Wrap Text
Reviewed Interim Financial Results for the six months ended 31 August 2015
CARTRACK HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/036316/06)
Share code: CTK
ISIN: ZAE000198305
("Cartrack" or "the company")
REVIEWED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2015
HIGHLIGHTS
Revenue up
on H1 2015
18%
Subscription
revenue up on
H1 2015
18%
Subscriber base up
on H1 2015
20% to
463 000 active
contracts
Operating
margin
34%
Interim
dividend per
share up 25%
to
20 cents
Headline EPS up
on H1 2015
16%
EBITDA up
on H1 2015
17%
Net cash from
operating
activities
R115
million
COMMENTARY
Group profile
Cartrack Holdings Limited is a holding company incorporated in South Africa and listed under the short code
"CTK" in the Business Support Services sector on the Johannesburg Stock Exchange. The Group's activities are
focused on the design, development and installation of telematics technology; data collection and analysis;
the delivery of fleet and mobile asset management solutions delivered as Software-as-a-service ("Saas"), and
the tracking and recovery of vehicles. The Group has a presence in various countries across Africa, Europe, Asia
and the Middle East.
Group performance
Cartrack increased headline earnings and headline earnings per share by 16% to R111.7 million (H1 2015:
R96.5 million) and 37.2 cents (H1 2015: 32.2 cents) respectively. An interim cash dividend of 20 cents (H1 2015:
16 cents) was declared, which represents a 25% increase on the prior period.
The Group increased revenue by 18% to R469.7 million and raised profit before tax by 14% to R164.6 million
in the six months ended 31 August 2015 compared to the same period last year. All regions contributed to
this growth, apart from the new country start-ups in Asia and the Middle East that were initiated in the latter
part of last year. These new start-ups generated losses due to infrastructure being built ahead of anticipated
future sales growth, and current losses are in line with management expectations. The global active subscriber
base grew by 20% or some 76 000 contracts since H1 2015. Contract subscription revenue grew by 18% and
continues to represent 84% of total revenue.
Growth in subscription revenue and generally higher contract pricing increased the profit contributions
from operations outside South Africa and maintained the gross profit margin at 82%, despite price
pressures in some regions. Advance purchasing of components and procurement cost management have thus
far prevented the recent weakening of the Rand from having a significant impact on product costs.
Operating margin reduced to 34% (H1 2015: 36%), but would have been maintained except for two primary
factors: firstly, the influence of the Asian and Middle Eastern operations where start-up costs have, as
anticipated, increased on the back of infrastructure build; secondly, the fact that the change in accounting
policy for the capitalisation and amortisation of the acquisition costs of rental contracts over their 36-month
contract periods, commencing only from 2013, has had a negative effect on operating profit in the current
period compared to H1 2015. This negative impact is a result of the number of months required to be amortised
only building up to a full 36 months and plateauing from March 2015. As such, going forward there will be no
further impact on profits arising from this policy change other than through normal growth. The current impact
is an estimated 1.5% reduction in operating margin. EBITDA margin has been maintained at 45%.
Acquisitions
On 1 March 2015 Cartrack purchased 100% of the shares in Cartrack Manufacturing (Pty) Ltd (formerly
Onecell Manufacturing (Pty) Ltd from Onecell Holdings (Pty) Ltd for R100, being the nominal share capital
value. This acquisition places Cartrack in full control of the supply chain for its products, from procurement of
components, to manufacture, testing and repair.
Cartrack acquired 100% of the shares in Cartrack Management Services (Pty) Ltd (formerly Bonito Recruitment
Services (Pty) Ltd from Onecell Holdings (Pty) Ltd on 1 March 2015 for R100, being the nominal share capital
value. This company provides the services of executive management and the non-executive directors to
the Group.
