2020-04-04 12:07:171970-01-01 00:00:00

Industry News

& Articles

WiseTech Global Downgrades Revenue Guidance


Logistics Software Company, WiseTech Global has defied criticisms and proceeded with its acquisition spree, picking up Swiss-based logistics provider SISA Studio Informatica for $15.5 million. The decision came after repeated criticisms that its valuation is attributed to third-party acquisitions, instead of organic growth. CEO Richard White believed that the purchase would provide his firm additional annual revenues of approximately $12.4 million and earnings of $500,000.

Prior to this, WiseTech acquired South Korean peer Ready Korea for $20 million, which consisted of $13.2 million of upfront payment while the remainder depended on the financial performance of Ready Korea. Headquartered in the capital city of Seoul, Ready Korea provides a cross-border compliance solution which assists in the lodgement of electronic transactions to the Korean Customs Services, including verifications of Free Trade Agreements.

Likewise, Mr White was of the view that this particular buy would provide the company with a crucial platform in Asia. Specifically, Korea plays a vital role in Asia and the world’s supply chain, given that it is the eighth largest export market globally. While strengthening its international reach across Asia remains one of Mr White’s priority, he too expressed plans for potential targets within the region. Presently, Ready Korea’s operations will be incorporated within WiseTech Global, with the company to continue to offer its solution directly to its existing customers, along with CargoWise One overtime.

More recently, the firm bore the brunt of its first major miss, with its shares plummeting 27 per cent. In mid-February, the $6.8 billion firm issued a guidance downgrade for the 2020 full year due to the slowdown in manufacturing in China. Consequently, this led to more than $2.6 billion being wiped off the company’s market capitalisation. WiseTech lowered its earnings before interest, tax, depreciation and amortisation forecast from a range of $145 to $153 million to $114 million to $132 million. Additionally, revenue guidance was lowered by more than one-third to $420 million - $450 million.

From a broader point of view, the rate at which WiseTech acquires business has been one of the key issues highlighted by short-seller J Capital Research in its recent attacks on the company. More notably, the firm has purchased close to 40 customs and logistics software firms since it $170 million IPO in 2016. In its most recent saga,  J Capital was of the view that the tech giant is using the coronavirus epidemic as an excuse to conceal the fundamental weaknesses concerning the business.

J Capital accused WiseTech of a variety of things, including shielding Australian subsidiaries from audit scrutiny, failing to properly consolidate purchased companies as well as inflation of revenues, among others. Yet, these allegations were completely denied by the firm. Despite Mr White’s reassurance that the impact of coronavirus on supply chains would be short-lived, the announcement revived fears on WiseTech’s stock which was already on a downward trajectory since the firm downgraded earnings.

By Caroline Wong 

Click here for a 7 days access to our Lotus Blue Portal.

Comment on this company

Latest Stories

Coronavirus Boosts Sales For Fisher & Paykel’s Respiratory Products

As the global coronavirus cases surpassed the 1 million mark, merely 20 per cent among all victims.. …

Kogan.com Benefits As Consumers Resort To Online Shopping

Back in Mid-February, shares in Kogan have slumped after CEO Ruslan Kogan indicated that his.. …

Woolworths Extends Helping Hand To Those In Need

Amid the current pandemic, supermarket giant, Woolworths Limited (WOW) is widely regarded…..

More for you

Austal Limited Plays Critical Role in US National Defence

Australia’s shipbuilder and contractor for some of the most advanced defence vessels has been.. …

Smartgroup Outperforms Despite Industry Headwinds

Salary packaging and administration services company, Smartgroup has been faced…..

Energy and Industrial Services Push Seven Group Higher

In its first-half report, the industrial services and energy sectors outperformed other aspects…..

Link Administration Suspends Earnings Guidance

Link Administration Holdings Limited (Link Group) has finalised its agreement to acquire Pepper…..

Altium Limited On Track To Achieve Goals

Altium Limited, one of ASX ‘WAAAX’ tech stocks along with WiseTech, Afterpay, Appen.. …

Reliance Worldwide Downgrades Earnings Guidance

Back in 2019 when President Donald Trump announced plans to increase tariffs in the…..

