Morning Note: Market News and an update from Experian.

Market News

The EU prepared a €72bn list of countermeasures targeting US goods, including Boeing aircraft, cars, and bourbon. Earlier, Donald Trump indicated he’s open to more trade talks, including with the bloc. Trump is also set to announce $70bn in AI and energy investments in Pennsylvania today.

US equities rose last night – S&P 500 (+0.1%); Nasdaq (+0.3%) – and have pushed on in the futures market this morning buoyed by news that Nvidia expects sales of its H20 chip to China will resume based on assurances from Washington that shipments will be approved. That’s a surprise reversal from the White House after it had banned exports in April. The recent strength of the US dollar continued, while gold rose to $3,362 an ounce. Brent Crude fell back below $70 a barrel. Core US inflation is due to be released later today.

In Asia this morning, equity markets were mixed: Nikkei 225 (+0.4%); Hang Seng (+1.0%); Shanghai Composite (-0.5%). Japanese Government Bonds (JGBs) were under pressure with the 30-year yield climbing to a record and the return on the 10-year note at the highest level since 2008. While China’s economic growth (+5.2%) beat estimates on strong exports, consumer demand, in particular retail sales, remained weak.

The FTSE 100 is currently little changed at 8,998, while Sterling trades at $1.3440 and €1.1510. UK retail sales jumped 3.1% in June, bolstered by strong sales of food and sports equipment, the BRC reported. Chancellor Reeves will address the City for the first time since her tearful Commons appearance jostled markets. Bankers will be on guard during the Mansion House speech for signs she’s planning a tax on the wealthy.

JPMorgan, Wells Fargo, and Citi kick off Wall Street earnings, with record trading from Trump’s April tariff shock expected to provide a boost. JPMorgan may raise its forecast for net interest income. Citi investors will focus on expenses and capital management.

Source: Bloomberg

Company News

Experian has today released results for the three months ended 30 June 2025, the first quarter of its financial year to 31 March 2026. Performance was strong and the company reiterated its guidance for the full year. In response, the shares have been marked up by 3% in early trading.

Experian is a global information services company that helps businesses to manage credit risk, prevent fraud, target marketing offers, and automate decision-making. The group also helps individuals check their credit report and credit score and protect against identity theft. The company has credit data on 1.4bn people and 190m businesses. The ownership of such rich, unique, and valuable data has become more important in an increasingly digital world and the group is targeting a total addressable market of more than $140bn.

Experian operates an attractive business model where its customers supply the company with raw credit history data for free. The bureau aggregates it, applies analytics and tools, and sells it back to the customers as a credit report. The industry operates as an oligarchy with high barriers to entry because of large historical databases and regulatory know-how.

The company has shifted from simply selling data to selling enhanced decision tools and analytics software which are essential in automating customers’ decisions, helping to reduce costs, and managing risk. As a result, customer relationships are very ‘sticky’, with renewal rates of 90%, and revenue is very resilient. The business has a long history of weathering uncertainty – notably, revenue grew in organic terms in both 2008 and 2020. Although credit application volumes slow in a recession, we believe the company has a natural hedge of risk management and asset protection products, as well as exposure to healthcare and other defensive segments.

Regarding the potential opportunities and threats posed to the business by AI, we believe the company is well placed given its hard-to-replicate proprietary datasets with scope to accelerate product innovation and increase operational efficiency, ultimately enhancing margins. In the last financial year, the company made good progress on its cloud programme, with significant new products and Generative AI features launched.

In the latest quarter, the group delivered revenue growth of 12% at constant exchange rates. In organic terms (i.e., underlying before M&A), growth was 8%, at the top-end of its full-year guidance range of 6%-8%. Growth was driven by new product innovation, client wins, and consumer expansion.

The group saw growth in every region. In the group’s largest division, North America, which accounts for two-thirds of revenue, organic growth from ongoing activities was 9%. Financial services generated strong growth, while Consumer Services delivered underlying organic revenue growth of 11%. Elsewhere, Latin America and EMEA/Asia Pacific grew by 5% and 7% respectively. Growth in the UK & Ireland was only 1% as a subdued economic environment continued to weigh on growth.

By division, B2B revenue (73% of the total) was up 8% in organic terms. Within B2B, Financial Services and Verticals were up 9% and 6%, respectively. The Consumer Services unit (27% of revenue) grew by 6% in organic terms, driven by 24% in Latin America as strong growth in the Brazil credit marketplace. The company now serves over 200m free members.

This was a revenue update, so there was no commentary on profitability or the group’s financial position. As a reminder, the business is very cash generative, and the company ended its financial year to 31 March 2025 with financial leverage of 1.8x net debt to EBITDA, at the lower end of the target range of 2.0x-2.5x.

Cash flow is sensibly reinvested in organic and strategic investments that generate attractive returns. The company has a good track record of growing its dividend – in the last financial year, the payout was raised by 7% – and is buying back its own shares, with up to $200m expected to be repurchased in the current programme.

For FY2026, the group continues to expect to deliver organic revenue growth in the range of 6%-8% (with total revenue growth of 9%-11%) and margin expansion in line with the group’s medium-term framework of 30-50 basis points, at constant currency.

Looking further ahead, the company expects the combination of economic recovery, continued new product and vertical market expansion, as well as productivity gains from technology cloud transition to drive strong financial performance.

Source: Bloomberg