SEEK billings fall 60 per cent

Online job postings provider SEEK (ASX: SEK) saw its billings in Australia, New Zealand and Asia (except China) fall 60 per cent in the last week of March, as government responses to Covid-19 impact revenue across all its businesses and markets.

A $110 million sales cut to SEEK's Chinese business Zhaopin announced in February was a precursor of things to come here in Australia, where billing declines accelerated from 40 per cent in the week prior.

It appears year-on-year declines have stabilised around the 60 per cent mark, as the company takes steps to keep customers on board.

For April and May the group will relieve hirers of their minimum monthly ad spend obligations and will only charge them for ads used, while expiry dates will be extended to allow for longer use periods.

The current year-on-year reduction for SEEK ANZ and SEEK Asia is more or less in line with the drop-off seen for Zhaopin in February. 

But the Chinese business - itself a rapidly-growing enterprise until Covid-19 hit - has seen an improvement since then with its billings down just 30 per cent year-on-year in March.

SEEK notes the Chinese market is returning to normal trading conditions and its teams in the country have returned to the office.

"When the pandemic subsides, as it will, job creation will be at the core of economic recovery," says SEEK CEO and co-founder Andrew Bassat.

"This aligns directly with SEEK's Purpose and we are determined to ensure we have the capabilities to help facilitate the economic recovery process in all of our markets."

He highlights staff have been working hard from home to continue rolling out new functionality across the business, while there has been a dual focus on cash preservation and adapting business model to customer needs in this challenging environment.

"The near-term economic challenges will impact SEEK's short-term profitability. They will delay, but not fundamentally change our long-term aspirations.

"Our focus remains on executing against our existing long-term growth strategies and developing new employment and education solutions to meet the needs of our customers in the months and years ahead.

"We expect our long-term focus to unlock large new revenue pools and create significant long-term shareholder value."

The company has deferred its dividend until 23 July and has also released a potential FY20 outcome based on high-level assumptions, which it emphasises is not to be interpreted as guidance.

Under this hypothetical scenario, SEEK would book $1.6 billion in revenue and an EBITDA of $410 million, which would compare to $1.54 billion in revenue in FY19 and $455 million EBITDA in that same period.

Updated at 10:47 AEST on 6 April 2020.