Seek (SEK) | SNAPSHOT
Profile: Seek (SEK) operates employment portals around the world, such as seek.com.au in Australia and Zhaopin in China, which allow hirers to advertise jobs and find employment candidates. They also allow job seekers to search for job vacancies. Seek also operates and invests in several employment-related business, including education and training websites such as Coursera.
History: SEK was established in 1997 by brothers Paul and Andrew Bassat (the current CEO of SEK) as well as Matthew Rockman. In the following year, www.seek.com.au was launched. SEK listed on the ASX in 2005. In 2006, SEK acquired a 24% stake in Zhaopin, increasing its stake to over 60% over time. Zhaopin was privatised and delisted from the NYSE in October 2017, with SEK holding a 61% stake in the privatised business. In April 2019, Seek acquired 50% of FutureLearn for c.A$92m and a minority interest in Coursera for c.A$50m.
Earnings composition: The Asia Pacific and America’s (AP&A) segment generated $351m, or 73%, of FY19 EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation). This segment includes businesses which SEK expects to see “reliable growth in revenue and earnings” and contains the ANZ business ($270m FY19 EBITDA), SEEK Asia ($91m) and the Latin America businesses of Brasil Online and OCC (Online Career Centre). The Seek Investments segment, which generated $129m EBITDA, includes Zhaopin ($99m), Online Education Services and Early Stage Ventures. These investments are more growth-oriented rather than short-term profit-oriented.
Most recent result – FY19: EBITDA increased 6% (3% on a constant currency basis) on the prior corresponding period (pcp) to $455m. This was driven by 15% growth in Seek Investments (13% cc) to $129m, with Zhaopin (the largest contributor to the segment) growing 18% on the pcp to $99m. Zhaopin revenue growth was 38% on the pcp, with EBITDA margins moderating as a result of reinvestment in the business. AP&A grew 3% (4% cc) to $351m. Seek ANZ grew 8% on the pcp to $270m. SEK noted the 8% growth was despite weaker macroeconomic conditions, and aided by a 26% increase in depth revenue – which is revenue from advertisers paying higher prices for more prominent advertisements.
Company guidance: SEK expects revenue growth of 15-18% and EBITDA growth of 8-11% in FY20. Depreciation and amortisation is expected to be A$135-140m. Reported NPAT is expected to be A$145-155m.
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