WiseTech share price on watch as net profit rockets 80%

WiseTech Global Ltd (ASX: WTC) shares will be closely monitored on Wednesday morning after the logistics software maker released its full-year results and future outlook.

What did the company report?

• Revenue was up 25% to hit $632.2 million
• Earnings before interest, taxation, depreciation and amortisation (EBITDA) was up 54% to hit $319 million
• Statutory net profit after tax was up 80% to hit $194.6 million
• Free cash flow was up 71% to hit $237.3 million
• Final ordinary dividend was raised from 3.85 cents per share to 6.4 cents.

What else happened in FY22?

WiseTech has acquired a remarkable 41 companies since listing on the ASX in 2016.

During the last financial year, it completed two takeovers — Inobiz and Hazmatica.

“We are actively looking at further tuck-in acquisition opportunities which are typically smaller in size but can quickly bring their team, technology and knowledge, without major rewrites, and rapidly add value to the CargoWise ecosystem,” said WiseTech founder and chief executive Richard White.

“We also continue to look at larger, strategically significant, acquisition opportunities supported by our strong balance sheet, cash flow and funding options.”

What did management say?

White said of the full-year result:

This standout performance demonstrates the increasing resilience of our business model. In an environment of persistent supply chain constraints, inflationary pressures and COVID-related business disruption, to have delivered these outcomes is a real testament to the strength of our business, the dedication of our people, and the effectiveness of our 3P strategy.

COVID-related capacity constraints, port congestion and labour shortages experienced during the year resulted in an overloaded supply chain which could take some time to unwind. Demand for goods continues to outpace pre-COVID-19 levels, 4.9% above pre-COVID trendlines.

What’s next?

Assuming market conditions stay reasonably similar, WiseTech is predicting revenue growth of 20% to 23% for the 2023 financial year and EBITDA growth of 21% to 30%.

“We are well placed to benefit from the continuing M&A consolidation activity amongst global logistics operators, and their increasing investment in replacing legacy systems with digital solutions, as well as pursuing our own M&A opportunities,” said White.

“Looking ahead, we also remain focused on R&D and accelerating our investments to deliver breakthrough products that enable and empower those that own and operate the supply chains of the world.”

WiseTech share price snapshot

In a remarkable rally, the WiseTech stock price has rocketed more than 51% since 22 June.

That means that it’s only down 11.5% for the year so far, despite getting caught up in the general sell-off of tech and growth shares.

The price-to-earnings ratio is still arguably quite high, sitting at 122.

The post WiseTech share price on watch as net profit rockets 80% appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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