JSE-listed fleet management, insurance telematics and stolen-vehicle recovery service provider Cartrack grew its subscriber base by 19% to more than 600 000 subscribers over five continents in the financial year ended February 28, compared with the previous financial year, says CEO Zak Calisto.
“We have managed to continue the momentum of the last ten years.”
Asia-Pacific and Europe contributed strongly to the company’s expansion, with 225% and 26% subscriber growth respectively off a low base.
The South African subscriber base grew by 17%.
However, in the rest of Africa, the subscriber base decreased by 2%.
South Africa has, by far, the largest Cartrack subscriber base at around 450 000 subscribers.
Calisto believes the group is now one of the ten largest telematics companies in the world.
However, he says the company is, for the time being, not seeking to expand its geographical presence any further.
“We have enough diversity, and enough to work on before opening up in more new countries. We are aware of the cost of losing focus.”
Cartrack has a presence in 24 countries.
Calisto adds that the company will have a strong focus on research and development going forward, as it works to improve its product offering.
“We are only at 10% of where we should be. We’ll invest a lot in research and development in the next five years to become a significant player in the market in the long term.
“Current and future customers require ever-increasing information about their assets and people to more effectively achieve their goals.
“Our ambition is to become a more integral part of their lives and shift from a service provider relationship to becoming business partners.”
Calisto says the past financial year delivered two challenges, namely the weak rand and a weak African market outside South Africa.
Currency fluctuations had a R27-million negative impact on Cartrack’s 2017 operating profit.
Political and economic instability in the African market outside South Africa saw revenue in this market drop by 22% to R109-million. Earnings before interest, taxes, depreciation and amortisation declined by 29% to R42.2-million.
A number of businesses in this region face liquidation, while individuals are “under enormous financial stress”, says Calisto.
He believes the African market may show an uptick this year.
Overall, Cartrack increased revenue by 13% for the year ended February 28 to R1.1-billion.
Operating profit increased from R344.8-million to R368.8-million.
Looking ahead, Calisto notes that the global telematics industry is showing signs of further consolidation.
Opportunities that may arise to provide “economies of scale”, as well as improved subscriber value, will be considered on their merits, he says.