The WiseTech Group Ltd (ASX: WTC) share price has jumped 12% on an excellent FY24 result which impressed investors.
WiseTech provides the CargoWise software, as well as other software, which is focused on helping the logistics industry globally. Customers include 46 of the top 50 global third-party logistics providers and 25 of the 25 largest global freight forwarders worldwide.
WiseTech FY24 result
Here are some of the main highlights for the 12 months to 30 June 2024:
- Total revenue increased 28% to $1.04 billion
- EBITDA increased 28% to $495.6 million
- Underlying net profit after tax (NPAT) grew by 15% to $283.5 million
- Statutory NPAT up 24% to $262.8 million
- Free cashflow up 14% to $333 million
- Final dividend per share up 10% to $0.092
WiseTech reported that CargoWise revenue soared 33% to $880.3 million, with 19% organic growth, thanks to acquisitions and customer growth including new large global freight forwarder (LGFF) rollouts.
CargoWise customer penetration momentum continues with LGFF wins, including Sinotrans. Nippon Express was secured after the year end.
The company-wide cost efficiency program achieved its goal and delivered $40 million of annual run rate savings with $14 million of net cost reductions inFY24. The program has been expanded, with an updated target of $50 million. The EBITDA margin was 48% in FY24, ahead of expectations, with a run rate of 50% in the fourth quarter. A rising EBITDA margin is good news for the WiseTech share price, in my eyes.
Management commentary
The WiseTech founder and CEO Richard White said:
Importantly, our three breakthrough product releases CargoWise Next, Container Transport Optimization and ComplianceWise, will present a step change in our product capabilities, growth and value to customers. Building on our capabilities across our key development areas, the productivity advantages we expect to deliver for our customers are significant and have the potential to change the commercial models of the industry and make the adoption of our software mission critical to remain competitive.
Outlook for the WiseTech Global share price
In FY25, the company is expecting revenue to be between $1.3 billion to $1.35 billion, which would represent growth of 25% to 30%. EBITDA is guided to be between $660 million to $700 million, representing growth of between 33% to 41%.
WiseTech’s full-year EBITDA margin is predicted to be between 51% to 52%.
It is highly impressive what the business has managed to achieve thus far. It seems the business still has plenty of profit growth potential, but WiseTech shares are definitely pricing in that possible growth.
It’s a great business, but I’m not sure what a good price to buy at is considering the very high price/earnings ratio (p/e ratio). There are other ASX growth shares I think would make better buys today.
