SEEK’s Share Price Rockets on Fat Profits

Australian employment data for February was announced only a week ago. The unemployment rate increased from 5.8% to 6%. Normally, this would be bad news. If more people are unemployed, then spending decreases and the Australian economy suffers.

Yet this is not bad news if your business is based on people looking for work. The job site SEEK [ASX:SEK] managed to increase reported NPAT by 50%, to $275.1 million. SEEK CEO, Andrew Bassat, said:

SEEK has achieved strong half year results while maintaining a focus on re-investment and operating in subdued macro conditions.

SEEK’s Australian and New Zealand revenues grew by 15%, while EBITDA climbed 18% over the prior corresponding year. SEEK has a clear strong hold on the market with 33% of all ad placements. This is eight times higher than the nearest competitor.

And internationally it posted even more impressive figures. Revenue growth increase by 34% and ‘in volatile macro conditions, the International division achieved EBITDA growth of 36%,’ Bassat said. He continues:

The outlook is exciting as we operate market leaders in high growth markets across 14 countries. The markets are also exposed to favourable long-term structural trends.

SEEK was also successful in floating IDP, their education business. It realised gross proceeds of $332 million from the IDP IPO. The sale represented a ninefold cash return on original investment, which can be boiled down to one word — successful.

SEEK’s result announcement saw their share price soar. It’s one of the biggest gainers on the ASX 200 today. Shares were up more than 10% this morning, trading at a high of $14.70 per share.

Seek share price

Source: Yahoo Finance

What’s next for SEEK

SEEK is Australia’s most favoured job site. But SEEK are planning to position themselves in internationally growing markets. ‘We are uniquely positioned to capture large market opportunities across the human capital management industry. SEEK’s strong market position combined with our rich data and insights means we are well positioned to develop new products and services that deliver significant value,’ Bassat said.

Yearly revenue growth for FY16 is expected to be in the range of 15–18%, with EBITDA in the 5–8% range. The year ahead is definitely looking bright for SEEK. First-half FY16 dividends grew by 11% compared to prior corresponding year. And if SEEK can continue to exceed targets, dividends might have no other choice but to go up.

Härje Ronngard,

Junior Analyst, Money Morning

PS: The Australian market is still down for the year. Amid all the pessimism, it’s becoming harder to pick winners. Staying on top of market news can also be tiresome. As soon as you think you’re up to date, something new gets reported. Some people just don’t have the time or knowledge to analyse every company in detail.

Thankfully, Money Morning’s Kris Sayce is here to help. Kris has written a report, ‘The Five Best ASX Stocks for 2016’, to point investors in the right direction. In Kris’ report you’ll learn why retailers are set for a revival. He also lets you in on a sneaky way to play the Australian property market.

If you want to find out the above and more, pick up Kris’ report today. To get your free copy, click here.


Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

Money Morning Australia is published by Port Phillip Publishing, an independent financial publisher based in Melbourne, Australia. As an Australian financial services license holder we are subject to the regulations and laws of Corporations Act and Financial Services Act.


Leave a Reply

Your email address will not be published. Required fields are marked *

Money Morning Australia