Seek Limited (SEK)
Views and News
Leading Online Job Site in Australia, Plus Education and Offshore Upside
Seek is the leading online employment site in Australia and New Zealand. It is also building complementary interests in online education. It has leveraged its expertise into substantial or controlling investments overseas with top tier job sites in China, South East Asia, Brazil and Mexico.
The strong swing to from print to internet-based services is continuing and Seek will continue to be a major beneficiary as it builds on major positions in rapdly expanding usage in some of the largest emerging growth markets worldwide. We expect strong growth to be reflected in the share price as the P/E reduces.
Recent News Highlights
As at 31/12/2012 : see details at www.seek.com.au
| 21/12/2012 Seek Asia increases stake in JobsDB from 80% to 100% |
| 29/11/2012 AGM; CEO presentation |
| 30/10/2012 Annual Report also (29 Oct) Board Changes |
| 14/09/2012 Refinancing of Syndicated Loan Facility |
| 30/08/2012 Laureate Education to acquire stake in THINK Education |
| 21/11/2011 AGM; CEO presentation |
Half-yearly Performance & Estimates - SEK
| Year-end June | FY11A | 1H12A | FY12A | 1H13A | FY13A | FY14E | FY15E |
|---|---|---|---|---|---|---|---|
| Sales, $m | 343.1 | 208.1 | 442.3 | 275.3 | 620.3 | 783.0 | 867.0 |
| EBITDA, $m | 160.4 | 103.7 | 200.5 | 121.8 | 260.8 | 294.2 | 338.1 |
| EBIT, $m | 147.8 | 93.9 | 180.0 | 109.2 | 229.9 | 254.2 | 301.5 |
| Report NPAT, $m | 96.8 | 63.1 | 109.3 | 72.2 | 152.8 | ||
| Adj. NPAT, $m | 152.8 | 159.5 | 196.0 | ||||
| Reported EPS, ¢ | 29.00 | 18.00 | 31.00 | 20.00 | 41.00 | ||
| Adjusted EPS, ¢ | 41.00 | 47.30 | 57.20 | ||||
| EPS %FY/Growth | 58% | 7% | 49% | 32% | 15% | 21% | |
| Dividend, ¢ | 14.3 | 8.3 | 17.3 | 10.0 | 22.0 | 23.70 | 28.50 |
| Franking, % | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| EBITDA Margin | 47% | 0 | 45% | 44% | 42% | 37.6% | 39.0% |
| NPAT Margin | 28% | 0 | 23% | 26% | 22% | 20.4% | 22.6% |
| ROE, % | 31% | 0 | 26% | 6 | 18% | ||
| EBIT/Interest | 10.0 | 0.0 | 7.6 | 9.35 | 10.05 | ||
| Net Debt / Equity | 0.41 | 0 | 0.29 | 0.24 | 0.23 | ||
| CashFlow/Sh, ¢ | 32.1 | 19.3 | 41.9 | 15.1 | 49.8 | 56.3 | 71.8 |
| Y/E Shares, m | 336.6 | 337.2 | 337.2 | 337.0 | 337.9 |
| Notes |
| Data sourced from IRESS Market Technology Limited. EPS Growth compared with the pcp is shown in most columns, except 1H11A and 1H12A which show the first half % of full year EPS. In a handful of cases, unadjusted share splits may give strange changes in ratios. |
Half-year Performance & Estimates - SEK
| Year-end June | 1H11A | FY11A | 1H12A | FY12A | 1H13A | FY13E | FY14E |
|---|---|---|---|---|---|---|---|
| Sales, $m | 159.0 | 343.1 | 208.1 | 442.3 | 275.3 | 615.0 | 776.0 |
| EBITDA, $m | 68.3 | 160.4 | 103.7 | 200.5 | 121.8 | 236.7 | 301.9 |
| EBIT, $m | 68.3 | 147.8 | 93.9 | 180.0 | 109.2 | 206.2 | 273.0 |
| Report NPAT, $m | 47.9 | 96.8 | 63.1 | 109.3 | 72.2 | ||
| Adj. NPAT, $m | 60.6 | 140.9 | 170.6 | ||||
| Reported EPS, ¢ | 14.00 | 29.00 | 18.00 | 31.00 | 20.00 | ||
| Adjusted EPS, ¢ | 17.90 | 42.00 | 50.70 | ||||
