Software company WiseTech shares jump on earnings upgrade

Wisetech’s shares have jumped more than 3 per cent after the logistics software company announced an improved forecast for the 2022 financial year, underpinned by better-than-expected growth and cost savings.

The Sydney-based group told investors on Friday that it now expected its earnings before interest, tax, depreciation and amortisation (EBITDA) for the year would be in the range of $310 million to $320 million. It had previously been guiding to an EBITDA of between $275 million and $295 million for the year.

WiseTech CEO Richard White at his home in Sydney.Credit: Natalie Boog

Shares in WiseTech leapt 7 per cent on the announcement, before paring those gains to close up 3.4 per cent at $44.13.

Wisetech chief executive Richard White put the group’s improved earnings outlook down to the group’s “3P” strategy which refers to the company’s focus on “product, penetration and profitability” to attract global logistics companies to its cargo management system.

“We are upgrading our FY22 guidance, with our performance reflecting the resilience of the WiseTech business model and strategy through the cycle,” White said.

“Our product led approach and focus on our 3P strategy has enabled us to continue to deliver strong top line growth and drive significant operating leverage. We look forward to updating the market further at our full year results.”

The increased EBITDA forecast represents a growth of 50 to 55 per cent on the prior year.

The earnings upgrade caps off a good month for the group. Earlier in July it announced it had acquired UK electronic documentation provider Bolero for an undisclosed sum.

Those positive announcements helped buoy the $14 billion company which has seen its shares fall 24 per cent this calendar year from an early January peak of $59.86 amid tech sell-offs in Australia and on Wall Street.

WiseTech’s flagship asset is CargoWise, a platform for managing shipment data and freight operations used to manage ports in more than 160 countries by logistics giants FedEx and DHL.

Last year the company posted an 18 per cent jump in revenue to $507.5 million and expects revenue in the range of $600 to $635 million in the 2022 financial year. White said at the time the company had been on the front foot reacting to the pandemic and had focused on larger companies that would recover from global lockdowns quickly.

“We were very early to predict the pandemic, much earlier than most,” he said. “We were very early on in seeing what was going on in China, we saw the trade figures drop. We heard from our staff who were locked up in Wuhan that there was a serious problem.”

WiseTech will post its full results on 24 August.

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