Cartrack’s share price surges 13.87% on earnings news
The share price leapt by 13.87 percent after the results were released. The share closed 14.84 percent higher at R17.80 yesterday.
Global chief executive Zak Calisto said in an interview that the company expected more double digit growth in the new financial year, based on the increase in subscriptions already on the books. He said, however, that the firm intended to remain “vigilant and prudent” due to the tough local economy, where the group derives most of its revenue.
The benefits of some of the investments in the past year, such as the recruitment of additional sales staff, and a continued focus on offshore growth, would also flow through in the new financial year, he said.
The past year was the sixth of double digit growth for the global provider of data analytics solutions for mobile asset management, asset recovery and workforce optimisation. Revenue growth in the South African operations grew 26.6 percent, while in South East Asia and the Middle East, revenues grew by 52 percent over the year.
Calisto said in South East Asia the group was still a relatively small operator in a very competitive market, but at current rates of growth the group could be a leader in its field in the region within five years. He said small and big businesses were facing tough times in South Africa, consumers were struggling, crime was on the increase, and while he was hopeful the economy would show signs of revival after the election, this had yet to happen.
Total revenue increased by 28 percent to R1.7 billion on the back of robust growth to 960 798 subscribers (February 2018: 751 380 subscribers),
Net subscriber additions grew 39 percent to 209418. Cartrack’s subscription revenue at 90 percent (88 percent) of total revenue, resulted in an increase in subscription revenue by 30 percent to R1.5bn.
A strong pipeline and order book was being maintained, while focusing on the distribution footprint that had been expanded during the year.
The Ebitda margin came in at 45 percent, compared with 49 percent in the previous period. Calisto said that margins were well within the group’s targeted range. Cash generated from operating activities remained strong, increasing by 16 percent to R544 million from R468m in February 2018.
During the year, Cartrack invested in back-office business systems.
The global management capacity had been increased, with the appointment of a chief information officer, Jesse Young, with 15 years of experience in fleet telematics. He would be based at Cartrack’s research and development hub in Singapore.
His appointment made room for a strategic split of the chief operating officer (COO) role at Cartrack into a focused operational delivery and product innovation function, with Richard Schubert at the helm of the operational delivery function as COO.
Harry Louw joined as chief executive of the South African region, and Brendan Horan took on the role of chief strategy officer and investor relations.
“Cartrack is gathering momentum in its efforts to capitalise on the increase in global trends of artificial intelligence and data analytics and tangible results are already becoming evident from these efforts,” said Calisto.