| EPS %FY/Growth | 48% | 58% | 7% | -1% | 35% | 21% | |
| Dividend, ¢ | 6.8 | 14.3 | 8.3 | 17.3 | 10.0 | 20.80 | 25.10 |
| Franking, % | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| EBITDA Margin | 48% | 47% | 0 | 45% | 44% | 38.5% | 38.9% |
| NPAT Margin | 32% | 28% | 0 | 23% | 26% | 22.9% | 22.0% |
| ROE, % | 25% | 31% | 0 | 26% | 6% | ||
| EBIT/Interest | 23.4 | 10.0 | 0.0 | 7.6 | 9.35 | ||
| Net Debt / Equity | 0.17 | 0.41 | 0 | 0.29 | 0.24 | ||
| CashFlow/Sh, ¢ | 11.6 | 32.1 | 19.3 | 41.9 | 15.1 | 45.2 | 60.3 |
| Y/E Shares, m | 336.6 | 336.6 | 337.2 | 337.2 | 337.0 |
| Notes |
| EPS Growth compared with the pcp is shown in most columns, except 1H10A and 1H11A which show the first half % of full year EPS. |
Half-yearly Performance & Estimates - SEK
| Year-end June | FY10A | 1H11A | FY11A | 1H12A | FY12A | FY13E | FY14E |
|---|---|---|---|---|---|---|---|
| Sales, $m | 280.8 | 159.0 | 343.1 | 208.1 | 442.3 | 587.0 | 635.0 |
| EBITDA, $m | 134.2 | 68.3 | 160.4 | 103.7 | 200.5 | 244.3 | 268.1 |
| EBIT, $m | 124.6 | 68.3 | 147.8 | 93.9 | 180.0 | 220.3 | 249.6 |
| Report NPAT, $m | 89.6 | 47.9 | 96.8 | 63.1 | 109.3 | ||
| Adj. NPAT, $m | 109.3 | 150.0 | 177.5 | ||||
| Reported EPS, ¢ | 27.00 | 14.00 | 29.00 | 18.00 | 31.00 | ||
| Adjusted EPS, ¢ | 31.00 | 43.90 | 52.30 | ||||
| EPS %FY/Growth | 48% | 7% | 58% | 7% | 42% | 19% | |
| Dividend, ¢ | 11.9 | 6.8 | 14.3 | 8.3 | 17.3 | 21.00 | 25.80 |
| Franking, % | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| EBITDA Margin | 48% | 48% | 47% | 49.8% | 45% | 41.6% | 42.2% |
| NPAT Margin | 32% | 32% | 28% | 30.3% | 23% | 25.6% | 28.0% |
| ROE, % | 25% | 25% | 31% | 26% | |||
| EBIT/Interest | 23.4 | 23.4 | 10.0 | 0.00 | 7.59 | ||
| Net Debt / Equity | 0.17 | 0.17 | 0.41 | 0 | 0.29 | ||
| CashFlow/Sh, ¢ | 24.0 | 11.6 | 32.1 | 19.3 | 41.9 | 44.0 | 53.9 |
| Y/E Shares, m | 336.6 | 336.6 | 336.6 | 337.2 | 337.2 |
| Notes |
| Data sourced from IRESS Market Technology Limited. EPS Growth compared with the pcp is shown in most columns, except 1H11A and 1H12A which show the first half % of full year EPS. In a handful of cases, unadjusted share splits may give strange changes in ratios. |
Notes
Comfortably on target. Overseas investments, particularly Zhao Pin in China, starting to show their expected form, and Education turning round well.
Company Overview
Russell Research in the media
Stock Picks for Sunday Herald Sun – 5 May 2013
HOLD Seek Limited, SEK, $11.14
Australia's clear leader in job search, also in online education, is leveraging its strengths across China and global growth areas, justifying its rising price.
Stock Picks for The Bull.com.au - 11 March 2013
HOLD Seek (SEK)
I like this stock. I said on January 21, 2013 in a feature story published on this website that Seek ticks all the boxes. The price then was $7.79. Seek is the outright leader in online job advertising in Australia and New Zealand. It has been leveraging its leadership into countries covering 20 per cent of global GDP. That’s before noting its expertise and growing profits in the burgeoning online education markets. Watch this space, but consider buying first.
