Bumper profit from Seek.com

Paul Bassat, co-founder of Australia’s biggest online job advertising firm Seek, is a happy man this morning after announcing to the market that the company has beaten analyst profit expectations for the first half year.

Seek’s net profit for the six months to December profit increased 49% to $35.6 million from $23.9 million a year earlier. Revenue was up 43% to $99.9 million.

Increased advertising volumes and new products like “standout ads” boosted the result, says Bassat. But, he says: “The key driver of growth for us as been the migration of employment advertising from print to online.”

Seek has fought off several new players into the online job market, including Jobs Jobs Jobs and Job X. Bassat says the company’s focus has remained on attracting advertisers and job seekers to Seek. “It’s a hard market to enter 10 years after the incumbents.”

In January a record 2.8 million unique browsers visited Seek.

Bassat says he is not giving the market specific guidance on profit expectations, but he expects strong revenue and profit growth for the 2008 financial year.

“It’s coming predominantly from the local market and the Seek Learning business,” Bassat says. For more on Seek Learning see our extended interview with Paul Basset.

He says the $US30 investment in the Chinese market through its 30% stake in Zhaopin is still making losses, but user registrations and traffic to the site are growing.

“Hopefully in this market we have got ourselves to position with big market share. Some of the challenges that Zhaopin are facing are not so different as those we have already faced, so hopefully we can add strategic advice.”

Bassat says Seek is assessing other countries for investment opportunities, but is tight-lipped over where they are.

Seek, which is chaired by James Packer, declared an interim dividend of 8.7 cents per share, fully franked, an increase of 45% from the dividend of six cents paid in the same half last year.

The group is 27% owned by the Packer-backed Consolidated Press Holdings.

Seeks’s share price has fallen recently, losing about 35% since it hit a high of $9.48 in October. The stock closed at $6.16 yesterday.


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