‘Momentum improving’: WiseTech says it remains on track for COVID recovery

WiseTech says its global logistics business continues to recover from the pandemic’s impact, but the $10 billion software group remains cautious about its outlook and is sticking with previous guidance.

“Since June we have seen a recovery, with momentum improving and continuing in 2020-21,” chief executive and co-founder Richard White told investors at its annual meeting on Thursday.

User numbers for WiseTech's flagship product CargoWise are now tracking ahead of pre-COVID levels, according to CEO Richard White.
User numbers for WiseTech’s flagship product CargoWise are now tracking ahead of pre-COVID levels, according to CEO Richard White. Credit:Jesse Marlow

“By the end of July, CargoWise user numbers were close to pre-COVID-19 levels and have since been trending upwards and above historical averages,” he said.

But WiseTech did not upgrade the guidance provided at its full-year result in August.


Assuming there are no material adverse events, WiseTech expects revenue for the 2020-21 financial year to grow between 9 per cent to 19 per cent, or $470 million to $510 million, and earnings before interest, tax, depreciation and amortisation (EBITDA) to grow between 22 per cent to 42 per cent, or $155 million to $180 million.

Bell Potter is forecasting revenue of $501 million and EBITDA of $172 million for the year. The company, which provides software services for the trillion-dollar global logistics industry, shredded short sellers after its full-year results in August when its stock rocketed by as much as 35 per cent to a high of $28.46.

WiseTech reiterated that the pandemic is providing a tailwind for the group, accelerating the use of its global logistics software by major freight forwarders and logistics groups.

“It has accelerated the longer-term trend away from legacy systems with bolt-together micro-point applications with inherent complexity and cyber security risks, towards integrated global technology that facilitates the ability of logistics providers to navigate the new world normal,” said Mr White.

WiseTech offers a cloud-based approach to the logistics sector, alllowing data to be entered once and shared everywhere on the system.

WiseTech chairman Andrew Harrison added that trade wars should also have the same effect due to increased complexity on the regulatory front.

“These cause pain points for our customers and logistics providers and that in turn actually provides an opportunity for WiseTech and it’s CargoWise product to help customers solve those pain points,” said Mr Harrison.

WiseTech reiterated that it will continue to slow its controversial acquisition strategy in the near term given it now has “significant resources and development capability to fuel our CargoWise technology pipeline.”

The acquisitions were at the core of a short seller report by Beijing-based J Capital last year that sent WiseTech’s share price plunging.

The report alleged that the $400 million worth of acquisitions the company had undertaken since listing on the ASX in 2016 were not paying off and J Capital said the report underlined its view that profits and revenue are “most likely overstated”.

WiseTech denied the allegations and provided much more detail on the performance of its acquisitions at its full-year result in August.

WiseTech shares were up 38.5¢, or 1.3 per cent, at $30.495 in late afternoon trade on Thursday.

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Source: Thanks smh.com