Shares in data services specialist Experian (EXPN) gained 5.5% to £31.42 after reporting higher than expected first quarter revenue growth to 30 June and upping its full year 2022 guidance.
Management had previously guided for first quarter organic revenue growth of between 15% and 20%, but beat that comfortably reporting 22%, while overall growth hit 28% stripping out currency movements.
The stronger than expected start to the new financial year prompted management to increase its full year revenue growth forecast from 9%-to-11% to between 13% and 15%, of which organic is expected to contribute between 9%-to-11%.
The company continues to expect ‘strong’ operating margin accretion in constant currencies.
UPGRADES TO COME
Robin Speakman at Shore Capital said he aims to move up his 2022 revenue growth estimate from 11.4% to around 14% and noted the higher margin potential, commenting ‘we see positive margin leverage potential on this performance’.
Speakman added, ‘we will discuss this with management in setting revised upgraded earnings forecasts’.
All geographical regions contributed to growth with the company attributing the strong performance to a combination of executing an ‘innovative-led’ strategy and a faster than expected recovery as countries emerge from the pandemic.
The results also reflected the relatively weak comparative period in the first quarter of last year.
STRENGH IN CONSUMER SERVICES
The largest region for Experian is the US, representing 65% of revenues, where it grew revenues by 26% including acquisitions with significant strength seen in consumer services.
The company noted an uplift in its credit comparison marketplace as more customers applied for credit and loans due to an ‘easing’ of lending criteria.
Latin America, the second largest region representing 12% of revenues, saw growth of 31% with the standout performer also being consumer services which more than doubled in size, growing 107% organically.
