WiseTech Global appoints two new independent directors to drive ongoing global growth

About WiseTech Global Limited

WiseTech Global Limited (WiseTech, the Group, ASX: WTC) is a leading developer and provider of software solutions to the global logistics industry. Logistics software solutions help international businesses move goods around the world reliably and quickly by optimising supply chain efficiency and security. The Group was established in 1994 when it began writing software for Australian freight forwarders. Subsequently, the Group listed on the Australian Securities Exchange in 2016 and currently employs 3,000 people globally, serving 17,000 customers licensed to use its software in 174 countries.

Board appointments driving growth and governance

Two new independent Non-executive Directors have been appointed on 1 February in support of WiseTech’s ongoing growth and governance objectives.

The combination of Fiona Pak-Poy and Lisa Brock brings extensive experience across technology, logistics, business growth, finance, and corporate governance to the WiseTech Board. Lisa Brock has more than 20 years of experience in transportation, infrastructure and technology that includes roles with Qantas Freight Enterprises, Star Track Express, Australian Air Express and Adelaide Airport. Fiona Pak-Poy is a professional Non-executive Director with 25 years of experience in technology and SaaS businesses, fintech, and eCommerce. Their appointment brings the number of Directors on the Board to nine, including seven independent Non-executive Directors.

Non-executive Director Fee Sacrifice Share Acquisition Plan

As a clear and practical illustration of WiseTech’s alignment of Board and shareholder interests, the Group has in place a Non-executive Director Fee Sacrifice Share Acquisition Plan (NED Plan). The NED Plan facilitates the building of Non-executive Directors’ equity holdings in the Group to align their interests with the interests of shareholders. The NED Plan enables Directors to invest and build their equity holding in the Group using their pre-tax Director fees.

Under the NED Plan, Directors can choose to voluntarily sacrifice a portion of their pre-tax

Non-executive Director fees to receive a grant of Rights. Each Right is a conditional entitlement to acquire one fully paid ordinary share in WiseTech Global at no cost.

A clever feature of the NED Plan is that it provides that shares to be delivered under the Plan may be satisfied by the issue of new shares or the acquisition of shares on-market. This flexibility means that existing shareholder dilution is avoided when shares are purchased on-market, which is more likely to occur if the share price is considered by the Board to be below ‘fair’ or ‘intrinsic value’. On the other hand, when shares are considered by the Board to be at or above ‘fair’ value, then the flexibility exists to issue new shares, which would represent a lower cost of capital than issuing shares when the price is assessed at being below fair value.

Looking Ahead

WiseTech’s ninety-six percent recurring revenue in FY23 and customer attrition rate of less than one percent point to a resilient business model. This resilience is further evidenced by the Group’s dependable revenue and earnings growth through the cycle despite varying trade flows, persistent inflationary pressures and rising interest rates. Moreover, the Group’s forty-seven percent EBITDA margin in FY23 is impressive; margins of this magnitude are normally the exclusive domain of monopolies, Microsoft, and the mafia!

Clearly, WiseTech Global is firmly entrenched as one of the world’s foremost logistics execution service companies in that it services 44 of the top 50 global third-party logistics providers and 24 of the 25 largest global freight-forwarders worldwide. As a market leader, WiseTech places a deliberate focus on continuously enhancing the compliance, productivity, and functionality attributes of its global CargoWise software suite. Over the past five years the Group has added 5,300 product enhancements to its CargoWise software solution while in FY23 R & D expenditure was $261 million, up from $180 million in the prior financial year.

WiseTech’s market leadership position and relentless product innovation has delivered impressive ASX50 share price out-performance throughout the past five years. The Group’s ongoing evolution into more products and product adjacencies, with deeper functionality, should support continuing shareholder value accretion, at least over the medium term.