Founder Richard White trims his stakes in ASX200 company WiseTech, should investors worry?

Summary

• WiseTech’s Founder and CEO, Richard White, gained almost AU$9,959,109 on 3 September 2020 by selling his 175,511 direct shares and173,993 indirect shares at an average per-share price of AU$49 and AU$28.50, respectively via series of on-market trades between 27 August 2020 and 2 September 2020.
• It is worth noting that the CEO still holds voting control of 139,699,669 (Direct: 11,410,091 and Indirect: 128,289,578) WiseTech’s shares, demonstrating 46.67% of total issued share capital.
• Co-Founder and Executive Director of WiseTech, Maree Isaacs’s 15,472 shares were also sold on the same day at an average per-share price of AU$28.50; She currently holds 11,408,693 indirect interest.
• The Company also highlighted that Mr White plans to sell down a small fragment of his shareholding to expedite liquidity in the Company’s shares, as well as allow some diversification of his assets.
• WiseTech may be monitored in near term amidst its highly cash generative business model, robust balance sheet and boosted cash flows with a continued focus on the product innovation, authorising the Company to take further strategic and operational initiatives, with inflated global demand amidst large logistics service providers for technological and digital solutions of the Company.

ASX 200 company, WiseTech Global Limited (ASX:WTC), a leading developer as well as a provider of the software solutions to the logistics execution industry, worldwide closed the day’s trade at AU$29.69, after hitting a low of AU$28.36 intra-day, on 3 September 2020.

Notably, WiseTech’s share price intra-day low followed the announcement of the sell down of the shareholdings of its Founder and Co-Founder.

On 4 September, WiseTech shares were trading at a price of AU$27.61, decreasing by 7.006% (at AEST 1:17 PM).

Mr Richard White, Founder and Chief Executive Officer of WiseTech has sold a total of 349,504 shares (includes Direct: 175,511 and Indirect: 173,993) via on-market trades between 27 August 2020 and 2 September 2020.

Mr Richard White gained almost AU$9,959,109 on 3 September 2020 by selling his direct and indirect shares at an average per-share price of AU$28.49 and AU$28.50, respectively through his 91.83% owned company RealWise Holdings Pty Limited.

While the market is flooded with the news of sales of WiseTech’s shares worth ~9.96 million by the Founder, it is worth noting that after the change in the stakes in the Company, the CEO still holds voting control of 139,699,669 (Direct: 11,410,091 and Indirect: 128,289,578) shares, demonstrating 46.67% of total issued share capital.

Furthermore, sale of the Founder’s shares was followed by the sale of shares of Ms Maree Isaacs, Co-Founder and Executive Director of WiseTech on the same day.

She sold a total of 15,472 shares at an average per-share price of AU$28.50 and gained ~ AU$ 4,40,952. Post the change, the Executive Director currently holds 11,408,693 indirect interest.

Earlier, Mr White had sold a portion of shares which equated to ~0.83% of WiseTech’s total issued share capital in June 2020, primarily to meet personal and financial-year end commitments.

Related read; WiseTech founder dumps $45.8m of shares, Is the charm around WiseTech Share Price fading away?

Mr White stated that the sale of the shares was undertaken as part of a trading program, which is noted to continue until 31 December 2020, contingent on no material, non-public information arising during this period of the trading program.

The announcement also highlighted that Mr White plans to sell down a small fragment of his stake holding to expedite liquidity in the Company’s securities, as well as allow some diversification of his assets.

Mr White intends to remain committed towards WiseTech as a longer-term shareholder.

Noteworthy, this repeated sales of shares by WiseTech’s Founder and CEO is raising numerous eyebrows, as it often acts as a signal for investors to assess a Company’s health.

Also, Read; Resilient ASX 200 Technology Stocks: EML Payments and WiseTech share prices

Casting an eye on Wistech’s Financial Update and guidance

On 19 August 2020, WiseTech unveiled its robust business performance with soared revenue of 23.3% to AU$429.4 million for the financial year ended 30 June 2020 as compared to FY19.

The swelled revenue reflected an enlarged growth of 20% (on pcp) through CargoWise platform’s consumers and an increase of 29% (on pcp) through 5 strategic acquisitions and integration procedure.

Other highlights of the accelerated financial performance of WiseTech for FY20 are as follows:

• The Company witnessed an upsurge of 17% (y-o-y) in EBITDA and stood at AU$126.7 million.
• WiseTech’s underlying NPAT was noted of AU$52.6 million for FY20.
• Furthermore, the WiseTech’s statutory net profit after tax (NPAT) experienced a boosted y-o-y growth of 197% and reached AU$8 million.
• The Company noted a substantial increment of 16% (y-o-y) in the operating cashflow and was recorded at AU$3 million.
• WiseTech also divulged its robust financial position with AU$223.7 million cash, as on 30 June 2020 versus AU$260.1 million noted in FY19.

Furthermore, the Company’s investment in the product noted an increment of 41% (y-o-y), representing swelled innovation pipeline, with a focus on assimilating acquired products, improvement of the existing product, and building new platforms.

Did you read; Did you Miss the Tremendous Boost in Value for this ASX 200 Tech Star – WiseTech Share Price

Dividend

WiseTech announced a total dividend of 3.30 cents per share (cps) in FY20, (inclusive of 1H20 interim dividend of 1.70 cps and a final dividend of 1.60 cps).

Notably, WiseTech’s shareholders would be receiving a fully franked final ordinary dividend of 1.60 cps on 2 October 2020.

Do Read; WiseTech Global Renegotiates Earnout Arrangements for Acquisitions

Outlook for FY21

The Company also provided the earnings guidance for FY21 and projected the following-

• Revenue to surge amid 9% to 19% (AU$470 - AU$510 million); and
• EBITDA, between 22% to 42% (AU$155 - AU$180 million).

Source: Company’s Presentation, dated 19 August 2020

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WiseTech’s highly cash generative business model, robust balance sheet and boosted cash flows, with a continued focus on the product innovation have authorised the Company to take further strategic and operational initiatives, with inflated global demand amidst large logistics service providers for technological and digital solutions of the Company.