Can you seek growth through Seek Ltd?

Team Veye | 02 May 2018 ASX - SEK
Can you seek growth through Seek Ltd?

Seek Ltd (ASX:SEK)

The company published its H1 FY2018 results on 19th Feb’18 highlighting a very strong performance across key metrics. The company highlighted Revenue and EBITDA growth of 26% and 20% (H1 18 vs pcp). The Underlying NPAT (excl significant items & Early Stage Ventures) stood at $114.0m (pcp: $113.6m) & Reported NPAT at $102.0m (pcp: $84.1m). The Revenue growth was driven by strong organic growth particularly from ANZ and acquisition related growth of 14% from consolidation of OES and certain ESV’s (Sidekicker, JobAdder). The EBITDA growth was again driven by strong growth from ANZ, acquisition related growth of 11%.


As part of its Outlook, the company shared an updated guidance

• Confirmed: Revenue growth in the range of 20% to 25% (FY18 vs FY17)

• Upgraded: EBITDA growth in the range of 14% to 15% (FY18 vs FY17) • Confirm at upper end of previous range : Reported NPAT in the range of $225m to $230m before deducting investments in early stage growth options of approximately $25m to $30m (Data Source – Company Reports).



The company currently offers a decent fully franked Annual Dividend Yield of 2.32% against a sector average of only 1.56%. The company’s EPS stands at 60.59 and EBITD margin at 34.80. The Debt-to-Equity ratio is 67.30 against a sector average of only 96.98. The group has a P/E ratio of 19.15 against the sector average of 24.81. The stock has a Market cap of 6.81bn & a Share Volume of 350.66m. The company had a Net Debt of $411m as on 31st Dec’17. The stock price of the company has grown 9% during the last 6 months and even touched an all-time high of $21.01 on 12th Mar’18 post which it slipped 12% and is currently on its way to recovery with an upside potential to go up further (Data Source – Reuters.com).


Veye’s Take    

We are Bullish on “Seek Ltd” and give it a “Buy” at the current price of $19.42


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