WiseTech profit up 39 per cent thanks to "relentless innovation"

Written on the 21 August 2019 by Business News Australia

WiseTech profit up 39 per cent thanks to "relentless innovation"

WiseTech (ASX: WTC) is proving a salve to global logistics pain points as its software gains traction around the world, bringing a significant boost to profits in the process.

In its FY19 results today the Sydney-based company reported EBITDA was up 39 per cent at $108.1 million, driven by "geographic expansion, relentless innovation and deepening product capability".

Founder and CEO Richard White (pictured) notes revenue was up 57 per cent at $348.3 million with WiseTech's CargoWise platform now used by 12,000 logistics organisations across 150 countries.

Following a recent $300 million capital raising, White points to a "significant multi-year innovation pipeline".

"With the addressable market in technology for global logistics in the hundreds of billions and the spend on digital transformation hundreds of millions more again, we are moving fast to leverage our lead," says White.

"Expanding out from our stronghold of international logistics and complex cross-border compliance, we are deepening our reach across the supply chain and putting in place the key technologies and assets to build out powerful ecosystems."

The company highlights the world's top 25 global freight forwarders are now all customers of WiseTech, as well as 43 of the top 50 global third party logistics providers.

White forecasts EBITDA will rise by 34-42 per cent in FY20 to reach $145-153 million, while revenue is set to grow at a slightly slower rate of 26-32 per cent to $440-460 million.

"Throughout the world, the dynamics inherent in the logistics industry causing pain points for operators worldwide are cycling up faster," he says.

"This is creating a Gordian Knot across the supply chain: increasing regulation, tariffs and taxes, trade wars, capital constraints, economic changes, the tsunami of ecommerce volumes and margin pressures to name just a few, all of which create ever stronger tailwinds for greater adoption and use of CargoWise One.

"With our global reach, we see into the world's supply chains at a breadth and depth that allow us to identify and build large global data sets and transaction execution capabilities."

He notes the company has a strong foundation to build the critical cargo chain, border compliance and e-commerce ecosystems.

"The opportunity available to us is vast and while our growth rates to date have been strong our penetration of both customers and addressable markets is still in the early stages. We are moving swiftly with determination to build upon our lead," he says.

"Our powerful innovation capacity across our 36 development centres worldwide, expanded geographic footprint, and significant operational capacity to support new entry markets, presents an incredible opportunity for efficient future growth benefiting new segments across the global supply chain and the 12,000 organisations using WiseTech logistics solutions across the world."

WTC shares were up 5.49 per cent at $29.22 at 10.45am AEST.

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