Categories: General

Australian Financial Review: WiseTech Global increases profit 368pc

Logistics software technology company WiseTech Global’s global growth strategy of mixing organic growth with target acquisitions is reaping rewards, with the business growing its net profit by 368 per cent to $14.5 million.

The company made its first acquisition as a public company only a month after listing and since January it has acquired another two companies, the most recent being Italian customs compliance technology company ACO Informatica for $1.65 million.

It has also increased its stake in liner shipping software business Softship AG to more than 50 per cent, which contributed $6.5 million in revenue for the half year.

Overall WiseTech exceeded analyst expectations and also declared its first dividend of 1¢ per share, on the back of a 46 per cent jump in revenue to $71.1 million.

Chief executive and founder Richard White said in a statement to the ASX that strong growth in existing customer revenue of $12.8 million resulted in the majority of organic growth revenue for the business.

“Our high quality earnings growth and 361 per cent increase in net profit [attributable to equity holders] has been fuelled by significant growth in revenue from existing customers across transactions, modules and geographies and new sales worldwide, further accelerated by target acquisitions,” he said.

“Heading into 2017, our technology, financial strength and efficient business model ensure that we are very well-placed to leverage macroeconomic conditions and the competitive dynamics of the supply chain execution industry globally.”

WiseTech has been one of the strongest performing tech listings of 2016, having listed at $3.35 and grown its share price to $5.10 at close on Tuesday, having reached a high of $6.15 in late October.

In its maiden full-year results last August the company beat its prospectus forecasts and has also increased its guidance for the 2017 financial year to revenue growth of 43-50 per cent to $148 million to $155 million and earnings before interest, tax, depreciation and amortisation of $50 million to $53 million.

On Wednesday the company reaffirmed this revised guidance, with Mr White saying WiseTech’s 99 per cent recurring revenue rate, excluding recent acquisitions, allowed it to have a high degree of visibility into its future earnings.”

“We have a high growth trajectory into 2018 and well-beyond, supported by our high performance core business, strong balance sheet and significant pipeline of innovations and acquisition opportunities,” he said.

“We will continue focused pursuit of our levers of growth across the business: relentless innovation and product development, growing revenue from existing customers, acquiring new customers, stimulating network effects and accelerating organic growth through acquisitions.”

WiseTech also has an annual attrition rate of less than 1 per cent.

In the first half the business invested $24 million and 51 per cent of its staff in product development, delivering about 300 product upgrades and enhancements across its flagship CargoWise One platform.

In the pipeline, the company is also working on developments around cross-border compliance, productivity and visibility, machine learning and artificial intelligence.

WiseTech also has more acquisitions on the horizon, signalling opportunities to buy companies in the short, medium and long term in Asia, Europe and South America.