Profits: SEK, REA

By Glenn Dyer | More Articles by Glenn Dyer

The market once again took a shine to the annual result from online jobs group, Seek.

It reported a 62.8% rise in net profit for the 2007 year and directors say they remain confident of future employment conditions and growth prospects.

Net profit increased to $55.5 million for the year to June 30, from $34.1 million in 2006.

The shares rose 58c at one stage before settling back to be up 33c, or 5% at $7.492.

SEEK, which is 27% owned by PBL, said sales revenue hit $157 million compared to $106.2 million in the previous year.

Earnings before interest, tax, depreciation and amortisation rose strongly to $80.3 million, from $49 million. That gave an EBITDA/sales margin for 2007 of 51c in the dollar, compared to 43.3c in 2006, a significant improvement.

"We have continued to enjoy strong growth over the past 12 months and have increased our market leadership position," joint chief executive, Paul Bassat, said.

"SEEK continues to lead the market in unaided awareness, ad volumes, unique browsers and market reach."

Mr Bassat said a "structural shift" was taking place in the Australian classifieds market, and it was likely to follow the US, where 38% of employment advertising is online.

That compared with Australia's 23% and underpinned the rosy outlook.

"Growth opportunities are still evident in the SME (small and medium enterprise) market and a focus on customer acquisition and retention is central to our growth strategy for the year ahead," he said.

"Increasing our market penetration in QLD, SA and WA as well as the Government and Healthcare sectors are also high on our agenda.

"SEEK Learning has performed well during the year, recording a 52.7% revenue growth. We have invested heavily this year in expanding our course breadth, sales and lead generation capability.

"The return on our 50% investment in IDP Education Australia this year has exceeded expectations and Zhaopin Limited is performing in line with expectations and increasing market share.

"Overall, we remain confident that SEEK is well placed to capitalise on the current strong employment conditions and to pursue identified opportunities for growth", he said.

The Board has declared a final dividend of 7.7 cents per share, fully franked, an increase of 60.4% from the dividend of 4.8 cents paid in the corresponding period last year.

That took the annual dividend to 13.7c from 8.5c in 2006 which is more than adequately covered by earnings per share of 19.6c (12.1c).

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News Ltd associate, RealEstate.com.au Ltd reported an 83.2% rise in net profit in 2007, spurred by the rising number of online property searches and rental inquiries.

The company said yesterday in a statement to the market that net profit was $15.1 million, compared to $8.2 million in 2006.

"Our mission is to be the leading provider of online property portal sites and agent software solutions in the global markets we consider attractive and therefore benefit from the rapid growth in online advertising, which is still in its early stages," chief executive and managing director Simon Baker said in statement.

"In the coming year we will continue to improve our existing operations while looking for opportunities to enter new markets."

"The Group's most important market is Australia." The flagship Australian site, Realestate.com.au, continues to increase the distance between itself and its competitors."

The company said that, according to Nielsen/NetRatings, in June 2007, the site had 100 per cent more unique browsers than the country's second site, the Domain.com.au site of Fairfax Media.

The company's revenue rose strongly, up 77% to $107.9 million from $60.9 million in 2006.

Earnings before interest, tax depreciation and amortisation (EBITDA) gained 76 per cent to $23.5 million.

The company also operates in Britain, Italy and Luxembourg but the heart of the business is in the Australian property search market where most of its services revenue came from, $86.6 million.

REA said the number of real estate subscribers, the company's core customers, increased by 59%

Senior News Ltd executive, Richard Freudenstein replaced Sydney real estate agent, John McGrath, as chairman during the year. The Ray White chain of real estate agents is also closely allied to REA.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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