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Australia – Rising costs temper SEEK’s full year profits

20 August 2014

Australian job board SEEK (SEK: ASX) reported revenue of AUD 724.2 million (USD 675.3 million) for the year ending 30 June 2014, an increase of +37.4% compared with AUD 527.1 million (USD 491.5 million) last year.

The company achieved a profit from continuing operations of AUD 198.4 million (USD 185 million), a sharp decline of -44.8% against AUD 308 million (USD 287.2 million) a year ago. The company’s profit was negatively impacted by increased operating expenses linked primarily to cost of service, sales & marketing, and business development.

SEEK reported a full year profit of AUD 223.4 million (USD 208.3 million), a fall of -28.8% against AUD 313.7 million (USD 292.5 million) in 2013.

Andrew Bassat, CEO and Co-Founder of SEEK, commented: “We’re pleased to announce another record result with all divisions performing well in moderate economic conditions. In the last 12 months, significant progress has been made in completing complex M&A, as well as the roll-out of key product initiatives to support the placement strategy. These activities are all central to SEEK’s evolution and long-term aspirations.”

SEEK’s domestic operations across Australia and New Zealand are divided into two segments: Employment and Learning. Revenue from SEEK Employment rose by +3% to AUD 241.2 million (USD 224.9 million) from AUD 234.9 million (USD 219 million) in 2013.

SEEK Learning reported revenue growth of +43% to AUD 87.7 million (USD 81.8 million), up from AUD 61.3 million (USD 57.2 million) in 2013.

SEEK International owns interests in several international job boards; including Zhaopin (China), JobsDB (Bangladesh), Brasil Online (Brazil), and OCC (Mexico). SEEK International investments Pty Ltd, holds a 68% stake in Zhaopin.

Total revenue from SEEK International rose to AUD 384.4 million (USD 358.4 million) during 2014, an increase of +71% compared with AUD 224.7 million (USD 209.5 million) last year.

During the year, Chinese job board Zhaopin was successfully listed on the New York Stock Exchange. SEEK also reached an agreement with Malaysian job board JobStreet on a revised purchase consideration for JobStreet of MYR 1.89 billion (USD 598.5 million). The deal is targeted for completion by the end of September 2014.

By business segment, operating revenue from JobsDB increased by +16% to AUD 59.4 million (USD 55.4 million) from AUD 51.3 million (USD 47.8 million) a year ago. Brasil Online reported revenue growth of +8%, with operating revenue rising from AUD 109.7 million (USD 102.3 million) in 2013 to AUD 118.8 million (USD 110.8 million) this year.

Mexican job board OCC reported revenue of AUD 22.3 million (USD 20.8) million during 2014, an increase of +62% compared with last year. Zhaopin was only consolidated in SEEK’s results for four months last year, making year-on-year comparisons impossible. However, the business reported revenue of AUD 183.9 million (USD 171.5 million) in 2014.

In trading today, the company’s share price closed down -1.7% at AUD 16.72 (USD 15.59), an increase of +81.7% compared with a year ago. Based on its current share price, the company has a market value of AUD 5.7 billion (USD 5.3 billion).