Seek gains on narrowed profit guidance, dividend lift
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More news: Shares in Seek were up nearly 2% to $24.63 in early trading after the job listings platform narrowed its full-year profit guidance and lifted its interim dividend despite a weaker first-half result. It also announced a part sale of its holding in Employment Hero for $95 million.
E&P analyst Entcho Raykovski said while Seek's first-half results were slightly below estimates, the narrowed FY25 EBITDA guidance was consistent with consensus.
"While the result is slightly weaker than Consensus, updated FY25 EBITDA guidance is in line, despite some shift of spend from capex to opex, and with yield growth guidance upgraded, this is arguably a higher quality outcome. The market will also like the Employment Hero sell-down. Based on this, we’d expect the stock to be slightly up today," he said in a note.
Seek profit tumbles as job ad volumes decline
The news: Job listings platform Seek reported a 21% drop in adjusted profit for the first-half of the financial year, as a reduction in job advertisement volumes saw revenue slip.
The numbers: Reported net profit for the six months to December jumped to $139.8 million, however adjusted profit was down 21% to $85.2 million. Revenue was down 4% to $536.2 million. The company will pay an interim dividend of 24 cents a share, up from 19 cents a year ago.
The context: The company said lower revenue reflected a 14% drop in job ad volumes during the period, which was partly offset by an increase in average yield. Volumes were down 12% in Australia, although the rate of decline has slowed across the half year.
“Job ad volumes are relatively stable in Australia, whilst in Malaysia and some of our emerging markets there may be moderate increases. However we expect volumes in New Zealand and Hong Kong to remain weaker,” Seek CEO Ian Narev said.
As a result, the company has narrowed its full-year guidance, with revenue now expected to be between $1.06 billion and $1.1 billion, compared to its previous estimate of $1.02 billion to $1.14 billion. Adjusted profit is now likely to be between $135 million and $160 million, compared to its earlier range of $130 million to $180 million.
The source: ASX announcement
