Wrap Text
Condensed Audited Financial Results for the Year Ended 28 February 2015 and Cash Dividend Declaration Announcement
CARTRACK HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/036316/06)
Share code: CTK
ISIN: ZAE000198305
("Cartrack" or "the company")
CONDENSED AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2015 AND CASH DIVIDEND
DECLARATION ANNOUNCEMENT
Salient features
2015 2014 % change
Revenue 843 700 543 637 020 292 32
Subscription Revenue (% of total revenue) 84 74
Operating Profit 298 910 031 258 126 363 16
Operating Profit margin % 35% 41%
EBITDA 370 507 738 300 256 661 23
EBITDA margin % 44 47
Headline earnings 194 504 879 167 406 648 16
Headline earnings per share (cents) (#) 65 58 12
Final dividend declared 90 000 000
- cents per share 30
Net cash from operating activities 265 948 790 214 445 741 24
(#) Computed on the basis of weighted average number of shares in issue
Key highlights
- Revenue growth of 32% with the proportion of revenue attributable to regions outside of South Africa increasing from
17% in 2014 to 26% in 2015
- Headline earnings growth of 16% to R195 540 879
- EBITDA up 23%
- Final dividend declared for the year of 30 cents per share
- Strong cash flow generation and cash conversion
- Cartrack was awarded a prisoner tracking tender by the Singapore government
- The company launched the Drive Vision (in cab camera) product and service
- New offices were opened in Indonesia, Malaysia, Hong Kong, Thailand, UAE and the Phillipines
- The high vehicle recovery rate was maintained – the South African audited rate was 93% (2014: 94%), with a record
number of vehicles recovered, valued at some R450 million.
Consolidated Statement of Financial Position as at 28 February 2015
Figures in Rand 2015 Restated 2014 Restated 2013
Assets
Non-Current Assets
Property, plant and equipment 150 530 171 104 489 706 67 895 641
Goodwill 144 269 346 99 433 144 82 255 688
Deferred tax 8 910 024 5 047 768 4 869 468
303 709 541 208 970 618 155 020 797
Current Assets
Inventories 62 532 373 32 740 048 21 435 807
Loans to related parties 5 262 651 35 040 191 130 178 048
Current tax receivable 449 025 351 665 163 140
Trade and other receivables 68 177 211 45 080 451 11 111 183
Cash and cash equivalents 110 047 934 41 656 645 12 825 828
246 469 194 154 869 000 175 714 006
Total Assets 550 178 735 363 839 618 330 734 803
Equity and Liabilities
Equity
Equity Attributable to Equity Holders of Parent
Share capital 42 487 600 42 487 300 100
Reserves 32 317 272 21 003 526 11 451 638
Retained income 300 414 544 157 306 237 204 587 246
375 219 416 220 797 063 216 038 984
Non-controlling interest 24 081 808 33 712 854 32 079 534
399 301 224 254 509 917 248 118 518
Liabilities
Non-Current Liabilities
Finance lease obligation 5 618 255 4 169 494 3 481 516
Deferred tax 235 692 1 351 2 011
5 853 947 4 170 845 3 483 527
Current Liabilities
Loans from related parties 1 235 487 737 623 -
Current tax payable 36 321 297 27 142 914 15 088 725
Finance lease obligation 6 218 117 3 526 932 3 530 721
Trade and other payables 101 134 758 73 751 387 51 576 332
Dividend payable - - 8 936 980
Bank overdraft 113 905 - -
145 023 564 105 158 856 79 132 758
Total Liabilities 150 877 511 109 329 701 82 616 285
Total Equity and Liabilities 550 178 735 363 839 618 330 734 803
Consolidated Statement of Comprehensive Income
Figures in Rand 2015 Restated 2014 Restated 2013
Revenue 843 700 543 637 020 292 495 811 748
Cost of sales (174 991 528) (123 425 601) (91 624 419)
Gross profit 668 709 015 513 594 691 404 187 329
Other income 7 284 614 11 946 375 7 489 829
Operating expenses (377 083 598) (267 414 703) (200 753 557)
Operating profit 298 910 031 258 126 363 210 923 601
Investment revenue 4 532 683 1 742 023 4 778 721
Finance costs (924 075) (1 211 071) (292 263)
Profit before taxation 302 518 639 258 657 315 215 410 059
Taxation (88 441 756) (74 130 054) (61 553 584)
Profit for the year 214 076 883 184 527 261 153 856 475
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange differences on translating foreign operations (7 291 984) 18 339 903 (7 902 438)
