Seek [ASX:SEK] Releases Trade Update and Lowers Guidance

Australian job listing and advertising online service Seek [ASX:SEK] posted lower 2023 revenue expectations than initially anticipated, claiming the difference could drop $15 million, to around $1.24 billion.

Seek said job ad volumes have continued soft, weakening the group’s earnings, yet it also expects to gain some traction through lowering operating costs.

EBITDA (earnings before interest tax, depreciation, and amortisation) and annual net profit guidance, however, will remain the same.

Despite the dip in expectations, the employment site saw its shares holding relatively strong, moving up very subtly more than 1% hours later.

Trading for around $24.21 at the time of writing, SEK has jumped 15.5% in the year so far, even though it’s down 18% in its sector, and below the wider market’s rolling 12-month average by 12.5%:

ASX:SEK Stock Chart News 2023

www.TradingView.com

 

Seek drops revenue guidance

Australia’s leading online job classifieds service Seek put out a short and sharp update to its trading and guidance, involving a revision to its expected revenue for the full-year fiscal 2023.

Seek said that while its FY23 EBITDA and net profit after tax guidance — previously released in the first half of the financial year — has remained the same, the company revealed that unfortunately, the same could not be said of its overall revenue for the full year.

Seek stated:

Based on trading momentum for the third quarter, revenue for the full year may be slightly lower than assumed in our guidance (approximately A$15m lower) due to continued moderation of job ad volumes.’

Despite a lowering of initial guidance by $15 million, which takes the group’s expected revenue total to around $1.245 billion, the employment classifieds listing service did state that at this stage, it expects this to be offset by also lower-than-presumed operating expenditure.

As is stands, Seek listed its current predictions for the business outcomes as:

  • UPDATE: Revenue of approximately A$1.245bn

  • AFFIRM: EBITDA of approximately A$560m

  • AFFIRM: NPAT of approximately A$250m

Seek released the guidance summary as a separate update to its investor presentation, which was also given today.

Highlights from the company’s investor presentation included a 10–20% increase in job ad views, 13% compound growth rate in collective Seek EBITDA since 2018, and the aim for $2 billion in revenue by FY28, driven by growth in New Zealand and Asia.

The employment service expects the labour market in Australia and NZ to grow 1.2–1.4% at a compound annual growth rate over the next five years.

At the height of the pandemic, unemployment rates in Australia escalated 7.5%, however, it now sits at a low of 3.4%.

Interestingly, a low-unemployment rate is linked to a strong economy, but it can also add to inflation as wages rise to placate workers.

Is it possible this is adding to the struggle in Australia’s fight against inflation? There could be many factors at play, but it could certainly have a hand in slowing the deflationary process.

Read on to learn more about the direction of Australia’s economy…

ASX:SEK Seek Graph

Source: Seek

 

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Regards,

Mahlia Stewart

For The Daily Reckoning

 

 

 

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