Sustained demand in North America drives the H1 performance; FY24 outlook confirmed

Experian reported H1 FY24 results largely in line with the consensus and our estimates. Revenue increased by 5% yoy with growth across all regions and businesses. The EBIT margin improved by 20bps underpinned by productivity initiatives. The management reiterated the outlook for FY23/24, providing reassurance to the market (share price up >6% at the time of writing). We do not expect to make significant changes to our estimates and retain our positive recommendation.

No frills Q1 update; FY outlook confirmed

Experian released its Q1 FY23/24 trading performance in line with street estimates. Organic and total revenue both grew by 5% yoy, driven by growth across all geographies and business segments. Given the resilience of the business model in the current tighter lending environment, the management reiterated its full year guidance. Overall, no big surprises. No wonder the share price reaction remained muted (+1.1% at the time of writing). We retain our positive view on the stock.

Lackluster close to the year

Experian reported FY22/23 results in line with the consensus on profitability. The group recorded positive growth across all geographies despite facing a tough macroeconomic environment. For FY23/24, the management guides for organic growth of 4-6% which is in line with street estimates of 5.8%. No wonder the share price reaction was muted (-0.7% at the time of writing). We do not expect to make major changes to our estimates and retain our positive view on the stock.

No frills Q3 update; FY guidance confirmed

Experian reported a Q3 FY23 trading update in line with our expectations. Organic growth moderated to 6% yoy (vs 8% in both the Q1 and Q2) due to a tough comparison base. The consumer services segment continued to lead, while core bureau (i.e. ex-mortgage) growth also remained resilient. The management reiterated its FY23 guidance. Overall, no big surprises and hence the share price reaction remained muted (+0.2% at the close). We maintain our cautiously optimistic view on the stock.

H1 FY22/23 performance in line with guidance; outlook remains murky

Experian reported H1 FY22/23 results slightly below street expectations. While organic growth was in line with the guidance, reported revenue and profitability were slightly short of the consensus estimates. The management reiterated the full year guidance. We will reduce our estimates slightly to account for the cloudy outlook but maintain our cautiously positive stance on the stock.

Q1 in line with expectations; Outlook confirmed

Experian’s Q1 FY22/23 trading report was in line with expectations and the management’s guidance. Organic growth of 8% yoy was supported by positive performances across regions and segments, despite mortgage headwinds. While the FY outlook was kept unchanged, given the current uncertain macroeconomic environment, this was still a positive. No wonder the share price has jumped c.3% (at the time of writing). We will tweak our estimates and are likely to maintain our positive view on the stock.

A decent performance in FY21/22 but the outlook disappoints

While Experian reported a decent close to FY21/22, with revenues and benchmark EBIT in line with the consensus, the FY22/23 guidance of 7-9% organic growth left investors wanting more. Additionally, the group guided for a mortgage headwind of c.1.5%, which is lower vs peers but they are more exposed to the vertical. However, the strong cash generation and 10% increase in dividend were encouraging. We will revise our estimates slightly upwards and will likely maintain our positive stance on the s

Q3 in line with expectations

Experian reported its Q3 revenue update which was largely in line with our expectations and management’s guidance. The organic growth of 11% yoy, which sits at the upper end of management’s guidance of 9-11%, was led by strong growth in the B2C segment. Following this update, the company has tightened the range of previously-raised FY21/22 guidance towards the upper limit. However, we will tweak our estimates and target price slightly downwards to factor in the increased risk of multiple rate hi

Impressive H1 earnings mired by poor operating cash flow

Experian reported mixed results for H1 FY21/22. While the revenue and benchmark EBIT were largely in line with street expectations, the cash from operations missed market consensus by 17%. On the positive side, management has once again upgraded the revenue guidance for FY21/22. However, given that the stock is already trading at a considerable premium to its long-term average, we maintain our cautious stance on the stock’s valuation.

A strong start to FY21

Experian’s Q1 FY21/22 trading update came in ahead of market expectations. The growth momentum spanned across the regions with healthy demand witnessed across the B2B and B2C offerings — aided by the faster-than-expected economic recovery and weak comparables. Management has raised the FY21/22 revenue guidance on the back of the Q1 performance. We will revise our financial estimates and target price upwards.

FY20/21 underpinned by strong US mortgage and B2C momentum

Experian’s FY20/21 results were ahead of headline figures. Revenue grew c.4% (in organic terms), led by the robust mortgage refinancing activity in the US and demand for consumer services in the US and Brazil. Adjusted EBIT was largely flat and the dividend was kept unchanged. Nevertheless, share repurchases were resumed. For FY21/22, management guides for 7-9% organic revenue growth and “strong EBIT margin accretion”. Overall, our estimates should reset higher, but the upside is likely to be li

Revenue growth accelerates in Q3

Experian delivered a strong show in Q3 FY20/21 (7% organic revenue growth), ahead of management’s guidance of 3-5% yoy. The US mortgage activity and consumer services in North and Latin America continued to drive the top line. However, the top-line momentum is expected to ease in Q4, given the tough comparable base. Management has guided the benchmark EBIT to be similar to the previous year’s.

