correction from source: The company says "The 'Benchmark earnings (non-GAAP measure)' under the 'Earnings' section should have been stated as US$321m, instead of US$312m". Accordingly our revised story follows.
UK-based information services company Experian Plc (EXPN.L) reported Wednesday a rise in first-half pre-tax profit, driven by lower one-time items and "excellent" cost efficiency progress, despite a decline in revenues. Meanwhile, net profit declined from last year, due to higher tax expenses. Further, the Dublin, Ireland-based company announced an interim dividend and also said it continues to expect modest organic revenue growth in the second half and remains on track to grow profits at constant currency for the year.
First-half pre-tax profit was $351 million, higher than last year's $318 million. The latest first-half results included total exceptional items of $46 million, mainly comprising restructuring costs and loss on disposal of the National Business Database in North America, compared to prior year's exceptional items of $33 million.
The results also included other non-GAAP measures, including amortization of acquisition intangibles, charge in respect of the demerger-related equity incentive plans, and financing fair value remeasurements, of $39 million, compared to $64 million a year ago.
First-half benchmark profit before tax, which excludes these items, was $437 million, up 5% from $416 million last year.
Group tax expense in the first half was $78 million, compared to prior year's $42 million.
On an after-tax basis, profit for the period fell to $265 million from $272 million a year ago. Profit attributable to owners of the company was $249 million or 24.1 cents per share, lower than $258 million or 25.2 cents per share a year ago.
Profit from continuing operations dropped to $273 million or 24.9 cents per share from last year's $276 million or 25.6 cents per share.
Benchmark earnings were $321 million, higher than $310 million a year ago. Benchmark earnings per share from continuing operations was 31.2 cents, up from 30.4 cents in the prior year. Expressed in GBP, Benchmark earnings per share climbed 26% year-over-year to 20.1 pence.
The company noted that the strong profit and margin performance was driven by excellent cost efficiency progress as well as positive operating leverage in Latin America. Also, FARES performed well in the period, helped by an increase in US mortgage refinancing activity.
Total revenue for the six months fell to $1.87 billion from $2.02 billion a year ago, after an adverse currency impact in the period. However, revenue from continuing activities rose 1% at constant exchange rates, driven by strength in Latin America and resilient performances elsewhere, notwithstanding the challenges caused by the weak economic environment. Organic revenue growth was 1%.
Segment-wise, Credit Services revenues declined to $802 million from last year's $854 million, while revenue rose 3% at constant exchange rates. Revenues from Decision Analytics fell to $211 million from $260 million a year ago, with an 8% decline at constant exchange rates. In Marketing Services, revenues fell to $341 million from $400 million last year, and the revenue decline at constant exchange rate was 7%. However, Interactive revenues rose to $503 million from $459 million a year ago, with a 12% revenue growth at constant exchange rates.
On a geographical basis, total North American revenues fell to $1.02 billion from $1.04 billion last year, and the revenue decline at constant exchange rates was 2%. The company pointed out that the region recorded a modest organic revenue decline, where strength in Interactive partially offset weak market conditions within the financial services and retail sectors. Latin American revenues declined to $255 million from prior year's $263 million, while revenues at constant exchanges rates grew 14%, driven by double-digit growth in Credit Services. Organic revenue growth was also 14%.
Total UK and Ireland revenues fell to $397 million from $505 million a year ago, and the drop was 4% at constant exchange rates, hurt by significant market challenges within the financial services and retail sectors.
First-half revenues from EMEA/Asia Pacific region declined to $205 million from $212 million a year ago, while revenue rose 5% at constant exchange rates. There were good performances across Credit Services and Marketing Services in the region, the company said.
Experian's first-half gross profit fell to $971 million from $1.07 billion a year ago, and operating profit dropped to $316 million from $331 million last year.
Commenting on the results, John Peace, Chairman of Experian, said, "Experian has yet again delivered a good performance against a backdrop of tough market conditions. Having invested throughout the downturn, Experian is advantageously positioned to further develop and grow, building on its global scale and market leading position."
Don Robert, Chief Executive Officer of Experian, added, "Experian's progress in the first half demonstrates the Group's ability to perform through the cycle. Although the global economic recovery is still at an early stage and will take time, we have a clear strategy and are investing in a series of targeted initiatives to drive growth."
Further, Experian announced a first interim dividend of 7.00 US cents per ordinary share, an increase of 4% from last year. The dividend will be paid on January 29, 2010 to shareholders on the register at the close of business on January 4, 2010. Unless shareholders elect by January 4, 2010 to receive US dollars, their dividends will be paid in sterling at a rate per share calculated on the basis of the exchange rate from US dollars to sterling on January 8, 2010, the company noted.
Looking ahead, Robert said, "In the second half, we continue to expect modest organic revenue growth and, for the year as a whole, remain on track to grow profits at constant currency and deliver strong free cash flow."
On the London Stock Exchange, EXPN.L is currently trading at 594.50 pence, up 5.50 pence or 0.93%.
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