian in credit after cash-rich first half

6th Nov 2014 08:11

First-half profits and cash flow from credit information group Experian hit the top end of expectations despite a decline in US consumer revenue due to rebranding.Organic revenue growth was unchanged and total revenue from continuing activities grew 4.5% to $2.39bn at actual rates, up 4% at constant exchange rates, driven by a return to growth in Brazil after the World Cup and good growth across all business lines in the UK and Ireland.Chief executive Brian Cassin, in his first set of results in the role, predicted organic revenue growth would be "subdued" in the third quarter but "improving as we exit the year".Benchmark earnings per share grew 6% to 45.1 cents in the six months to 30 September as operating cash flow rose 17% and cash flow conversion improved to 95% from 84% the year before.This strong cash performance allowed the interim dividend to be comfortably hiked 7% to 12.25 cents while debt reduced ahead of schedule, although net debt grew due to acquisitions.South American credit was up around 4% but North American consumer revenue declined 14% under plans to move the principal brand for US consumers to Experian.com, which saw revenue under that segment grow by 15%."In the early stages of the transition, we've focused on raising consumer awareness of Experian.com through advertising and promotional activity, and response rates are good," Cassin said.For the UK, he said lenders were increasingly focused on enhancing their core lending offers and were prioritising their spending in the areas of regulatory compliance and fraud prevention, all areas in which Experian was well placed to support.For the year, he increased guidance for cash flow conversion to 95% from 90% previously.Analysts at Liberum said the profit was in line with the top end of consensus forecasts and cash conversion was ahead."There is no sign - yet - of the hoped for improvement in organic growth, with encouraging recovery in US and UK credit still offset by client transition in the US consumer division, which will continue to weigh on the second half," they wrote."While the second-half growth outlook remains challenging, continued developed region recovery and the annualisation of acquisitions should drive an improvement as the group exits the year."