SEEK shares surge on new Asia buy

SEEK shares surged by more than 20 per cent after announcing a $580 million purchase of Jobstreet’s online employment unit, giving the company a stronger foothold in Asia.

The news came as SEEK reported a 64 per cent jump in first-half net profit to $111 million.

Revenue in the six months ended December 31 rose 48 per cent to $343.3 million from $231.2 million in the year-earlier period, the company said in a statement to the Australian stock exchange. Net profit in the previous half year totalled $67.5 million.

The job-search website giant said its Asian arm was buying the online employment businesses of JobStreet Corporation for a valuation of $580 million.

Chief executive and co-founder Andrew Bassat said the transaction marked an ongoing focus in Asia, including China.

“In the near term, we expect revenue residing in Asia to comprise over 50 per cent of SEEK’s overall revenue which further cements SEEK as a global leader in online employment,” he said in a statement.

Citigroup analyst Justin Diddams said the result exceeded expectations as it was boosted by currency gains in its international business and by a strong performance from its education business.

“The outlook statement suggests positive momentum in each business,” he said while also pointing out that second half net profit is expected to be only marginally ahead of first-half profit.

Mr Bassat praised the company’s ability to perform strongly, despite a weakening local labour market.

“We’ve been seen for some time now as a cyclical business exposed to the Australian unemployment rate and we’ve had a really negative performance in the Australian unemployment rate over the last six months but despite this we’ve seen a really clear record result,” he told The Australian Financial Review.

“We’ve seen SEEK International come through really strongly, SEEK Education come through really strongly and the employment business perform credibly and basically hold flat.

“Overall we’re just really proud the group has delivered a record result in tough conditions.”

The interim dividend, payable to shareholders of record on April 30, is held at 14¢.