SEEK's revenue hits $1b amid record ad volumes for jobs in Australia and NZ

SEEK's revenue hits $1b amid record ad volumes for jobs in Australia and NZ

Photo courtesy of Scott Graham (Unsplash).

The tightening employment market has led to record job ad volumes for SEEK (ASX: SEK), helping the online marketplace report a 130 per cent increase in NPAT to $240.8 million from continuing operations in FY22.

The Melbourne-based company announced sales revenue of $1.11 billion for the year, up 47 per cent on FY21, as job ad volumes in New Zealand and Australia surged to a new high during the year.

With ambitious plans for growth across Asia, SEEK’s operating expenses increased by 42 per cent to $607 million during the year due to significant regional investment, including a large-scale rebranding campaign.

“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,” SEEK CEO Ian Narev says.

“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.

“Across ANZ, high levels of hiring activity resulted in record job ad volumes of 325,000 in March 2022. Yield also increased through higher prices, customer mix and increased depth adoption.”

In Australia and New Zealand, the tight employment market is driving high levels of activity, with overall job ad volumes up 39 per cent on FY21, delivering revenue growth of 53 per cent and EBITDA growth of 60 per cent.

SEEK’s revenue growth was achieved despite increased personnel costs from product and technology and increased marketing costs following lower activity in FY21 due to COVID.

The company attributed $16 million of a total of $22 million spent on platform unification costs to ANZ, which SEEK hopes to complete by the end of FY24.

As a result of increased scope and rises in the cost of highly skilled technical resources, it estimates that the incremental costs of the program over three years have grown to approximately $180 million.

The average number of monthly users in Australia and New Zealand increased by 6 per cent, with engagement benefitting from the ‘great job boom’ campaign and improved AI recommendations.  

However, the site received lower applications per ad throughout FY22 in trends consistent with the unemployment rate at a historical low.

The share of corporate job listings rose 50 per cent against the previous year and now makes up more than a quarter of all job ads, with SMEs consisting of 40 per cent and recruiter job ads making up less than a quarter.

The highest growth sectors in ANZ included administration and office support, retail and consumer products and hospitality and tourism. At the same time, trades and services, healthcare, information and communication technology remain the top advertising industries.

Demand across all states is ahead of pre-pandemic levels, with Victoria, NSW and Queensland experiencing the highest growth compared to FY21.

SEEK warns that macroeconomic conditions at the start of FY23 remain uncertain, though it says most economists are forecasting continuing low unemployment.

Although Aussie and Kiwi job ad volumes moderated slightly in June, recovering to a stable level in July, both were well ahead of the prior period.

“Economic and labour market conditions across our key markets remain positive, although some leading indicators look slightly weaker,” Narev says.

“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 is paying total dividends of 44c for the year, up 10 per cent on FY21.

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