Experian released its half year figures to 30 September 2012 this morning. Aside from the perfunctory stuff at the front, there are four factors towards the back which I reckon should be the
Operating cash flow in H1 2013 was $433m, marginally down
from $439m in H1 2012 (Mar yr-end). The group highlights that cash flow is
seasonally weaker in the first half, but still this doesn’t fully explain why
it should be lower than the prior year period. This is highlighted by the cash
flow conversion being 73% in H1 2013, compared to 79% in H1 2012.
The group is laying out its stall for $110m of “one-off
restructuring costs.” Further, the majority of this is suggested to be in cash.
$9m of this impacted the H1 cash flow statement, so it would seem the remaining
$101m will impact in H2.
Net capex and spend on intangibles (software, databases etc)
continues to climb higher. Expenditure on these items rose to $218m in H1 2013,
compared to $198m in H1 2012. This equated to 9.5% of sales, while it equated
to 9.2% of sales in H1 2012, and 7.2% of sales in H1 2011.
Despite “benchmark” profit again rising, when stripping out
goodwill and intangible items, the group’s balance sheet continues to weaken.
Net tangible LIABILITIES totalled $2,463bn in H1 2011, $2,645bn in H1 2012,
$2,814bn for FY 2012 (Mar yr-end), and rose to $3,187bn in H1 2013. In the
light of the loss of shareholder value attributable to PriceGrabber and
LowerMyBills, I would be cautious as to the carried value attached to the goodwill and
intangibles the group reports arriving at its total net asset figure.
|EXPN share price|
|EXPN current P/E and EV/EBITDA|
|EXPN consensus 2013 earnings momentum and share price|
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