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	WiseTech's Margin Guidance Shouldn't Have Surprised Market -- Interview
1	23/08/2023 3:22PM
2	By Stuart Condie SYDNEY--WiseTech Global had flagged the hit to margins from recent acquisitions and the logistics software provider's fiscal guidance shouldn't have surprised the market, Chief Executive Richard White said. WiseTech shares slumped about 20% Wednesday after it said it expected fiscal 2024 earnings before interest, tax, depreciation and amortization of between 455 million and 490 million Australian dollars (US$292.2 million- US$314.7 million). The average analyst forecast for the 12 months through June 2024 had been for A$550 million, according to data compiled by FactSet. Revenue guidance was broadly in-line with expectations but WiseTech anticipates an Ebitda margin of between 44% and 45%, down from 47% in fiscal 2023 and 50% in fiscal 2022. The company had warned investors back in February that its recent acquisitions were lower-margin businesses, White told Dow Jones Newswires. "All we can do is explain the situation, which we did extensively at the half year. We actually said that this margin contraction was going to occur," White said in an interview. "The noise in the market is just that: noise." WiseTech this year acquired intermodal rail-solutions provider Blume Global and transport-management software provider Envase Technologies for a total of US$644 million. In February, it said it expected Envase's calendar 2023 margin to be in the low-to-mid 20% range, and for Blume's fiscal 2024 margin to be about 10%. "The acquisitions are a lower-margin business than WiseTech is, so there will be some dilation as they integrate. What we're really focused on here is generating that high revenue growth which will ultimately deliver the profitability that we expect," Chief Financial Officer Andrew Cartledge said. WiseTech expects an Ebitda margin for the second half of fiscal 2024 of 47%-48% before returning to 50% by fiscal 2026. Margins could even be around 50% a year earlier than that, E&P Financial analyst Paul Mason said in a note. Write to Stuart Condie at [email protected]