Segmental contribution
South Africa
This segment continues to account for 76% of total revenue. Revenue grew by 18% to R356.2 million (H1 2015:
R302.8 million) on the back of an equivalent increase in subscriber base. Operating profit margin decreased by
6% to 35% compared to H1 2015, substantially attributable to the additional expenditures incurred to build the
South African sales and distribution infrastructure as a platform for future growth. This resulted in operating
profits for this segment growing by only 1% relative to H1 2015. Cartrack South Africa, the largest operating
entity in the Group, performed strongly in sales growth and achieved financial results in line with operational
growth strategies. The now stronger infrastructure platform established over the past 12 months is already
yielding higher growth and costs are being contained in line with new operational activity levels. Second half-
year revenue and profitability is anticipated to reflect commensurate improvement.
Sales of fleet management products have shown particularly good growth. The market continues to see
and realise increased benefits, for both risk management and commercial operational efficiencies, from the
numerous real-time monitoring features provided. Consequently, the rate of market adoption across a range
of telematics products is increasing. Stolen vehicle recovery remains a very important component of our
services, this being supported by the worsening vehicle theft statistics as released by the South African Police
Services in September 2015. Despite the increasing vehicle theft and hijack incidence rate being experienced,
Cartrack is maintaining its 93% recovery rate.
Africa – Other
Revenue increased by 18% to R62.6 million (H1 2015: R53 million), continuing to contribute approximately
13% to overall Group revenue. All operations improved their performances. The benefits of scale from the
subscriber growth of 19% since H1 2015 are reflected in the 78% increase in operating profit. Consequently,
the African – Other segment has increased its contribution to Group operating profit from 11% to 17%.
Some significant orders have recently been received in Nigeria which will start to contribute to profit
improvement in the second half-year. Additionally, sales forces in Kenya and Tanzania are being strengthened
to drive sales to achieve the full potential that management perceives to exist in these territories.
Europe
Revenue grew by only 6% to R39.1 million (H1 2015: R36.9 million), reducing this segment's contribution to
Group revenue to 8% from 9% in the prior year. Price pressures are being experienced in this segment, but
simultaneously the cost of sales base has been lowered by virtue of reduced telemetry communication costs
and increased operational efficiencies, which together have led to reduced overhead expenses. The operating
profits increased by 105%, lifting the segment's contribution to Group operating profit from 5% (H1 2015) to 8%.
Asia and Middle East
Coming off a low base, revenue increased by 138% compared to H1 2015. The active subscriber base has
increased by 3 522 contracts since end of H1 2015 to a current total of 6 295 contracts. Operating losses for
the segment increased from R1.6 million for H1 2015 to R5.5 million in H1 2016, attributable to expenditure on
infrastructure development costs in the start-up phase of operations established in the latter part of last year
in the Philippines, Malaysia, UAE, Thailand, Hong Kong and Indonesia.
The operating losses of these recently established entities are being closely managed during this
establishment stage and have been controlled within management's expectations. Sales have commenced in
all operations and a steady monthly increase is anticipated. However, losses will continue and even increase
over the remainder of the year as has been budgeted. Breakeven is only expected to be achieved within
approximately three years of commencement of trading.
Funding and capital management
During the period the Group continued to generate strong positive cash flows. Cash and cash equivalents
decreased by R43.4 million to R66.5 million since year-end, after a dividend payment of R90 million and the
strategic building of inventory by a further R29.4 million during the period. Noteworthy is that the increase in
finance costs is substantially attributable to an interest charge from South African Revenue Services on the
arrear tax arising from the change in accounting policy adopted at the end of the last financial year, relating to
the capitalisation of acquisition costs of rental contracts.
Working capital control has resulted in our trade receivables remaining well below a 30-day average collection
period, despite the difficult economic situation faced globally. Inventory has, however, increased by 47% since
last year-end. This is due primarily to the acquisition and consolidation of Cartrack Manufacturing (Pty) Ltd
with this entity holding stocks of components and finished goods to the value of R35 million. A management
decision was made to procure components in volume to achieve improved pricing and manage costs in the face
of a deteriorating Rand. Additionally, some lengthening procurement lead times for componentry have led to
the decision to increase stock buffer levels against our sales growth.
Outlook
Cartrack anticipates further solid growth potential in all the regions it serves during the remainder of this year
and beyond. Global research reports continue to predict considerable telematics and related services growth,
which supports management's view. The subscriber base is expected to grow to greater than 500 000 by year-end*.
