Wrap Text
Unaudited Group Interim Financial Results for the period ended September 30, 2018
MiX Telematics Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1995/013858/06)
JSE share code: MIX NYSE code: MIXT ISIN: ZAE000125316
("MiX Telematics" or "the Company" or "the Group")
UNAUDITED GROUP INTERIM FINANCIAL RESULTS FOR THE PERIOD ENDED SEPTEMBER 30, 2018
Commentary
MiX Telematics announces financial results for second quarter and first half of fiscal 2019
An explanation of non-IFRS measures used in this press release is set out in the Non-IFRS financial measures
section of this press release. A reconciliation of these non-IFRS measures to the most directly comparable
IFRS measures is provided in the financial tables that accompany this release.
References in this announcement to "R" are to South African Rand and references to "U.S. Dollars" and "$" are to
United States Dollars. Unless otherwise stated MiX Telematics has translated U.S. Dollar amounts from South
African Rand at the exchange rate of R14.1437 per $1.00, which was the R/$ exchange rate reported by Oanda.com
as at September 30, 2018.
Highlights:
Second quarter fiscal 2019:
- Subscription revenue of R420 million ($29.7 million), an increase of 18.5% year over year, on a constant
currency basis
- Net subscriber additions of over 22,000, bringing the total base to over 714,000 subscribers, up 12%
year over year
- Operating profit of R87 million ($6.1 million), up 92% year over year
- Adjusted EBITDA of R153 million ($10.8 million), up 48% year over year
- Adjusted EBITDA margin of 30.8%, up 570 basis points year over year
- Net cash generated from operating activities of R179 million ($12.6 million)
- Free cash flow of R93 million ($6.6 million), up from R4 million ($0.3 million) compared to the second
quarter of fiscal 2018
First half fiscal 2019:
- Subscription revenue of R811 million ($57.3 million), an increase of 18.4% year over year, on a constant
currency basis
- Net subscriber additions of 37,100, compared to 18,100 additions in the first half of fiscal 2018
- Operating profit of R154 million ($10.9 million), up 75% year over year
- Adjusted EBITDA of R279 million ($19.8 million), up 42% year over year
- Adjusted EBITDA margin of 29.3%, up 520 basis points year over year
Company raises full year guidance:
-
Subscription revenue - R1,683 million to R1,695 million ($115.4 million to $116.2 million)
-
Total revenue - R1,930 million to R1,963 million ($132.3 million to $134.6 million)
- Adjusted EBITDA - R550 million to R570 million ($37.7 million to $39.1 million)
- Adjusted earnings per diluted ordinary share of 35.1 to 37.9 South African cents.At a ratio of 25 ordinary shares to one
ADS, this equates to adjusted earnings per diluted ADS of 60.2 to 65.0 U.S. cents. Refer to the Business Outlook section
below.
Midrand, South Africa, November 1, 2018 - MiX Telematics Limited (NYSE: MIXT, JSE: MIX), a leading global provider of
fleet and mobile asset management solutions delivered as Software-as-a-Service (SaaS), today announced financial results
for its second quarter and first half of fiscal 2019, which ended on September 30, 2018.
"MiX reported a very strong second quarter, highlighted by our ability to exceed expectations across all key operating
metrics," said Stefan Joselowitz, Chief Executive Officer of MiX Telematics. "Our over 18% year over year subscription
revenue growth was broad-based, driven by uptake from our premium fleet customers globally. Additionally, this is the
ninth consecutive quarter of year over year adjusted EBITDA margin improvement, reaching over 30%. MiX remains well
positioned to maintain the momentum for the second half of fiscal 2019 and beyond given the strong and growing pipeline
of opportunities worldwide."
Financial performance for the three months ended September 30, 2018
Subscription revenue: Subscription revenue was R420.2 million ($29.7 million), an increase of 20.3% compared to
R349.3 million ($24.7 million) for the second quarter of fiscal 2018. Subscription revenue increased by 18.5% on
a constant currency basis. Subscription revenue benefited from a net increase of over 73,800 subscribers from
October 2017 to September 2018, representing an increase in the subscriber base of 11.5% during that period.
Subscription revenue has also benefited from an expansion in the average revenue per user.
Total revenue: Total revenue was R496.7 million ($35.1 million), an increase of 20.8% compared to R411.2 million
($29.1 million) for the second quarter of fiscal 2018. Hardware and other revenue was R76.6 million ($5.4 million),
an increase of 23.7% compared to R61.9 million ($4.4 million) for the second quarter of fiscal 2018.
Gross Margin: Gross profit was R336.6 million ($23.8 million), compared to R269.4 million ($19.1 million) for the
second quarter of fiscal 2018. Gross profit margin was 67.8%, compared to 65.5% for the second quarter of fiscal 2018.
Operating Margin: Operating profit was R86.7 million ($6.1 million), compared to R45.3 million ($3.2 million) for the
second quarter of fiscal 2018. Operating margin was 17.5%, compared to 11.0% for the second quarter of fiscal 2018.
The margin expansion was attributable primarily to improved economies of scale and ongoing cost management initiatives.
Operating expenses of R250.4 million ($17.7 million) increased by R26.2 million ($1.9 million), or 11.7%, compared to the
second quarter of fiscal 2018. Operating expenses represented 50.4% of revenue compared to 54.5% of revenue in the second
quarter of fiscal 2018.
Adjusted EBITDA: Adjusted EBITDA, a non-IFRS measure, was R152.9 million ($10.8 million), compared to R103.3 million
($7.3 million) for the second quarter of fiscal 2018. Adjusted EBITDA margin, a non-IFRS measure, for the second quarter
of fiscal 2019 was 30.8%, compared to 25.1% for the second quarter of fiscal 2018.
Profit for the period and earnings per share: Profit for the period was R54.4 million ($3.8 million), compared to
R24.2 million ($1.7 million) in the second quarter of fiscal 2018. Profit for the period included a net foreign exchange
gain of R0.5 million ($0.04 million) before tax. During the second quarter of fiscal 2018, profit for the period included
a net foreign exchange gain of R3.2 million ($0.2 million).
Diluted earnings per ordinary share were 9 South African cents, compared to 4 South African cents in the second
quarter of fiscal 2018. For the second quarter of fiscal 2019, the calculation was based on diluted weighted average
ordinary shares in issue of 587.6 million, compared to 566.0 million diluted weighted average ordinary shares in
issue during the second quarter of fiscal 2018.
