Experian adopts cautious outlook, shares fall

(Sharecast News) - Shares in Experian fell sharply on Wednesday after the data services firm reported lower full-year profits and adopted a more cautious approach to the current year. The credit rating specialist said revenues in the year to 31 March rose 5% to $6.62bn, while revenues from ongoing activities rose 7% on an organic basis to $6.59bn, at the lower end of forecasts.

Benchmark earnings before interest and tax rose 9% to $1.79bn.

However, operating profits fell 11% to $1.27bn, while pre-tax profits were 19% lower at $1.17bn, largely due to a goodwill impairment.

Brian Cassin, chief executive, called the results "very strong", and said they reflected a combination of new business wins, new products and expansion into higher growth markets. "We saw growth in every region, in many cases outperforming our underlying markets substantially," he noted.

Looking to the current year, he said: "We anticipate another year of growth due to the breadth and the resilience of our portfolio, and significant structural growth opportunities.

"Despite the uncertain economic climate, we expect to deliver organic revenue growth in the range of 4% to 6% and modest margin accretion, all at constant exchange rates and on an ongoing basis." Most analysts were expecting 2024 growth of around 5.8%.

As at 0930 BST, shares in the blue chip were off 5% at 2,595p, making it the biggest faller in the FTSE 100.

Robin Speakman, analyst at Shore Capital, said: "For the 2024 full-year, our forecast like-for-like growth has been at 7%. Guidance is now at 4% to 6%. A more cautious outlook than at this stage, but still good growth in the context of Experian's performance over the past few years through the pandemic in achieving constant compounding growth."

Shore reiterated its 'buy' rating on the stock.