SEEK (ASX:SEK) share price on watch as revenue falls flat

Why the human resources consulting company is on watch today

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The SEEK Limited (ASX: SEK) share price is one to watch this morning after the human resources consulting company's latest full-year result.

SEEK share price on watch as FY21 revenue falls flat

SEEK this morning reported its full-year results for the period ended 31 December 2021 (FY21). Some of the key takeaways include:

  • Revenue up 1% on the prior corresponding period (pcp) to $1,591 million (+17% to $760 million from continuing operations)
  • Earnings before interest, tax, depreciation and amortisation (EBITDA) up 15% to $474 million (+30% to $332 million from continuing operations)
  • Net profit after tax (NPAT) excluding significant items up 58% to $141 million (+68% to $135 million from continuing operations)

The SEEK share price is one to watch this morning after the Board announced a final dividend of 20 cents per share, fully franked.

What happened in FY21 for SEEK?

SEEK reported Australia and New Zealand (ANZ) as its strongest market during the year. That coincided with record ad volumes in the second half of the year amid easing COVID-19 restrictions. SEEK reported its market position remained strong despite "intense" competition.

SEEK reported 40 million monthly site visits representing 10% growth on pre-COVID-19 levels. ANZ revenue grew 40% to $541 million thanks to a small and medium enterprise (SME)-led recovery.

The Aussie company also launched the SEEK Growth Fund with seed assets of $1,215 million. The fund's purpose is on greater independence to enable long-term, aggressive investment decisions.

What did management say?

SEEK CEO and Managing Director, Ian Narev, had this to say about the results:

Market conditions in FY21 were unprecedented for SEEK. The year started in the depths of the first wave of COVID-19, which then gave way to a strong recovery in Australia, New Zealand, and many Asian markets.

Operationally, revenue in our core businesses grew 17% and EBITDA grew 30%.

The recovery in ANZ job ad volumes began in the second quarter of FY21, and then increased rapidly. By March of this year, job ad volumes exceeded pre-COVID-19 levels and were at all-time highs.

While we have observed an improvement in operating conditions from the COVID-19 lows of early 2020, we continue to experience volatility in hiring demand as our key markets react to localised outbreaks of COVID-19.

Despite these challenges, we will continue to focus on our key priorities to grow our core businesses over the long term and invest in our capabilities.

What's next for SEEK and its share price?

SEEK provided FY22 guidance excluding significant items and the SEEK Growth Fund. That includes expected EBITDA of $425 million to $450 million and net profit after tax of $190 million to $200 million.

The Seek share price has climbed 54.8% in the last 12 months and is outperforming the S&P/ASX 200 Index (ASX: XJO) in 2021.

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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