Difficult trading conditions in the US subprime mortgage market and the UK consumer credit industry were among “challenges” Experian Group faced during the first quarter of its financial year, reported the Financial Times on July 12th, 2007.  Revenues at LowerMyBills, Experian’s US business, which provides leads to subprime mortgage lenders, fell more than 20 per cent in the April-June quarter, following an 8 per cent dip in the last quarter of 2006-07. That held back a rise in sales at the group’s Americas interactive division to 10 per cent.   Paul Brooks, chief financial officer, quoted: “We do see clients taking leads, there is demand, but it’s significantly reduced. It makes good money even in these difficult times.”   He added that LowerMyBills had been looking to diversify from the mortgage market and was now more actively pursuing that strategy.

Experian also reported that the environment for UK financial services companies remains tough, with lenders more focused on portfolio management than origination.  With UK interest rates rising, unsecured lending has almost come to a halt.

Excluding businesses acquired in the previous 12 months, Experian group sales increased by 7 per cent at constant exchange rates.  Adding in sales by the several acquisitions, including five in the first quarter, and translating into dollars at current rates, sales increased by 11 per cent.   Experian, which reports in dollars, benefited from the fall in that currency.  Sales from the Americas rose 8 per cent in total, those from the UK, Ireland and the rest of the world rose by 17 per cent in dollar terms.   As BIIA News reported in the June 2007 newsletter, the Experian group spent $1.6bn on acquisitions this year.   Nevertheless the purchase of Serasa and Hitwise, an online market intelligence business, did little to benefit first-quarter sales. Source: Financial Times

BIIA Newsletter July – 2007 Issue