WiseTech [ASX:WTC] Shares Rise on ‘Strong Growth and Margin Expansion’

Cloud-based logistics software group WiseTech Global [ASX:WTC] presented its first-half results for FY23, revealing a surging NPAT of $108.5 million and a 35% gain in total revenue.

EBITDA also rose 36% to a total of $187.3 million, leading the group’s board to declare an interim dividend increase of 39% to the tune of 6.6 cents each.

Shares for WTC were increasing in value by more than 4% by the early afternoon, worth $58.14 each.

In the year so far, share value has grown nearly 15% for WTC, and the software corporation possesses a 43% lead in value in its sector average, 33% over the wider S&P 200:

Source: tradingview.com

Revenue and earnings abound for WiseTech’s 1H FY23

Wednesday saw the logistics software developer provide its first half financial year 2023 results overview, touting an increase of 35% in total revenue and 40% in net profit after tax (NPAT).

For the first half, WTC claimed $378.2 million in revenue. An organic increase of 32% on the first half of 22.

Underlying NPAT turned over $108.5 million, and statutory NPAT was $109 million, 41% up on 1H 2022.

The group’s CargoWise segment went up 50% — or 46% organically — on the same time last year, with $289.2 million. According to WiseTech, this segment was driven by growth from existing and new customers, including new rollouts from Large Global Freight Forwarder.

EBITDA (earnings before interest, tax, depreciation, amortisation) increased 36% on last year, totalling $187.3 million.

The group’s EBITDA margin increased by one percentage point to 50%, which was described as a reflection of operating leverage, pricing, the release of new products, and ‘ongoing financial discipline.’

WiseTech reported free cash flow of $137.8 million, an increase of 53% on the prior year.

An interim dividend of 6.6 cents per share was declared by the group’s board, fully franked. This was an increase of 39% year-on-year and reflects a payout ratio of 20% of the group’s underlying NPAT.

Based on continuing uncertainty in the market, WTC anticipates FY23 revenue of $790–822 million (representing revenue growth of 26–30%) and EBITDA growth of 19–29%.

While cautious, this guidance beats analysts’ consensus, the company bolstered by new deals with NTG, IFB, EMO Trans, and Kuehne & Nagel.

CEO, Richard White, said:

‘Our strong first half performance highlights the continued resilience of our business model and progress of our 3P strategy. Our ability to deliver strong growth in revenue, earnings and free cash flow, in a softening global macroeconomic climate, is the result of a tremendous effort by our teams around the world and we’re immensely proud of the progress we are making towards our vision of being the operating system for global logistics.

‘We continue to see strong demand for our products from the world’s largest freight forwarders, having secured four new global rollouts and three organic global rollouts since July last year. CargoWise is rapidly becoming the industry standard.’

Source: WTC

Regards,

Mahlia Stewart

For The Daily Reckoning

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