Other comprehensive income for the year net of taxation (7 291 984) 18 339 903 (7 902 438)
Total comprehensive income for the year 206 784 899 202 867 164 145 954 037
Total comprehensive income attributable to:
Equity holders of the parent 190 488 352 181 144 005 129 311 082
Non-controlling interest 16 296 547 21 723 159 16 642 955
206 784 899 202 867 164 145 954 037
Profit attributable to:
Equity holders of the parent 195 242 597 171 592 117 137 213 520
Non-controlling interest 18 834 286 12 935 144 16 642 955
214 076 883 184 527 261 153 856 475
Earnings per Share - cents 65 59 65
Headline Earnings per Share - cents 65 58 65
Consolidated Statement of Changes in Equity
Total
attributable
Foreign to equity
currency holders of
Total share translation Retained the group / Non-controlling
Figures in Rand Share capital Share premium capital reserve income company interest Total equity
Opening balance as previously reported 100 - 100 11 451 638 188 419 815 199 871 553 32 079 534 231 951 087
Adjustments
Change in accounting policy - - - - 16 167 434 16 167 434 - 16 167 434
Balance at 01 March 2013 as restated 100 - 100 11 451 638 204 587 246 216 038 984 32 079 534 248 118 518
Profit for the year - - - - 171 592 117 171 592 117 12 935 144 184 527 261
Other comprehensive income - - - 9 551 888 - 9 551 888 8 788 015 18 339 903
Total comprehensive income for the year - - - 9 551 888 171 592 117 181 144 005 21 723 159 202 867 164
Issue of shares 42 42 487 158 42 487 200 - - 42 487 200 - 42 487 200
Acquisition of subsidiaries - - - - (2 831 301) (2 831 301) 3 083 588 252 287
Dividends - - - - (184 909 000) (184 909 000) (11 819 012) (196 728 012)
Increase in interest in subsidiaries - - - - (31 132 825) (31 132 825) (11 354 415) (42 487 240)
Total contributions by and distributions to owners of 42 42 487 158 42 487 200 - (218 873 126) (176 385 926) (20 089 839) (196 475 765)
company recognised directly in equity
Balance at 01 March 2014 142 42 487 158 42 487 300 21 003 526 157 306 237 220 797 063 33 712 854 254 509 917
Profit for the year - - - - 195 242 597 195 242 597 18 834 286 214 076 883
Other comprehensive income - - - (4 703 543) - (4 703 543) (2 588 441) (7 291 984)
Total comprehensive income for the year - - - (4 703 543) 195 242 597 190 539 054 16 245 845 206 784 899
Foreign currency translation movements within equity - - - 16 017 289 - 16 017 289 (16 017 289) -
Acquisition of subsidiaries with NCI portion - - - - - - 1 837 843 1 837 843
Share issue 42 487 458 (42 487 158) 300 - - 300 - 300
Dividends - - - - (48 000 000) (48 000 000) (10 831 735) (58 831 735)
Increase in interest in subsidiaries - - - - (4 134 290) (4 134 290) (865 710) (5 000 000)
Total contributions by and distributions to owners of 42 487 458 (42 487 158) 300 16 017 289 (52 134 290) (36 116 701) (25 876 891) (61 993 592)
company recognised directly in equity
Balance at 28 February 2015 42 487 600 - 42 487 600 32 317 272 300 414 544 375 219 416 24 081 808 399 301 224
Note(s) 12 12 12
Consolidated Statement of Cash Flows
Figures in Rand Note(s) 2015 Restated 2014 Restated 2013
Cash flows from operating activities
Cash generated from operations 20 343 831 659 276 325 668 224 670 591
Interest income 4 532 683 1 742 023 4 778 721
Finance costs 18 (924 075) (1 211 071) (292 263)
Tax paid 21 (81 491 477) (62 410 879) (66 197 357)
Net cash from operating activities 265 948 790 214 445 741 162 959 692
Cash flows from investing activities
Purchase of property, plant and equipment 4 (119 698 020) (80 469 435) (56 926 553)
Proceeds of property, plant and equipment 4 650 724 3 170 180 2 133 862
Acquistions of subsidiaries 22 (53 428 030) 2 366 846 -
Acquisition of increase in control of subsidiaries (5 000 000)
Net cash from investing activities (173 475 326) (74 932 409) (54 792 691)
Cash flows from financing activities
Proceeds on share issue 12 300 - -
Finance lease receipts 4 139 946 684 189 3 263 338
Dividends paid 22 (58 831 735) (205 664 992) (23 983 833)
Increase in loans from related parties 497 864 - (124 037 009)
Proceeds from related parties 29 777 540 95 875 480 -