TheBull highlights Seek as one of the target stocks for 2013 ;
www.thebull.com.au 6 Big Stock Picks For 2013 By Anthony Black 21.01.2013
Which stocks are brokers targeting in 2013? We asked six experienced stockbrokers to put forward a listed company they expect to perform well in 2013; and the reasons why.
Peter Russell, Russell Research : Seek (SEK)
Russell says Australia’s dominant jobs website is expanding its footprint in Asia by increasing its 55.5 per cent stake in Chinese employment website Zhaopin to 72.3 per cent. In Asia, it owns 69 per cent of JobsDB and 22 per cent of JobStreet. It has a 51 per cent stake in Brazil’s leading job search operator, Brasil Online, and 57 per cent of Mexico’s leading job search operator, OCC.
“These regions are among the fastest growing and cover 20 per cent of global GDP,” Russell says.
Russell believes that Seek has a sound track record of successfully executing long-term opportunities. “Since 2004, Seek’s revenue, EBITDA and net profit after tax have delivered 32 per cent compound annual growth,” he says. “We expect 2013 and 2014 to deliver double digit growth, with aprice/earnings ratio sliding below 15 times and a franked yield increasing to more than 3 per cent.”
Russell says Seek’s educational services are also showing profitable growth. Partnerships with Swinburne University and Laureate Education bolster its profile in the new online education market.
“Also, a rapidly growing middle class in Asia will take advantage of opportunities offered by online education,” Russell says. “In my view, Seek ticks all the boxes.”
Stock Picks for Sunday Herald Sun – 4 November 2012
BUY Seek Limited, SEK, $6.63
An online job search leader across Australia, China, Asia, Brazil and Mexico. Earnings are set to grow in double digits for years.
Wave Chart
Profile
Seek
Rating: ♠
Category: Best Stock ; Large
Action: Accumulate
Website: www.seek.com.au
| ASX code: | SEK |
| Closing Price, 30/12/2013: | $ 13.265 |
| Market Capitalisation: | $ 4,490 million |
| 52 Week High: | $ 13.50 |
| 52 Week Low: | $ 6.93 |
| Sector: | Human Resource & Employment Services |
| Index: | S&P/ASX 100 Index |
Summary of Fundamentals
| Year-end June | FY12A | FY13A | FY14E | FY15E |
|---|---|---|---|---|
| NPAT, $m | 109.3 | 152.8 | 161.2 | 192.6 |
| Reported EPS, ¢ | 31.00 | 41.00 | ||
| Adjusted EPS, ¢ | 41.80 | 47.15 | 55.65 | |
| EPS Growth, % | 7% | 35% | 13% | 18% |
| P/E Ratio, x | 42.79 | 31.73 | 28.13 | 23.84 |
| Dividend, ¢ | 17.3 | 22.0 | 24.00 | 28.00 |
| Franking, % | 100% | 100% | 100% | 100% |
| Div. Yield, % | 1.30 | 1.66 | 1.81 | 2.11 |
Notes
| Our Adjusted EPS is used for the last year and forward estimates and as basis for EPS Growth and P/E Ratio. We currently use Reported data for all historic NPAT, for the prior year EPS and as base for last year EPS growth. |
| Data & Chart sourced from IRESS Market Technology Ltd. |
One Year Chart
As at 30 December 2013
Other Highlights
| Sector: | Human Resource & Employment Services |
| Return on Equity, FY13 : | 18% |
| Net Debt to Equity, FY13 : | 23 % |
| EBIT / Interest Cover, FY13 : | 10.05 x |
| Gicscode: | 20202010 |
| First Listed: | 19-Apr-05 |
Business Activities
Seek Limited (SEK) is the leader in online job classifieds in Australia and New Zealand. It is a major player in China, Brasil, Mexico and South East Asia. It also provides training and learning facilities.
Glossary:
| ♠ | "A Core Stock" - reliable long-term yield & growth |
| ♥ | "We like it" - a seasoned performer, growth & yield |
| ♦ | "A tough scout" - creating a potential breakthrough |
| ♣ | "A steady performer" - giving reliable yield or growth |
| Best Stocks | Portfolio of selected attractive investments |
| Potential | Stocks that may have good improvement prospects |
| Speculative | More risky usually smaller stocks with spec. upside |
| Midcaps | In RR Midcap Index, $ 70m to 1,500m market cap. |
| Large Stocks | Larger Stocks upwards of $ 1,500m market cap |