The Company's effective tax rate was 37.7%, compared to 50.2% for the second quarter of fiscal year 2018. Ignoring
the impact of net foreign exchange gains and losses, and related tax consequences, the tax rate which is used in
determining adjusted earnings below, was 29.4% compared to 32.0% in the second quarter of fiscal 2018.
On a U.S. Dollar basis, using the September 30, 2018 exchange rate of R14.1437 per U.S. Dollar, and a ratio
of 25 ordinary shares to one American Depositary Share ("ADS"), profit for the period was $3.8 million, or
16 U.S. cents per diluted ADS compared to $1.7 million, or 8 U.S. cents per diluted ADS in the second quarter
of fiscal 2018.
Adjusted earnings for the period and adjusted earnings per share: Adjusted earnings for the period, a non-IFRS
measure, were R61.2 million ($4.3 million) compared to R30.9 million ($2.2 million) for the second quarter of
fiscal 2018. Adjusted earnings per diluted ordinary share, also a non-IFRS measure, were 10 South African cents,
compared to 5 South African cents in the second quarter of fiscal 2018.
On a U.S. Dollar basis, using the September 30, 2018 exchange rate of R14.1437 per U.S. Dollar, and a ratio
of 25 ordinary shares to one ADS, adjusted earnings for the period were $4.3 million, or 18 U.S. cents per
diluted ADS, compared to 10 U.S cents per diluted ADS in the second quarter of fiscal 2018.
Statement of Financial Position and Cash Flow: At September 30, 2018, the Company had R312.3 million ($22.1 million)
of net cash and cash equivalents, compared to R290.5 million ($20.5 million) at March 31, 2018. The Company
generated R178.7 million ($12.6 million) in net cash from operating activities for the three months ended
September 30, 2018 and invested R85.9 million ($6.1 million) in capital expenditures during the quarter
(including investments in in-vehicle devices of R61.9 million ($4.4 million), leading to free cash flow,
a non-IFRS measure, of R92.8 million ($6.6 million) compared to free cash flow of R3.8 million ($0.3 million)
for the second quarter of fiscal 2018. The Company utilized R10.6 million ($0.7 million) in financing activities,
compared to R12.6 million ($0.9 million) utilized during the second quarter of fiscal 2018. The cash utilized
in financing activities during the second quarter of fiscal 2019 mainly consisted of dividends paid of
R16.9 million ($1.2 million) and the payment of lease liabilities of R4.7 million ($0.3 million), offset
by proceeds from the issuance of shares in respect of employee share options of R11.1 million ($0.8 million).
The cash utilized in financing activities during the second quarter of fiscal 2018 mainly consisted of
dividends paid.
Financial performance for the first half of fiscal 2019
Subscription revenue: Subscription revenue increased to R810.5 million ($57.3 million), an increase of 18.4% compared
to R684.6 million ($48.4 million) for the first half of fiscal 2018. On a constant currency basis, subscription revenue
also increased by 18.4%. Subscription revenue benefited from a net increase of over 73,800 subscribers from October 2017
to September 2018, representing an increase in subscribers of 11.5% during that period. Subscription revenue has also
benefited from an expansion in the average revenue per user.
Total revenue: Total revenue was R953.6 million ($67.4 million), an increase of 16.7% compared to R816.8 million
($57.8 million) for the first half of fiscal 2018. Hardware and other revenue was R143.0 million ($10.1 million),
compared to R132.2 million ($9.3 million) for the first half of fiscal 2018.
Gross margin: Gross profit was R642.4 million ($45.4 million), an increase of 18.7% compared to R541.0 million
($38.2 million) for the first half of fiscal 2018. Gross profit margin was 67.4%, compared to 66.2% for the first
half of fiscal 2018.
Operating margin: Operating profit was R154.4 million ($10.9 million), compared to R88.2 million ($6.2 million) in
the first half of fiscal 2018. The operating margin was 16.2%, compared to 10.8% in the first half of fiscal 2018.
The margin expansion was attributable primarily to the revenue growth leveraging the Company's fixed overheads, and
ongoing cost management initiatives. Operating expenses represented 51.2% of revenue compared to 55.8% in the first
half of fiscal 2018.
Adjusted EBITDA: Adjusted EBITDA was R279.4 million ($19.8 million) compared to R197.2 million ($13.9 million) for
the first half of fiscal 2018. Adjusted EBITDA margin was 29.3%, compared to 24.1% in the first half of fiscal 2018.
Profit for the period and earnings per share: Profit for the period was R68.8 million ($4.9 million), compared to
R58.1 million ($4.1 million) in the first half of fiscal 2018. Profit for the period included a net foreign exchange
gain of R0.3 million ($0.02 million) before tax. During the first half of fiscal 2018, a net foreign exchange loss
of R1.8 million ($0.1 million) was recorded.
Diluted earnings per ordinary share were 12 South African cents, compared to 10 South African cents in the first half
of fiscal 2018. For the first half of fiscal 2019, the calculation was based on diluted weighted average ordinary shares
in issue of 587.2 million, compared to 566.7 million diluted weighted average ordinary shares in issue during the first
half of fiscal 2018.
The Company's effective tax rate was 55.6%, compared to 34.0% for the first half of fiscal 2018. Ignoring the impact
of net foreign exchange gains and losses, and related tax consequences, the effective tax rate, which is used in
calculating adjusted earnings, was 29.0% compared to 31.4% in the first half of fiscal 2018.
Adjusted earnings for the period and adjusted earnings per share: Adjusted earnings for the period were R109.9 million
($7.8 million), compared to R61.6 million ($4.4 million) in the first half of fiscal 2018. Adjusted earnings per
diluted ordinary share were 19 South African cents, compared to 11 South African cents for the first half of fiscal
2018. The impact of foreign exchange movements and the related tax effects on the Group's effective tax rate is included
in note 19 of the unaudited Group interim financial results for the six months ended September 30, 2018.
On a U.S. Dollar basis, using the September 30, 2018 exchange rate of R14.1437 per U.S. Dollar, and a ratio of
25 ordinary shares to one ADS, adjusted earnings were $7.8 million, or 33 U.S. cents per diluted ADS, compared to
$4.4 million, or 19 U.S. cents per diluted ADS in the first half of fiscal 2018.
Cash Flow: The Company generated R201.5 million ($14.2 million) in net cash from operating activities for the first
half of fiscal 2019 and invested R164.2 million ($11.6 million) in capital expenditures during the period (including
investments in in-vehicle devices of R119.2 million ($8.4 million), leading to free cash flow of R37.3 million
($2.6 million), compared to negative free cash flow of R60.2 million ($4.3 million) for the first half of fiscal 2018.