Net cash from financing activities (24 416 085) (109 105 323) (144 757 504)
Total cash movement for the year 68 057 379 30 408 009 (36 590 503)
Cash at the beginning of the year 41 656 645 12 825 828 49 341 361
Effect of exchange rate movement on cash balances 220 005 (1 577 192) 74 970
Total cash at end of the year 11 109 934 029 41 656 645 12 825 828
Accounting Policies
Presentation of Consolidated Financial Statements
The consolidated annual financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB), the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and the requirements of the South African Companies Act No 71 of 2008.
The financial statements are presented in South African Rand (ZAR), the functional currency of the group and are prepared on the
historical cost basis, except where indicated.
These accounting policies are consistent with the previous period, except for the changes set out in note 2 Changes in accounting policy.
Notes
1. Changes in accounting policy
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards on a basis consistent with
prior years, except for the change in accounting policy described below.
IAS 16 Property, plant and equipment & IAS 8 Accounting policies, changes in accounting estimates and errors
During the year, the group changed its accounting policy with respect to the treatment of capital rental units. The capital rental units meet the
definition of property, plant and equipment in terms of IAS 16, and thus has been reclassified to property, plant and equipment as capital rental units.
These were previously accounted for as a prepayment asset. Acquisition costs which are directly related to vehicle tracking contracts are now being
capitalised to the capital rental units and depreciated over the period of the contracts. The typical duration of a rental contract is 36 months.
These costs were previously expensed when incurred. This policy was adopted as management believes it will provide more relevant information and
will more closely match acquisition costs to revenue generation.
The aggregate effect of the changes in accounting policy on the consolidated financial statements for the year ended 28 February 2014 is as follows:
Consolidated Statement of Financial Position
2015 2014 2013
Net Deferred tax (liability)/asset
Previously stated - (3 689 341) (1 134 885)
Adjustment - 8 735 758 6 002 342
- 5 046 417 4 867 457
Property, Plant and Equipment
Previously stated - 31 308 379 21 506 282
Adjustment - 73 181 327 46 389 359
- 104 489 706 67 895 641
Retained earnings
Previously stated - (124 619 058) (188 419 815)
Adjustment - (32 687 179) (16 167 431)
(157 306 237) (204 587 246)
Net Income tax asset (liability)
Previously stated - (10 505 882) (3 821 502)
Adjustment - (16 285 367) (11 104 083)
- (26 791 249) (14 925 585)
Prepayment - Long term portion
Previously stated - 14 607 994 9 775 743
Adjustment - (14 607 994) (9 775 743)
- - -
Prepayment- Short term portion
Previously stated - 18 336 545 15 344 444
Adjustment - (18 336 545) (15 344 444)
Profit or Loss
Cost of sales
Previously stated - 128 578 810 97 018 648
Adjustment - (5 153 209) (5 394 229)
- 123 425 601 91 624 419
Operating expenses
Previously stated - 281 229 107 216 628 498
Adjustment - (13 814 404) (15 874 941)
- 267 414 703 200 753 557
Tax
Previously stated - 71 682 188 56 451 843
Adjustment - 2 447 866 5 101 741
- 74 130 054 61 553 584
2. Goodwill
SA Africa - Other Europe Asia Total
Balance 1 March 2012 1 499 495 86 895 385 - - 88 394 880
Translation
adjustments - (6 139 192) - - (6 139 192)
28 February 2013 1 499 495 80 756 193 - - 82 255 688
Additions - 1 762 813 - 899 179 2 661 992
Translation
adjustments - 14 399 869 - 115 595 14 515 464
28 February 2014 1 499 495 96 918 875 - 1 014 774 99 433 144
Additions - 382 620 45 040 694 471 357 45 894 671
Translation
adjustments - 1 954 610 (3 390 466) 377 387 (1 058 469)
Total 1 499 495 99 256 105 41 650 228 1 863 518 144 269 346
Goodwill is allocated to identifies cash generating units ('CGU's) within their operating segments. A summary of goodwill is presented in the table above.
