Seek’s Long-Term Outlook Remains Good Despite Short-Term Challenges

Narrow-moat-rated Seek’s share price fell by 9% following the release of its fiscal 2020 result; however, we think the company is in better shape than the share price reaction suggests. It comes as no surprise that employment advertising has been hard-hit during the coronavirus pandemic and management already provided two updates to fiscal 2020 earnings guidance since the interim financial result in February 2020. The fiscal 2020 financial result itself wasn’t particularly surprising, with reported revenue in line with our forecast, underlying EBITDA just 1% above our forecast, and reported NPAT 10% below our forecast, albeit inclusive of a range of one-off costs.