Capital expenditures in the first half of fiscal 2018 were R182.5 million ($12.9 million) and included in-vehicle devices
of R124.5 million ($8.8.million).
The Company utilized R29.7 million ($2.1 million) in financing activities, compared to R42.5 million ($3.0 million)
utilized during the first half of fiscal 2018. The cash utilized in financing activities during the first half of
fiscal 2019 mainly consisted of dividends paid of R33.8 million ($2.4 million) and the payment of lease liabilities
of R6.9 million ($0.5 million), offset by proceeds from the issuance of shares in respect of employee share options
of R11.1 million ($0.8 million). The cash utilized during the first half of fiscal 2018 consisted primarily of
dividends paid of R25.2 million ($1.8 million) and share repurchases of R18.7 million ($1.3 million).
Segment commentary for the first half of fiscal 2019
The segment results below are presented on an integral margin basis. In respect of revenue, this method of measurement
entails reviewing the segment results based on external revenue only. In respect of Adjusted EBITDA (the profit measure
identified by the Company), the margin generated by our Central Services Organization ("CSO"), net of any unrealized
intercompany profit, is allocated to the geographic region where the external revenue is recorded by our Regional Sales
Offices ("RSOs").
CSO is our central service organization that wholesales our products and services to our RSOs who, in turn, interface
with our end-customers and distributors. CSO is also responsible for the development of our hardware and software
platforms and provides common marketing, product management, technical and distribution support to each of our other
operating segments. CSO's operating expenses are not allocated to each RSO.
Each RSO's results reflect the external revenue earned, as well as the Adjusted EBITDA earned (or loss incurred) by
each operating segment before the CSO and corporate cost allocations.
For further information in this regard, please refer to note 3 of the unaudited Group interim financial results for
the six months ended September 30, 2018.
Subscription Total Adjusted Adjusted
Revenue Revenue EBITDA EBITDA Adjusted
Half-year Half-year Half-year Half-year % EBITDA Margin
2019 2019 2019 change on Half-year
Segment R'000 R'000 R'000 prior period 2019
Africa 470,565 507,596 230,200 9.9% 45.4%
Subscription revenue increased by 11.2% in the segment as a result of a 10.4% increase in subscribers
since October 1, 2017. Total revenue increased by 8.1%. The region reported an Adjusted EBITDA margin
of 45.4% (up from the 44.6% Adjusted EBITDA margin reported in the first half of fiscal 2018).
Americas 136,223 151,009 74,858 199.9% 49.6%
Subscription revenue growth on a constant currency basis was 62.1%. Subscribers increased by 31.4%
since October 1, 2017. Subscription revenue continued to receive assistance from the market's
ongoing preference for bundled deals across new and existing customers. Total revenue improved
by 55.6% on a constant currency basis as hardware and other revenues increased by 13.5%. The region
reported an Adjusted EBITDA margin of 49.6% (up from the 26.0% Adjusted EBITDA margin reported in
the first half of fiscal 2018). Americas is currently the fastest growing geographical region both
at a subscription revenue and Adjusted EBITDA level.
Middle East 109,168 155,448 67,762 36.7% 43.6%
and Australasia Subscription revenue increased by 10.6% on a constant currency basis. Subscribers increased by
7.1% since October 1, 2017. Total revenue in constant currency improved by 14.8% as hardware
revenues were higher than in the first half of fiscal 2018. The region reported an Adjusted
EBITDA margin of 43.6% (up from the 36.4% Adjusted EBITDA margin reported in the first half
of fiscal 2018).
Europe 64,784 108,408 37,403 27.0% 34.5%
Subscription revenue growth on a constant currency basis was 10.9%. Subscribers increased by
8.3% since October 1, 2017. Total revenue increased by 16.1% on a constant currency basis due to
higher hardware revenues compared to the first half of fiscal 2018. The region reported an
Adjusted EBITDA margin of 34.5% (up from the 32.9% Adjusted EBITDA margin reported in the
first half of fiscal 2018).
Brazil 29,417 30,707 11,292 29.0% 36.8%
Subscription revenue increased by 48.8% on a constant currency basis. The increase was due to the
market's preference for bundled deals and an increase in subscribers of 29.1% since October 1, 2017.
On a constant currency basis, total revenue increased by 41.1%. The segment reported Adjusted EBITDA
of R11.3 million ($0.8 million) in the first half of fiscal 2019, at an Adjusted EBITDA margin of
36.8% (up from the 34.4% Adjusted EBITDA margin reported in the first half of fiscal 2018).
Central Services 385 391 (82,283) (19.5%) -
Organization CSO is responsible for the development of our hardware and software platforms and provides common
marketing, product management, technical and distribution support to each of our other operating
segments. The negative Adjusted EBITDA reported arises as a result of operating expenses carried
by the segment.
Business Outlook
MiX Telematics has translated U.S. Dollar amounts in this Business Outlook paragraph from South African Rand at the
exchange rate of R14.5849 per $1.00, which was the R/$ exchange rate reported by Oanda.com as at October 29, 2018.
Based on information as of today, November 1, 2018, the Company is issuing the following financial guidance for the
full 2019 fiscal year:
- Subscription revenue - R1,683 million to R1,695 million ($115.4 million to $116.2 million), which would represent
subscription revenue growth of 17.3% to 18.2% compared to fiscal 2018. On a constant currency basis, this would
represent subscription revenue growth of 15.3% to 16.2%. Previous guidance was R1,624 million to R1,645 million.
- Total revenue - R1,930 million to R1,963 million ($132.3 million to $134.6 million), which would represent revenue
growth of 12.7% to 14.6% compared to fiscal 2018. On a constant currency basis, this would represent revenue
growth of 10.9% to 12.8%. Previous guidance was R1,864 million to R1,895 million.
- Adjusted EBITDA - R550 million to R570 million ($37.7 million to $39.1 million), which would represent Adjusted
EBITDA growth of 24.5% to 29.0% compared to fiscal 2018. Previous guidance was R526 million to R545 million.
- Adjusted earnings per diluted ordinary share of 35.1 to 37.9 South African cents based on 583 million diluted
ordinary shares in issue (previous guidance was 31.2 to 33.2 South African cents based on 587 million diluted
ordinary shares in issue), and based on an effective tax rate of 28.0% to 31.0%. At a ratio of 25 ordinary
shares to one ADS, this equates to adjusted earnings per diluted ADS of 60.2 to 65.0 U.S. cents.
