CARTRACK Holdings, the listed fleet management, stolen vehicle recovery and insurance telematics group, is looking for potential mergers and acquisitions.
Zak Calisto, the global chief executive of Cartrack, said the group had organically grown its subscriber base to more than 600 000 from 210 000 five years ago but the timing was now right for mergers and acquisitions.
But Calisto stressed this was not easy because mergers and acquisitions could “consume you” and destroy value.
“We are contacted regularly and are open to the possibility but have never really come across the right fit. If the possibility comes along and it makes sense to shareholders, we are open to it.
“We have never done an acquisition but the times are changing. In the world you have maybe 10 to 15 big players and 10 000 small players.
“The market will start consolidating in the next five years. It has already started but will gain momentum,” he said at a briefing last week.
Calisto said Cartrack was ranked globally in the top 10 in terms of subscribers.
The group has operations across five continents. Apart from South Africa, the group has operations in several countries in Africa, three countries in Europe, the Asia Pacific region is its largest market and it recently established a presence in the US.
Calisto said Cartrack’s entry into the US market had been delayed because the software was not ready but by next month would start selling its products into this market.
He said the opportunities in the US market were huge but he was “not sitting with an American dream”.
“The opportunities are big everywhere in the world. We have sufficient opportunities in the countries where we already have operations.
“South Africa is the market where we have the most penetration but still a doubling of our subscribers from 450 000 to 1-million in the medium term,” he said.
Calisto added that Cartrack only sold its fleet management products into the Asia Pacific market because it was still waiting for licences for its stolen vehicle recovery products, which were imminent.
He said the opportunities available for the group’s stolen vehicle recovery products in Asia Pacific were huge but stressed it took time to gain momentum.
Political and economic instability in Africa and fluctuations in the exchange rate of the rand dented the performance of Cartrack in the year to February.
Calisto said excluding the negative impact of the group’s African business and currency, normalised earnings a share in the year to February would have been 22 percent as opposed to 12 percent.
“Fluctuations of the rand and other currencies had a negative impact of R27 million on our profitability this year,” he said.
Cartrack reported a 6 percent growth in headline earnings a share to 85c in the year to February from 81c in the previous year.
Revenue rose by 13 percent to R1.14bn from R1.0bn.
Operating profit improved by 7 percent to R368.8m from R344.8m.
Cash generated from operating activities grew by 48 percent to R386.7m from R261.4m.
An unchanged dividend a share of 55c was declared.