The recoverable amount of all CGU's is determined based on value-in use calculations which use pre-tax cash flow projections based on approved financial
budgets for the forthcoming financial year plus estimates covering a further four - year period. Five years is considered a reasonable period for
management to exercise its insight and make properly considered projections with respect to the cash generation capability of a CGU.
Cash flow projections are based on macro and micro economic factors, present and expected, in the environment in which a CGU operates. At the end of the
projected five year period a terminal value is included, which together with the annual projected cash generated by a CGU, is then discounted to present
value using rates that reflects the risks related to the relevant CGU. A growth rate of between 5% and 10% was applied depending on the operating
environment of each CGU discount rate use for the value in use calculations was 20% calculated on pre-tax cash flow projections.
Goodwill sensitivity
The calculation of the CGU's discounted net present value requires extensive use of estimates and assumptions about discount rates and forecasted cashflows.
To assess the margins for variations in projections that can be incurred without necessarily resulting in the impairment of goodwill, the growth rate
applied was reduced by between 3% and 5% which still left headroom above the recorded goodwill value.
3. Share capital
Authorised
1 000 000 000 ordinary shares of no par value 1 000 000 000 - -
1 000 ordinary shares of R1 each at par value - 1 000 1 000
1 000 000 000 1 000 1 000
Cartrack Holdings Limited converted its par value shares and issued no par value shares in November due to the anticipation of its listing on the JSE.
A nominal value was paid for this. The company was listed on the JSE on
19 December 2014.
Reconciliation of number of shares issued:
Reported as at 01 March 2014 142 100 100
Issue of par value shares - ordinary shares - 42 -
Issue of no par value 299 999 858 - -
300 000 000 142 100
700 000 000 unissued ordinary shares are under the control of the directors in terms of a resolution of members passed in anticipation of the listing.
This authority remains in force until the next annual general meeting.
Issued
142 Ordinary shares of par value - 142 100
300 000 000 Ordinary shares of no par value 42 487 600 - -
Share premium - 42 487 158 -
42 487 600 42 487 300 100
4. Basic earnings per share
Basic earnings per share - cents
Continuing earnings per share based 65 59 65
The calculation of basic earnings per ordinary share is based on the profits attributable to equity holders of the parent and a weighted average number
of shares in issue as per the table below.
The 300,000,000 shares in issue, weighted accordingly, were treated as a share split for earnings per share calculation purposes.
This provides the user with more comparable and relevant information.
5. Dilutive earnings per share
There are no dilutive instruments and therefore diluted earnings per share is the same as basic earnings per share.
Weighted - average number of ordinary shares (basic)
Issued ordinary shares at 1 March 300 000 000 211 267 605 211 267 605
Effect of shares issued in April 2013 - 78 278 990 -
300 000 000 289 546 595 211 267 605
Profit - attributable to ordinary shareholders basic
Profit for the year, attributable to the equity holders of parent 195 242 597 171 592 117 137 213 520
6. Headline earnings per share - cents
Headline earnings per share 65 58 65
The calculation of headline earnings per share has been based on the following profit attributable to ordinary shareholders and weighted average
number of ordinary shares in issue after adjustments for headline earnings.
Weighted - average number of ordinary shares
Weighted average number of ordinary shares (basic) 300 000 000 289 546 595 211 267 605
Profit attributable to ordinary shareholders
Profit for the period attributable to the equity holders of the parent 195 242 597 171 592 117 137 213 520
Adjusted for:
Discount on bargain purchase - (3 352 930) -
Gains on disposal of assets (737 718) (832 539) (526 972)
194 504 879 167 406 648 136 686 548
7. Segment reporting
The group is organised into geographical business units and has four reportable segments. The group monitors the operating results of its business units
separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or
loss and is measured consistently with the consolidated financial statements.
