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.

Half-year Performance & Estimates - SEK

Year-end June	1H12A	FY12A	1H13A	FY13A	1H14A	FY14E	FY15E
Sales, $m	208.1	442.3	275.3	620.3	337.6	735.0	855.0
EBITDA, $m	103.7	200.5	121.8	260.8	153.0	307.3	368.0
EBIT, $m	93.9	180.0	109.2	229.9	134.5	265.6	320.3
Report NPAT, $m	63.1	109.3	72.2	152.8	124.5
Adj. NPAT, $m					124.5	179.9	213.4
Reported EPS, ¢	18.00	31.00	20.00	41.00	25.00
Adjusted EPS, ¢					25.00	52.75	62.75
EPS %FY/Growth	58%		49%	32%	25%	29%	19%
Dividend, ¢	8.3	17.3	10.0	22.0	14.0	29.00	35.00
Franking, %	100%	100%	100%	100%	100%	100%	100%
EBITDA Margin	0	45%	44%	42%	45%	41.8%	43.0%
NPAT Margin	0	23%	26%	22%	30%	24.5%	25.0%
ROE, %	0	26%	6%	18%	5%
EBIT/Interest	0.0	7.6	9.4	10.1	13.06
Net Debt / Equity	0	0.29	0.24	0.23	0.16
CashFlow/Sh, ¢	19.3	41.9	15.1	49.8	29.3	66.0	80.0
Y/E Shares, m	337.2	337.2	337.0	337.9	338.8

Notes

Data sourced from IRESS Market Technology Limited. EPS Growth compared with the pcp is shown in most columns except the first half years which show their percentage of full year EPS. In a handful of cases, unadjusted share splits, or changes between positive and negative values, may give strange changes in ratios.

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

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

Company Overview

Notes

Comfortably on target. Overseas investments, particularly Zhao Pin in China, starting to show their expected form, and Education turning round well.