Cartrack delivers strong subscriber growth in difficult period

Cartrack, a provider of vehicle tracking and recovery systems, said Wednesday (14 October) that despite the limited capacity to install the in-vehicle IoT technology due to the imposed Covid-19 operating restrictions, it still delivered subscriber growth of 13% to 1,175,173 units.

The group said that it delivered a strong performance across its key-growth-metrics for the half-year ended August 2020, with subscription revenue growing by 19%, from R897 million to R1.07 billion. Subscription revenue now represents 98% of total revenue as the trend of customers choosing the bundled SaaS platform contracts with no up-front fees continues, it said.

Operating profit increased by 16% to R368 million from R316 million before, while the group declared an interim gross cash dividend of 87 cents per ordinary share.

Cartrack said it anticipates that demand for mobility solutions and actionable data will continue to increase and lucrative growth opportunities across all operating regions and distribution channels will continue to emerge.

“In addition, Cartrack continues to invest in data analytics and behavioural science to ensure that its customers reap the full benefits of the Cartrack platform and data driven solutions,” it said.

Despite the operational restrictions and the Covid-19 associated costs, South Africa delivered solid subscription revenue growth of 17% to R763 million and a subscriber growth of 13%.

The South Africa segment delivered EBITDA of R438 million (HY20: R386 million) with a year-on-year growth of 14%, at an EBITDA margin of 57%, Cartrack said.

Zak Calisto, founder and chief executive officer, said: “This reporting period was materially affected by a substantial number of our loyal customers facing cash flow and operational difficulties due to the severe global lockdowns and travel restrictions.

“Despite this, the group has continued to experience strong demand for our Software-as-a-Service platform. The latter months of the period have seen us record two of our best months of new subscriber additions.

“Our predictable and resilient subscription based business model, combined with our strategic broad industry approach and low customer and industry concentration risk has resulted in Cartrack delivering consistently strong year-on-year subscriber, subscription revenue and operating profit growth.”

Calisto noted that subscriber churn during these difficult times has remained materially consistent with historical trends. “Collections improved significantly in Q2 vs Q1 and our balance sheet and prudent capital allocation remain key strengths.

“I have been encouraged by our ability to innovate and adapt to new challenges as we continue to optimize the platform for the evolving future of mobility.”

Read: Cartrack hits 1 million subscribers as revenue and profits jump