Experian Rallies as Sales Jump 5%

LONDON -- The shares of Experian (LSE: EXPN  ) have edged 1.25% higher to 1,051 pence as of 8 a.m. EST after the credit information specialist claimed its third-quarter sales had gained 5%.

The FTSE 100 member, which is best known for its CreditExpert consumer credit reports, said its U.K. sales had improved 10% during October, November, and December.

Experian also reported third-quarter turnover within North America improving 7%, with Latin American revenue slipping 1% and sales in Europe, Africa, and Asia advancing 1%. In addition, the group confirmed that its year-end net debt position is expected to be approaching twice the level of EBITDA.

Commenting on the performance, Experian CEO Don Robert said:

We are pleased with the progress made in the third quarter, with total and organic revenue growth of 7%, at constant exchange rates. We delivered widespread growth demonstrating the breadth of our portfolio and continued successful execution of our growth strategy, helping us to withstand ongoing pressures in the global economy.

Looking ahead, for the full year we expect organic growth to be to high single-digit, with organic growth in the second half similar to our third quarter results. We also reiterate our full-year expectations of modest margin improvement (at constant currency) and to convert at least 90% of EBIT into operating cash.

Prior to today, City experts who followed Experian were expecting current-year earnings to advance from $0.79 to $0.86 per share and the dividend to increase from $0.32 to $0.35 per share. The projections equate to a P/E of 19 and a yield of 2%.

The present rating does not look a bargain, although the business has proved to be resilient during the banking crash and subsequent recession. Between 2007 and 2012, for instance, profits have jumped 55%, while the dividend has climbed 88%. The price has rallied from as low as 274 pence during that time, too, thereby making the share almost a four-bagger for investors smart enough to spot the handsome buying opportunity.

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