Cartrack records subscriber growth of 25%

Cartrack, a provider of solutions for mobile asset management, vehicle recovery, and data analytics, on Tuesday reported a 19% lift in subscription revenue for the year ended February 2018, to R1.166 billion.

Subscription revenue represents 88% of the total revenue, with that  figure also up 16% to R1.324 billion. The increase in revenue can primarily be attributed to strong subscriber growth, Cartrack said. The group recorded what it deemed to be ‘robust’ subscriber growth of 25% to 751,380.

Revenue was negatively impacted on consolidation by the strengthening rand. Had exchange rates remained unchanged, revenue would have increased by 18% to R1.343 billion, it said.

Operating profit was up to R434 million, from R369 million before.

Additional highlights:

  • EBITDA of R652 million, up 25%
  • Basic earnings per share (EPS) of 100.5 cents, up 17%
  • Headline EPS (HEPS) of 100.0 cents, up 17%
  • Normalised EPS (NEPS)1 of 100.0 cents, up 18%
  • Final dividend per share of 28 cents
  • Cash generated from operating activities of R467 million, up 21%

Cartrack said that its South Africa, Europe and Asia-Pacific operations all contributed positively to the strong growth in subscriber numbers, while the Africa segment showed a decrease in subscribers of 2% as a result of the challenging economic conditions across this segment.

“The group continues to maintain a strong order book while focusing efforts on channel and market development,” it said.

Cartrack said it continued to invest in operational, distribution and service capacity, while also accelerating its investment in research and development. This resulted in operating expense growth of 21%.

“Lucrative growth opportunities are evident across all channels to market and in each operating region as the demand for telematics data continues to increase. Opportunities to develop further vertically aligned revenue streams remain at the forefront of management’s short and medium-term strategy,” it said.

The South Africa segment delivered particularly strong results, Cartrack said. Subscription revenue increased by 18% year on year while subscribers grew 26% over the same period.

The realisation of a strong sales pipeline, investment in operating capacity and an effective distribution strategy, are the primary contributors to this organic growth, it said.

“In line with expectations, the sales mix changed to include significantly more rental than cash sales in FY18. As a result, hardware revenue decreased 7% year on year, resulting in total revenue growth of 14%.”

The South African market, particularly in the lower vehicle value segment, remains underpenetrated, Cartrack said. To this end, the company launched what it said is a first-to-market innovative insurance offering for vehicle theft that targets the previously uninsured market in South Africa.

It noted that as much as 70% of the more than 12 million registered vehicles in South Africa are uninsured. “Leveraging its 91% recovery rate, wealth of Insurance Telematics data and investment in research and development, Cartrack is able to offer theft-only car insurance at R9.99 per month, subject to terms and conditions, if a Cartrack telematics device is installed.”

Read: Cartrack hits 700,000 active customers

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Cartrack records subscriber growth of 25%