The rapid and recent weakening of the Rand against the US dollar, the currency in which our main product
components are purchased, will impact later in the year on cost of sales when new component stock is procured,
manufactured and distributed through the sales pipeline. The impact of this currency deterioration has been
minimised by advance procurement of components and higher than normal stocks. If the current Rand/US
dollar exchange rate persists, the impact on margins of the higher procurement cost going forward as compared
to our current component cost is estimated at 1.5%. On the other hand, this currency risk will be partially hedged
as the offshore operations grow and a larger share of profits are generated from countries with strong currencies.
Cartrack's business model, which is based on high contract subscription revenue, typically yields increased
revenue and profitability in the second half of a year. Management is confident that this cycle, combined with
anticipated further good sales growth and the economies of scale, will yield a considerably higher rate of profit
growth and cash flow despite the negative foreign exchange impact and operating losses still to be incurred in
those Asian and Middle Eastern countries of recent expansion.
On 16 October 2015 Cartrack issued a SENS announcement that it is planning to launch a start-up operation
in the USA by the end of this calendar year. However, more time is required to evaluate the market and determine
optimal structures. Therefore, no USA start-up will be effected during this calendar year. A stated key strategic
objective is global expansion and the USA represents a potentially significant market for Cartrack's fleet
management offerings.
* This forecast has not been reviewed by or reported on by the company's auditors.
Dividends and dividend policy
The directors have declared a gross cash dividend from retained earnings of 20 cents per share (H1 2015:
16 cents on an equivalent number of shares in issue) in respect of the six-month period ended 31 August 2015.
The increase of 25% in the interim dividend has been determined by virtue of the increased profitability of
the Group and no investment outlays on acquisitions of any Cartrack licensees having been made in H1 2016
(approximately R53.4 million was spent on acquisitions in FY 2015).
The directors intend to declare a dividend on at least an annual basis and to adopt a dividend cover of between
1.25 and 1.55 times headline earnings per share for the full 2016 financial year. The directors believe this
approach to be compatible with the Group's growth opportunities and ambitions and will regularly review the
dividend policy considering levels of debt, if any, the capital requirements reflected in the Company's business
plans, monies required for expansion and other growth opportunities.
However, there is no assurance that a dividend will be paid in respect of any financial period, and any future
dividends will be dependent on, inter alia, the factors outlined above.
Executive Incentive Scheme
The Cartrack Executive Incentive Trust Scheme was approved at the annual general meeting held on
25 August 2015. Accordingly, the board of directors has commenced the implementation of this scheme and
shares will be allocated to eligible employees during the second half of this year in accordance with the criteria
as determined by the remuneration committee. The board of directors has approved the application of a rule
that no employee who holds directly or indirectly more than 5% of the issued share capital of Cartrack shall be
eligible to participate in the Cartrack Executive Incentive Trust Scheme. This incentive scheme is designed to
incentivise and retain qualifying middle and senior management who are considered to be key contributors
to the continued success of Cartrack.
Remuneration and nomination committee
Although the board has appointed a combined remuneration and nominations committee, it has agreed to
appoint David Brown, chairman of the board, as chairman of the nomination committee considerations and
Thebe Ikalafeng will continue as chairman of the remuneration committee considerations. This is in alignment
with the principles of the South African Code of Corporate Practices and Conduct as set out in the third King
Report on Corporate Governance.
On behalf of the board
David Brown Zak Calisto
Chairman Global chief executive officer
Basis of accounting
The 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 the Financial Reporting Standards Council, the requirements of the Companies
Act of South Africa (Act 71 of 2008) as well as the Listings Requirements of the JSE Limited. The accounting
policies and their application are consistent with those used by the Group in the previous financial period.
