Seek takes $700m hit
JOBS site Seek has had nearly $700 million wiped off its market value after flagging a sharp slowdown in forecast earnings and revenue growth, as well as higher than expected investment costs. Chief executive Andrew Bassat (right) said the cut to the book value of the Brazil and Mexico operations was “unfortunate”. “Performance has been disappointing but we remain committed to these markets,” he said in a statement.
JOBS site Seek has had nearly $700 million wiped off its market value after flagging a sharp slowdown in forecast earnings and revenue growth, as well as higher-than-expected investment costs.
The group will book a $178 million impairment charge against its operations in Brazil and Mexico for 2017/18, saying deteriorating political and economic conditions are impacting performance.
Chief executive Andrew Bassat said the cut to the book value of the Brazil and Mexico operations was “unfortunate”.
“Performance has been disappointing but we remain committed to these markets,” he said in a statement.
“A turnaround of Brasil Online and (Mexico) will require more time and better economic conditions. The likely short-term outcome is that financial performance will be worse before an expected sustained improvement.”
Seek shares – which have risen sharply in recent months together with other tech stocks – were down $1.92, or 8.8 per cent, to $20 yesterday.
Seek has forecast earnings before interest, tax, depreciation and amortisation growth of 5-8 per cent for the year ending June 30, 2019, compared with expected growth of about 15 per cent for 2017/18.