Like the straitened consumers that are ultimately its customers, Experian is tightening its belt.

With banks continuing to curb lending and carrying out fewer checks on potential borrowers, the FTSE 100 credit reference agency is feeling the pinch and stepping up its cost-cutting accordingly.

Alongside yesterday’s full-year results, Experian said that it is now targeting $110 million (£55.8 million) of cost savings in 2010, $30 million more than before. This should largely come from the rationalisation of its data centres and the shift of additional IT development work to offshore facilities in Chile and India.

That initiative appears prudent, and, together with the contributions from last year’s acquisition of Serasa in Brazil and Hitwise in America, should ensure that profits continue to move smartly ahead. It also relieves some of the pressure on Experian as it seeks a reasonable price for the two businesses that it has flagged for disposal: Pricegrabber, the US price comparison website, and its French transaction processing business.

As for the figures themselves, a 15 per cent rise in operating profits was in line with expectations, with a strong increase in operating margins in its US Interactive operation offsetting weakness in UK marketing services, which has been hit by lower spending in financial services. Meanwhile, Experian’s Latin American and Asian businesses – which now account for 25 per cent of sales – continue to grow strongly.

The worry is in Experian’s outlook for the first quarter of its new financial year, which is as far ahead as it is willing to forecast for now. It expects organic growth to be flat to slightly negative, the first time it has been so since its demerger from GUS two years ago. Its US credit services business has been especially weak, with sales of prescreening checks for credit card issuers – who are more interested in managing existing customers than acquiring new ones – down 20 per cent. This could be seen as either a cyclical low or, more soberly, as a harbinger of worse to come: US and UK credit services still account for a quarter of sales.

Tempus has been a solid holder of Experian on the strength of its market position – No 1 in the UK and No 3 in the US – and the belief that the credit crunch could even stimulate demand for its services. With little sign of that boost and with the shares, at 397p, trading at 14 times current-year earnings, it is time to bale out. Sell.

Britvic

To judge by the poor forecast for the approaching Bank Holiday weekend, now may not be the time to bet on this summer’s weather being better than last year’s. However, should that be the case, Britvic, the FTSE 250 soft-drinks maker, is likely to be among the stock market’s biggest beneficiaries. The company draws 70 per cent of its sales from the second half of its financial year – the six months to September 30 – and faces benign year-on-year comparatives, given that volumes last July were down 20 per cent. That month also felt the effect of the advent of the smoking ban in England and Wales (Britvic has 46 per cent of the on-premises market), and so the recent resilience of pub food sales – to which soft drinks are correlated – relative to beer also augurs well.

As first-half numbers showed yesterday, Britvic is entering its busiest period in good shape. Operating margins improved (despite a 4 per cent rise in raw material costs), The company’s still-drinks business, which includes Robinsons squash, Fruit Shoot and J2O, is growing faster than its peers, earnings per share were up 20 per cent and the interim dividend is being raised 15 per cent. Cost synergies from last year’s purchase of the soft-drinks business of Ireland’s C&C provides an added fillip this year, as will a strengthened euro.

There are concerns – not least the growing consumer backlash against bottled water (Britvic owns Pennine Spring), which the likes of Danone are already feeling. Discounting remains high – revenue growth is trailing volumes – and net debt of £400 million is more than half Britvic’s stock market value. Further, the 14 per cent stake held by Permira still overhangs the shares. However, at 329½p, or 12 times next year’s earnings, offering a 4 per cent yield, the shares are reasonably priced. Buy.

Great Portland Estates

The resilience of the central West End offices market was borne out by Great Portland Estates (GPE), which yesterday reported a 2 per cent annual decline in net asset value per share (NAV) after a 0.2 per cent markdown on the value of its buildings to £1.6 billion. That compares favourably both with Derwent London, its closest listed peer, and with the 20 per cent slide in NAV reported this week over the same period by British Land, the City offices developer. GPE generated total property returns of 2 per cent, beating by 7.4 percentage points the central London benchmark measured by Investment Property Databank.

The strategy of refurbishing to relet at higher rents produced a 33 per cent rise in total rental and joint venture fees to £72 million. Vacancy rates fell from 3.4 per cent to 3.1 per cent while generally in the West End they are at a low of 1.3 per cent.

There is a short-term risk of redundancies in the media and financial services sectors, but with gearing at 35 per cent and £280 million of untapped borrowings GPE is stronger than most.

At 435p, shares in GPE trade at a 25 per cent discount to NAV and yield 2.7 per cent. Worth holding on.

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