The review has been conducted in accordance with International Standards on Review Engagements 2410
(revised), Review of Interim Financial Information Performed by the Independent Auditor, Grant Thornton
Johannesburg partnership, and their unmodified review conclusion is available for inspection at the Company's
registered office. Any reference to future financial performance included in this announcement has not been
reviewed or reported on by the Group's external auditors. The auditors' review report does not necessarily
report on all the information contained in this announcement/financial results. Shareholders are therefore
advised that in order to obtain a full understanding of the nature of the auditors' engagement they should
obtain a copy of the auditors' review report together with the accompanying financial information from the
issuer's registered office.
Dividend declaration
Ordinary shareholders are advised that the board of directors has declared an interim gross dividend of
20 cents per ordinary share (17 cents net of dividend withholding tax) for the six months to 31 August 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 3
Gross cash dividend per share 20 cents
Issued share capital as at declaration date 300 000 000
Dividend declaration date Monday, 16 November 2015
Last day to trade cum dividend Friday, 4 December 2015
Shares commence trading ex dividend Monday, 7 December 2015
Record date Friday, 11 December 2015
Dividend payment date Monday, 14 December 2015
Share certificates may not be dematerialised or rematerialised between Monday, 7 December 2015 and Friday,
11 December 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
16 November 2015
Sponsor
Investec Bank Limited
Reviewed consolidated interim statement
of financial position
as at 31 August 2015
Reviewed Audited Restated
31 August 28 February 31 August
Figures in R'000 Note(s) 2015 2015 2014
ASSETS
Non-current assets
Property, plant and equipment 176 869 150 530 126 844
Goodwill 3 146 085 144 269 142 162
Deferred tax 11 728 8 910 6 330
334 682 303 709 275 336
Current assets
Inventories 91 932 62 532 52 106
Loans to related parties 5 346 5 263 2 810
Trade and other receivables 79 843 68 177 49 077
Current tax receivable 4 847 449 1 110
Cash and cash equivalents 67 044 110 047 57 279
249 012 246 468 162 382
Total assets 583 694 550 177 437 718
EQUITY AND LIABILITIES
Equity
Equity attributable to equity holders of parent
Share capital 42 488 42 488 42 488
Reserves 37 451 32 317 22 481
Retained income 319 152 300 415 200 421
399 091 375 220 265 390
Non-controlling interest 31 255 24 082 32 367
430 346 399 302 297 757
Liabilities
Non-current liabilities
Finance lease obligation 6 392 5 618 4 043
Deferred tax 908 236 55
7 300 5 854 4 098
Current liabilities
Trade and other payables 106 543 101 133 80 669
Loans from related parties 1 113 1 235 1 587
Finance lease obligation 5 988 6 218 5 667
Current tax payable 31 853 36 321 38 254
Dividend payable – – 9 619
Bank overdraft 551 114 67
146 048 145 021 135 863
Total liabilities 153 348 150 875 139 961
Total equity and liabilities 583 694 550 177 437 718
Reviewed consolidated interim statement of
profit or loss and other comprehensive income
for the six months ended 31 August 2015
Reviewed Audited Restated
Six months 12 months Six months
ended ended ended
31 August 28 February 31 August
Figures in R'000 Note(s) 2015 2015 2014
Revenue 469 728 843 701 397 647
Cost of sales (83 888) (185 536) (72 492)
Gross profit 385 840 658 165 325 155
Other income 5 942 6 852 3 737
Operating expenses (230 211) (366 539) (184 205)
Operating profit 161 571 298 478 144 687
Foreign exchange gains 2 328 433 10
Investment revenue 4 638 4 533 681
Finance costs (3 963) (924) (516)
Profit before taxation 164 574 302 520 144 862
Taxation (46 757) (88 442) (40 714)
Profit for the period 117 817 214 078 104 148
Other comprehensive income:
Items that may be reclassified to
profit or loss:
Exchange differences on translating
foreign operations 3 913 (7 292) 3 637
Other comprehensive income for
the period net of taxation 3 913 (7 292) 3 637
Total comprehensive income for
the period 121 730 206 786 107 785
