The SEEK Limited (ASX: SEK) share price has risen strongly today after the company reported its earnings results for the 2019 financial year (FY19) this morning.
What were SEEK's numbers like?
SEEK delivered some positive numbers across the board for FY19, which are summarised below.
- Revenue came in at $1.54 billion, up from $1.3 billion in FY18 (a rise of 18.5%)
- Earnings (EBITDA) came in at $455 million, up from $431.2 million in FY18 (a rise of 5.52%)
- Net profit after tax (NPAT) at $180.3 million, up from $52.2 million in FY18 (a rise of 245%) including one-off/significant items
- Underlying NPAT of $229 million, up from $228.5 million in Fy18 (a rise of 0.22%). This figure excludes the one-off/significant items from above
- Final dividend for FY19 of 22 cents per share (total for FY19 at 46 cents) – no change from FY18.
SEEK's revenue can be broken down into its core business – Asia, Pacific & Americas (consisting of SEEK ANZ and SEEK Asia) and SEEK Investments, the company's portfolio of small or start-up 'purpose-aligned emerging leaders'. SEEK ANZ reported revenue growth of 7% and EBITDA growth of 8%, with the company noting that SEEK ANZ remains the market leader with a "6x lead over our nearest competitor". SEEK Asia reported revenue growth of 9% and EBITDA growth of 11%.
In regards to SEEK Investments, CEO Andrew Bassat commented that the company's "portfolio of emerging leaders in online education, online contingent labour and HR SaaS is focused on growing market share in large addressable markets." Zhaopin was a standout performer, with revenue growth of 34% and EBITDA growth of 18%.
Outlook for SEEK
In terms of FY20 outlook, Seek reports that it is expecting revenue growth in the 15–20% range, EBITDA growth from 8–11% and NPAT to come in between $145–155 million.
A significant change to SEEK's dividend policy will take place this financial year. SEEK up until the present time had a dividend payout policy of 50–60% of cash NPAT, however this will change to 30–50% for FY20 and beyond. The company has explained that this change will "support investment into high ROI (return on investment) strategies as SEEK pursues large new revenue opportunities."
On the company's future, Mr Bassat stated:
[V]olatile economic conditions may impact our near-term results, but this will not impact SEEK's focus on investing to grow long-term shareholder value. We remain focused on our approach of investing aggressively to capture large revenue opportunities alongside growing our overall defensibility.
SEEK shares opened trade at $19.09 today but have since risen to $20.04 – a rise of 4.87% at the time of reporting.
