Fleet management, stolen vehicle recovery and insurance telematics group Cartrack is looking at entering the US market with its fleet management offering.
CEO Zak Calisto says the appointment of a management team from that country is likely to determine the location of the group’s office.
He says Cartrack will “go it slow” in the US, “and only once we are very happy will we throw money at it”.
He believes the US market has “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 says US technology will typically migrate to Europe, with Cartrack already an eager pupil in this market.
Cartrack is active in the Middle East, Europe, Africa and Asia.
Calisto admits that many fleet management offerings are essentially the same, but believes that Cartrack will differentiate itself through its service stability, distribution model, customer service and pricing.
Increased ProfitCartrack in November 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 expanded 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 six-month period, 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 says stolen vehicle recovery remains a vital component of its services and is being supported by worsening vehicle theft statistics.
Despite increasing vehicle theft and hijackings, Cartrack says it maintains 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 were received in Nigeria. Additionally, sales activities in Kenya and Tanzania are being strengthened.
Revenue in Europe grew by 6% to R39.1-million, or 8% of group revenue.
Profit GrowthHowever, 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 expects solid growth potential in all the regions Cartrack serves during the remainder of this year and beyond.
Subscriptions are expected to reach more than 500 000 by the end of this financial year.