Work with your personal adviser to grow your wealth

International Opportunity – WiseTech Global


WiseTech’s Annual Profit Doubles as Container Volumes Rise – WTC.ASX

Logistics software firm WiseTech Global Ltd, said annual profit more than doubled, as container volumes recovered from the prior year’s Covid-related disruptions.

The Australia-listed company reported an underlying net profit for the 12 months through to June of 105.8 million Australian dollars ($76.8 million), compared with A$52.6 million a year earlier. Revenue jumped 18% to A$507.5 million.  Including one-off items, statutory profit fell 33% to A$108.1 million. 

Earnings before interest, tax, depreciation and amortization – a measure closely watched by analysts – rose 63% to A$206.7 million, handily exceeding WiseTech’s upgraded guidance range of A$165 million-A$190 million. The average of analysts’ forecasts was for Ebitda of A$186.1 million, according to data compiled by Factset. 

WiseTech said it expects revenue to rise by 18-25% in FY 2022, with Ebitda rising by 26-38%. WiseTech said it expected supply chain disruption and capacity constraints to continue until vaccinations are widespread. 

 “We have continued to see a goods-led recovery in global trade resulting in tighter capacity, congestion and higher rates in global logistics channels,” founder and chief executive Richard White said. 

“Whilst these higher rates do not translate into immediate revenue growth for WiseTech, we are benefiting from the acceleration of the longer-term structural changes that they are driving.” 

WiseTech declared a final dividend of 3.85 Australian cents per share, up from 1.6 Australian cents a year earlier. 

The company had A$315.0 million in cash at the end of fiscal 2021, with no outstanding debt excluding lease liabilities. While WiseTech paused its acquisition strategy a year ago, it said on Wednesday that its new unsecured four-year, A$225 million facility would provide a solid foundation for future growth. 

WiseTech invested A$167.1 million in research and development in fiscal 2021, up 5.0% on year, equating to 33% of total revenue.  “We remain focused on research and development that delivers breakthrough products that enable and empower those that own and operate the supply chains of the world,” Mr. White said.

Investment Perspective

WiseTech Global has grown quickly in recent years, with revenue increasing at a CAGR of 34% between fiscal 2015 and 2021. We expect strong growth to continue and forecast a revenue CAGR of 21% over the next decade, underpinned by the global rollout of WiseTech’s cloud-based logistics software platform at large third-party logistics clients such as DHL. The narrow economic moat, which is based on switching costs, and strong annual client retention rate of around 99%, should protect earnings from competition as the business grows. We expect revenue growth and the scalable business model to drive margin expansion, and we forecast an improvement in the EBIT margin from 31% in fiscal 2021 to 45% by fiscal 2031. However, we expect ongoing investment in capitalised research and development to cause weak cash conversion for the foreseeable future.

Business Description

WiseTech Global Limited provides software solutions to the logistics industry in the Asia Pacific, the Americas, Europe, the Middle East, and Africa. The company develops, sells, and implements software solutions that enable logistics service providers to facilitate the movement and storage of goods and information. It offers CargoWise, a software platform for logistics service providers that enables execution of complex logistics transactions and manage operations. In addition, the company provides tariff management software; terminal management logistics solutions; customs, bonded warehouse and trade compliance solutions; freight forwarding solutions; intermodal trucking, less than truckload, and parcel shipping transportation management solutions; container optimisation solutions to the shipping and landside logistics communities; and messaging integration solutions. It serves multinational companies, and small and mid-sized regional and domestic enterprises. WiseTech Global Limited was founded in 1994 and is based in Alexandria, Australia.

Related Posts

Is it Time to Rethink your Term Deposit Strategy?

Term deposits are currently riding near a 15-year peak, offering investors a temporary high. However, this…


Dovish sentiment favours accommodative policies, aiming to stimulate economic growth even at the cost of higher…

International Women’s Day

International Women’s Day provides an important opportunity to fundraise for female-focused charities, help raise their visibility,…

Investing for Income

Tom McBride and Richard Parkin hosted an investor seminar at the Novotel Cathedral Christchurch on Thursday…