Figures in Rand
Segment Report South Africa Africa - Other Europe Asia & Middle Total
- 2015 East
Revenue 627 174 799 124 279 954 80 422 114 11 823 676 843 700 543
Intersegment 34 973 730 - - - 34 973 730
elimination of
revenue
Revenue before 662 148 529 124 279 954 80 422 114 11 823 676 878 674 273
segment
elimination
Profit before 236 985 044 56 776 144 15 836 286 (7 078 835) 302 518 639
taxation includes
the following
items
Investment 1 616 804 2 915 839 22 18 4 532 683
revenue
Finance costs 694 136 210 124 7 373 12 442 924 075
Depreciation 58 815 444 1 917 427 10 388 652 476 186 71 597 708
Total tangible 278 139 609 77 605 529 36 605 106 14 137 207 406 487 451
assets
Total liabilities (108 039 132) (25 042 409) (13 097 400) (5 276 632) (151 455 573)
Goodwill 144 269 346
Equity 399 301 224
Segment Report South Africa Africa - Other Europe Asia & Middle Total
- 2014 East
Revenue 530 962 678 88 595 185 13 162 200 4 300 229 637 020 292
Intersegment 12 724 121 - - - 12 724 121
elimination of
revenue
Revenue before 543 686 799 88 595 185 13 162 200 4 300 229 649 744 413
segment
elimination
Profit before 218 554 972 37 906 227 1 029 208 1 166 908 258 657 315
taxation includes
the following
items
Investment 249 931 1 390 430 101 662 - 1 742 023
revenue
Finance costs 598 219 328 685 284 166 - 1 211 071
Depreciation 39 487 907 1 322 849 1 319 542 - 42 130 298
Total tangible 193 597 669 55 683 009 6 950 881 3 619 730 259 851 289
assets
Total liabilities (77 576 340) (20 432 120) (4 022 408) (2 743 648) (104 774 516)
Goodwill 99 433 144
Equity 254 509 917
COMMENTARY
Introduction
Cartrack is a leading global provider of Telematics solutions for mobile asset tracking and related data management, using
"Software-as-a-service" as the delivery model. Its primary focus is the provision of Fleet Management and Insurance
Telematics solutions using intelligent data as a business enhancing tool, and Stolen Vehicle Recovery services in high crime regions.
Cartrack currently provides services to a wide range of clients and industries, with over 430 000 active subscribers and offices
established in 21 different countries.
Financial performance
Cartrack produced a strong set of results in 2015. Headline earnings increased by 16% to R194 504 879 on the back of a 32% growth in
revenue to R 843.7 million. The company declared a final dividend of 30 cents per share, on the back of reported headline earnings per
share of 65 cents, which represents a dividend cover of over 2 times. The results for 2015 primarily reflect Cartrack's focus on
revenue growth and the establishment and integration of new international operations.
Net additions to Cartrack's subscriber base of 82 155 units generated a revenue growth of 32.4%, which comprised a 31% increase in the
revenue recognised from hardware sales and a 34% increase in the annuity revenue received from subscriptions. The latter constitutes
84% of total revenue. Revenue from non-South African operations increased from 17% of total revenue in 2014 to 26% in 2015.
Gross profit margins reduced slightly from 81% to 79% primarily as a result of the competitive influences in South Africa prompting
marginally reduced pricing structures in order to increase market share. The impact relating to the deterioration of the Rand on the
cost of goods manufactured has not been material and component procurement processes are expected to minimise the associated impact
for the year ahead.
Cartrack's operating profit increased by 16% despite a reduction of 6% in operating profit margin. This margin reduction is attributable
primarily to somewhat lower trading margins in the entities acquired in Africa and Europe during the year, plus the set-up costs
associated with the newly established Asian operations which are yet to break even; the once-off listing costs also impacted on margins.
