Experian extends run of sales growth

Credit information group Experian posted a 14% rise in annual sales today after a strong performance on both sides of the Atlantic.

In its first set of annual results since its demerger from Argos owner GUS in October last year, Experian said sales hit $3.4bn (€2.53bn) while earnings before interest and tax rose 11% to $825m (€614m).

The Nottingham-based group said sales rose by double digits for the fifth consecutive year after continued growth in its core US and UK consumer credit checking and risk analysis operations as well as at its interactive division, which includes online credit reports and price monitoring services.

It added that it benefited from strengthened relationships with existing clients during the period, including securing renewed, and enlarged, contracts with seven of the top ten US banks.

Meanwhile, the firm also moved to expand its presence outside the UK and the US, with significant new client wins in Spain, France, China and South Africa.

Sales in the UK and Ireland increased by 13% in the year to March 31, with underlying earnings up 16% at $221m (€164m).

The firm’s credit services division grew sales by 3% despite a “challenging” consumer credit environment. The company benefited as firms switched their focus from new customers to cross-selling to existing clients.

Increased awareness over identity fraud saw a strong rise in demand for consumer credit reports, helping to boost performance at the firm’s consumer credit checking business CreditExpert.

Higher levels of television and radio advertising, as well as marketing partnerships with AOL, Yahoo and MSM, helped drive demand for the service.

In the US, weaker levels of sub-prime mortgage lending continued to impact sales at Experian’s LowerMyBills website.

LowerMyBills, which accounts for 4% of the group’s total sales, provides information on mortgage lenders to people looking to switch mortgages.

A tightening by lenders following a rising number of people defaulting on their mortgages led to a decline in sales from the site.

However, this was more than offset by strong demand for the group’s price comparison website, PriceGrabber, and its credit monitoring service, Consumer Direct. Total US earnings rose by 18% in the period to $562m (€418m).

Chief executive John Peace said he was confident of achieving further growth in the year ahead, despite some specific market challenges including the decline in unsecured lending in the UK and a continued slowdown in the US sub-prime mortgage market.

Panmure Gordon analyst Christian Koefoed-Nielsen said the results revealed a “good performance” from the group.

“Overall, Experian’s superior breadth of products, greater sector diversification and wider geographic reach confer significant competitive advantage relative to its competitors,” he said.