The Seek Ltd (ASX: SEK) share price has dived 7.4% in the early minutes of Thursday trade after the market digested its 2023 financial report.
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What did the company report?
- Revenue up 10% to $1.225 billion
- Earnings before interest, taxes, depreciation, and amortisation (EBITDA) up 7% to $546 million
- Reported net profit after tax (NPAT) down 16% to $203 million
- Operating expenses up 12% due to personnel costs and "inflationary impacts"
- Final dividend of 23 cents, making the total 47 cents (up from 44 cents)
What else happened in FY23?
Seek has had a pretty quiet 2023 financial year. As the company itself stated in Tuesday's annual presentation, it "maintained market and brand metrics".
Fortunes for the jobs classifieds provider are correlated to the economy. Australia and much of the developed world has just been through a curious 12 months where interest rates were steeply rising but unemployment has not significantly spiked.
For its Asian businesses, Seek completed a platform unification software project, while Australia and New Zealand sites saw "record visits and higher applications per ad" during the year.
Perhaps reflecting this stability, the share price only changed 3.43% over the 2023 financial year.
What did Seek's management say?
Seek chief executive Ian Narev said on Tuesday:
"In ANZ, after unprecedented demand led to record job volumes in FY22, volumes moderated in FY23. However, the job market remains tight with a low unemployment rate. Applications per job ad have recovered to pre-pandemic levels due to increased candidate activity and lower job volumes. Our dynamic pricing and suite of depth products have enabled us to respond to this environment and better align price to the value SEEK delivers.
"In Asia, we achieved a major milestone with the implementation of a new budget-based contract structure across our six markets. This is a direct result of the Platform Unification program. The new structure has led to increased substitution of depth products for basic ad products, which along with higher ad prices has delivered higher yield to more than offset lower paid volumes."
What's next for Seek?
With the economy expected to continue to suffer the effects of massive interest rate rises, Seek was modest in its 2024 guidance.
It expects revenue of $1.18 to $1.26 billion, which is mostly lower than the 2023 figure, while EBITDA will remain similar.
"Economists are generally forecasting lower levels of economic activity in the markets in which we operate," said Narev.
"Our FY24 guidance is based on our best current estimates, though any degree of precision is difficult."
Seek share price snapshot
Before market open on Tuesday, Seek shares had gained a tidy 26% since the start of the year.
This compares well to the S&P/ASX 200 Index (ASX: XJO), which is 4.76% up year to date.
However, Seek lags its peers when looking at the S&P/ASX All Technology Index (ASX: XTX), which has rocketed 30% so far in 2023.