For the third quarter of fiscal 2019, the Company expects subscription revenue to be in the range of R429 million to
R434 million ($29.4 million to $29.8 million) which would represent subscription revenue growth of 14.0% to 15.3%
compared to the third quarter of fiscal 2018. On a constant currency basis, this would represent subscription revenue
growth of 13.3% to 14.6%.
The key assumptions used in deriving the forecast are as follows:
- Growth in subscription revenue and vehicles under subscription is based on expected growth rates related to market
conditions and takes into account growth rates achieved previously.
- Achieving hardware sales according to expectations. Hardware sales are dependent on the volumes of bundled
solutions selected by customers.
- An average forecast exchange rate for the 2019 fiscal year of R13.8000 per $1.00.
The forecast is the responsibility of the board of directors and has not been reviewed or reported on by the Company's
external auditors. The Company's policy is to give guidance on a quarterly basis, if necessary, and it does not update
guidance between quarters.
The Company provides earnings guidance only on a non-IFRS basis and does not provide a reconciliation of forward-
looking Adjusted EBITDA and Adjusted Earnings per Diluted Ordinary Share guidance to the most directly comparable
IFRS financial measures because of the inherent difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliations, including adjustments that could be made for foreign exchange gains/(losses)
and related tax consequences, restructuring costs, share-based compensation costs, and other charges reflected in
the Company's reconciliation of historic non-IFRS financial measures, the amounts of which, based on past
experience, could be material.
The information disclosed in this "Business Outlook" section complies with the disclosure requirements in terms of
paragraph 8.38 of the JSE Listings Requirements which deals with profit forecasts.
Quarterly Reporting Policy in respect of JSE Listings Requirements
Following the listing of the Company's ADSs on the New York Stock Exchange, the Company has adopted a quarterly
reporting policy. As a result of such quarterly reporting the Company is, in terms of paragraph 3.4(b)(ix) of the
JSE Listings Requirements, not required to publish trading statements in terms of paragraph 3.4(b)(i) to (viii) of
the JSE Listings Requirements.
Conference Call Information
MiX Telematics management will also host a conference call and audio webcast at 8:00 a.m. (Eastern Daylight Time)
and 2:00 p.m. (South African Time) on November 1, 2018 to discuss the Company's financial results and current
business outlook:
- The live webcast of the call will be available at the "Investor Information" page of the Company's website,
http://investor.mixtelematics.com.
- To access the call, dial 1-877-451-6152 (within the United States) or 0 800 983 831 (within South Africa) or
1-201-389-0879 (outside of the United States). The conference ID is 13684158.
- A replay of this conference call will be available for a limited time at +1-844-512-2921 (within the United States)
or 1-412-317-6671 (within South Africa or outside of the United States). The replay conference ID is 13684158.
- A replay of the webcast will also be available for a limited time at http://investor.mixtelematics.com.
About MiX Telematics Limited
MiX Telematics is a leading global provider of fleet and mobile asset management solutions delivered as SaaS to
customers managing over 714,000 assets in approximately 120 countries. The Company's products and services provide
enterprise fleets, small fleets and consumers with solutions for safety, efficiency, risk and security. MiX Telematics
was founded in 1996 and has offices in South Africa, the United Kingdom, the United States, Uganda, Brazil, Australia,
Romania, Thailand and the United Arab Emirates, as well as a network of more than 130 fleet partners worldwide.
MiX Telematics shares are publicly traded on the Johannesburg Stock Exchange (JSE: MIX) and MiX Telematics ADSs
are listed on the New York Stock Exchange (NYSE: MIXT). For more information visit www.mixtelematics.com.
Forward-Looking Statements
This press release includes certain "forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, including without limitation, statements concerning our financial guidance for the third
quarter and full year of fiscal 2019, our position to execute on our growth strategy, and our ability to expand our
leadership position. These forward-looking statements reflect our current views about our plans, intentions, expectations,
strategies and prospects, which are based on the information currently available to us and on assumptions we have made.
Actual results may differ materially from those described in the forward-looking statements and will be affected by a
variety of risks and factors that are beyond our control including, without limitation, those described under the caption
"Risk Factors" in the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission (the "SEC")
for the fiscal year ended March 31, 2018, as updated by other reports that the Company files with or furnishes to the SEC.
The Company assumes no obligation to update any forward-looking statements contained in this press release as a result
of new information, future events or otherwise.
Non-IFRS financial measures
Adjusted EBITDA
To provide investors with additional information regarding its financial results, the Company has disclosed within
this press release, Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS
financial measures, and they do not represent cash flows from operations for the periods indicated, and should not be
considered an alternative to net income as an indicator of the Company's results of operations, or as an alternative to
cash flows from operations as an indicator of liquidity. Adjusted EBITDA is defined as the profit for the period before
income taxes, net finance income/(costs) including foreign exchange gains/(losses), depreciation of property, plant and
equipment including capitalized customer in-vehicle devices and right-of-use assets, amortization of intangible assets
including capitalized in-house development costs and intangible assets identified as part of a business combination,
share-based compensation costs, restructuring costs, profits/(losses) on the disposal or impairments of assets or
subsidiaries, insurance reimbursements relating to impaired assets and certain litigation costs.
The Company has included Adjusted EBITDA and Adjusted EBITDA margin in this press release because they are key
measures that the Company's management and Board of Directors use to understand and evaluate its core operating
performance and trends; to prepare and approve its annual budget; and to develop short and long-term operational
plans. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA and Adjusted EBITDA margin
can provide a useful measure for period-to-period comparisons of the Company's core business. Accordingly, the
Company believes that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and
others in understanding and evaluating its operating results.
The Company's use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider this
performance measure in isolation from or as a substitute for analysis of our results as reported under IFRS.
Some of these limitations are:
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have
to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such
replacements or for new capital expenditure requirements;
- Adjusted EBITDA does not reflect changes in, or cash requirements for, the Company's working capital needs;
- Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
- Adjusted EBITDA does not reflect tax payments or the payment of lease liabilities that may represent a reduction in
cash available to the Company; and
- other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its
usefulness as a comparative measure.
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures,
including operating profit, profit for the period and our other results.
Headline Earnings
Headline earnings is a profit measure required for JSE-listed companies and is calculated in accordance with circular
4/2018 issued by the South African Institute of Chartered Accountants. The profit measure is determined by taking the
profit for the period prior to certain separately identifiable re-measurements of the carrying amount of an asset or
liability that arose after the initial recognition of such asset or liability net of related tax (both current and
deferred) and related non-controlling interest.
