Coronavirus: Seek hurting as job ads plunge amid COVID-19 shutdowns

Online recruitment group Seek is pinning hopes on a post-pandemic hiring boom as a job ad slump slices revenue in half.  

Seek CEO Andrew Bassat. Picture: Aaron Francis

Online recruitment platform Seek says short-term revenue will be greatly affected by the coronavirus economic shutdown because of a plunge in job advertisements.

The company has withdrawn full-year guidance, saying billings from job ads dropped by more than half in March due to the global pandemic.

In a statement released to the ASX on Monday, Seek said its Australian and New Zealand website and its Seek Asia operations recorded a fall in billings of approximately 60 per cent for the week ending March 29 compared to the corresponding period in 2019.

Seek’s core business has been hit hard by the COVID-19 economic fallout, as companies press pause on recruitment in an attempt to lower costs while in commercial hibernation.

For the week ending March 22, Seek recorded a decline in billings of 40 per cent across its ANZ and Asian businesses.

Seek said that while the decline in billings was starting to stabilise, it was deferring the payment of its half yearly dividend.

Seek chief executive Andrew Bassat said the economic challenge would affect short-term profitability and that a dividend payout in the current environment was not viable.

“Deferring the dividend was a decision that we did not make lightly,” Mr Bassat said.

“The level of uncertainty arising from the virus has prompted us to take a prudent approach to managing our cash flow and balance sheet.”

Seek has deferred its interim dividend to July 23. It was initially scheduled to make the payment to shareholders on April 9.

In its interim results released on February 25, Seek noted its Chinese and Hong Kong businesses were directly impacted by COVID-19 regional shutdowns, but said at the time that overall company guidance remained on track.

The company’s Chinese recruiting site, Zhaopin, had recorded an approximately 60 per cent decline in billings in February. But Seek noted the decline had eased in March as operating conditions gradually returned to normal.

“When the pandemic subsides, as it will, job creation will be at the core of economic recovery,” Mr Bassat said.

“Our focus remains on executing against our existing long-term growth strategies and developing new employment and education solutions to meet the needs of our customers in the months and years ahead.”

The company has implemented hirer support measures to assist businesses in the associated costs of recruiting new employees.

Seek said it would relieve employers of monthly ad spending obligations and would only charge them for ads used. It has also extended the expiry date for all pre-purchased ad packs.

For the first six months of the 2020 financial year, the group posted an interim net profit of $75.6m, which was down 24 per cent compared to the previous half yearly result.

As at December 31, 2019, the company had a net debt position of $895m. It also noted it recently refinanced its syndicated loan facility, allowing it to raise an additional $150m. As at April 6, Seek said it had $395m in undrawn debt facilities.