Sunday 18 August 2019

Experian gains customers after Equifax breach but expects tighter regulations

The credit checking group booked revenues of 2.1 billion US dollars (£1.66 billion) for the six months to September 30.

FTSE 100
FTSE 100

By Kalyeena Makortoff, Press Association City Reporter

Credit checking group Experian has reported a 5% jump in half-year revenues, having seen a customer windfall in the wake of the Equifax data breach, but warned that tighter regulations could follow.

The firm said it had a “good start” to its financial year,  booking revenues of 2.19 billion US dollars (£1.66 billion) for the six months to September 30, while operating profit rose 6% to 518 million US dollars (£393 million).

On a statutory basis, pre-tax profit fell 7% to 467 million US dollars (£355 million).

It noted “strong” growth in its business-to-business activities and “good progress” in consumer services.

There was also a silver lining to the Equifax hack, which resulted in a raft of new customers for Experian.

“We witnessed a spike in enrolments in the immediate aftermath of the Equifax data breach,” the company said.

“Normalising for this event, take-up rates have been strong and, over the balance of the year, we will introduce new features to build on and sustain this momentum.”

Rival Equifax admitted in October that almost 700,000 UK consumers have had personal information accessed in the cyber attack, including partial credit card details, phone numbers, and driver’s licence numbers.

The Atlanta-based firm discovered the hack in July, but only informed consumers in September.

Experian said the Equifax breach could result in heightened oversight in the industry and noted a rise in consumer protection-focused “legislative and regulatory activity” in its key markets.

“The Equifax data breach has resulted in increased legislative and regulatory activity, and may result in increased oversight of security matters.

“The notoriety of the breach has also increased in the near term the external risks associated with information security,” the company said.

Experian is also facing a higher number of consumer and class action suits in the US related to the Equifax breach, it noted.

More broadly, Experian is facing “uncertainty” around tax legislations as well as the “longer-term impact”  that Brexit will have on its UK business, which is already experiencing  a “modest decline” in growth.

However, a slowdown in the UK and Ireland was offset by strong performance across Latin America, the EMEA region covering Europe, the Middle East and Africa, as well as Asia Pacific.

Organic revenues across the UK and Ireland business fell 3%, as a drop in its consumer services operations offset growth in its business to business activities.

But Experian said it had taken “important steps to reposition” its consumer services business with the likes of free score offers that have helped generate scale by attracting nearly three million free members since its launch.

“We have started the year well and are on course to deliver stronger organic revenue growth as we move through the year,”  Experian chief executive Brian Cassin said.

“Looking ahead, we continue to expect good levels of growth for the year, with organic revenue growth in the mid single-digit range and stable margins as we invest in our operations and growth initiatives.”

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