The WiseTech Global (ASX: WTC) share price has fallen over 4% after the company gave FY20 guidance at its annual general meeting (AGM).
WiseTech Global was founded in 1994 by Richard White to provide software to the logistics sector. Since then it has grown to become a global provider of logistics software, claiming to service 19 of the top 20 logistics companies globally. WiseTech makes money by charging its customers on a ‘per use’ basis rather than as a subscription model. Meaning, WiseTech directly benefits as its customers grow their businesses.
WiseTech Global’s AGM Update
The tech businesses reminded investors that in the FY19 result it grew revenue by 57% to $348.3 million and generated net profit of $54.1 million.
It also reminded shareholders that with CargoWise One customers, recurring revenue is 99% of total revenue and customer loss rate was under 1% for the seventh consecutive year.
Comments On Organic Growth And Acquisitions
One of the main things that the recent short report attacked was the company’s organic growth and acquisitions.
Today, management said that these acquisitions provide safer, faster, stronger entry to new key markets along with talented industry experts and developers, local management, local infrastructure and relevant customer bases.
The company “will continue” to execute on smaller, but important, European economies and the remaining markets in Asia, but it said that the heavily lifting with the geographic acquisitions is done.
WiseTech’s acquisitions span 30 countries with potential reach of 80% of global GDP and 74% of imports.
Explaining how it is able to integrate so many businesses at once, WiseTech Global CEO Richard White “We are an engineering-led business with IP around management of processes, software development, sales and marketing and people management.
“As can be seen by the way we have engineered our M&A orgination pipeline and acquisition processes to be a highly repeatable, consistent engine, we continue to systemically automate and improve processes.
“We apply this approach to the integration of newly acquired businesses…It is important to understand that integration and product development are only one part. We are reshaping each strategic asset”.
Outlook
The company reconfirmed its FY20 guidance for FY20 revenue to be between $440 million to $460 million, representing growth of 26% to 32%.
EBITDA (click here to learn what EBITDA means) is expected to be between $145 million to $153 million, representing growth of 34% to 42%.
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