Seek posts revenue growth but coronavirus impact causes uncertainty
Seek has posted strong revenue growth despite the spread of coronavirus and weak economic conditions in Australia and Hong Kong.
The employment website said it was "impossible" to forecast the impact of coronavirus on full year earnings as net profit fell by 24 per cent to $75.6 million.
Seek CEO Andrew Bassat said it was too early to tell the impact of the coronavirus.Credit:Eamon Gallagher
Despite uncertainty on the financial impact of coronavirus, Seek's revenue climbed by 16 per cent to $875.5 million, driven by growth form premium offerings, while earnings before interest, tax, depreciation and amortisation (EBITDA) climbed by 4 per cent to $247 million. Chief executive Andrew Bassat said the company was operating below its "true earning potential."
"Our near-term results will be impacted by the coronavirus, softer economic conditions and our investment bias," Mr Bassat said.
"Due to these factors, we are significantly under-earning relative to our true earnings potential. Over time we expect China and the rest of the world to return to more normal conditions, and are confident that our long-term strategy and aspirational targets remain intact.
Revenue was flat in Australia and New Zealand, despite growth in premium offerings while revenue from Asia operations was hit by a weaker economy, particularly in Hong Kong.
At August's annual general meeting, Seek confirmed guidance for the 2020 full year of 15-18 per cent revenue growth, net profit of $145 million to $155 million and a increase of 8-11 per cent in EBITDA. However, the company said it could not reliably update guidance for the full business, due to an inability to predict the impact or recovery from the Coronavirus particularly in Zhaopin, China.
An interim dividend of 13 cents will be paid on April 9.
In morning trade on Tuesday, Seek shares are 1.8 per cent lower at $22.00. The wider market is 1.8 per cent lower.
More to come
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