Seek share price slides despite NPAT soaring 81%

The Seek Limited (ASX: SEK) share price is heading south today after the company dropped its full-year results.

At the time of writing, the job listings giant’s shares are down 0.45% to $24.24.

The share price fell as low as $23.67 shortly after the market open but has recovered somewhat now.

Seek share price falters despite double-digit growth

This morning, Seek delivered its FY 2022 results for the 12 months ending 30 June 2022.

Here are some of the key takeaways:

• Sales revenue from continuing operations up 47% on the prior corresponding period (pcp) to $1,116.5 million
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) up 53% to $509.1 million
• Net profit after tax (NPAT) excluding significant items up 81% to $245.5 million
• Final dividend of 21 cents a share, fully franked.

What happened in FY 2022?

Seek achieved record ad volumes of 325,000 in March 2022 across Australia and New Zealand. This was underpinned by a tight employment market which drove high levels of activity.

The average ad yield grew 11% over the pcp, attributed evenly through higher prices, customer mix, and increased depth adoption.

In Asia, volumes grew across all markets despite some ongoing lockdowns from COVID-19. The average ad yield fell 1% compared to FY 2021 on the back of advertisers purchasing larger packages resulting in higher volume-based discounts.

However, this was largely offset by an increase in depth adoption with growth in branded ads and strong take-up of the new premium ad. Bundling of ad products also made it easier for advertisers to purchase depth products.

Management commentary

Seek CEO and managing director, Ian Narev, had this to say about the results:

In all our Asia Pacific markets, ongoing economic recovery drove high demand for labour, which in turn led to strong job ad volumes and increased depth adoption. Our markets continue to be highly competitive. However, SEEK maintained its market leadership positions, with stable placement metrics throughout Asia Pacific. Increased investment in Asia led to improved candidate metrics.

What’s the outlook for FY 2023?

Seek provided its FY 2023 guidance excluding significant items and the Seek Growth Fund.

This includes the following:

• Revenue in the range of $1.25 billion to $1.30 billion
• EBITDA in the range of $560 million to $590 million
• NPAT in the range of $250 million to $270 million.

Narev touched on the new financial year, concluding:

Economic and labour market conditions across our key markets remain positive, although some leading indicators look slightly weaker. Our revenue guidance for FY23 assumes a continuation of largely positive conditions.

We have assumed a low risk of job market volatility from monetary policy, geopolitical change and the pandemic. If this assumption changes, revenue could fall below guidance. Our guidance also assumes a continuation of the accelerated investment from FY22, in particular the Platform Unification program. Spend for the project will peak in FY23 as we ensure that our systems are sufficiently flexible, resilient and scalable to drive future growth.

Seek share price snapshot

The Seek share price has lost 28.7% since the beginning of 2022 but is up 3.7% in the past week.

For context, the benchmark S&P/ASX 200 Index (ASX: XJO) has shed around 6% for the calendar year.

Seek presides a market capitalisation of approximately $8.64 billion.

The post Seek share price slides despite NPAT soaring 81% appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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