WiseTech Global Limited (WiseTech or the company) has announced its financial results for the six months ended 31 December 2022 (1H23). The Company reported Total Revenue of $378.2 million, up 35% on the six months ended 31 December 2021 (1H22). 1H23 Statutory Net Profit after Tax (NPAT) of $109.0 million was up 41% (1H22: $77.4 million) and Underlying NPAT of $108.5 million was up 40%, delivering Underlying earnings per share (EPS) of 33.2 cps. The board declared an interim ordinary dividend of 6.60cps, representing a payout ratio of 20% of Underlying NPAT.
WiseTech Founder and 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. Importantly, in January this year, we also secured our first global customs rollout with Kuehne+Nagel, the world’s largest global freight forwarder. This is a testament to the success of our foothold acquisition strategy and our customs product development, as we build out a global customs engine. We now have 47 large global rollouts in place, including 11 of the Top 25 Global Freight Forwarders, with a significant pipeline of new customers and the opportunity to deepen our penetration with existing customers.
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“To supplement our organic growth, we use targeted acquisitions to accelerate the development of the CargoWise product and give us further reach in the global logistics ecosystem. We completed two further tuck-in acquisitions in the first half in Bolero and Shipamax, and recently we announced the strategic acquisitions of Envase Technologies and Blume Global, both leading landside logistics businesses, which together extend and strengthen our position in one of our six key development priority areas.”
Strong financial and operational performance
The Company reported Total Revenue growth in 1H23 of 35% to $378.2 million (1H22: $281.0 million) reflecting strong growth from the CargoWise platform (up 50%). Total Revenue growth benefited from a $2.3 million FX tailwind and includes $5.7 million growth from tuck-in acquisitions. Organically, Total Revenue grew by 32% ($89.3 million) on the prior corresponding period (pcp). This included a $93.9 million increase to recurring revenue, up 36% on the pcp, and a $4.7 million decrease in non-recurring revenue resulting from an expected contraction from acquisitions completed in prior years.
CargoWise revenue in 1H23 grew by $96.1 million, or 50% on 1H22, to $289.2 million. Organically, CargoWise revenue grew by $88.3 million or 46%, reflecting:
· Growth from existing customers equating to $74.1 million (1H22: $37.3 million), driven by the continued progress of global rollouts, price increases and new product releases; and
· Growth from new customers equating to $14.2 million (1H22: $11.8 million).
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Earnings before interest, tax, depreciation and amortization (EBITDA) grew 36% on the pcp to $187.3 million, including tuck-in M&A dilution and $10.1 million M&A costs. Recent M&A activities limited EBITDA Margin growth to 50%, up 1pp on 1H22. Organically, the Company achieved an EBITDA Margin of 53% for the half, up 4pp on 1H22. This improvement reflects WiseTech’s enhanced operating leverage, pricing, new product releases, and ongoing financial discipline.
Strong balance sheet, cash flow generation and liquidity
Cash as at 31 December 2022 was $489.9 million, demonstrating the highly cash-generative nature of the business and strength of its underlying operating model. 1H23 operating cash flow of $203.4 million was up 51% on 1H22 and free cash flow of $137.8 million was up 53% on 1H22.
The company expects to have available liquidity of ~$400 million from existing cash reserves and undrawn debt facilities post the completion of the Blume Global acquisition, as well as ongoing strong free cash flow generation.