Australia job board Seek (ASX: SEK) provided a trading update today on its businesses including Seek ANZ, Seek Asia, Zhaopin and other businesses. 

This update follows the job board’s previous April update.

The group’s Seek ANZ and Seek Asia businesses experienced sharp billing declines through the last two weeks of March 2020.

More recently, in April 2020, the group saw a stabilisation of the rate in billing declines for these businesses in the range of -65% to -70% vs the prior corresponding period (pcp).

Since early May 2020, there has been a consistent trend of improving weekly billings and in June 2020 Seek added that it is now observing weekly billing declines that are in the range of -40% to -50% across SEEK ANZ and SEEK Asia vs pcp, signaling sustained improvements in billing results since March 2020.

As the group disclosed in its 6 April 2020 announcement, for the month of February 2020, billings

were around -60% lower than Zhaopin’s pre-coronavirus expectations. Since early March 2020 the group has observed improvement in billings as China emerged from coronavirus restrictions and returned to more normal conditions. The improvement in billing trends has continued throughout April and May 2020 where billing declines have improved to around -10% vs pcp in May 2020.  Seek added that since the outbreak of the coronavirus, Zhaopin’s prudent cost management and efficiency programs have mitigated the impact to EBITDA.

In its other businesses, the group reported as follows:

• LatAm: Billing trends have been significantly impacted by the coronavirus
• OES (Online Education Services): Continues to perform well and has not been negatively impacted by the coronavirus
• ESVs (Early Stage Ventures): 'Our investments across Online Education, HR SaaS (Software as a Service) and Contingent Labour are performing well and the overall portfolio is achieving strong revenue growth vs pcp’, the group stated.

The group also published its best estimate for its FY20 results. It forecasted revenue of approximately AUD 1.575 billion (USD 1.0 billion) and EBITDA of AUD 410 million (USD 280.5 million).

“Seek’s best estimate is broadly in line with the illustrative example that was disclosed in SEEK’s ASX announcement on 6 April 2020,” the group stated. “This is a best estimate only to keep the market as well informed as possible, is subject to audit, and may vary to the above based on a range of factors including FX, second wave impacts of the virus in key markets, macro conditions and business performance.”

In its trading update Seek also announced that it expects to recognise an aggregate non-cash impairment charge of AUD 190 million to AUD 230 million (USD 129.9 million to USD 157.3 million) relating to Brasil Online, OCC Mundial and four non-core minority investments for FY 2020. The impaired minority investments are all outside Seek’s core focus areas of Online Education, HR SaaS or Contingent Labour.

“As highlighted in the trading update, Seek’s larger businesses are recovering well and the majority of our ESVs are performing well despite challenging conditions. However, the virus has had a devastating economic impact across Brazil and Mexico. We have also seen a deterioration in the financial outlook for four minority investments that operate outside our core themes,” the job board stated.

As a result of the non-cash impairment charges, Seek said it will recognise a net loss after tax in FY 2020.

The group also published a capital management update and announced that it had increased funding flexibility.