Seek Confirms Softer Result As China Story Leaves Investors Cold

By Glenn Dyer | More Articles by Glenn Dyer

Online recruitment group Seek was another leading company (like IAG last Friday and Downer EDI, also yesterday) to confirm previously announced write-downs, losses, and impairments, and no final dividend.

The group’s 2019-20 results were in line with last week’s trading update.

The market though didn’t like the figures, again and also didn’t warm to an attempt by management to hint at an improvement in its Chinese based business.

Seek claimed there were signs of a post-pandemic recovery in its China business Zhaopin but said it is impossible to accurately forecast the duration or shape of the recovery out of COVID-19.

The shares fell and ended the day at $19.58, down 8.6% on a day when the wider market was in the red.

Seek confirmed a loss of $111.7 million for the year to June 30, down sharply from the $180.3 million profit reported a year ago.

Earning before tax and interest fell 9% $40.1 million to $414.9 million for the 2020 financial year.

The company said the fall was a direct result of the pandemic throwing the global economy into recession that dried up the jobs market.

Total revenue rose 2% over the year to just on $1.6 billion.

SEEK chief executive Andrew Bassat said near-term profits would continue to be adversely affected while the pandemic lasted.

“The current macro outlook is highly uncertain,” he said on Wednesday.

“Our near-term profits will be impacted by COVID-19, but our focus is on executing and investing for the long term. We are confident our investment and long-term focus is the right approach as SEEK’s revenue opportunity remains large and under-penetrated.”

SEEK said it was unable able to provide financial guidance for the 2021 financial year while the global macroeconomic environment remains highly volatile and unpredictable.

Mr. Bassat said SEEK’s ability to return to normal operating conditions would be highly dependent on the shape of the economic recovery.

But the company did float a ’scenario’ where seek achieved revenue of $1.47 billion and net profit of $20 million in 2020-21.

That’s more a wish and hope at the moment and would preclude dividend payments for the next year as well.

Glenn Dyer

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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