Experian says coronavirus lockdowns could hit first quarter revenue
Data credit company Experian said today it could take a 10 per cent revenue hit in the first quarter if government coronavirus lockdown policies persist through the period.
The London-listed business said it was not providing financial guidance for the current financial year because of the unpredictability of the crisis which had caused major disruption across all its main markets.
Experian’s annual statutory pre-tax profit fell 1.6 per cent to $942m (£768m) for the year ended 31 March, below analysts’ average estimate of $1.24bn, according to IBES data from Refinitiv.
Revenue grew seven per cent to $5.18bn, up from $4.86bn the previous year.
However, the company said the coronavirus crisis has already knocked five per cent off organic revenue in April.
Experian said it estimates revenue in the first quarter to fall five-to-10 per cent as a result of lockdowns across the world.
Experian also said it was being affected by exchange rate volatility, in particular the weakening of the Brazilian Real.
The company said if the weakness continues it will have a five per cent negative impact on first quarter revenue and earnings.
Experian chief executive Brian Cassin said: “While we continue to assess the impact of the crisis on our markets, and we expect near-term revenue to be affected, the nature of our business means we have a degree of resilience.
“We are taking mitigating cost actions in the short term, but we are also positioning ourselves to emerge strongly by continuing to invest in our people and growth initiatives.”
Experian said it had not furloughed any employees, but had cut costs by reducing discretionary spending.
“We have instigated a range of short-term cost mitigation actions, while remaining committed to maintaining organisational capacity and positioning ourselves to emerge strongly when conditions improve,” the company said.
Experian said it was paying a second interim dividend of 32.5 cents per share, to bring the total for the financial year of 47 cents per share.
It said the dividend payment was recognition of its “strong financial position and our diversified and cash generative business model”.
Mamta Valechha, equity research analyst at Quilter Cheviot, said: “We expect investors to be encouraged by Experian’s impressive fourth quarter results today which saw a 10 per cent increase in organic revenue growth, and a retention of its dividend.
“The group also demonstrated its relative covid-19 resilience, with organic revenue down five per cent in April, which was considerably better than peers Transunion and Equifax which reported double-digit declines.”
Experian shares rose more than three per cent this morning to 2,603p.