Credit data firm Experian boosted by sustained consumer lending

Experian posted robust revenue growth in the third quarter, driven by steady progress in the Americas and continued high borrowing levels.

The world’s largest credit reporting group revealed that total revenue increased 7 percent in the last three months of 2022 at constant exchange rates, in line with the company’s forecasts.

In North America, where the company generates more than two-thirds of its sales, trading benefited from strong performance from Experian Ascend, its analytics platform, as well as its verification services and health divisions.

Meanwhile, the Latin American business saw organic sales grow 16 percent, supported by the expansion of the consumer services division and the acquisition of data products in Brazil.

There was also healthy growth in the UK and Ireland, although Experian noted that sales were impacted by “market disruption” in October, which followed a controversial mini-budget of £45bn in unfunded tax cuts.

Trading was further impacted by tighter credit requirements as the turmoil caused by the UK government’s fiscal plan caused mortgage rates to rise, home loan approvals to fall and additional rate hikes.

But despite significant economic challenges, Experian has maintained its full-year guidance of 7 to 9 percent organic sales growth.

Group CEO Brian Cassin said: “While pressures in the global economy are likely to persist for some time, we expect to remain resilient, supported by the execution of our growth strategy and growth in countercyclical revenue streams.”

Experian added that consumer demand for credit was “generally higher,” and lenders are increasingly interested in analytics tools aimed at evaluating affordability, cost-of-living insights and economic exposure of small businesses.

In November it revealed that utility and energy customers were urging to see more analysis showing the impact of skyrocketing utility bills on Britons.

At the same time, the Dublin-based company noted increased demand for debt management tools and facilities from clients in the telecommunications industry.

Matt Britzman, an equity analyst at Hargreaves Lansdown, commented: ‘Lenders are tightening the criteria, which is where Experian’s suite of tools is an invaluable source of information; at the same time, consumers continue to look for credit on good terms to continue spending money.

“There is certainly concern about how long that spending trend can continue, and that is especially true if conditions for consumers’ real wealth worsen in the coming quarters.

“The US mortgage segment is an excellent example, where performance suffered due to the challenges faced by both buyers and lenders as mortgage costs rise.”

Experian shares were 0.6 per cent lower at £29.36 on Tuesday morning, though their value has still grown by around 77 per cent over the past five years.