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Cartrack passes 660 000 global subscribers

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Cartrack has recorded a 20% increase in headline earnings to R138.1 million from R114.9 million for the comparable period.

This was achieved through strong subscriber and revenue growth, enabling the company to maintain its industry-leading EBITDA and operating profit margins, which increased to 47% (HY 17: 43%) and 32% (HY 17: 30%), respectively.

Cartrack declared an interim dividend of 18 cents per share.

The subscriber base grew by 115 000 to 666 422 active subscribers globally, and to over 500 000 in South Africa. The performance is in line with the strong, consistent growth over the past years.

Cartrack, which operates across five continents – with South Africa, Europe and Asia Pacific as the largest contributors to growth – delivered a solid Return on Equity of 59% (HY 17: 53%) and Return on Assets of 33% (HY 17: 33%), an indication of the continued efficient application of capital across the Group.

Global Chief Executive Officer, Zak Calisto, commented: “The increase in active subscribers and subscription revenue has translated into solid growth.

“South Africa performed admirably and the business case for Asia Pacific is now well entrenched. Europe also delivered strong subscriber growth. The outperformance in our subscriber growth over the last year is a direct result of a dedicated and motivated workforce. We are constantly upgrading our market offering to our customers through our innovative and reliable products and services.”

The Group’s global subscriber base increased from 551 391 to 666 422, representing 21% growth. South Africa, Asia Pacific and Europe contributed strongly with 19%, 122% and 24% subscriber growth, respectively.

“We are part of an under-penetrated and high-growth industry and view ourselves as still being in a growth phase across all continents. The expectation is that this growth trend will continue,” Calisto added.

The Group achieved an increase in subscription revenue of 19%, taking annuity income up to 88% of total revenue.

The South African subscriber base reached a milestone of over 500 000 subscribers by end-August, driven by an increasing awareness of our technology offerings and a dedicated workforce focusing on consistent customer engagement.

The Africa (excluding South Africa) segment delivered a resilient performance despite sluggish regional economic conditions. The segment adopted a new management structure and a refreshed strategy, which is expected to deliver rewards for the Group over the next 6 – 18 months.

In Europe, strong subscriber growth of 24% was recorded over the period, largely as a result of the investment in distribution and operating capacity. This is set to continue, particularly where markets remain under-penetrated. Both these markets represent lucrative future opportunities to provide telematics offerings and value-added services.

As expected, the Asia Pacific segment continues to deliver strong subscriber growth of 122% from 19 100 to 42 385.

Start-up costs are incurred as the business expands to include Thailand, Malaysia, Philippines and Indonesia, with the breakeven point expected in three to four years. Singapore, currently in its fourth year of operation, is now consistently contributing towards the growth in Group revenue and operating profit.

Cartrack continues to invest in technology in its USA operations to secure its position in a competitive market, with sales efforts currently underway.

The future of the telematics industry will continue to expand in tandem with advancements in technologies across varied fields, including global positioning systems, driver-behaviour modelling, cloud computing, kinematics, real-time tracking, smartphones and software.

Cartrack’s considerable experience, knowledge and skills in the telematics field, has allowed the company to grow at a swift pace over its 13-year history and to forge a wide-ranging and meaningful impact in this sector, with operations now established in 24 countries, spanning Africa, Europe, Asia Pacific and the US.

“Cartrack remains at the forefront of the related telematics expansion and continues to drive innovation and application through its interaction with customers and strategic research and development activities.

“It requires a continued and deliberate investment in technology, information management, human resources as well as distribution and operating capacity in current and new markets.”

The South African market remains under-penetrated with lucrative opportunities in the lower end segments. The order book in Europe remains strong while new sales are being actively pursued.

The Africa-Other operations will be closely monitored and managed in anticipation of a more favourable economic environment. Asia Pacific continues to gain operational mass as a region, with a strong sales pipeline and many cross-border opportunities which are being explored.

With all of this in mind, and notwithstanding global economic and foreign exchange volatility, Cartrack expects to continue double-digit subscriber and revenue growth in the foreseeable future.

“We predict continued growth as we expand our offering, particularly products we have developed for fleet management, which not only reduces costs but also improves productivity.

“The fleet and corporate market have not been fully accessed yet, therefore significant growth opportunities still exist in this area. We further expect to see an increase in tailor-made solutions for specific industries and continued and increased web-based usage as well as application development,” concludes Calisto.

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