KOSEC Terms & Conditions

Kodari Securities Pty Ltd (CAR 399556) trading as KOSEC is regulated by the Australian Securities and Investment Commission (ASIC). KOSEC is a financial services company and any information provided by its platforms, portals, reports and documents is protected by copyright. Any unauthorised production of this information is prohibited.
KOSEC reserves the right to change or remove any information provided on our website, reports or any documents including these terms and conditions at any time without notice. The change or modification to the terms and conditions will be effective immediately upon posting an updated version on our website, necessary platforms and documents. It is recommended that you review the information provided on our website, including these terms and conditions frequently for any changes.

KOSEC provides general advice only. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. KOSEC recommends that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Please make sure you read our Financial Services Guide (FSG).

KOSEC does not guarantee any returns. Past performance of any product discussed is not indicative of future performance. (We urge that caution should be exercised in assessing past performance. All financial products are subject to market forces and unpredictable events that may adversely affect their future performance). Investing in the stock market can incur huge losses. Please also be aware that fees will incur on every transaction regardless of the performance of your investments or returns generated. Employees and or associates of KOSEC may hold one or more of the stocks, securities or investments reviewed by the company.

Your use of information from our website, reports, documents and from talking to our representatives/associates is at your risk. Under no circumstance should the investment be based solely on KOSEC information and general advice. You should seek professional financial planning advice.
KOSEC aims to maintain the accuracy of the data and information provided on this website, by using information prepared from a wide variety of sources, which KOSEC to the best of its knowledge and belief, considers accurate and does not make any representations or warranties of any kind, expressed or implied, about the completeness, accuracy, reliability, suitability or availability of the information provided.

We may at times refer to third parties, which the details of these third parties have been provided solely for you to obtain further information about other relevant products and entities in the market. KOSEC has no control over the information third parties have, or the products or services offered, and therefore make no representations regarding the accuracy or suitability of such information, products or services. You are advised to make your own enquiries in relation to third parties. Our inclusion of any third party content is not an endorsement of that content or the third party.

As a client you will be charged a yearly service fee and a set brokerage fee per transaction. Your service fee will automatically renew at the end of your agreed 12 month period at the same rate advertised at the time. Your credit card or bank account will be charged for a further year following which will again auto renew until you cancel your yearly service fee. You can cancel the auto renewal at any time in advance of the renewal date by contacting us. KOSEC is aware of the need to ensure the security of your credit card details and our payment systems are compliant with the Payment Card Industry (PCI) Data Security Standard.

You consent to receiving email correspondence from KOSEC, as well as companies KOSEC has an association with. These emails will be sent by KOSEC and third party companies. You can opt out of receiving any category of emails at any time by contacting us. We may from time to time inform you of special offers, or even ask your opinion of the services we provide, but your involvement is optional. Should you request us to do so, we will archive your details.

Indemnity and Liability
You indemnify KOSEC from all claims or threatened claims, suits, demands, damages, costs as well as including legal costs incurred in dealing with any threatened claim, expenses made by any person or corporation against KOSEC and any other amounts which is caused by KOSEC providing information, execution and General Advice.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from a decision made by you on the basis of information obtained through the use of our portal, reports, documents or any General Advice given and any transaction taken place.

You hold KOSEC harmless and release it from any liability in respect of any loss, harm or damage arising from delays in executing orders for the client and acknowledges KOSEC makes no guarantees about the time taken to execute an order on behalf of the client. You acknowledge that KOSEC relies on third parties in providing technology and release KOSEC from any harm, loss or damage you may suffer as a result of the failure of such information technology.

Cookies and Links
KOSEC website, and its portal uses cookies, which lets us identify your browser while you are using the site or our portal. Cookies do not identify you personally. They simply allow us to track your usage patterns. If you prefer not to receive cookies, you can configure your browser to reject them or to notify you when they are being used. The functionality of the KOSEC website may be impacted if you restrict the use of cookies.

Fill up the form below and we will get back to you as soon as possible.



KOSEC’s CEO, Michael Kodari’s new book, “Stock Market Success” valued at $39.95, available at Dymocks book stores with all the proceeds going to Dymocks Children’s Charities.


Latest TV Commercial