Experian has reported today on what appears to be a satisfactory third quarter’s trading performance. Overall growth was 7% (with organic growth of 5%).compared with a 6% revenue growth throughout the first half. There was a much faster 3Q increase, of 16%, from Decision Analytics, at about 11% of revenue the smallest of the four Operating Divisions, which benefited from growth in US public sector contracts for identity authentication services.
Credit Services, the largest division providing credit scoring is benefiting from new sources of data and an expansion in business from the automotive sector, growing by around 4%.
Along with the trading update, Experian have announced a change of the top team as Don Robert, the CEO moves up to Chairman and Brian Cassin, the current CFO, takes on the CEO role. The search for a new CFO has begun and this will be an external appointment.
Looking ahead, we see that fraud, identity theft and security breaches will be hot topics as cyber-criminals focus on the rich pickings available with the rapid growth in banking and payments via mobile and internet. Experian already has a portfolio of products to counter these threats (e.g. after the acquisition of 41st Parameter last year) and we expect further investments and acquisitions as the company recognises the opportunity for growth and margin in this area.
Across the group, economic recovery will be good news for Experian in two ways; firstly demand will grow as the number of transactions increase, but higher interest rates will intensify the need for credit-checking, decision analysis and for Experian’s services. Things look set fair for Experian in 2014.