Healthy H1 FY20/21 performance; momentum to sustain during Q3 FY20/21

Experian performed strongly in Q2 FY20/21 (+5% yoy organic revenue; at top-end of management’s guidance), on the back of the sustained robust momentum in the US mortgage activity and consumer services (in North and Latin America). Group overheads were also well managed, leading to just an 80bp dip in the H1 FY20/21 underlying EBIT margin. As the H2 FY20/21 top-line performance is likely to be relatively better and cost avoidance measures are expected to prevail, we will revise our estimates upwa

Experian lost just 2% of revenue in Q1 FY20/21

Experian’s better-than-expected Q1 FY20/21 performance (-2% yoy on an organic basis) shows the resilience of the business model (with various countercyclical products) and the sustained demand in its key geographies (the US and Brazil). In Q2 FY20/21, management expects to deliver broadly similar results (flat to -5% yoy), but with an improved contribution from the laggard regions (the UK and EMEA / Asia Pacific). At the same time, it is likely to remain tight on cost management.

IP Group - Several potential portfolio catalysts on the horizon

IP Group’s NAV declined by 13% in total return (TR) terms in FY23, affected by continued soft valuations across venture capital (VC) markets, as well as funding delays at some of its holdings. That said, management indicated that many of IP Group’s portfolio companies continued to make strong progress. Its maturing portfolio offers a number of potential NAV triggers and is now available at a wide 59% discount to NAV. We note that, as at end-2023, only 14% of IP Group’s portfolio was valued based

Meet, beat, repeat

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

FY23 - preparing for two high impact wells this year

LIBERUM: The Liberum Leisure Digest: NLW increase - pricing power is key

Hybridan Small Cap Feast - 16/04/2024

16th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radical Limited for

Braemar - Diversification paying dividends

Braemar’s FY24 trading update was in line with expectations, with revenues of c £150m and underlying operating profit of c £18m. Underlying operations continue to expand and diversify and the company remains well-positioned to drive its future growth strategy. The trading outlook is promising and Braemar should be able to leverage its strong balance sheet in pursuit of strategic growth. We have maintained our underlying estimates for FY24 and FY25, but edge down the valuation based on the lower

Trinity Delta Lighthouse: Avacta

Trinity Delta view: The proprietary pre|CISION platform is key to Avacta’s investment case, hence updated data that continue to support key hypotheses for AVA6000 are reassuring. Future efficacy data from studies planned to start in H224 will be key, and could also help to more broadly validate pre|CISION. The recent £31.1m fundraise (March 2024 Lighthouse), which provides a cash runway of c 24 months ie into early 2026, will be used to advance the therapeutics pipeline, in particular AVA6000, a

Morning Note – 9 April 2024

LIBERUM: Agents of change: Evolving for modern demands

Avacta Group - AACR update

As pre-announced, Avacta has presented the results of the 3-weekly P1 Arm 1 study of its AVA6000 lead clinical asset, based on the pre|CISION™ drug development platform at the American Association for Cancer Research's annual general meeting. The update does not cover progress on the ongoing 2-weekly dosing study which is underway, and Avacta confirmed current guidance on timing including being on track to begin the dose expansion study in 2H24. There are compelling updates on the progress repor

hVIVO - FY 2023 results, revenue in-line, margin better, future is bright

hVIVO has delivered FY 2023A results in-line with the 30 January 2024 TU, with total customer revenues of £56m, growth of 16% versus 2022A. Other income related to tax credits added another £2.6m. 2024 revenue guidance of £62m has been reiterated, representing 11% growth over 2023A, and ahead of the £60m that we had previously forecast. The company has good visibility with the 2024 figure, with 90% already being covered by the existing orderbook (stands at £80m at the end of 2023), as well as in

UK Equities: Overlooked, oversold, and over here

In this note we look at the gap between perception and reality in the UK equity market, the opportunities and threats in the economic and market outlook, and the emerging consensus that the valuation discount versus other major markets is at or close to an inflection point. We consider the benefits of UK equity strategies both for income investors and for those seeking exposure to the higher growth potential of smaller and mid-cap companies.

Allenby Capital: Deltic Energy - Update

Deltic Energy plc (DELT.L) has announced some positive news concerning its 50% interest in the Selene joint-venture with Shell UK Ltd. The announcement concerns a farm-out to Dana Petroleum Ltd of a 25% interest in Licence P2437 which contains the Selene prospect. The farm-out calls for Deltic retaining a highly meaningful 25% interest in one of the most interesting prospects in terms of risk profile and scale in the Southern North Sea (SNS) Basin while largely eliminating exposure to the cost o