The SEEK (ASX: SEK) share price is up after providing an update at its annual general meeting (AGM).
SEEK is an online employment business that matches job seekers and employers together. It is also used by hiring agencies to build a portfolio of candidates. SEEK operates in a list of countries including Australia, New Zealand and China. SEEK also offers online education services and volunteering opportunities for not-for-profits.
SEEK’s AGM
SEEK reminded investors that in FY19 it increased its total revenue by 18% to $1.54 billion. Net profit excluding significant items fell 7% to $184.4 million, including significant items it jumped 245% to $180.3 million. Underlying net profit was flat at $229 million.
The company has also told investors that it’s going to reduce its dividend payout ratio to between 30% to 50% of cash net profit, the previous payout ratio was 50% to 60% of cash net profit. Cash net profit in FY20 is expected to be similar to FY19, so a dividend cut seems to be on the cards.
Trading Update
SEEK said that economic conditions are weak in a number of SEEK’s key markets of Australia & New Zealand, Asia and China. But despite these hard conditions, SEEK has reaffirmed its FY20 guidance that was provided along with its FY19 result. However, if economic conditions worsen it may mean FY20’s guidance can’t be met.
Compared to FY19, SEEK expects to grow 15% to 18% in FY20. SEEK’s EBITDA (click here to learn what EBITDA means) is predicted to grow by 8% to 11%. Depreciation & amortisation is expected to be in a range of $135 million to $140 million. Ultimately, reported net profit is expected to be between $145 million to $155 million.
SEEK said that it’s taking the long term approach and investing aggressively to capture large revenue opportunities which will grow its overall defensibility. The company is aiming for a $5 billion aspirational revenue target over the long term.
[ls_content_block id=”14947″ para=”paragraphs”]
[ls_content_block id=”18380″ para=”paragraphs”]
