Source: Shutterstock
Summary
- SEEK MD and CEO Andrew Bassat is transitioning to a new full-time role.
- The company registered a resilient performance in 1H amid the pandemic-induced challenges.
- The company is targeting greater independence for AP&A and Investments.
Global technology company SEEK Limited (ASX: SEK) has released a slew of strategic updates including senior leadership changes, potential sell down of Zhaopin, and half-year report for the period ended 31 December 2020.
Current CEO Transitioning to New Role
Andrew Bassat, co-founder and current SEEK CEO, has decided to step down from his position of MD & CEO. He will transition to a new full-time role of Executive Chairman and CEO of SEEK Investments. Mr Bassat will continue to serve as a SEK Director.
Ian Narev will succeed him, effective 1 July 2021. He brings a strong track record in strategy, digital transformation, , and public company leadership.
Data Source: SEK ASX Update, dated 23 Feb 2021
Last month in January 2021, SEK announced the retirement of Group CFO Geoff Roberts, effective from 30 June 2021.
Solid First-Half Performance Amid the Challenging Environment
SEEK Limited delivered a solid result amid the pandemic-related challenges. The first-half results and FY21 outlook are better than the expectations.
In the first half, revenue declined by 6 per cent and EBITDA was down by 1 per cent. Reported revenue stood at AUD 819 million, EBITDA was AUD 246 million, and NPAT was AUD 70 million. The 1H performance was broadly in line with the previous corresponding period.
On the back of improved YTD results and business momentum, the company intends to repay AUD 9.8 million in COVID-19 subsidies, including JobKeeper. Online Education Services (OES) and Early Stage Ventures (ESVs) are capitalising on growth opportunities. OES, a COVID-19 beneficiary, reported revenue growth of 38 per cent on PCP and ESV's 'Look-through' revenue of AUD 50 million, again an increase of 38 per cent on PCP.
The critical employment businesses' performances were better than the expectations. ANZ results were broadly in line with the previous corresponding period.
Potential Sell Down of Zhaopin
In terms of local currency, for Zhaopin, revenue was down by 8 per cent. EBITDA grew by 13 per cent on PCP, driven by improving billing trends and operational efficiencies.
SEK and other Zhaopin shareholders are in discussions with a consortium interested in acquiring an ownership interest in Zhaopin.
For a 100 per cent implied equity value, the transaction valuation is expected to be in the order of AUD 2.2 billion. SEEK is likely to reduce its stake to c23.5%, if the proposed transaction is finalised.
SEEK Plans More Focus and Independence for AP&P and Investments
The Board opines that more focus and independence can benefit SEEK Investments and SEEK Asia Pacific & Americas (AP&P). The company is reviewing options for retaining the crucial economic exposure to investments. Moreover, the Board wants SEEK to have access to third-party capital for investments while growing further.
An independent Board Committee has been established for the review process. It also includes external advisors. It is anticipated that the review will result in two more focussed and independent businesses:
- SEEK comprising AP&P and the ownership of Zhaopin.
- Investments comprising ESVs and OES
SEEK Chairman Graham Goldsmith has highlighted the various benefits from more independence and focus on SEEK and Investments. An independent SEEK will have more capital flexibility for re-investment in AP&P and for dividends. Investments with access to external capital can focus on long-term investments for building large businesses.
On 23 February 2021, at AEDT:2:06 PM, SEK traded at AUD 27.860, down by 8.175%.
