Johannesburg - Cartrack Holdings, the listed fleet management, stolen vehicle recovery and insurance telematics group, plans to put increased focus on its prisoner monitoring business.
Cartrack global chief executive Zak Calisto said prisoner monitoring made a very insignificant contribution to the group at this time and accounted for about 1 percent of revenue and also 1 percent of profit, because its margins were much higher than other businesses in the group.
Prisoner tracking involves monitoring the movements of prisoners who are on parole to ensure they comply with their parole conditions.
But Calisto was confident Cartrack could grow its prisoner tracking business. But he stressed new business did not happen in isolation and the group got credibility from doing one thing, such as the fleet management of government vehicles, and this resulted in benefits in another area.
Cheaper
Calisto said they would be satisfied if all the other businesses in the group were growing and the prisoner tracking business still only accounted for 1 percent of the group’s revenue and profit. He claimed Cartrack’s prisoner tracking device was 80 percent cheaper than its competitors.
Calisto said he was convinced that Cartrack had won a recent correctional services department prisoner tracking tender, which was subsequently not awarded.
Cartrack launched its prisoner tracking product in 2015 and has secured a contract in Singapore. Singapore introduced a Home Detention Scheme (HDS) in 2000, which allows eligible prisoners to spend the last part of their sentences in their own homes, subject to them having a monitoring system to track their movements.
Cartrack was awarded the contract to supply the monitoring technology in a bid process.
The HDS involves the monitoring of the prisoner through a central monitoring system (CMS). Cartrack used the control room platform it uses for its fleet management system for the prisoner CMS.
Calisto said the group would be predominantly targeting first world countries to grow its prisoner tracking business because these countries were all using this technology.
“We are now employing project management teams just to run with this because it takes up a lot resources to sell this. We have got quite a lot of demand but we sometimes haven’t got the human resources to carry through,” he said.
Calisto confirmed that much of the prisoner monitoring business was obtained via tender, but stressed companies had to be invited to tender and needed “feet on the ground to visit all these different countries and interact with their prisons”. He said a lot of people were needed to do both tender and pre-tender work and Cartrack up until now had not had sufficient resources to be able to do this work properly.
Cartrack last week reported a 2.7 percent growth in headline earnings a share to 38 cents in the six months to August from 37c in the previous corresponding period on the back of an 18 percent increase in group revenue to R554 million.
Cartrack shares closed flat at R10.20 on the JSE on Friday.
BUSINESS REPORT