Experian shares dropped 3.2% to 2,582.3p in late morning trading on Wednesday, after the company announced a 17% increase in revenue to $6.2 billion compared to $5.3 billion in its FY2022 results.
The credit-focused group said its positive performance was driven by strong demand for consumer-focused services across North America, Latin America and the UK.
The firm reported an operating profit growth of 16% to $1.4 billion from $1.1 billion year-on-year, and included a net gain from associate disposals of $90 million, which was offset by a business disposal loss of $43 million.
The group also incurred impairment charges net of reversals of $25 million, and restructuring and exceptional costs of $26 million.
Experian confirmed a pre-tax profit rise of 34% to $1.4 billion against $1 billion in 2021, boosted by a $186 million reduction in net finance costs from financing fair value remeasurements.
“We had a very good year with total revenue growth of 17% at both actual and constant exchange rates, and organic revenue growth of 12%,” said Experian CEO Brian Cassin.
“Benchmark earnings per share also progressed strongly, up 21%. Cash performance was very strong, with Benchmark EBIT to operating cash flow conversion of 109%, and actual exchange rates growth of 22%.”
“We have made major steps forward in Consumer Services, which is transforming the shape of our business, and we also progressed materially a series of strategic initiatives in Business-to-Business.”
The group announced an EPS uptick of 34% to 127.5c, reflecting the higher pre-tax profit, alongside a $16 million profit from discontinued operation, and a reduction in its effective tax rate and a higher level of shares in issue.
Experian also reported a total dividend increase of 10% to 51.7c against 47c year-on-year.
The group highlighted an estimated organic revenue growth in the slower range of 7%-9%, with modest margin growth at constant currency exchange rates supported by continuing investment in the execution of its strategy.
Experian said it was in a strong position to weather the current volatile macroeconomic disruptions on the back of its positive track record and robust, resilient performance.
Legal Claims
The company furthermore pointed out an “increasing number of pending and threatened claims and regulatory actions involving the group across all its major geographies”, which Experian said were being “vigorously defended.”
Experian confirmed that some claims were in enforcement, including a series from the Consumer Financial Protection Bureau in North America and the Information Commissioner’s Office in the UK.
The firm commented that it did not believe the outcome of any individual enforcement notice would have a material impact on the company’s financial position, however, Experian noted that in the possible case of unfavourable outcomes to the legal proceedings, the group could benefit from applicable insurance recoveries.