Adjusted Earnings and Adjusted Earnings Per Share
Adjusted earnings per share is defined as profit attributable to owners of the parent, MiX Telematics Limited,
excluding net foreign exchange gains/(losses) net of tax, divided by the weighted average number of ordinary shares
in issue during the period.
We have included Adjusted earnings per share in this press release because it provides a useful measure for
period-to-period comparisons of the Company's core business by excluding net foreign exchange gains/(losses) from
earnings. Accordingly, we believe that Adjusted earnings per share provides useful information to investors and
others in understanding and evaluating the Company's operating results.
Free cash flow
Free cash flow is determined as net cash generated from operating activities less capital expenditure for investing
activities. We believe that free cash flow provides useful information to investors and others in understanding and
evaluating the Company's cash flows as it provides detail of the amount of cash the Company generates or utilizes after
accounting for all capital expenditures including investments in in-vehicle devices and development expenditure.
Constant currency and U.S. Dollar financial information
Financial information presented in United States Dollars and constant currency financial information presented as
part of the segment commentary constitute pro forma financial information under the JSE Listings Requirements. Unless
otherwise stated, MiX Telematics has translated U.S. Dollar amounts from South African Rand at the exchange rate
of R14.1437 per $1.00, which was the R/$ exchange rate reported by Oanda.com as at September 30, 2018.
Constant currency information has been presented to illustrate the impact of changes in currency rates on the Group's
results. The constant currency information has been determined by adjusting the current financial reporting period
results to the prior period average exchange rates, determined as the average of the monthly exchange rates applicable
to the period. The measurement has been performed for each of the Group's currencies, including the U.S. Dollar and British
Pound. The constant currency growth percentage has been calculated by utilizing the constant currency results compared to
the prior period results.
This pro forma financial information is the responsibility of the Group's board of directors and is presented for
illustrative purposes. Because of its nature, the pro forma financial information may not fairly present MiX Telematics'
financial position, changes in equity, results of operations or cash flows. The pro forma financial information does not
constitute pro forma information in accordance with the requirements of Regulation S-X of the SEC or generally accepted
accounting principles in the United States. In addition, the rules and regulations related to the preparation of pro forma
financial information in other jurisdictions may also vary significantly from the requirements applicable in South
Africa. The information contained in this report has not been reviewed or audited by the Group's auditors.
Investor Contact JSE Sponsor
Brian Denyeau Java Capital
ICR for MiX Telematics
ir@mixtelematics.com
+1-855-564-9835
UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2018
CONDENSED CONSOLIDATED INCOME STATEMENT
Six months Six months Three months Three months
ended ended ended ended
South African Rand September 30, September 30, September 30, September 30,
Figures are in thousands 2018 2017 2018 2017
unless otherwise stated Unaudited Unaudited Unaudited Unaudited
Revenue 953,559 816,830 496,737 411,167
Cost of sales (311,168) (275,864) (160,107) (141,732)
Gross profit 642,391 540,966 336,630 269,435
Other income/(expenses) - net 423 2,879 435 (64)
Operating expenses (488,383) (455,676) (250,359) (224,116)
- Sales and marketing (98,811) (98,238) (51,955) (49,259)
- Administration and other charges (389,572) (357,438) (198,404) (174,857)
Operating profit 154,431 88,169 86,706 45,255
Finance income/(costs) - net 628 (84) 473 3,402
- Finance income 5,970 3,900 3,524 5,108
- Finance costs (5,342) (3,984) (3,051) (1,706)
Profit before taxation 155,059 88,085 87,179 48,657
Taxation (86,274) (29,941) (32,829) (24,417)
Profit for the period 68,785 58,144 54,350 24,240
Attributable to:
Owners of the parent 68,786 58,084 54,350 24,248
Non-controlling interest (1) 60 * (8)
68,785 58,144 54,350 24,240
Earnings per share
- basic (R) 0.12 0.10 0.10 0.04
- diluted (R) 0.12 0.10 0.09 0.04
Earnings per American Depositary Share
- basic (R) 3.04 2.59 2.40 1.08
- diluted (R) 2.93 2.56 2.31 1.07
Ordinary shares (‘000)1
- in issue at September 30 569,756 559,381 569,756 559,381
- weighted average 565,249 560,677 566,025 558,824
- diluted weighted average 587,152 566,715 587,616 566,008
Weighted average American Depositary
Shares ('000)1
- in issue at September 30 22,790 22,375 22,790 22,375
- weighted average 22,610 22,427 22,641 22,353
- diluted weighted average 23,486 22,669 23,505 22,640
* Amounts less than R1,000
1 September 30, 2018 figure excludes 40,000,000 (September 30, 2017: 40,000,000) treasury shares held
by MiX Telematics Investments Proprietary Limited ("MiX Investments"), a wholly owned subsidiary of
the Group.
