Seek (ASX:SEK) share price leaps 8% as revenue soars

“Record job ads” – here’s why the Seek share price is rising today.

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Key points

  • The Seek share price is up 8% on Tuesday amid the company releasing strong half-year results 
  • Australia and New Zealand saw record job ads 
  • The company reported a 147% increase in NPAT on continuing operations 

The Seek Limited (ASX: SEK) share price is surging today amid strong profit and record job ads reported in the company’s FY22 half-year results.

The online job advertising company’s share price is currently trading at $30.05, an 8.17% gain. It hit a high of $30.15 earlier in the session.

Let’s take a look at why the Seek share price is rising today.

Seek share price climbs amid half-yearly results

Highlights of the company’s half-year (H1 FY22) results include:

  • Revenue surged 59% on previous corresponding period (PCP) of H1 FY21 to $517.2 million
  • 83% increase in EBITDA to $250.6 million
  • Net profit after tax (NPAT) on continuing operations surged 147% to $124 million, excluding significant items
  • NPAT on discontinuing operations fell 47% from $16.5 million to $8.7 million
  • NPAT on total operations surged 32% from $66.8 million to 88.1 million
  • Earnings per share (EPS) on total operations soared by 32%
  • Interim fully franked dividend of 23 cents a share

What else happened in the half?

Seek experienced record ad volumes in Australia and New Zealand. Unique hirers, on average, also surged 30% on the previous corresponding period.

Corporate job ad volumes rocketed 73% on PCP while small and medium enterprise volumes jumped 60%. Meanwhile, recruiters placed 26% more job ads than in the first half of the 2021 financial year.

The board declared an H122 interim fully-franked dividend of 23 cents per share. This will be paid on 7 April and recorded on 24 March.

Seek’s share of job advertising in Australia leapt around 30% over the PCP to 34.3%, a 15% gain.

In Asia, Seek experienced growth in paid job ads in all major markets including Malaysia, Singapore, Philippines, Indonesia, and Thailand.

The Seek Growth Fund portfolio value jumped by 17% to $1,738 million.

Management comment

Commenting on the results, CEO and managing director Ian Narev said:

Market conditions across our ANZ and Asia businesses were favourable for revenue growth. Businesses continued to rehire following COVID-related cuts, and in many cases restarted investment.

Whilst candidate activity on our sites remained high, application rates were weaker, which in turn drove greater depth adoption. Previous investments, in particular the flexibility of our new ANZ contract and pricing model, positioned us well to capture these opportunities.

Our key markets are experiencing, to varying degrees, a combination of ongoing economic recovery, relatively low unemployment rates and continued restrictions on labour mobility. Job ad volumes and depth adoption remain high. We have assumed these conditions continue for the remainder of this financial year, and have therefore upgraded our guidance.

What’s next

Seek sees “significant growth opportunities” in Australia/New Zealand and Asia with a chance to double revenue in the next five years if markets are stable and the company executes well.

Seek has updated its FY22 guidance, excluding significant items, for its continuing operations. It expects its EBITDA to be between $490 and $515 million based on revenue between $1.05 billion and $1.10 billion. Meanwhile, it predicts a NPAT for FY2022 of between $230 and $250 million.

This is based on a number of assumptions outlined in its results presentation, including low economic volatility from COVID-19.

Seek share price summary

The Seek share price has dropped 5% in the past year but has gained 7.5% in the past week.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 5% over the past year.

Seek has a market capitalisation of more than $10.5 billion based on today’s share price.

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