Fleet management, stolen vehicle recovery and insurance telematics group Cartrack on Monday said it was looking at entering the US market with its fleet management offering.

CEO Zak Calisto said the appointment of a management team from that country was likely to determine the location of the group’s office.

He said Cartrack would “go it slow” in the US, “and only once we are very happy will we throw money at it”.

He believed the US market had “huge potential” for the group.

“You can bleed a lot if you are not careful. It will take time, but it is a market we have to go to.”

Calisto said US technology would typically migrate to Europe, with Cartrack already an eager pupil in this market.

Cartrack was active in the Middle East, Europe, Africa and Asia.

Calisto admitted that many fleet management offerings were essentially the same, but believed that Cartrack would differentiate itself through its service stability, distribution model, customer service and pricing.

Cartrack on Monday reported that profit for the six months ended August 31 increased to R118-million, up from the R104-million reported in the same period last year.

Revenue increased 18% to R469.7-million.

Cartrack’s global subscriber base grew 20% to 463 000 active contracts. Contract subscription revenue grew by 18% and continued to represent 84% of total revenue.

The profit before tax contribution from non-South African operations increased to 24%, up from 14% in the prior period.

All regions contributed to the growth seen in the past six months, apart from the new country start-ups in Asia and the Middle East initiated last year.

The South African business, which accounted for 76% of revenue, saw revenue grow by 18%, to R356.2-million, on the back of an equivalent increase in the subscriber base. 

Operating profit for this business grew by 1%.

Fleet management products proved to be increasingly popular in the local market.
 
Cartrack said stolen vehicle recovery remained a vital component of its services and was being supported by worsening vehicle theft statistics.

Despite increasing vehicle theft and hijackings, Cartrack said it maintained its 93% recovery rate.
 
Revenue in the rest of Africa increased by 18% to R62.6-million, or 13% of group revenue. 

This business increased its contribution to operating profit from 11% to 17%.

Significant orders had been received in Nigeria. Additionally, sales activities in Kenya and Tanzania were being strengthened.
 
Revenue in Europe grew by 6% to R39.1-million, or 8% of group revenue. 

However, increased efficiencies saw operating profit grow by 105%, lifting this business’s contribution to group operating profit from 5% to 8%.
 
Revenue from Asia and the Middle East increased by 138%, albeit off a low base, with the active subscriber base more than doubling to 6 295 contracts. 

Operating losses for this business segment increased from R1.6-million to R5.5-million, attributable to infrastructure development costs in the start-up phase of operations established in the Philippines, Malaysia, Thailand, Hong Kong and Indonesia. 
 
Calisto anticipated solid growth potential in all the regions Cartrack served during the remainder of this year and beyond.
 
Subscriptions were expected to reach more than 500 000 by the end of this financial year.