LONDON - Experian (OTC:EXPGF) plc, a global information services company, has reported a substantial increase in its financial performance for the first half of the fiscal year ending September 30, 2023. The company's pre-tax profit soared by 48 percent to $763 million, compared to $517 million in the previous year, driven by a combination of revenue growth and cost reductions.
The company's revenue rose by 5 percent to $3.42 billion, fueled by strong performances across all regions and sectors. Experian's business-to-business (B2B) and Consumer Services divisions both showed robust growth. The latter now serves 178 million free members, an increase of 21 million from the previous year, reflecting a 6 percent rise in organic revenue for Consumer Services. B2B organic revenue also grew by 4 percent.
This growth was underpinned by a diverse portfolio of services, the introduction of new products, and successful customer acquisition strategies. Organic revenue growth was consistent at 5 percent in both the first and second quarters, contributing to an overall revenue increase of 6 percent at actual exchange rates from ongoing activities.
The company's benchmark earnings before interest and taxes (EBIT) from ongoing activities increased by 6 percent to $929 million. The benchmark EBIT margin expanded by 20 basis points at constant currency to reach 27.2 percent. Basic earnings per share jumped significantly by 86 percent to 62.3 US cents, while benchmark earnings per share rose by 8 percent to 70.4 US cents.
Experian maintains a strong financial position with a net debt to EBITDA ratio of 1.8x and benefits from low average interest rates of around 3 percent due to their forward rate fixing program. The cash flow conversion rate stood at 77 percent during the seasonally weaker half of the year for cash flow.
Looking ahead, Experian forecasts organic revenue growth for fiscal year 2024 to be between 4 and 6 percent with modest margin accretion at constant exchange rates. Shareholders can anticipate an interim dividend increase of 6 percent to 18 US cents per share, scheduled for payment on February 2.
The company plans to hold a presentation via webcast for analysts and investors regarding these results and will provide an update on third quarter trading for FY24 on January 16, 2024.
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