Experian’s management faced analysts on July 10th, 2008 with chief executive Don Robert almost pounding the table stressing the fact that revenues may be flat for some time, but his management would pull all levers on cost reduction to keep profits and margins at current levels.  The Lex Column of the Financial Times commented recently that management and analyst may have no clue as to how margins will perform in a prolonged contraction of credit transactions.

In regard to future prospects Mr. Robert commented: “Looking ahead, while we do not plan on the basis of any short-term recovery in the US and UK financial services markets, we expect strength in new geographies and across many business lines to support Group revenue growth. Our cost efficiency program is progressing well, and we remain focused on driving profit growth.”

Independent of the above Roberts stated recently that Experian may have to resort to a share repurchase program to prop up its share price.  Experian has in the past relied predominantly on an aggressive acquisition strategy rather than organic growth.  These acquisitions were largely focused on more of the same (consumer), increasing its dependence on the financial services sector for revenue. In the absence of diversification and large acquisition prospects becoming rare, Experian will have to be content with lower growth rates for the time being.

Source: Experian Press Release

BIIA Newsletter July / August 2008 Issue