Seek Shares Soar After Upgrading Full Year Guidance
- Seek Shares have surged to all-time highs following the ASX release.
- The Company have upgraded Revenues, EBITDA and NPA guidance.
- Shares opened 5.49 per cent higher to $32.42 per share.
Seek Limited (ASX: SEK) shares have opened 5.49 per cent higher on 4th May 2021 following an ASX announcement. The Company provided a brief update on the completion of their Zhaopin transaction and a business update for the first 3 months of 2021. Strength in the Australian Labour market has undoubtedly assisted the Company’s strong performance in 2021.
The recently released ANZ Australian Job Adds data confirmed this strength, rising 2.7 per month for the 11th consecutive month. Currently, Jobs Ads are 27 per cent higher than their pre-pandemic levels. Senior Economist at ANZ, Catherine Birch commented how “ANZ Job Ads is still signalling ongoing declines in the unemployment rate.” Australian labor Market strength is likely to continue as Australian Business conditions continue to strengthen post-COVID-19, benefiting Seek.
In Seeks announcement the Company have confirmed that the sale of their holding has been successfully reduced from 61.1 to 23.5 per cent. Based on this transaction value, this ownership sits at a current value of $515 million. $500 million of the total gross proceeds have been received. Following the completion of this transaction, Seek will pay a dividend of 20 cents per share paid on the 24th May 2021.
Seek also upgraded guidance for the full financial year 2021 due to improved operating conditions and strong performance for the already recorded 9 months. Current conditions have exceeded previous expectations, primarily driven by Seek Australia and New Zealand and Seek Asia. Seek Expected full-year revenues to be in the order of $1.740 billion up from $1.7 billion. Likewise, Earnings before interest, tax, depreciation, and amortization (EBITDA) was upgraded from $460 to $510 million and net profit after tax (NPAT) from $100 to $150 million.
Founder and Chief Executive Officer Andrew Bassat has observed how, “Seek has significant balance sheet flexibility for ongoing reinvestment and future dividends” and notes, “Seek Australia and New Zealand continues to benefit from record high levels of Small & Medium Enterprise hiring activity and increasing usage of our depth products.”
Seek Opened trading today at $32.42 per share, 13.6 per cent higher year to date. Today’s surge in price saw the Company reach all-time highs almost 30 per cent above its pre-COVID-19 levels and 182 per cent from its March 2020 lows. Major Institutions UBS and Credit Suisse maintain Buy and Outperform ratings on Seek, based on future labor market conditions.