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Strong maiden results for Cartrack

26 May 2015Zak Calisto, Cartrack
Zak Calisto, Cartrack Global Chief Executive Officer.

Zak Calisto, Cartrack Global Chief Executive Officer.

Revenue growth and international expansion featured strongly in 2015.

• Revenue growth of 32%, with annuity revenue representing 84% of total revenue
• Revenue from non-South African operations increased from 17% to 26% in 2015
• Subscriber growth of 24% to over 430 000
• Profit before tax growth of 17% to R302.5 million
• Headline earnings growth of 14% to R195.2 million
• A final dividend declared in respect of FY15 of R90 million: 30 cents per share
• Strong cash flow generation with net cash from operating activities of R266 million, up 24%

Leading fleet management, stolen vehicle recovery and insurance telematics group, Cartrack Holdings Limited, announced today that headline earnings increased by 14% to R195.2 million. The company declared a final dividend of 30 cents per share, bringing the total dividend for the year to 46 cents per share. The l dividend was covered 1.4 times. Normalised EBITDA for the period of R370.5 million was 23% ahead of the prior year.

“Cartrack produced a strong set of results in 2015,” says Zak Calisto, Global CEO of Cartrack. “The results for 2015 primarily reflect our focus on the Cartrack brand, effective distribution model and quality customer service.”

The 24% growth in Cartrack’s subscriber base to over 430 000 units increased the annuity revenue to 84% of total revenue, while international expansion increased the percentage of non-South African revenue from 17% in 2014 to 26% in 2015. In the four-year period ending February 2015, the Cartrack subscriber base grew by 105%.

Cartrack has continued to grow in Stolen Vehicle Recovery (SVR) services even though the relative contribution of these services increasingly reflects a smaller share of the total business, due to stronger growth in the Fleet Management Services. This SVR growth was supported primarily by Cartrack’s leading 93% recovery rate and unique R150 000 recovery warranty.

Strong growth has been achieved in Fleet Management services with sales of Fleet Management products accounting for 64% of total global sales (2014: 52%). Fleet Management now accounts for more than 50% of Cartrack’s subscriber composition due to the huge demand by owners of vehicles to optimise the costs, safety and security of their assets and workforce.

Globally the demand for fleet and workforce optimisation is strong and growing rapidly. During the year Cartrack opened new offices in Indonesia, Malaysia, Hong Kong, Thailand, United Arab Emirates and the Philippines, in addition to driving sales in existing geographies.

Calisto said there were many highlights this year: “Apart from our successful listing in December 2014, Cartrack Singapore being awarded the prisoner tracking tender was particularly pleasing, given the high reputation standards of the Singaporean government. We see this being a great reference and giving significant credibility to Cartrack’s presence in the region. Additionally, this award reflects the flexibility and scalability of the company’s technology platform and the innovative capabilities of its in-house agile engineers. In South Africa, the high stolen vehicle recovery rate was maintained at 93%, with a record number of vehicles recovered, valued at over R450 million.”

On the technology front, Cartrack released an upgraded and miniaturised Fleet Management unit with ancillary Stolen Vehicle Recovery features. Several additional features were added for existing Fleet Management clients through the release of software updates. Cartrack’s product range was supplemented further through an in-vehicle camera system, thereby complementing Cartrack’s existing Telematics services and enhancing Cartrack’s driver behaviour and safety monitoring capabilities. A miniature wireless and self-powered tracking device was released for multiple applications, including vehicle recovery and other forms of asset tracking and monitoring.

Outlook

Cartrack continues to invest significantly in improving the performance and features of its platform-based system, in the skills and capacity of staff, the efficiency of Cartrack’s distribution and the company’s brand equity. All these factors are key to organic as well as new market growth and Cartrack is well positioned to take advantage of its scalable annuity based business model.

“Looking ahead, we anticipate subscriber and revenue growth to be consistent with that achieved in the past few years, with further boosts from our global expansion over time. Robust profit growth and commensurate dividend growth is expected for 2016, supported by the new technological and service offerings we expect to bring to market in 2016,” Calisto concludes.

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