Those hard to please investors were up to it again yesterday selling off shares in jobs group, Seek, despite an improved earnings guidance upgrade at yesterday’s annual meeting
CEO Andrew Bassat told the meeting on Wednesday that pre-tax earnings for 2017-18 are now expected to be up by around 13% from last financial year, up from SEEK’s previous forecast of 10% growth.
SEEK shares which had risen before the meeting, sagged in the afternoon as investors chewed over the upgrade.
Seek shares in fact traded through a 5% range yesterday, ending the day down 3.6% at $18.70. That was after hitting the day’s high of $19.88 just before the meeting started.
Mr Bassat told shareholders the earnings performance of the Australian and New Zealand operations, Seek Asia and online education services so far this financial year have been encouraging but the company would have larger than expected interest costs related to its Chinese subsidiary, Zhaopin.
Interest expenses will be higher than anticipated due to higher debt on Zhaopin’s balance sheet (was that the reason for the sell down?). Revenue is forecast to be up 20% to 25% over the year to June from the 2017 financial year.
SEEK finished Zhaopin’s privatisation last month, partnering with private equiry firms Hillhouse Capital Management and FountainVest Partners.
It still expects to make a net profit in the range of $220 million and $230 million in 2017-18, excluding investments of about $25 million in new business ventures.
Chairman Neil Chatfield told shareholders the company’s Australian and New Zealand business is the most advanced after a long period of reinvestment, while almost two thirds of the company’s revenue now comes from international operations.
"The success in ANZ has reaffirmed that reinvestment is the right strategy for our international businesses which offer much larger revenue opportunities than the ANZ business."
