What: SEEK Limited (ASX: SEK) is seeing strong progress in growth outside of its main job search website seek.com.au, which still stands as Australia's number one site for job hunters and recruiters.
It has been expanding its business overseas with good results so far. If investors haven't followed the company much as of yet, they should now. Its making business development in Asia-Pacific a high priority and SEEK could become a major player in South East Asia and other developing regions.
So what: Of the $308.5 million in EBITDA generated in FY 2014, the majority was from the domestic job search segment – $143.9 million. SEEK's international employment business comes in second with EBITDA of $113.3 million, racking up 95% EBITDA growth over FY 2013, mostly due to acquisitions.
Thirdly, SEEK Education, which provides training and education programs for students and workers, had EBITDA of $46.7 million, with a whopping 88% increase. Enrolment growth is in the double digits.
This shows the great importance of expanding internationally while it grows its market-leading domestic job placement service.
The stock is already up from about $7 to $17 over the past two years as earnings per share rose a compound 27% annually in the same period.
Now what: SEEK just received further regulatory approval for its recent acquisition of Singapore-based JobStreet, a job search website. Along with its Malaysian JobsDB business and its controlling stake in China's biggest jobs website Zhaopin (NYSE: ZPIN), SEEK has a strong foothold in South East Asia.
The international business now has a presence in Asia, Africa and South America. These largely populated regions offer SEEK the opportunity to establish itself as the leading job placement business.
Over the past five years, SEEK delivered an average 21% earnings growth annually. Now, it looks like it can keep that pace going. Consensus estimates put earnings growth at around 22% annually over the next two years.
The stock's 30 PE may look high to some, yet the growth potential seems stable. You may pay a premium to buy in now, but SEEK's compelling growth outlook and solid expansion program may be worth it as a long-term investment.