CONDENSED CONSOLIDATED INCOME STATEMENT
Six months Six months Three months Three months
ended ended ended ended
United States Dollar September 30, September 30, September 30, September 30,
Figures are in thousands 2018 2017 2018 2017
unless otherwise stated Unaudited Unaudited Unaudited Unaudited
Revenue 67,419 57,752 35,121 29,071
Cost of sales (22,000) (19,504) (11,320) (10,021)
Gross profit 45,419 38,248 23,801 19,050
Other income/(expenses) - net 30 204 31 (5)
Operating expenses (34,530) (32,218) (17,701) (15,846)
- Sales and marketing (6,986) (6,946) (3,673) (3,483)
- Administration and other charges (27,544) (25,272) (14,028) (12,363)
Operating profit 10,919 6,234 6,131 3,199
Finance income/(costs) - net 44 (6) 33 240
- Finance income 422 276 249 361
- Finance costs (378) (282) (216) (121)
Profit before taxation 10,963 6,228 6,164 3,439
Taxation (6,100) (2,117) (2,321) (1,726)
Profit for the period 4,863 4,111 3,843 1,713
Attributable to:
Owners of the parent 4,863 4,107 3,843 1,713
Non-controlling interest * 4 * *
4,863 4,111 3,843 1,713
Earnings per share
- basic ($) 0.01 0.01 0.01 #
- diluted ($) 0.01 0.01 0.01 #
Earnings per American
Depositary Share
- basic ($) 0.22 0.18 0.17 0.08
- diluted ($) 0.21 0.18 0.16 0.08
Ordinary shares ('000)1
- in issue at September 30 569,756 559,381 569,756 559,381
- weighted average 565,249 560,677 566,025 558,824
- diluted weighted average 587,152 566,715 587,616 566,008
Weighted average American Depositary
Shares ('000)1
- in issue at September 30 22,790 22,375 22,790 22,375
- weighted average 22,610 22,427 22,641 22,353
- diluted weighted average 23,486 22,669 23,505 22,640
* Amounts less than $1,000
# Amounts less than $0.01
1 September 30, 2018 figure excludes 40,000,000 (September 30, 2017: 40,000,000) treasury shares held
by MiX Telematics Investments Proprietary Limited ("MiX Investments"), a wholly owned subsidiary
of the Group.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
South African Rand United States Dollar
Six months Six months Six months Six months
ended ended ended ended
September 30, September 30, September 30, September 30,
Figures are in thousands 2018 2017 2018 2017
unless otherwise stated Unaudited Unaudited Unaudited Unaudited
Profit for the period 68,785 58,144 4,863 4,111
Other comprehensive income:
Items that may be subsequently
reclassified to profit or loss
Exchange differences on translating
foreign operations 96,206 18,796 6,802 1,329
- Attributable to owners of the parent 96,203 18,785 6,802 1,328
- Attributable to non-controlling
interests 3 11 * 1
Taxation relating to components of
other comprehensive income (262) - (18) -
Other comprehensive income for the
period, net of tax 95,944 18,796 6,784 1,329
Total comprehensive income for the period 164,729 76,940 11,647 5,440
Attributable to:
Owners of the parent 164,727 76,869 11,647 5,435
Non-controlling interests 2 71 * 5
Total comprehensive income for the period 164,729 76,940 11,647 5,440
* Amounts less than $1,000
HEADLINE EARNINGS
Reconciliation of headline earnings
South African Rand United States Dollar
Six months Six months Six months Six months
ended ended ended ended
September 30, September 30, September 30, September 30,
Figures are in thousands 2018 2017 2018 2017
unless otherwise stated Unaudited Unaudited Unaudited Unaudited
Profit for the period attributable
to owners of the parent 68,786 58,084 4,863 4,107
Adjusted for:
Profit on disposal of property,
plant and equipment and intangible assets (238) (313) (17) (22)
Impairment of product development
costs capitalized 51 127 4 9
Income tax effect on the above components 53 - 4 -
Headline earnings attributable to
owners of the parent 68,652 57,898 4,854 4,094
Headline earnings
Headline earnings per share
- basic (R/$) 0.12 0.10 0.01 0.01
- diluted (R/$) 0.12 0.10 0.01 0.01
Headline earnings per American
Depositary Share
- basic (R/$) 3.04 2.58 0.21 0.18
- diluted (R/$) 2.92 2.56 0.21 0.18
ADJUSTED EARNINGS
Reconciliation of adjusted earnings
Six months Six months Three months Three months
ended ended ended ended
South African Rand September 30, September 30, September 30, September 30,
Figures are in thousands 2018 2017 2018 2017
unless otherwise stated Unaudited Unaudited Unaudited Unaudited
Profit for the period attributable
to owners of the parent 68,786 58,084 54,350 24,248
Net foreign exchange (gains)/losses (309) 1,784 (540) (3,209)
Income tax effect on the above component 41,434 1,692 7,352 9,853
Adjusted earnings attributable
to owners of the parent 109,911 61,560 61,162 30,892
Reconciliation of earnings per
share to adjusted earnings per share
Basic earnings per share (R) 0.12 0.10 0.10 0.04
Net foreign exchange (gains)/losses # 0.01 # (0.01)
Income tax effect on the above component 0.07 # 0.01 0.03
Basic adjusted earnings per share (R) 0.19 0.11 0.11 0.06
Adjusted earnings per share
- basic (R) 0.19 0.11 0.11 0.06
- diluted (R) 0.19 0.11 0.10 0.05
Adjusted earnings per American
Depositary Share
- basic (R) 4.86 2.74 2.70 1.38
- diluted (R) 4.68 2.72 2.60 1.36
# Amounts less than R0.01
Six months Six months Three months Three months
ended ended ended ended
United States Dollar September 30, September 30, September 30, September 30,
Figures are in thousands 2018 2017 2018 2017
unless otherwise stated Unaudited Unaudited Unaudited Unaudited
Profit for the period attributable
to owners of the parent 4,863 4,107 3,843 1,713
Net foreign exchange (gains)/losses (22) 126 (38) (227)
Income tax effect on the above component 2,930 120 520 697
Adjusted earnings attributable to
owners of the parent 7,771 4,353 4,325 2,183
Reconciliation of earnings per share
to adjusted earnings per share
Basic earnings per share ($) 0.01 0.01 0.01 #
Net foreign exchange (gains)/losses # # # #
Income tax effect on the above component # # # #
Basic adjusted earnings per share ($) 0.01 0.01 0.01 #
Adjusted earnings per share
- basic ($) 0.01 0.01 0.01 #
- diluted ($) 0.01 0.01 0.01 #
Adjusted earnings per American
Depositary Share
- basic ($) 0.34 0.19 0.19 0.10
- diluted ($) 0.33 0.19 0.18 0.10
# Amounts less than $0.01
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
South African Rand United States Dollar
September 30, March 31, September 30, March 31,
Figures are in thousands 2018 2018 2018 2018
unless otherwise stated Unaudited Audited Unaudited Unaudited
ASSETS
Non-current assets
Property, plant and equipment 461,968 334,038 32,662 23,617
Intangible assets 934,225 898,527 66,052 63,528
Capitalized commission assets 50,290 - 3,556 -
Deferred tax assets 44,857 40,717 3,172 2,879
Total non-current assets 1,491,340 1,273,282 105,442 90,024
Current assets
Assets classified as held for
sale (Note 6) 17,058 17,058 1,206 1,206
Inventory 66,154 57,013 4,677 4,031
Trade and other receivables 351,726 286,406 24,868 20,250
Taxation 12,371 30,373 875 2,147
Restricted cash 32,664 20,935 2,309 1,480
Cash and cash equivalents 347,253 308,258 24,552 21,795
Total current assets 827,226 720,043 58,487 50,909
Total assets 2,318,566 1,993,325 163,929 140,933
EQUITY
Stated capital 857,475 846,405 60,626 59,845
Other reserves 51,099 (51,614) 3,613 (3,649)
Retained earnings 781,968 722,380 55,287 51,074
Equity attributable to owners
of the parent 1,690,542 1,517,171 119,526 107,270
Non-controlling interest 12 10 1 1
Total equity 1,690,554 1,517,181 119,527 107,271
LIABILITIES
Non-current liabilities
Deferred tax liabilities 132,369 82,658 9,359 5,844
Provisions 2,437 2,132 172 151
Recurring commission liability 2,632 - 186 -
