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Australia – Increased job ads could lead to SEEK upgrading full year forecast

28 November 2013

Australian job board SEEK Ltd (SEK: ASX) reported a slight increase in the number of online job advertisements in the past few months, which could see it deliver a stronger than expected earnings result this financial year, reports sbs.com.au.

SEEK had been experiencing a flat to gentle decline in the number of job adverts posted on its websites each month up to the end of June 2013. However, according to company CEO Andrew Bassat, the company has recorded an improvement in recent months. "Based on the first four months of the financial year, we are observing improving trends with flat to gentle increases in ad volumes on a month-on-month basis.”

This could mean good news for job seekers, as the unemployment rate in Australia is currently sitting at 5.7% and many economists expect it to push above 6% next year.

Mr Bassat said a continued improvement in job adverts numbers could lead the company to upgrade its earnings forecast for the 2013/14 financial year. The company had previously forecast growth on its 2012/13 revenue, earnings and underlying profit, which was AUD 141 million (USD 128.4 million).

At SEEK’s annual general meeting today, company chairman Neil Chatfield provided a trading update to the company’s shareholders, highlighting the company’s +40% annual revenue growth compared with last year.

Speaking at the event, Mr Chatfield said: “The drive and passion of the entire SEEK team remains strong today. This is evident in the past year with SEEK’s continued investment in Zhaopin, our China business, moving to a controlling stake during the financial year. We also increased the size of our controlling stake in JobsDB, our South East Asian business. In addition, we invested in the African market with our acquisition of a 25% stake in One Africa Media.”

SEEK also announced plans to float its international student recruitment business IDP Education in 2014. The recruitment business is 50% owned by SEEK, with the rest of the ownership spread between 38 Australian universities.

IDP chief executive Andrew Thompson said an initial public offering (IPO) would set the business up for future growth. "The IPO will provide a more flexible capital structure for future growth and provide IDP shareholders an opportunity to realise a portion of their investment in the company."

Following the company’s annual general meeting today, the company’s share price rose by +5.9% to AUD 13.13 (USD ), an increase of +100.6% compared with a year ago. Based on its current share price, the company has a market value of AUD 4.45 billion (USD 4.05 billion). 

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