Sorry. I'm not sure I agree. I've invested in WTC several times. I'm not in it at the moment, but I think (at least, for the time being) it's a terrific company with masses of growth potential. But I'm not clear on exactly what Richard White is saying in his response. Some of his response even seems to confirm some of JCap's reported accusations. And the sudden resignation of Christine Holman, who, as a board member of several other companies has a reputation to protect, further suggests something may be amiss.
The part I have the most problem with is:
No overstatement of profit, growth or revenue: accounts accurate and not inflated through acquisition accounting.
Richard actually acknowledges that software R&D costs are capitalized (as assets) rather than reported as expenses, as software is the asset WiseTech builds. That makes sense to an extent.But does it justify capitalizing the costs of developing the software? The software is an asset. But the costs of developing the asset are surely an expense? From the statement, it appears as if even the salaries/wages/hours of individual software developers may be capitalized. "The inputs [for the capitalization calculation] are based on detailed digital datarecorded real-time across hundreds of product developers, which is checked and verified as part of audit each year." This sounds like billable hours. Is WiseTech capitalizing employment costs?
I'm not saying that WiseTech is capitalzing when it should be expensing. I'm just asking the question because to me it is an unclear point in White's response. Interested to know what other's in this forum think. If WiseTech is capitalizing costs it would be a major red flag for me.
(20min delay)