Seek pumps more money into Brazil, Asia

23 Jun 2016

Seek, the Australia-based jobs platform, paid AUD$104 million ($78.8 million U.S.) for full ownership of Brazil’s Brasil Online, operator of the country’s leading jobs marketplace Catho.

Seek also marginally increased its stake in Seek Asia Limited – from 80 percent to 86.2 percent – at a cost of AUD$78 million.

Seek also has interests in job sites in Africa, India and Bangladesh.

The latest round of overseas investment by Seek confirms the strategy of consistently increasing investment in both international businesses, and development of new products, followed by the company in the past 12 months.

This strategy resulted in an investment of $125 million U.S. in OCC Mexico, a Mexican job site, the consolidation of its JobsDB and JobStreet brands into Seek Asia Limited, and tightening the hold on its 67-percent interest in Chinese site Zhaopin with new appointments to the Zhaopin board.

In 2012, Seek paid an estimated AUD$100 million to increase its stake in Brasil Online/Catho from 30 percent to 51 percent, and a further AUD$22.5 million to increase its stake in OCC Mexico from 41 percent to 57 percent.

Both Catho and OCC Mexico are market leaders in employment classifieds in their respective countries. Catho claims 95 percent brand awareness in Brazil, and more than double the “unique” job opportunities of its nearest competitors.

Ronnie Fink, corporate development director of Seek, said Catho was a key partner in Seek’s global collaboration and product development activities. This has included Brasil Online acting as pilot and test market for the roll-out of new initiatives and research and development programs, including the launch of a Careers and Salary Insights product, and the use of Brasil as a “global development pod” for research into job matching through artificial intelligence.

Fink admitted that the Latin American economy had been “challenging” in the past year, but said even against the downturn, the Brazilian business had grown its EBITDA by two percent in H1 of FY2016.

In terms of Seek Asia, Seek CEO Andrew Bassat said, the Asian business (like the Latin American business) acted as a key hub for product development and played a leading role in creating Seek’s next generation of products. He said Seek had already managed a complex mergers and acquisitions strategy for Seek Asia and had launched its Seek Learning model across Asia. Following this latest investment, Seek owns 86.25 percent of Seek Asia with News Corp holding 13.75 percent.

In its H1 of FY2016 results, Seek reported revenue growth of 22 percent with total revenue at AUD$482 million. Seek International grew its revenue by 34 percent in H1 from the same period last year, outpacing domestic revenue growth in Australia and New Zealand. (The latter was up 15 percent.)

Bassat reaffirmed management’s estimate for net profit after tax (NPAT) in FY2016 at AUD$195 million, and said Seek will continue with its strategy of re-investing internationally for future growth.

Preliminary forecasts for Seek’s FY2017 NPAT are in the range of AUD$215 million to AUD$220 million.

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Kate Lyons

Kate Lyons has worked as a business, marketing and finance journalist for over 25 years. Formerly news editor and deputy editor of advertising weekly B&T, as well as editor of Australian Small Business magazine and Franchising Magazine, she has written for all major metropolitan newspapers in Australia, including The Australian Financial Review, The Australian, The Sunday Telegraph and The Sydney Morning Herald.