Shares in WiseTech Global
(ASX:WTC), one of the ASX’s premier tech stocks, are back on track to reach last August’s all-time highs after a better-than-expected interim result on Wednesday and higher guidance for the year to June.
WiseTech is a global smoother of logistics, especially customer paperwork, and has managed to convince a lot of people here and around the world that its systems can remove the usual nasty frictions that occur when freight is sent or received, no matter the distance or destination.
The shares were up more than 8% Wednesday morning on the earnings news as WiseTech again confounded the doubters and revealed that it knows its business and how to integrate the string of takeovers made in recent years without losing momentum.
The shares peaked at $88.69 last August around its record full-year earnings report but then fell sharply to a low around $56 at the end of October as the markets took a set on the weak outlook and fears the company would have trouble handling its string of takeovers (especially Matchbox Exchange in the same month), while cutting costs and protecting revenue.
Revenue of $500 million was up 32% from the December 2022 half-year. EBITDA was up 23%, underlying net profit after tax rose 5% to $128 million, and shareholders will get a 17% lift in the fully franked dividend, which was set at 7.7 cents a share.
The company said it was still holding to its full-year revenue forecast of $1.04 to $1.10 billion.
That strong rise in EBITDA saw WiseTech lift its full-year EBITDA margin guidance range to between 44% and 46%, just under the 47% in 2022-23, which many investors thought the company would struggle to reach again this year.
But it looks like it has the momentum to do that, based on the quarterly report. The company said the 46% EBITDA margin for the first half was “ahead of expectations”.
The company still sees full-year EBITDA in the range of $455 million to $490 million, with an annual growth rate of 18% to 27%.
During the half, WiseTech acquired MatchBox Exchange in October. The company says this has further enhanced its CargoWise Landside Logistics.
CargoWise remains its major driving force, with revenue rising 40% to $421 million for the six months. This was driven by recent acquisitions as well as customer growth, including new Large Global Freight Forwarder (LGFF) rollouts.
CEO Richard White said in Wednesday’s ASX release that the company continues to concentrate on “enhancing our core CargoWise platform in pursuit of our vision to be the operating system for global logistics. Innovation remains a critical driver of our growth.”
"We have increased our investment in research and development over the last five years, investing over $1 billion to deliver more than 5,500 product enhancements which creates substantial value for our customers and underpins revenue growth…
"Adding to our list of Top 25 Global Freight Forwarders, we have secured a CargoWise global rollout with Sinotrans, bringing our penetration of the Top 25 Global Freight Forwarders to 13, which is more than half of the Top 25. We also secured large global freight forwarder rollouts with APL Logistics and Yamato Transport, taking us to 49 LGFFs overall.”
As of December 31, WiseTech had total liquidity of $445 million from cash and undrawn debt facilities.
