Johannesburg - Mix Telematics is eyeing growth in the unpenetrated premium fleet market in the Americas as well as consumer vehicle tracking, according to Stefan Joselowitz, the chief executive of the global fleet and vehicle management company.
He told investors on a conference call yesterday that Mix Telematics had identified opportunities to further invest beyond the oil and gas industry in the Americas, where it has customers. South America was attractive, he noted, with “significant opportunity in the passenger vehicle sector”.
Joselowitz said Mix Telematics had identified opportunities in the Brazilian consumer market, which was four times the size of its home South African market and “only single-digit penetrated”. Together, the two markets represented more than 30 million vehicles.
The company already runs an operation from São Paulo, which launched in the company’s second quarter to September. Mix Telematics said this operation showed modest revenue growth in the period and made an expected loss of R5.4 million. The operation is not expected to break even during the current fiscal year.
Joselowitz said it would not grow independently in the region but would roll out its technology with partners.
Mix Telematics operates in 112 countries.
Joselowitz would not comment on specific opportunities, saying: “We don’t give visibility into our pipeline. We’ve started the process of extending beyond our exclusive focus on oil and gas. We certainly have what we think is a pipeline to meet our objectives this year.
“We are well into the process of increasing our investment in sales and marketing in the US. This is not an overnight process. We are looking for a number of experienced, highly qualified sales people. We are making progress in finding these people.”
Joselowitz said in Australasia the company was realising growth in its bus and coach fleet management business, particularly from the resources and mining sector. The Middle East was another high growth area for Mix Telematics.
The Middle East and Australasia region grew turnover 45.5 percent year on year and contributed 25.1 percent to group revenue.
During the period, the Europe fleet solutions segment implemented a restructuring plan costing about R2.8m. The restructuring is expected to result in operating cost savings for the segment in future.
Joselowitz said more than 70 percent of subscription revenues were derived from fleet management. The consumer business had also shown strong subscriber growth.
Subscription revenue grew 24 percent to R401m during the six months to September. Total vehicles under contract increased 28 percent to 404 000.
Interim group revenue gained 9 percent year on year to R613m. Cash generated from operations increased by 15 percent to R101m.
Operating profit for the half year was R80.3m compared with R76.3m for the same period last year.
Megan Pydigadu, the chief financial officer, forecast that revenue for the full year could grow by about 8 percent to 11 percent to between R1.2 billion and R1.3bn.
Mix Telematics stock gained 0.93 percent to close at R5.40 yesterday. - Business Report