Profit attributable to:
Owners of the parent 108 737 195 244 96 935
Non-controlling interest 9 080 18 834 7 213
117 817 214 078 104 148
Total comprehensive income
attributable to:
Owners of the parent 113 871 190 490 97 998
Non-controlling interest 7 859 16 296 9 787
121 730 206 786 107 785
Earnings per share
Per share information
Basic earnings per share (cents) 4 0.36 0.65 0.32
Headline earnings per share (cents) 5 0.37 0.65 0.32
Reviewed consolidated interim statement
of changes in equity
for the six months ended 31 August 2015
Foreign Total attributable
currency to equity holders
translation of the Group/ Non-controlling
Figures in R’000 Share capital Share premium Total share capital reserve Retained income Company interest Total equity
Opening balance as previously reported – 42 488 42 488 22 481 155 523 220 492 32 367 252 859
Change in accounting policy – – – – 44 898 44 898 – 44 898
Balance at 1 September 2014 – 42 488 42 488 22 481 200 421 265 390 32 367 297 757
Profit 1 September 2014 to
28 February 2015 – – – – 99 994 99 994 11 450 111 444
Other comprehensive income
1 September 2014 to 28 February 2015 – – – (6 181) – (6 181) (4 748) (10 929)
Total comprehensive income for
the period – – – (6 181) 99 994 93 813 6 702 100 515
Foreign currency translation movements
within equity – – – 16 017 – 16 017 (16 017) –
Acquisition of subsidiaries with
NCI portion – – – – – – 1 837 1 837
Share issue* 42 488 (42 488) – – – – – –
Buyback and cancellation of shares (510 000) – (510 000) – – (510 000) – (510 000)
Issue of new shares 510 000 – 510 000 – – 510 000 – 510 000
Dividends – – – – – – (807) (807)
Total contributions by and
distributions to owners of company
recognised directly in equity 42 488 (42 488) – 16 017 – 16 017 (14 987) 1 030
Balance at 1 March 2015 42 488 – 42 488 32 317 300 415 375 220 24 082 399 302
Profit 1 March 2015 to 31 August 2015 – – – – 108 737 108 737 9 080 117 817
Other comprehensive income 1 March
2015 to 31 August 2015 – – – 5 134 – 5 134 (1 221) 3 913
Total comprehensive income for
the period – – – 5 134 108 737 113 871 7 859 121 730
Dividends – – – – (90 000) (90 000) (686) (90 686)
Total contributions by and
distributions to owners of company
recognised directly in equity – – – – (90 000) (90 000) (686) (90 686)
Balance at 31 August 2015 42 488 – 42 488 37 451 319 152 399 091 31 255 430 346
*R300 not displaying due to rounding.
Reviewed consolidated interim statement
of cash flows
for the six months ended 31 August 2015
Reviewed Audited Restated
Six months 12 months Six months
ended ended ended
31 August 28 February 31 August
Figures in R'000 2015 2015 2014
Cash flows from operating activities
Cash generated from operations 171 929 343 832 163 165
Interest income 4 638 4 533 681
Finance costs (3 288) (360) (267)
Tax paid (57 949) (81 491) (31 595)
Net cash from operating activities 115 330 265 514 131 984
Cash flows from investing activities
Purchase of property, plant and equipment (71 162) (119 698) (59 356)
Sale of property, plant and equipment 507 4 651 1 843
Acquisition of subsidiaries, net of cash acquired (15) (53 428) (39 119)
Net cash from investing activities (70 670) (168 475) (96 632)
Cash flows from financing activities
Proceeds on share issue** – – –
Increase/(decrease) in loans from related parties (122) 498 856
(Increase)/decrease in loans to related parties (83) 29 778 32 223
Finance lease (payments)/receipts 1 217 3 576 1 888
Dividends paid (90 686) (58 832) (48 405)
Acquisitions resulting in increase in
control of subsidiaries – (5 000) (5 000)
Buyback of company's own shares* – (510 000) –
Proceeds of share issue* – 510 000 –
Net cash from financing activities (89 674) (29 980) (18 438)
Total cash movement for the period (45 014) 68 059 16 914
Cash at the beginning of the period 109 933 41 656 41 656
Effect of exchange rate movement on cash balances 1 574 218 (1 358)
Total cash at end of the period 66 493 109 933 57 212
* This is additional disclosure not disclosed at the year-end, however, the impact is nil. The amounts relate to the proceeds
from the private placement used to settle the purchase price in terms of the buyback agreement.
