Former Commbank boss Ian Narev to take CEO role at Seek

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This was published 3 years ago

Former Commbank boss Ian Narev to take CEO role at Seek

By Colin Kruger

Former Commonwealth Bank boss Ian Narev has been promoted to the chief executive role at Seek but he won’t have control of the entire business, as it looks to split its traditional job ads unit and its investments unit.

In what promises to be a major transformation of the group, Seek co-founder Andrew Bassat will give up the CEO title but will become executive chairman of the $10 billion company and continue to head the investments business, which controls lucrative assets like Seek’s 61 per cent stake in Zhaopin.

Seek chief executive Andrew Bassat will be succeeded by former Commonwealth Bank chief executive Ian Narev on July 1.

Seek chief executive Andrew Bassat will be succeeded by former Commonwealth Bank chief executive Ian Narev on July 1.

Seek’s share in Zhaopin, a China-based job ads platform, is worth around $1.4 billion. The company said on Tuesday that it and other Zhaopin shareholders, are in advanced discussions with a consortium looking to acquire an ownership interest in Zhaopin.

“What we’ve released is pretty much all we can talk about at this stage. But we wouldn’t have put something out there if you weren’t hopeful that the transaction will be concluded,” Mr Bassat said.

The changes, announced on Tuesday, will see the Seek Investments unit look for external investors and the company hinted that it could be spun out completely at some point. Mr Bassat said the plan was to attract external capital for Seek Investment so it can pursue opportunities independently of what the core Seek business might be prepared to invest at any one time.

“We think that just makes sense … just setting up Investments for success, and having a degree of focus on Seek Asia Pacific & Americas (AP&A) that allow that business to stand up in its own right and thrive. That’s sort of the model we’re trying to pursue,” he said.

“Seek will always retain a connection with and (a stake) in Investment.”

The company said the AP&A job ads business would also be subject to a greater degree of independence and focus as part of the sharing of duties between Mr Bassat and Mr Narev.

Mr Narev is currently Seek’s chief operating officer and the head of Seek AP&A. Mr Narev presided over a run of record profits at CBA, but his achievements were overshadowed by a string of public relations scandals at the bank, culminating in money-laundering breaches that led to a record $700 million fine and an excoriating regulatory report that concluded it was complacent from the top down.

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“I am honoured that Andrew and the board have chosen me to become Seek’s CEO,” Mr Narev said.

Mr Bassat announced the executive changes at the job search site, effective as of July 1, along with its half year results on Tuesday.

Seek reported that underlying earnings were only down slightly despite the COVID impact and upgraded its forecast revenue and earnings for the 2021 financial year thanks to a strong performance from its traditional job ads business.

Seek’s revenue for the half declined 7 per cent to $826 million and net profit slipped 8 per cent to $69.7 million after a year blighted by COVID.

“It is the board’s intention to recommence payment of ordinary dividends at the full year (FY21) subject to ongoing improvement in the macroeconomic conditions across our key markets,” the company said.

For fiscal 2021, Seek expects revenue of $1.7 billion, earnings before interest, tax, depreciation and amortisation (EBITDA) of $460 million - up from previous guidance of $400 million - and a net profit of $100 million.

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Seek shares closed 7 per cent lower at $28.19.

UBS analyst Eric Choi said the CEO change and upgrade were both positives but the potential sale of a large portion of Seek’s Zhaopin stake was a negative as the valuation much lower than expectations. Seek has pegged the total valuation of Zhaopin at $2.2 billion, significantly lower than the $3.5 billion forecast by UBS.

Seek chairman Graham Goldsmith priased Mr Bassat for his work at Seek and said the new role allows him to “focus his expertise and passion on growing Investments.”

“Ian is the natural successor for Andrew. He brings a strong track record in digital transformation, strategy, and public company leadership.”

Mr Bassat said now is the right time for a new leader.

“Ian is a very accomplished senior executive and it has been a delight to work alongside him the past two years. As well as bringing skills well suited to the next part of the journey, Ian’s character and values give me great confidence that the Seek culture will be preserved and enhanced under his leadership,” he said.

Seek was the target of a short seller attack last year by Blue Orca which accused Seek of being a slow or no-growth platform whose core business is shrinking and which carries a dangerous amount of debt. Seek refuted the claims.

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