Capitalized lease liability 33,679 - 2,381 -
Total non-current liabilities 171,117 84,790 12,098 5,995
Current liabilities
Trade and other payables 380,733 350,519 26,919 24,780
Capitalized lease liability 10,322 - 730 -
Taxation 5,894 2,832 417 200
Provisions 24,969 20,283 1,765 1,434
Bank overdraft 34,977 17,720 2,473 1,253
Total current liabilities 456,895 391,354 32,304 27,667
Total liabilities 628,012 476,144 44,402 33,662
Total equity and liabilities 2,318,566 1,993,325 163,929 140,933
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
South African Rand United States Dollar
Six months Six months Six months Six months
ended ended ended ended
September 30, September 30, September 30, September 30,
Figures are in thousands 2018 2017 2018 2017
unless otherwise stated Unaudited Unaudited Unaudited Unaudited
Cash flows from operating activities
Cash generated from operations 221,187 141,163 15,639 9,981
Net financing income 4,133 1,703 292 120
Taxation paid (23,851) (20,582) (1,686) (1,455)
Net cash generated from operating
activities 201,469 122,284 14,245 8,646
Cash flows from investing activities
Capital expenditure payments (164,192) (182,516) (11,609) (12,904)
Proceeds on sale of property, plant
and equipment and intangible assets 412 1,218 29 86
Decrease in restricted cash 323 22 23 2
Increase in restricted cash (1,057) (689) (75) (49)
Net cash used in investing activities (164,514) (181,965) (11,632) (12,865)
Cash flows from financing activities
Proceeds from issuance of ordinary shares 11,070 1,325 783 94
Share repurchase - (18,666) - (1,320)
Repayment of capitalized lease liability (6,914) - (489) -
Dividends paid to Company's owners (33,822) (25,200) (2,391) (1,782)
Net cash used in financing activities (29,666) (42,541) (2,097) (3,008)
Net increase/(decrease) in cash
and cash equivalents 7,289 (102,222) 516 (7,227)
Net cash and cash equivalents
at the beginning of the period 290,538 356,333 20,542 25,194
Exchange gains on cash and
cash equivalents 14,449 2,753 1,021 194
Net cash and cash equivalents
at the end of the period 312,276 256,864 22,079 18,161
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the parent
South African Rand Non-
Figures are in thousands Stated Other Retained controlling Total
unless otherwise stated capital reserves earnings Total interest equity
Balance at April 1, 2017 (Audited) 854,345 (4,370) 594,514 1,444,489 (1,558) 1,442,931
Total comprehensive income - 18,785 58,084 76,869 71 76,940
Profit for the period - - 58,084 58,084 60 58,144
Other comprehensive income - 18,785 - 18,785 11 18,796
Transactions with owners (17,341) 3,373 (25,227) (39,195) 1,501 (37,694)
Shares issued in relation to
share options and share
appreciation rights exercised 1,325 - - 1,325 - 1,325
Share-based payment transaction - 4,874 - 4,874 - 4,874
Dividends declared - - (25,227) (25,227) - (25,227)
Share repurchase (note 8) (18,666) - - (18,666) - (18,666)
Transactions with non-controlling interest - (1,501) - (1,501) 1,501 -
Balance at September 30, 2017 (Unaudited) 837,004 17,788 627,371 1,482,163 14 1,482,177
Total comprehensive income - (79,361) 123,050 43,689 (4) 43,685
Profit for the period - - 123,050 123,050 (1) 123,049
Other comprehensive loss - (79,361) - (79,361) (3) (79,364)
Transactions with owners 9,401 9,959 (28,041) (8,681) - (8,681)
Shares issued in relation to
share options and share appreciation
rights exercised 9,401 - - 9,401 - 9,401
Share-based payment transaction - 4,126 - 4,126 - 4,126
Share-based payment - excess tax benefit - 5,833 - 5,833 - 5,833
Dividends declared - - (28,041) (28,041) - (28,041)
Balance at March 31, 2018 (Audited) 846,405 (51,614) 722,380 1,517,171 10 1,517,181
Adjustment on initial application
of IFRS 15, IFRS 16 and IFRS 9 (note 2) - - 24,675 24,675 - 24,675
Adjusted balance at April 1, 2018 846,405 (51,614) 747,055 1,541,846 10 1,541,856
Total comprehensive income - 95,941 68,786 164,727 2 164,729
Profit for the period - - 68,786 68,786 (1) 68,785
Other comprehensive income - 95,941 - 95,941 3 95,944
Transactions with owners 11,070 6,772 (33,873) (16,031) - (16,031)
Shares issued in relation to
share options and share appreciation
rights exercised 11,070 - - 11,070 - 11,070
Share-based payment transaction - 4,167 - 4,167 - 4,167
Share-based payment - excess tax benefit - 2,605 - 2,605 - 2,605
Dividends declared (note 9) - - (33,873) (33,873) - (33,873)
Balance at September 30, 2018 (Unaudited) 857,475 51,099 781,968 1,690,542 12 1,690,554
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the parent
United States Dollar Non-
Figures are in thousands Stated Other Retained controlling Total
unless otherwise stated capital reserves earnings Total interest equity
Balance at April 1, 2017 (Unaudited) 60,406 (309) 42,034 102,131 (110) 102,021
Total comprehensive income - 1,328 4,107 5,435 5 5,440
Profit for the period - - 4,107 4,107 4 4,111
Other comprehensive income - 1,328 - 1,328 1 1,329
Transactions with owners (1,226) 239 (1,784) (2,771) 106 (2,665)
Shares issued in relation to
share options and share appreciation
rights exercised 94 - - 94 - 94
Share-based payment transaction - 345 - 345 - 345
Dividends declared - - (1,784) (1,784) - (1,784)
Share repurchase (note 8) (1,320) - - (1,320) - (1,320)
Transactions with non-controlling interest - (106) - (106) 106 -
Balance at September 30, 2017 (Unaudited) 59,180 1,258 44,357 104,795 1 104,796
Total comprehensive income - (5,611) 8,700 3,089 - 3,089
Profit for the period - - 8,700 8,700 - 8,700
Other comprehensive loss - (5,611) - (5,611) - (5,611)
Transactions with owners 665 704 (1,983) (614) - (614)
Shares issued in relation to share
options and share appreciation
rights exercised 665 - - 665 - 665
Share-based payment transaction - 292 - 292 - 292
Share-based payment - excess tax benefit - 412 - 412 - 412
Dividends declared - - (1,983) (1,983) - (1,983)
Balance at March 31, 2018 (Unaudited) 59,845 (3,649) 51,074 107,270 1 107,271
Adjustment on initial application
of IFRS 15, IFRS 16 and IFRS 9 (note 2) - - 1,745 1,745 - 1,745
Adjusted balance at April 1, 2018 59,845 (3,649) 52,819 109,015 1 109,016
Total comprehensive income - 6,784 4,863 11,647 * 11,647
Profit for the period - - 4,863 4,863 * 4,863
Other comprehensive income - 6,784 - 6,784 * 6,784
Transactions with owners 781 478 (2,395) (1,136) - (1,136)
Shares issued in relation to share
options and share appreciation
rights exercised 781 - - 781 - 781
Share-based payment transaction - 295 - 295 - 295
Share-based payment - excess tax benefit - 183 - 183 - 183
Dividends declared (note 9) - - (2,395) (2,395) - (2,395)
Balance at September 30, 2018 (Unaudited) 60,626 3,613 55,287 119,526 1 119,527
* Amounts less than $1,000
NOTES TO CONDENSED CONSOLIDATED FINANCIAL RESULTS
1. Basis of preparation and accounting policies
Condensed unaudited Group interim financial results for the half year ended September 30, 2018
These condensed unaudited Group interim financial results for the half year ended September 30, 2018 have been
prepared in accordance with International Financial Reporting Standard ("IFRS"), IAS 34: Interim financial reporting,
the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Pronouncements as
issued by the Financial Reporting Standards Council ("FRSC"), the JSE Listings Requirements and the requirements
of the South African Companies Act, No. 71 of 2008. The interim financial results have not been audited or reviewed
by the Group's external auditors.