As expected, the associated start-up costs for the new operations opened during the year have adversely impacted
Cartrack's consolidated profits during the period. Cartrack has managed to curtail this impact to a minimum through the Group's low
cost start-up business model and the ability to leverage off the Group's scalable infrastructure. In line with prior experiences,
Cartrack believes that the timeframe required to reach a breakeven point for newly established operations averages three years from
the date of establishment. These new operating entities contributed expected losses of R4.9 million for the year. The profitability
of the operations in new geographies are anticipated to improve in the short to medium term as these businesses gain traction in
their respective markets. Typically, operating margins are expected to increase as each new entity increases its critical
mass of subscribers.
Working capital control and cash generation are key financial management objectives. Cartrack's current ratio of 1.7 and the quick ratio
of 1.3 are both very healthy. Interest bearing debt comprises only 3% of equity and relates to financed motor vehicles. Cash generated
from operating activities increased by 24% to R266 million. Continuous control over working capital and relatively low fixed asset
infrastructure requirements ensures a high rate of conversion to cash from operating activities. Cash requirements for start-up operations
in accordance with the global expansion plans, are well provided for through the high cash generation abilities of the more
established entities.
Difficult economic conditions generally experienced over the past year by consumers in South Africa, Cartrack's most significant operation
by far, did result in an increase in payment defaults. However, through maintaining tight credit control procedures the debtor's book
remains healthy and the average debtor's days outstanding at year end 2015 was less than one month of sales.
Inventory levels are managed by a centralised procurement department in accordance with supplier lead times, best-price negotiations and
Cartrack's growth strategies. As such, inventory levels will vary from time to time. Inventory value doubled over the year due to the
acquisitions and global expansion; a strategic increase in stock levels to cover lengthening supplier lead times; and to take advantage of
volume price negotiations.
Dividends
A final cash dividend of 30 cents per share has been declared. This final dividend, together with the interim dividend of R48m, brings the
total dividends in respect of 2015 to R138m payable to equity holders of the Group.
Achievement of PLS projections
We are pleased to report that our profits for 2015 exceed those forecast in terms of the PLS. The accounting policy change implemented
subsequent to the date of publication of the PLS is described below and more fully in the notes to the AFS. We are satisfied that we
have substantially achieved both the milestones and financial results reflected in the PLS.
Operational review
The year was characterised by a strong continued focus on sales growth in all countries of operation and an expansion drive through Africa,
Europe, Middle East and Asia.
In the reporting period, Cartrack invested significantly in improving the performance and features of its platform-based system, in the
skills and capacity of staff, the efficiency of Cartrack's distribution and the company's brand equity. All these factors are key to both
organic and new market growth and Cartrack is well positioned to take advantage of its scalable annuity based business model.
Cartrack achieved a growth rate in its subscriber base of 24% and a revenue growth of 32%, despite difficult trading conditions in some
of the Sub-Saharan African states in which it conducts business. In the four-year period ending February
2015, the Cartrack subscriber base increased by 105%. This growth comprises of a 196% increase in Fleet Management subscribers and a 35%
increase in Stolen Vehicle Recovery subscribers. Off the back of this growth, as at February 2015, Fleet Management accounts for more
than 50% of Cartrack's subscriber composition.
Cartrack has continued to grow in Stolen Vehicle Recovery (SVR) services even though the relative contribution of these services increasingly
reflects a smaller share of the total business, due to stronger growth in the Fleet Management
Services. This SVR growth was supported primarily by Cartrack's ability to recover stolen vehicles in conjunction with a strong marketing
campaign in South Africa, emphasising Cartrack's leading recovery rate and unique R150 000 recovery warranty. The recovery continues to be
successful in increasing the interest and demand for Cartrack systems in both the retail and corporate markets. Growth in Insurance
Telematics, combining driver behaviour elements with vehicle recovery, is a new trend in the market for which the company is well positioned.
Strong growth has been achieved in Fleet Management services which are now contributing to an increasing proportion of total new subscribers.
For the year, sales of Fleet Management products accounted for 64% of total global sales (2014: 52%). Currently, 45% of Cartrack's total
global active subscriber base also incorporate the Stolen Vehicle Recovery service as part of their product selection.