** R300 not displaying due to rounding.
Accounting policies
1. Presentation of reviewed interim condensed consolidated
financial statements
The interim consolidated financial statements are prepared in accordance with the requirements of
the JSE Limited Listings Requirements for provisional reports, and the requirements of the Companies
Act applicable to interim financial statements. The Listings Requirements require interim reports
to be prepared in accordance with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by
the Financial Reporting Standards Council and to also, as a minimum, contain the information required
by IAS 34: Interim Financial Reporting. The accounting policies applied in the preparation of the
consolidated financial statements from which the condensed financial statements were derived are in
terms of International Financial Reporting Standards and are consistent with those accounting policies
applied in the preparation of the previous consolidated annual financial statements, apart from the
improvements made to the accounting standards and interpretations.
This is the first interim report being prepared and the effect of the change in accounting policy, made in
the year ended 28 February 2015, is reflected in note 2 for the comparative period ended 31 August 2014.
Notes to the reviewed interim condensed
consolidated financial statements
2. Changes in accounting policy
The reviewed interim condensed consolidated financial statements have been prepared in accordance
with IAS 34: Interim Financial Reporting on a basis consistent with the annual financial statements for the
year ended 28 February 2015.
For the year ended 28 February 2015, 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 have 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
the policy will more closely match acquisition costs to revenue-generation.
The aggregate effect of the changes in accounting policy on the interim condensed consolidated
financial statements for the six months ended August 2014 was as follows:
Restated
Figures in R'000 31 August 2014
Consolidated statement of financial position
Property, plant and equipment
Previously stated 36 780
Adjustment 90 064
126 844
Net deferred tax (liability)/asset
Previously stated (3 616)
Adjustment 9 891
6 275
Retained earnings
Previously stated (155 523)
Adjustment (44 898)
(200 421)
Net income tax asset (liability)
Previously stated (14 876)
Adjustment (22 268)
(37 144)
Trade and other receivables*
Prepayment previously stated 43 642
Adjustment (32 789)
Subtotal 10 853
Reclassification (note 9) (9 507)
Trade debtors previously stated 47 731
49 077
Restated
Figures in R'000 31 August 2014
Profit or loss
Cost of sales*
Previously stated 73 778
Adjustment (5 251)
Subtotal 68 527
Reclassification (note 9) 3 965
72 492
Operating expenses*
Previously stated 199 880
Adjustment (11 710)
Subtotal 188 170
Reclassification (note 9) (3 965)
184 205
Tax
Previously stated 35 964
Adjustment 4 750
40 714
Earnings per share (cents)
Previously stated 0.28
Adjustment 0.04
0.32
* To be read in conjunction with note 9.
3. Goodwill
Africa – Asia and
Figures in R'000 South Africa Other Europe Middle East Total
Balance 1 March 2014 1 499 95 100 – 2 834 99 433
Additions – 382 37 400 471 38 253
Translation adjustments – 4 966 (867) 377 4 476
31 August 2014 1 499 100 448 36 533 3 682 142 162
Addition – – 7 641 – 7 641
Translation adjustments – (1 192) (2 524) (1 818) (5 534)
28 February 2015 1 499 99 256 41 650 1 864 144 269
Addition 157 – – – 157
Translation adjustments – (4 322) 5 783 198 1 659
31 August 2015 1 656 94 934 47 433 2 062 146 085
Refer to note 7 for new acquisitions.
4. Basics earnings per share
Reviewed Audited Restated
31 August 28 February 31 August
2015 2015 2014
Continuing earnings per share (cents) 0.36 0.65 0.32
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 shares in issue on 1 March 2014 were 142 ordinary par value shares. In preparation for the listing in
December 2014, these 142 par value shares were converted to 142 no par value shares and an additional
299 999 858 shares were issued to Onecell Holdings (Pty) Ltd for R300 to take the total issued shares
to 300 000 000 ordinary shares of no par value. For purposes of determining the weighted average
number of shares in issue, this share conversion and subsequent share issue have been treated as a
share "split". Consequently, the weighted average shares in issue for each of the comparative periods
have been determined to be 300 000 000 shares. This provides the user with more comparable and
relevant information.
