Experian benefits from the turmoil
Consumer credit rating agency Experian today showed that even a credit-crunch cloud has a silver lining.
The firm, which has details of 40 million British consumers and 220 million US ones on its books, saw much greater growth in the last three months than the three before. In the quarter from April to June, its revenues excluding acquisitions grew by just 1% but between July and September, they rose by 5%.
Finance director Paul Brooks said: "The banks and other financial services clients are doing very little prospecting for new customers and are concentrating on cross-selling and upgrading existing ones. At the same time, consumers are applying for much less credit because the banks have got so much tighter and are charging more."
But at the other end of the spectrum, demand for Experian's skills is booming. Brooks said: "Rising delinquencies, and people and businesses applying for bankruptcy mean that the banks are paying a lot more attention to their existing loan portfolios.
"They are improving their collection techniques and doing everything to minimise defaults. At the same time, we are also seeing an increased focus on our fraud prevention services."
One major downside from the credit crunch is that Experian has failed to find a buyer for its price-comparison website PriceGrabber, which it put up for sale in February. But it is selling two businesses in France.
It bought PriceGrabber for $485 million (£277 million) in 2005 but has seen growth curtailed as consumer spending slowed. Brooks said: "At first, we had a good deal of interest but as the credit crunch progressed, it became clear we were not going to be able to sell at an acceptable price. PriceGrabber is a good business but it is not a natural strategic fit, so when conditions improve we could be open to offers again."
The French card-processing and business-process outsourcing businesses are being sold to Advent International and Doc@post, part of state-run La Poste, for a total of ¤203 million (£158 million). The two businesses had revenues of ¤240 million last year and earnings of ¤26 million.
