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Seek Releases Robust Half-Yearly Results

Seek Releases Robust Half-Yearly Results
SEEK remains optimistic with its full year outlook
Feb 25, 2016 By Ben Khouri Tags: SEK

Seek Ltd (ASX:SEK) has released its earnings results for the half-year ending 31st December 2015. Attributable to gains in international and domestic revenue, the job recruiting agency reported upbeat financial results.

Revenue up 22%

Over the period, the recruiting agency reported a 22% growth in revenue to the PCP, to A$482million. Posting an A$86.7million rise in revenue to the prior period. Excluding the successful sale of IDP Education for A$330million in late 2015, the company reported Underlying NPAT growth of 9% for the period, to A$102.4million. EBITDA for the period grew 15%, to A$193.3million.

Seek International revenue was the key contributor to the results, growing 34% for the period, to A$298million. With Chinese revenue expanding 19% (on a Constant Currency basis), to A$166.3million. However, the appreciation of the AUD against the Brazilian Real negatively affected Brazilian revenue, down 4% (on a Constant Currency basis), to A$46.5million. Moreover, Australia and New Zealand revenue grew 15% for the period, to A$151.8million.

Operating cash flow was A$146.5million, a 28% improvement for the period.

CEO and Co-founder Andrew Bassat positively commented on the results: “SEEK has achieved strong half year results while maintaining a focus on re-investment and operating in subdued macro conditions. SEEK is also re-investing in new products and services which have significantly increased our value proposition to hirers and candidates.”

Additionally, SEEK Learning revenue had contracted 24% for the period, to A$30.6million (H1FY15: A$40.2million). However, the company remains optimistic with this segment, believing it is in a transition period, expecting the business to resume a trajectory of solid earnings growth in the medium to long term.

11% Dividend Growth

The board has declared an interim fully franked dividend of $0.21cents per share. Representing 11% growth in the dividend to the prior corresponding distribution period (April 2015: $0.19cents).

The Ex-Dividend and Payment date are on the 5th and 27th April 2016 respectively.

Outlook

SEEK remains optimistic with its full year outlook, with reported FY16 revenue growth to be between 15-18%, along with reported EBITDA growth between 5-8%. Reported NPAT (before significant items such as the profit on the IDP sale) is forecasted to be approximately A$195million.

Investors have reacted positively to the results, with SEK surging over 6% (As at 10.33am AEDT), to $14.13.

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Ben Khouri Author: Ben Khouri Feb 25, 2016

Ben Khouri is a financial editor for Wise-Owl with a particular focus on the top ASX 300 companies. Having a vast background in economics and finance, Ben provides financial commentary & analysis as well as global market updates, which guide investors in devising investment strategies. Ben specialises in analysing economic data and global events from around the world and examines the impacts they have on the major equity markets.

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