Reviewed Audited Restated
31 August 28 February 31 August
Figures in R'000 2015 2015 2014
Weighted average number of ordinary
shares ('000) 300 000 300 000 300 000
Profit attributable to ordinary shareholders
Profit for the year attributable to the equity
holders of parent 108 737 195 244 96 935
5. Headline earnings per share
Reviewed Audited Restated
31 August 28 February 31 August
Figures in R'000 2015 2015 2014
Headline earnings per share (cents) 0.37 0.65 0.32
The calculation of headline earnings per share has been based on the following profit attributable to
ordinary shareholders and the weighted average number of shares in issue as determined above in note 4.
Reviewed Audited Restated
31 August 28 February 31 August
Figures in R'000 2015 2015 2014
Weighted average number of ordinary
shares ('000) 300 000 300 000 300 000
Reconciliation between basic
earnings/(loss) and headline earnings/(loss)
Basic earnings 108 737 195 244 96 935
Adjusted for:
Reversal of bargain purchase 3 278 – –
Gain on disposal of assets net of tax (266) (738) (426)
111 749 194 506 96 509
6. 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.
Asia and
Segment report – South Africa – Middle
31 August 2015 Africa Other Europe East Total
Revenue 356 243 62 618 39 147 11 720 469 728
Intersegment elimination
of revenue 98 507 – – – 98 507
Revenue before
segment elimination 454 750 62 618 39 147 11 720 568 235
Profit before taxation
includes the following items 125 478 31 403 13 240 (5 547) 164 574
Investment revenue 2 388 2 250 – – 4 638
Finance costs 3 698 240 11 14 3 963
Foreign exchange gains 465 1 996 (115) (18) 2 328
Depreciation 37 298 1 004 7 466 620 46 388
Total tangible assets 281 633 87 393 45 181 23 402 437 609
Total liabilities (106 929) (19 358) (19 064) (7 997) (153 348)
Goodwill 146 085
Equity 430 346
Asia and
Segment report – South Africa – Middle
28 February 2015 Africa Other Europe East Total
Revenue 627 175 124 280 80 422 11 824 843 701
Intersegment elimination
of revenue 34 974 – – – 34 974
Revenue before
segment elimination 662 149 124 280 80 422 11 824 878 675
Profit before taxation
includes the following items 236 986 56 777 15 835 (7 078) 302 520
Investment revenue 1 617 2 916 – – 4 533
Finance costs 693 210 8 13 924
Foreign exchange gains 35 307 8 83 433
Depreciation 58 816 1 917 10 389 476 71 598
Total tangible assets 277 562 77 606 36 605 14 135 405 908
Total liabilities (107 459) (25 042) (13 097) (5 277) (150 875)
Goodwill 144 269
Equity 399 302
Segment report – Africa – Asia and
31 August 2014 South Africa Other Europe Middle East Total
Revenue 302 757 53 046 36 914 4 930 397 647
Intersegment elimination
of revenue 15 924 – – – 15 924
Revenue before
segment elimination 318 681 53 046 36 914 4 930 413 571
Profit before taxation
includes the following items 124 639 15 358 6 514 (1 649) 144 862
Investment revenue 680 1 – – 681
Finance costs 307 203 5 1 516
Foreign exchange gains (130) 137 3 – 10
Depreciation 26 459 818 7 936 136 35 349
Total tangible assets 164 615 64 897 27 698 2 346 259 556
Total liabilities (55 533) (44 581) (18 091) (21 756) (139 961)
Goodwill 142 162
Equity 297 757
7. Business combinations
Immaterial business combinations occurring during the period ended 31 August 2015
On 1 March 2015, the group acquired 100% of the shares in Cartrack Manufacturing (Pty) Ltd (previously
Onecell Manufacturing (Pty) Ltd) from Onecell Holdings (Pty) Ltd for a cash consideration. The group
acquired this company in order to manage and control the procurement and manufacture of its products.
