Seek swings to $112m loss, ditches dividend for the first time

Seek warning near term profit will continue to be hit by virus uncertainty as it swings to a heavy full-year loss and ditches its dividend for the first time.

Seek CEO Andrew Bassat. Picture: Aaron Francis

Seek has warned that near term profits will continue to be hit by the uncertainty created by the coronavirus crisis, as the online recruitment platform announced it had swung to a heavy full-year loss as a result of lower job volumes.

Unveiling a net loss of $111.7 million for the 12 months through June, compared to a net profit after tax of $180.3m a year ago, Seek chief executive and co-founder Andrew Bassat said the current macro outlook was highly uncertain.

“SEEK’s short-term results will be negatively impacted by the challenges of COVID-19,” Mr Bassat said.

“Over the long term, our strategy and overall revenue opportunity remain intact albeit COVID-19 will likely impact the timeframe to achieve our $5 billion revenue aspirations.”

Seek provided $13m in relief to its customers during the COVID-19 crisis and received $8.1m in JobKeeper payments from the federal government.

Shares in the company sank as much as 13.3 per cent on Wednesday before closing down 8.6 per cent at $19.58 each.

Mr Bassat moved to reassure investors, saying that Seek’s revenue opportunity was under-realised, and that it could emerge from the current period, a stronger company. But he stopped short of providing a guidance figure for the year ahead.

“When labour markets return to more normal conditions, we expect to generate a high return on investment, given our market leadership and track record of generating strong returns from investing in product, technology and data,” Mr Bassat said.

“The near-term will continue to pose challenges, but we will remain agile to take advantage of new growth opportunities as they arise.”

While the company didn’t provide specific guidance, it did outline an outlook “scenario”, assuming gradual improvements based on assumptions about gradual improvements as well as is July trading figures. That scenario included a net profit figure of $20m for the 2021 financial year.

Goldman Sachs analysts said the outlook scenario was “significantly below” consensus, as well as its own estimates.

“Seek noted that although there is no fundamental change to its $5bn revenue aspiration, COVID-19 has impacted the timeframe of achieving this, so that fiscal year 2025 is now unlikely, and it is too early to determine a revised target date,” Goldman analysts said.

Earnings before interest, tax, depreciation and amortisation fell 9 per cent to $414.9m for the full-year, while revenue lifted 3 per cent to $1.58 billion.

Seek’s directors did not declare a final dividend, after paying a final dividend of 22 cents a share fully-franked last year. Until now, Seek has paid an interim and final dividend every year since it listed in 2005.