19 November 2019
AGM addresses, on track to deliver FY20 guidance
In FY19, our business continued to experience strong growth with revenues up 57% to $348.3million, and net profit after tax attributable to equity holders increasing to $54.1million. These results were fuelled by significant organic growth in revenues across our global business, plus the development of hundreds of product enhancements and features for our CargoWise One technology platform, and the acquisition of many strategic assets in new geographies and adjacent technologies.
Importantly, our revenues are high quality. For CargoWise One customers, our recurring revenue is 99% of total revenue, with 98% usage-based and our customer attrition rate remains well below 1% for the seventh year in succession.
During FY19, we continued our focus on innovation, investing over 32% of our revenue and over 47% of our people in product development. We further expanded our pipeline of commercialisable innovations and delivered over 830 product upgrades seamlessly across the CargoWise One platform to our customers across 150 countries. Our investment in product development and innovation over the last five years totalled $309m, and we are accelerating our development capability within our innovation teams across our 35+ development centres.
Investing deeply, and innovating continuously over the long term, makes our products easier to sell so revenues grow faster and make our sales and marketing efforts highly efficient, utilising just 14% of revenue and 12% of our people.
During FY19, and in the months since, the 15 valuable geographic and adjacent acquisitions we have announced across Europe, Asia, Australasia and the Americas will allow WiseTech to access market positions and key technologies that would otherwise take years to build. We then integrate the acquired industry and developer talent and customers over time to accelerate our long-term organic growth.
Our acquisitions in key adjacent technologies facilitate development of globally scalable innovation and fuel the convergence of technologies that add to our next generation of automations and machine learning. We also use these to grow and enhance our extensive global data and transaction sets. In addition, each new geography and adjacency we acquire adds a valuable point on our strategic map and accelerates the network effects. All of which makes CargoWise even more compelling to local and global logistics providers.
In FY19, we continued to leverage our acquired business relationships with key global customers and explored connections between the adjacent acquisitions, CargoWise and our geographic footholds. With our strategic execution and strong organic growth in FY19, the power of our CargoWise platform, annual attrition rate of less than 1% and continued investment in innovation and expansion across our global business, we are well positioned for the future.
Sustainability and environment
Global logistics is one of the world’s oldest and largest industries with annual revenues of $16trillion – yet that industry is resource intensive. As a pure technology company our own sustainability footprint is small. But our technology is designed to maximise efficiency, minimise energy and resource wastage, and reduce risks across the global supply chain. With CargoWise licensed in 150 countries, increased productivity from our technology can have widespread environmental benefits. Examples include:
- reduction in futile road trips,
- improvement in land transport’s impact on local communities, and
- elimination of delays in intermodal transportation.
Efficiency improvements available through the software we provide also allow automation and the removal of numerous manual tasks. This in turn reduces paper, electricity usage, human labour, and commercial costs.
Together, these deliver significant improvement in the world’s resources and beneficial impacts on land-side communities which can continue for future generations.
Shareholder returns, dividends and financial strength
In the full year to 30 June 2019, WiseTech provided shareholders with a Total Shareholder Return of 77.1%. The WiseTech share price rose 76.9% and outperformed the ASX 200 by 70.1% for the year.
We have declared a fully franked final dividend of 1.95 cents per share for FY19, which we paid in October. This is in addition to the 1.50 cent interim dividend paid to shareholders in April. We also offer a dividend reinvestment plan to enable eligible shareholders to re-invest their dividends to acquire additional WiseTech shares. Our ongoing dividend policy is to target a dividend payout ratio of up to 20% of our net profit after tax.
Our balance sheet remains healthy, supported by $112.5m of net cash flows from operating activities.