The WiseTech Global Ltd (ASX: WTC) share price has soared in 2019 and the company has been a standout performer on the ASX this week so far. Today is no different, with WiseTech shares surging more than 10% to $30.58 (at the time of writing), after the world-class logistics company released its FY19 results this morning.
How did WiseTech perform in FY19?
Here are some financial highlights from the company's investor presentation:
- 57% revenue growth to $348.3 million from the previous corresponding period, amounting to a 49% compound annual growth rate over the last 4 years
- 39% increase in EBITDA to $108.1 million
- 33% in net profit after tax to $54.1 million
- 18% increase in FY fully franked dividends to be paid 4 October
The company now services 43 out of the 50 top global third-party logistics providers across 150 countries, up from its last reported figure of 38. WiseTech also services all 25 of the top global freight forwarders. Yet, the logistics company boasts a diversified revenue channel with no single customer comprising of over 5% of revenue.
From a product perspective, WiseTech manages to ensure minimal churn of less than 1% across its CargoWise One global platform, with 99% of the revenue from this key product recurring and 98% on-demand, meaning the company grows with its customers.
Another investment highlight is WiseTech's R&D spend. Its total investment in product development and innovation is 32% of revenue, totalling $112 million. This has allowed the company to add around 3,500 enhancements to its product line. WiseTech also plans to increase investment in FY20 by 30–40%.
Acquisitions
The company is renowned for its aggressive acquisition strategy in fuelling rapid international expansion, which makes total sense for a company that is acutely cash rich. At the end of FY19, WiseTech recorded cash and cash equivalents at $260 million. This reflects its $336 million capital raising 2H19, offset by its numerous acquisitions.
WiseTech's strategy has allowed it to bypass regulatory barriers (e.g. customs, logistics, tariffs). This includes its investment in Ulukom (Turkey), Fenix (Canada), Multi Consult (Italy), Taric (Spain) and DataFreight (UK) to name a few. These acquisitions have boosted organic revenue growth by 86% in FY19.
Looking forward
For FY20, WiseTech's revenue growth is estimated to fall between 26% and 32%, much lower than FY19's result of 57%. Also, despite the shining financial highlights, the company's NPAT actually missed analyst expectations. Estimated NPAT was a 6.7% higher than $54.1 million, and WiseTech only narrowly beat dividend expectations by 0.05%.
