Experian, the credit checking company, said there had been signs of stability in its key North American business although the UK market remained weak as banks continued their efforts to rebuild balance sheets leading them to make fewer new loans.
But the Dublin-based group said margins for the year would be slightly better than it indicated in July, aided by a cost cutting programme, and shares opened up 1.1 per cent at 535½p.
“We are seeing signs of stability in the US but we’re more cautious in the UK, where we’ve seen more softening in the quarter,” said Paul Brooks, chief financial officer.
“There’s a lot of deleveraging going on. Banks are more focused on their balance sheets, we’re seeing rising deliquencies across all forms of lending, new lending criteria is tightening and there’s not a lot of marketing for new customers,” he said.
Despite the slowdown in its main financial services market, Experian has been aggressively moving into other areas, including government services such as driver licensing checks, the telecoms market and the US healthcare payment system.
Experian said total revenues rose 1 per cent in the interim period to September 30, compared to the year before, with organic revenue growth having risen by the same total.
Revenue growth in the UK and Ireland dropped 18 per cent at actual exchange rates.
“For the year as a whole we remain on track to at least maintain margins, grow profits at constant currency and deliver strong cash flow conversion,” said Don Robert, chief executive.
Mr Brooks confirmed that the margin guidance represented an improvement from July’s guidance that it would “maintain margins”. The depth of the recession forced Experian to deepen a cost-cutting programme in the first half and a target for total annualised savings was raised by $20m to $150m.
The strongest growth came again from the Interactive division, where customers can look at their credit history online. This business saw revenues increase by 12 per cent during the period.
Experian said organic revenue in North America fell 2 per cent, with turnover from credit services down 7 per cent.
Latin American, which has been the group’s strongest growth market for the past year, saw revenues rise 14 per cent on a constant currency basis.
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