WiseTech Global Ltd (ASX: WTC) shares are going bananas right now, it’s up 27% after reporting the FY20 result.
WiseTech FY20 report
WiseTech announced that its total revenue increased by 23% to $429.4 million with recurring revenue increasing a proportion of total revenue to 89% (up from 88%).
The company described this revenue growth as solid despite COVID-19 headwinds. CargoWise revenue was up 20% to $263 million, which management said that displayed the strength of the core CargoWise platform. Revenue attributed to acquired businesses grew 29% to $166.4 million.
Some of the recent global contract wins has been Hellmann Worldwide Logistics and Aramex.
WiseTech reported that its EBITDA (click here to learn what EBITDA means) rose by 17% to $126.7 million. However, the EBITDA margin declined by 1% to 30%. The CargoWise EBITDA margin was 48%.
Reported net profit after tax grew by 197% to $160.8 million and statutory profit/earnings per share (EPS) grew by 185% to 50.3 cents. However, underlying net profit was flat at $52.6 million and underlying EPS fell 4% to 16.4 cents. Operating cashflow increased by 16%.
The underlying profit figures exclude a fair value gain of $111 million and $2.9 million of contingent consideration interest unwind after closing out earnouts relating to 22 acquisitions.
WiseTech dividend
The WiseTech board decided to reduce the final dividend per share by 18% to 1.6 cents.
The company finished with cash of $223.7 million with no debt excluding lease liabilities. It also has undrawn facilities in place for financial headroom and flexibility. The company has no plains to raise additional capital or debt.
Management comments
WiseTech Founder and CEO Richard White said: “COVID-19 market disruptions have provided a long-term tailwind for growing our market share as the need for digitalisation across the global logistics execution market accelerates and significantly increases the value and demand for CargoWise.
“In FY20 we saw a number of our large logistics customers such as DHL Global Forwarding and DSV/Panalpina expand their global rollouts on the CargoWise platform.
“In addition, CargoWise recently signed global contracts that include freight forwarding and customs global rollouts with Aramex (35 countries), Seafrigo Group (12 countries) and top-25 global forwarder Hellmann Worldwide Logistics (42 countries).”
Outlook
The company is expecting FY21 revenue to grow by between 9% to 19% (to $470 million to $510 million) and EBITDA growth of 22% to 42% (to $155 million to $180 million).
WiseTech seems to have done well to ride through the troubles of the past 12 months after COVID-19 and a short attack.
At the current WiseTech share price it’s valued at 161 times FY20’s underlying profit. That’s extremely pricey and I don’t think it represents good value today. A technology ASX growth share like Pushpay Holdings Ltd (ASX: PPH) seems like much better value with just as good (if not better) growth prospects in my opinion.
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