Experian hails record FY, announces $1bn buyback but shares fall on outlook

(Sharecast News) - Experian announced a $1bn share buyback on Wednesday as it hailed a record full year, but shares in the credit-checking firm slumped amid disappointment over its guidance for revenue growth. In the year to the end of March, statutory pre-tax profit rose 26% from the previous year to $1.95bn on revenue of $8.45bn, up 12%, with all regions contributing to organic revenue growth. North America delivered growth of 10%, while organic revenue grew 8% in Latin America and 2% in the UK and Ireland. EMEA and Asia Pacific saw revenue grow 5%.

Experian lifted its dividend by 11% to 69.25 cents. Benchmark earnings per share grew 15% to 179.8 cents and the company announced a further $1bn share buyback programme.

Chief executive Brian Cassin said: "FY26 was a record year for Experian, with performance at the upper end of our expectations and strong strategic momentum. We delivered benchmark EPS growth of 15%, reflecting operating leverage ahead of guidance, alongside 13% total and 8% organic revenue growth, at the top of our guidance range. We also achieved another year of very strong post-tax return on capital employed, at 17.2%.

"Given the strength of our performance, cash generation and balance sheet flexibility, we have today announced a further US$1 billion share repurchase programme, whilst retaining significant capacity to continue investing in growth opportunities.

"Looking ahead, we expect another year of strong growth in FY27, supported by continued expansion of our addressable markets, successful strategic progress, further productivity gains, and whilst taking a prudent approach to macroeconomic uncertainties linked to the Middle East."

Cassin said the company expects to deliver another year of double-digit benchmark EPS growth, underpinned by total revenue growth of 8-11%, organic growth of 6-8%, and margin expansion at the higher end of its medium-term framework.

The guidance reflects "continued strategic progress, balanced with prudence in relation to the macroeconomic backdrop", the company said.

At 1000 BST, the shares were down 4.6% at 2,585.75p.

Russ Mould, investment director at AJ Bell, said: "As one of the companies caught up in the data and software sell-off unleashed by fears of AI disruption earlier this year, credit rating specialist Experian may have felt it had something to prove to shareholders.

"However, despite unveiling a new share buyback and beating expectations with its full-year results, weaker than expected guidance for organic revenue growth for the current year has put the shares on the back foot. Management has been explicit in saying there is some conservatism baked into this guidance as it eyes a tricky geopolitical backdrop, but investors were still disappointed.

"The combination of concern about AI disruption and regulatory pressures in the US - where there has been talk of a cap on credit card interest rates - have meant it has been difficult for Experian to get the benefit of the doubt from the market.

"There is also a competitive threat posed by Fair Isaac Corporation which is seeking to cut out the middleman and sell its credit scores directly to mortgage lenders. Experian and other credit bureaus have fought back with their own scoring system, VantageScore, but the situation is creating a cloud of uncertainty.

"The company is adamant that AI can be a benefit to the business and boost margins as it allows for growth without an increase in headcount. For now, the jury is out and the market appears to be unconvinced."

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