WiseTech Global Ltd (ASX: WTC) is holding its AGM today. Is it time to jump on the tech share after it gave an update?
WiseTech is a business that provides software for global logistics businesses.
What did WiseTech say?
The management team reminded investors about its performance in FY20. It said that revenue went up by 23% with CargoWise (the main software) revenue going up 20% despite COVID-19 headwinds.
FY20 EBITDA (EBITDA explained) went up 17% to $126.7 million and operating cashflow grew by 16%. Statutory net profit rose by 197% to $160.8 million, though this included a non-cash fair value gain of $111 million. Underlying net profit was $52.6 million.
What was said in FY21?
Most importantly, WiseTech is still expecting solid growth in FY21. Revenue in FY21 is expected to be between $470 million to $510 million, which would represent growth of 9% to 19% compared to FY21.
Key variables for the report will depend on large customer rollouts, new customer wins, user and transaction growth, new product and feature enhancement rollouts. Market share growth is the main driver of CargoWise revenue growth.
FY21 EBITDA is expected to be between $155 million to $180 million, this would represent growth of 22% to 42%. The EBITDA margin is expected to come in between 33% to 35%, which would be an improvement of 3 percentage points to 5 percentage points.
The company is expecting a foreign currency exchange headwind of $20 million to revenue and $9 million to EBITDA.
WiseTech isn’t expecting any new acquisitions not already closed. The full year impact of FY20 acquisitions is $12 million. The acquisitions are expected to deliver flat growth.
The company is expecting to reduce costs by $10 million in FY21, and it’s expecting a run rate of $20 million to $30 million for FY22.
Summary thoughts
WiseTech seems like a good business that continues to grow strongly, despite the negative comments by shorters.
Considering the WiseTech share price has risen above $30 again, I’m not sure that it’s a clear buy today because of the valuation. But if I were a shareholder then I’d be happy to hold for the coming years. But there are other ASX growth shares I’d prefer to buy today such as Pushpay Holdings Ltd (ASX: PPH).
