Karooooo, an international provider of real-time data analytics and business intelligence, reported solid results for its first quarter ended May 31, leaving management confident enough to keep the outlook for the remainder of the financial year unchanged.
Total revenue was up 28 percent to R801 million (R626m).
Revenue growth coupled with ongoing operating efficiencies resulted in profit for the period increasing 44 percent to R156m (R108m) and earnings per share 42 percent to R4.96m.
Chief executive and founder Zak Calisto said in an interview that he believed the revenue growth momentum was sustainable throughout the year.
He said he was satisfied with the financial performance, but there were some things he wished they could have done better, such as dealing with the “uphill battle” of recruitment, particularly as many job hunters now wanted to work from home.
Karooooo owns 100 percent of Cartrack, 100 percent of Carzuka and 70.1 percent of Karooooo Logistics (Picup), recently renamed Karooooo Logistics.
The group assists more than 90 000 enterprise customers (quarter one 2022: 76000+) to digitally transform their on-the-ground operations including systems integration, fleet administration, field worker management, video-based safety, risk mitigation, delivery management and ESG compliance and reporting.
Calisto said: “With record earnings and cash generation from operating activities, this is a pleasingly solid start to our 2023 financial year. It confirms our robust business model and extends our decade-plus track record of execution and ability to scale operations in variable market conditions.”
He said the top-line growth was maintained in spite of the global economic headwinds that included higher energy and raw material prices and electronic component shortages.
He expected that the electronic component shortages would most likely pass within a year.
The cash position, notwithstanding investments for future growth, stood at R854m (R554m) at the end of the first quarter.
An interim dividend of $0.60 cents per ordinary share was declared on April 27, 2022.
“The traction in our South-east Asia operations was particularly encouraging. As Covid disruptions eased, we accelerated the investment in our operations in this region. Among other highlights, Coca-Cola selected Cartrack as their technology partner in the Philippines to strengthen their operations.”
He said they had multiple levers for expansion and were well positioned to capitalise on a large and growing market opportunity.
“Our ability to create compelling value from the billions of data points we collect continues to improve, differentiating our offering to enterprise customers.”
Adjusted earnings per share increased 27 percent to R4.96 in the first quarter of 2023 - the difference between profit and adjusted profit in the prior period (the first quarter of 2022) was due to R10m once-off non-taxable IPO costs that were expensed in the first quarter of 2022.