Experian chief executive Don Robert said in a FT interview that there was a positive aspect from the credit crunch as US and UK banks were questioning traditional lending practices and are looking for better data tools to assess the best quality customers. In regard to the credit crunch he stated it was too early to predict an end to the credit crisis in the US and the UK.

It was reported that Experian may consider to buy-back its shares if it cannot find suitable acquisitions. In the past Experian spent between US$ 600 to US$ 700 million on acquisitions per annum. The credit bureau industry market is largely carved up in mature markets and large acquisition prospects in emerging markets such as China, India and Russia do not exist.

On May 21st the company announced its preliminary results for financial year ending March 31, 2008.  Experian reported good revenue, profit and cash performance against a backdrop of difficult market conditions. Revenue grew 18% at actual exchange rates to US$4.1bn (largely thanks to the Serasa acquisition).  Revenue from continuing activities up 14% at constant exchange rates to US$4.1bn. Organic revenue growth was 4%.  Total EBIT growth of 15% at actual exchange rates to US$945m. Continuing EBIT up 13% at constant exchange rates. EBIT margin of 21.8% from continuing activities, excluding FARES contribution, in line with prior year (2007: 21.9%) during period of investment.  Profit before tax of US$549m. Benchmark profit before tax of US$819m. Basic EPS of 43.3 US cents. Benchmark EPS of 60.3 US cents.

Swift action to improve efficiency and reduce costs, with annualized cost savings target raised to US$110m from US$80m.  Strong contribution from strategically important expansion into Brazil via Serasa, on plan for revenue, ahead on EBIT.  Excellent cash conversion of 95%.  Net debt of US$2.7bn after funding acquisitions of US$1.7bn, mainly Serasa and Hitwise. Second dividend of 12.0 US cents per share, to give full year dividend of 18.5 US cents per share, up 9%.   Source:  FT May 21, 2008

Experian reported recently that it would concentrate more on its core business, aggressive organic growth plus tight cost management. The implications will be that competition between credit bureaus is likely to intensify, resulting in further price erosion. A share buy-back should lift its sagging stock price. A share buy-back strategy is working nicely for D&B as evidenced by a strong share price performance.

BIIA Newsletter May – 2008 Issue