Founder Calisto believes Cartrack is still in its start-up phase
Companies / 24 October 2019, 11:00am / Edward West
CAPE TOWN – Cartrack Holdings founder and chief executive Zak Calisto believes the telematics group, which already trades in 23 countries, is still in start-up phase.
“We are still a start-up. We have so many ideas, so much still to do,” he said in a telephone interview at the release of results for the six months to August 31. The good results saw the share price rise by 5.1 percent to R24.49 by midday yesterday, before closing the day on the JSE at R24.48.
The fast growing provider and developer of fleet management, stolen vehicle recovery and insurance telematics services group, which he founded and which is 68 percent controlled by his family, started operating in 2004 and now also trades across Africa, Europe, US, Asia Pacific and the Middle East.
The interim results were “in line with budget,” said Calisto. The group had used the past six months “to consolidate and tighten the belt a little bit” following the strong growth in the second half of the previous financial year.
There had been no geographic expansion in the past six months, the focus was on deepening its presence in its existing markets, particularly Australia.
Some consolidation in the first half would also put the group in a position to “give it some gas” in January, he added. Cartrack might consider entering the French and German markets, he said.
In the six-month period revenue was up 26 percent to R1.04 billion, with subscription revenue up 26 percent to R897 million.
Earnings before interest tax depreciation and amortisation (Ebitda) was up 28 percent to R480m, while cash generated from operating activities increased 70 percent to R446m.
Headline earnings per share increased 28 percent to 72.2 cents. The interim dividend was raised 11 percent to 20c. Calisto said the results showed a continued demand for the group’s technology platforms.
During the reporting period, one million subscribers was surpassed for the first time, “a significant milestone that places us among a select group of global leaders in mobility solutions,” he said.
Listed in 2014, Cartrack had consistently delivered double-digit revenue growth, with growth driven by “a vibrant customer-centric sales culture and increased adoption of our platforms”, Calisto said. Regions outside of South Africa now account for 27 percent of revenue.
In Cartrack’s South African segment, revenue grew strongly by 26 percent to R655m, while subscribers grew by 23 percent, despite the weak economy.
Hardware revenue in South Africa fell by 56 percent compared to the first half of the past financial year, while subscription revenue now accounts for 96 percent of revenue. Ebitda in South Africa of R386m grew 18 percent.
“The South African business was able to effectively maintain its operating costs as a result of significant investment in back-office systems. These proprietary systems will enable Cartrack to continue to compete and trade effectively in an economy with many untapped opportunities despite significant economic headwinds,” the group said.
Asia Pacific was the second largest revenue contributor and the fastest growing segment in the group, with subscription revenue up by 46 percent to R105m after an increase of 39 percent in subscribers. The European segment saw subscriber growth of 16 percent and subscription revenue growth of 20 percent to R80m.