On 1 March 2015, the group acquired 100% of the shares in Cartrack Management Services (Pty) Ltd
(previously Bonito Recruitment Services (Pty) Ltd) from Onecell Holdings (Pty) Ltd for a cash consideration.
The group acquired this dormant company in order to account separately for group management services and related
costs within the group.
Immaterial business combinations occurring during the year ended February 2015
In May 2014, the group acquired 60% of the shares in Retriever Rwanda Ltd from AH Nyimbo for a cash consideration
to increase its footprint in Africa.
In August 2014, the group acquired 100% of the shares in Cartrack Technologies (Pty) Ltd (previously
Onecell Technologies (Pty) Ltd from Onecell Holdings (Pty) Ltd) for a cash consideration. The group acquired this
entity for the development of technologies in the industry.
Material business combinations occurring during the year ended February 2015
In March 2014, the group acquired 100% of the shares in Cartrack - Sistema de Controlo e Identificacoa
de Veiculos S.A, Cartrack Espana S.L, Cartrack Europe SGPS, Cartrack Capital SGPS, and Cartrack
Investments UK Ltd from JMV Matias for a cash consideration of R46 223 160. The group acquired these entities
to obtain a global footprint in Europe. The acquisition has been accounted for using the acquisition
method. The goodwill recognised is primarily attributed to the expected synergies from combining the
assets and activities of the European acquisitions with those of the group and to the economies of scale
to be achieved through future growth. The goodwill is not deductible for income tax purposes.
Fair value of assets acquired and liabilities assumed
Audited
28 February
Figures in R'000 2015
Property, plant and equipment 1 645
Loan receivable 59 636
Investments in subsidiaries 12 635
Inventories 3 016
Trade and other receivables 20 625
Borrowings (78 682)
Trade and other payables (16 260)
Tax liabilities (1 072)
Cash 736
Outside shareholders (1 097)
Goodwill 45 041
Cash consideration paid 46 223
Net cash outflow on acquisition
Cash consideration paid (46 223)
Cash acquired 736
(45 487)
8. Commitments
Mercantile Bank Limited has provided a facility of R40 million to Cartrack Manufacturing (Pty) Ltd.
Cartrack (Pty) Ltd has provided limited suretyship in favour of Mercantile Bank Limited.
9. Comparative figures
Reviewed Audited Restated
31 August 28 February 31 August
Figures in R'000 2015 2015 2014
Certain comparative figures have been reclassified
from operating expenses to cost of sales to provide
an appropriate allocation of expenses that directly
relate to cost of sales.
The effect of the reclassifications is as follows:
Profit or loss
Cost of sales – 10 544 3 965
Operating expenses – (10 544) (3 965)
– – –
Certain comparative figures have been reclassified
from other income to foreign exchange gains.
The effect of the reclassifications is as follows:
Profit and loss
Other income – (433) (10)
Foreign exchange gains – 433 10
– – –
Certain comparative figures have been reclassified
in the consolidated statement of financial position.
Other receivables, other payables and finance lease
obligations have been reclassified to be consistent
with the February 2015 reporting format.
The effect of the reclassifications is as follows
Statement of financial position
Trade and other receivables including prepayments – – (9 507)
Deferred income – – 3 399
Trade and other payables – – 6 108
Finance lease obligation long term – – 5 667
Finance lease obligation short term – – –
Certain comparative figures have been restated due
to a change in accounting policy. Refer to note 2 of
the financial statements.
CORPORATE INFORMATION
Registered office of Cartrack
Cartrack Holdings Limited
Cartrack Corner, Cnr Jan Smuts and 7th Avenue
Rosebank
2196
(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 and Deputy Global CEO)
Company Secretary
Annamè de Villiers
Cartrack Corner
11 Keyes Avenue
Rosebank
2196
(PO Box 4709, Rivonia, 2128)
Sponsor
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)
www.cartrack.com
Date: 16/11/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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