The SEEK Limited (ASX: SEK) share price is trading broadly flat this afternoon after the release of its annual general meeting presentation.
What did SEEK speak about at its annual general meeting?
As well as giving investors a summary of its performance in FY 2020, the company provided an update on current trading conditions and its guidance for the new financial year.
In respect to current trading, SEEK revealed that its performance financial year to date has been far stronger than it was expecting.
According to the release, group revenues are well above the assumptions underlying its illustrative scenario provided with its FY 2020 results.
It notes that the SEEK ANZ, OES, and Zhaopin businesses have all performed well above these assumptions. And while the SEEK Asia is also performing better than expected, it is to a lesser extent compared to the other businesses.
Management notes that this revenue growth has been driven by a mix of rehiring of roles lost during previous months, and growth in some sectors.
The company’s Early Stage Ventures (ESV) segment continues to perform well, which has increased management’s conviction levels to re-invest.
FY 2021 guidance.
Management notes that forecasting remains challenging given the ongoing uncertainty in all markets caused by COVID-19 restrictions, overall business confidence, and FX rates.
Furthermore, its ad volumes have responded quickly to changes in COVID-19 restrictions, both positively and negatively, and yields are also sensitive to the sectors in which activity occurs.
Nevertheless, the company is providing guidance for FY 2021, based on a number of key high level assumptions.
These include COVID-19 restrictions remaining consistent with current conditions across key markets, hiring activity remaining broadly in line with current levels, the usual seasonal fluctuations, and its investment increasing above what was initially assumed to reflect its stronger revenue performance.
Based on this, SEEK is expecting its revenue to be in the order of $1,600 million in FY 2021 and EBITDA to be in the order of $400 million.
This compares to its previous illustrative FY 2021 guidance of revenue of ~$1,470 million and EBITDA of $330 million and FY 2020’s revenue of $1,577.4 million and EBITDA of $414.9 million.
SEEK’s chairman, Graham Goldsmith AO, commented: “As I look out over the coming years, whilst COVID-19 has created near-term economic challenges, this does not fundamentally change our long-term aspirations. I am confident that if our management team, led so ably by CoFounder and CEO Andrew Bassat, continue our long-term focus and execute well, we will unlock large new revenue pools and create significant long-term shareholder value.”