Internationally, Cartrack focused both on driving sales in existing geographies as well as establishing businesses in new countries.
New offices were opened in Malaysia, Philippines, Indonesia, Hong Kong and Thailand, using the already well established office in Singapore
as the hub. An office has also been set up in the UAE. Initial trading commenced in these countries only at the beginning of the
2016 financial year. In addition, a number of Cartrack licensees in Africa and Europe were acquired during the year, either as wholly
owned or majority owned together with a strategic partner.
Cartrack Singapore being awarded the prisoner tracking tender was a highlight, given the high reputation and standards of the
Singaporean government. We see this being a great reference and giving significant credibility to Cartrack's presence in the region.
Additionally, this award reflects the flexibility and scalability of the company's technology platform and the innovative
capabilities of its in-house engineers.
On the technology front, Cartrack released an upgraded and miniaturised Fleet Management unit with ancillary Stolen Vehicle Recovery
features. Several additional features were added for existing Fleet Management clients through the release of software updates.
Cartrack's product range was supplemented further through an in-vehicle camera system, thereby complementing Cartrack's existing
Telematics services and enhancing Cartrack's driver behaviour and safety monitoring capabilities. A miniature wireless and self-powered
tracking device was released for multiple applications, including vehicle recovery and other forms of asset tracking and monitoring.
Dealing with the depreciating Rand and its impact on the cost of our production is a factor that the company has to manage. Fortunately,
the cost of most electronic componentry has decreased in dollar terms and Cartrack has control over most links in the supply chain.
With the company's centralised procurement strategy and the volume of purchases of main components, unit costs of production
have been contained.
Outlook
Subscriber and revenue growth in the short to medium term is anticipated to be consistent with that achieved in the past few years.
Sustainable growth is expected in all operations. The global expansion will generate a greater share of revenue and profit from
operations located outside of SA, although the new Asian/ME operations will only achieve breakeven in the medium term.
Cartrack will maintain a disciplined capital allocation into the new geographies. Pivotal to Cartrack's expansion strategy is a
well-defined and tested expansion model with low initial set-up costs and a hands-on approach from management.
Furthermore, Cartrack does not have any material third party debt on its balance sheet providing it with the ability to leverage
should the opportunity arise.
Strong profit growth and commensurate dividend growth within Cartrack's dividend cover targets of between 1.25 and 1.55 times headline
earnings is expected for 2016, supported by the strong cash-generative nature of Cartrack's business.
The Telematics industry throughout the world has advanced considerably from basic location and trip reporting, to a high level of data
analytics and business intelligence. Its fields of influence are now extending well beyond just monitoring a vehicle and recovering
stolen vehicles to those of performance enhancement, safety and risk management, vehicle diagnostics and related connectivity between
consumers, business, drivers and vehicles. This is a dynamic industry to be part of, and, with the recent high growth experienced being
projected to continue globally at almost exponential rates, the future augers to be exciting and rewarding. Cartrack is well positioned
through its proven technology and service, scalable system platform, low cost base and increasing footprint to take advantage of this
trend, using the SaaS delivery model.
On behalf of the board
David Brown Zak Calisto
Chairman Global chief executive officer
Johannesburg
25 May 2015
Auditors' report
The accompanying financial information has been extracted from the consolidated financial statements, which have been audited by the group's
independent auditors, Grant Thornton Chartered Accountants (SA). An unmodified report has been issued. The full report is available for
inspection at the Company's registered office. Any other information contained herein or reference to future financial performance included
in this announcement, has not been reviewed or reported on by the group's auditors.
Basis of accounting
This condensed group financial information has been prepared in accordance with the framework concepts and the measurement and
recognition requirements of the International Financial Reporting Standards (IFRS) adopted by the International
Accounting Standards Board, Interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) of the IASB,
IAS 34 "Interim Financial Reporting", the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and
Financial Reporting Pronouncements as issued by Financial Reporting Standards Council, the requirements of the Companies Act
of South Africa (Act 71 of 2008) as well as the Listing Requirements of the JSE Limited.
Cartrack has made a change in accounting policy in the year. This policy change relates to the capitalisation and amortisation of
costs of acquisition of rental sales and the reclassification of capital rental units from pre-payments to Property, Plant and Equipment
in the Balance Sheet. This is fully described in the notes to the financial statements and also conforms to the policies commonly
adopted by industry peers.
