The WiseTech Global Ltd (ASX: WTC) share price has jumped 11% after the ASX tech share reported its FY24 first-half result.
WiseTech provides software called CargoWise which is used by many of the world’s largest logistics companies across 181 countries, including 45 of the top 50 global third-party logistics providers and 25 of the 25 largest global freight forwarders.
HY24 result
These are some of the main numbers from the first six months of FY23:
- Revenue rose 32% to $500.4 million
- EBITDA increased 23% to $229.9 million
- Underlying net profit after tax (NPAT) grew 5% to $128.4 million
- Statutory NPAT rose 8% to $118.2 million
- Interim dividend per share up 17% to $0.077
Overall organic revenue growth was 15%. CargoWise revenue rose 40% to $420.7 million, with organic growth of 19%. Impressively, recurring revenue made up 97% of revenue, up from 96% last year.
The company said it further enhanced its landside logistics capability with the acquisition of MatchBox Exchange, “extending and strengthening WiseTech’s position in one of its six key development priority areas.”
FY24 first half profitability benefited from price increases to offset the impacts of inflation and generate good profit growth. It’s that prospect of growing profit which keeps sending the WiseTech share price higher over time.
A cost efficiency program is “on track” to deliver $15 million in net savings in FY24, as part of an overall target of $40 million in annual savings.
Recent acquisitions are diluting the overall EBITDA margin while being integrated, but the company is on track to return to an EBITDA margin of at least 50% in FY26 as per its previous guidance.
Guidance reconfirmed
The guidance is based on the assumption that market conditions do not “materially change” and it’s based on current trends in supply chain volumes. It warned changes in industrial production and/or global trade may impact guidance.
FY24 revenue could grow between 27% to 34%, to a range of $1.04 billion to $1.1 billion. The FY24 EBITDA could be between $455 million to $490 million, which would represent growth of between 18% to 27%.
The company’s full-year EBITDA margin guidance range increased to 44% to 46% because of the first half’s EBITDA margin strength.
Final thoughts on the WiseTech share price
Investors loved the result, with the EBITDA margin being stronger than expected.
I’d say it’s one of the ASX’s best businesses, and it’s doing really well. It deserves to trade on a high valuation, but I don’t know if the current valuation is fair, particularly in a higher interest rate environment.
The WiseTech share price may keep rising if its revenue and underlying margins keep increasing, but I can’t say it looks good value to buy today.
