|›||Seek Employment, which focuses on the online Australian and New Zealand employment|
|›||Seek Education, which incorporates Seek Learning and Think Education|
|›||Seek International, which includes significant interests in overseas online employment based websites|
The company is the dominant player in the Aussie job ads market. However, with a slowdown in the domestic market, the international and education divisions are the group’s major drivers.
The group’s 1H13 results were a solid improvement on the prior corresponding period, with a few of the key highlights being:
|›||Revenue growing 32%, to $275.3 million|
|›||EBITDA up 20% to $89.8 million|
|›||Interim dividend increase of 20% to 10 cents a share|
Seek’s EBITDA margin did fall from 43% in 1H12 to 39% in 1H13, but this was the result of the company obtaining a controlling interest in Brasil and OCC. Without these inclusions, the group’s underlying margin stayed steady at 43%.
The company had $96.5 million on hand at the end of the December half, helped by operating cash flow increasing 5.3%. Overall, the group reported great results despite the challenging macro conditions experienced in the half.
The above shows the group’s solid history of growing its revenue, much of which has been driven by its domestic business.
With online employment volumes under increasing pressure, the group has turned its focus to international expansion for growth. The group’s approach to this expansion was to target high growth regions.
In the first half of the fiscal year, the group took controlling interest of OCC (Mexico) and Brasil Online (Brazil), both the leading online employment sites in their respective countries.
SEK is also in the process of taking a controlling interest in JobsDB (Asia based) and Zhaopin (China), both are leading online employment sites in high growth areas with increasing internet penetration.
SEK’s 1H13 was solid, especially given that its main domestic business experienced an 11% decline in volumes. The key take away from the results was the group’s ability to make up for domestic weakness via its growing international footprint. We particularly like SEK’s approach in this area with the company targeting the high growth regions of Asia and South America.
While domestic volumes are likely to be subdued, its international expansion will see the company’s earnings and share price continue to grow.
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