Apart from the change in policy as noted above all the other accounting policies and their application are consistent with those
used by the company in the previous financial year.
Dividend declaration
Ordinary shareholders are advised that the board of directors has declared a final gross cash dividend of 30 cents per ordinary share
(25.5 cents net of dividend withholding tax) for the 12 months to 28 February 2015 (the cash dividend). The cash dividend will be paid
out of profits of the company.
Timetable
Share code CTK
ISIN ZAE000198305
Company registration number 2005/036316/06
Company tax reference number 9108121162
Dividend number 2
Gross cash dividend per share 30 cents
Issued share capital as at declaration date 300 000 000
Declaration date Monday, 25 May 2015
Last date to trade cum dividend Thursday, 11 June 2015
Shares commence trading ex dividend Friday, 12 June 2015
Record date Friday, 19 June 2015
Dividend payment date Monday, 22 June 2015
Share certificates may not be dematerialised or rematerialised between Friday, 12 June 2015 and Friday, 19 June 2015 both dates inclusive.
Tax implications
The cash dividend is likely to have tax implications for both resident and non-resident shareholders. Shareholders are therefore encouraged to consult
their professional tax advisers should they be in any doubt as to the appropriate action to take.
In terms of the Income Tax Act, the cash dividend will, unless exempt, be subject to dividend withholding tax (DWT).
South African resident shareholders that are liable for DWT, will be subject to DWT at a rate of 15% of the cash dividend and this amount will be
withheld from the cash dividend. Non-resident shareholders may be subject to DWT at a rate of less than 15% depending on their country of residence
and the applicability of any double tax treaty between South Africa and their country of residence.
By order of the board
Cartrack Holdings Limited
Company secretary
Johannesburg
25 May 2015
Segmental analysis
2015 2014 % CHANGE
Revenue
South Africa 627 174 799 530 962 678 18
Africa – other 124 279 954 88 595 185 40
Europe 80 422 114 13 162 200 511
Asia & ME* 11 823 676 4 300 229 175
Total 843 700 543 637 020 292 32
Operating profit before tax
South Africa 236 985 044 218 554 972 8
Africa – other 56 776 144 37 906 227 50
Europe 15 836 286 1 029 208 1 439
Asia & ME (7 078 835) 1 166 908 NA
Total 302 518 639 258 657 315 17
EBITDA
South Africa 294 877 819 258 391 168 14
Africa – other 55 987 856 38 167 331 47
Europe 26 232 289 2 531 254 936
Asia & ME (6 590 226) 1 166 908 NA
Total 370 507 738 300 256 664 23
*ME – Middle East
The Group is organised into geographical business units and has four reportable operating segments. Each operating segment provides essentially
the same or similar products and services to a homogenous target market. The losses incurred in the Asia/MEA segment in 2015 were attributable
to the start-up costs of the six new offices opened in the region – trading only commenced early in 2016.
Johannesburg
25 May 2015
Sponsor
Investec Bank Limited
CORPORATE INFORMATION
Registered office of Cartrack
Cartrack Holdings Limited
Unit 7 Boskruin Business Park
Bosbok Road
Randpark Ridge
Ex. 75 2169
(PO Box 4709, Rivonia, 2128)
Directors
Independent Non-executive Directors
David Brown (Independent Chairman)
Thebe Ikalafeng
Kim White
Executive Directors
Isaias Jose Calisto (Global Chief Executive Officer)
John Richard Edmeston (Global Chief Financial Officer)
Company Secretary
Anname de Villiers
Cartrack Corner
11 Keyes Road
Rosebank
Johannesburg 2196
(PO Box 4709, Rivonia, 2128)
Sponsor
The Corporate Finance division of Investec Bank Limited
2nd Floor
100 Grayston Drive
Sandown
Sandton 2196
(PO Box 785700, Sandton, 2146)
Transfer Secretary
Computershare Investor Services Proprietary Limited
70 Marshall Street
Johannesburg
2001
(PO Box 61051, Marshalltown, 2107)
Date: 25/05/2015 01:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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