The condensed unaudited Group interim financial results do not include all the information and disclosures required in
the annual financial statements and should be read in conjunction with the Group's annual financial statements for the
year ended March 31, 2018, which have been prepared in accordance with IFRS.
The preparation of interim financial results requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses.
In preparing these condensed interim financial results, the significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation and uncertainty were the same as those applied to the
consolidated financial statements for the year ended March 31, 2018, except for the adoption of IFRS 9 Financial Instruments
("IFRS 9"), IFRS 15 Revenue from Contracts with Customers ("IFRS 15") and IFRS 16 Leases ("IFRS 16") from April 1, 2018.
The condensed unaudited Group interim financial results were prepared under the supervision of the Interim Chief
Financial Officer, PM Dell, CA(SA). The results were made available on November 1, 2018.
Financial results for the second quarter of fiscal 2019
In addition to the condensed unaudited Group interim financial results for the half year ended September 30, 2018,
additional financial information in respect of the second quarter of fiscal 2018 has been presented together with the
relevant comparative information. The quarterly information comprises a condensed consolidated income statement, a
reconciliation of adjusted earnings to profit for the period, a reconciliation of Adjusted EBITDA to profit for the
period (note 4), a reconciliation of free cash flow to net cash generated from operating activities (note 7), other
financial and operating data (note 11) and development costs historical data (note 18).
The quarterly financial results have not been audited or reviewed by the Group's external auditors.
Presentation currency and convenience translation
The Group's presentation currency is South African Rand. In addition to presenting these interim financial results in
South African Rand, supplementary information in U.S. Dollars has been prepared for the convenience of users of the
Group interim financial results. Unless otherwise stated, the Group has translated U.S. Dollar amounts from South
African Rand at the exchange rate of R14.1437 per $1.00, which was the R/$ exchange rate reported by Oanda.com as
at September 30, 2018. The U.S. Dollar figures may not compute as they are rounded independently.
The supplementary information prepared in U.S. Dollars constitutes pro forma financial information under the JSE
Listings
Requirements. This pro forma financial information is the responsibility of the Group's Board of Directors and is
presented for illustrative purposes. Because of its nature, the pro forma financial information may not fairly present
MiX Telematics' financial position, changes in equity, results of operations or cash flows. The pro forma financial
information does not constitute pro forma information in accordance with the requirements of Regulation S-X of the SEC or
generally accepted accounting principles in the United States. In addition, the rules and regulations relating to the
preparation of pro forma financial information in other jurisdictions may also vary significantly from the requirements
applicable in South Africa.
2. Adoption IFRS 9, IFRS 15 and IFRS 16
IFRS 9 is effective for the Group from April 1, 2018.
IFRS 15 permits a modified retrospective cumulative catch-up approach for the adoption, which the Group has decided to
apply. Under this approach, the Group has recognized transitional adjustments in retained earnings on the date of
initial application (i.e. April 1, 2018), without restating the comparative period. Under the practical expedient,
the new requirements were only applied to contracts that were not completed as of April 1, 2018.
IFRS 16 applies to annual reporting periods beginning on or after January 1, 2019, but can be early adopted. Given
that the Group applied IFRS 15 from April 1, 2018, the Group decided to early adopt IFRS 16 from this date.
The Group has chosen to apply the 'simplified approach' on adoption of IFRS 16 that includes certain relief related to
the measurement of the right-of-use asset and the lease liability at April 1, 2018, rather than full retrospective
application. Furthermore, the 'simplified approach' does not require a restatement of comparatives.
Refer to Note 2.1.1.2 of our consolidated financial statements for the year ended March 31, 2018 for further details
on the adoption of the above mentioned standards.
Summary of the impact at April 1, 2018 of adopting IFRS 9, IFRS 15 and IFRS 16:
South African Rand United States Dollar
IFRS 9 Assets (R3.2 million) ($0.2 million)
Trade and other receivables (R3.2 million) ($0.2 million)
IFRS 15 Assets R46.5 million $3.3 million
Capitalized commission assets R45.3 million $3.2 million
Trade and other receivables (1) R1.2 million $0.1 million
IFRS 16 Assets R29.9 million $2.1 million
Property, plant and equipment R30.6 million $2.2 million
Trade and other receivables (2) (R0.7 million) ($0.1 million)
Total Assets R73.2 million $5.2 million
IFRS 15 Liabilities R8.7 million $0.6 million
Recurring commission liability (non-current) R4.0 million $0.3 million
Trade and other payables (3) R4.7 million $0.3 million
IFRS 16 Liabilities R31.9 million $2.3 million
Capitalized lease liability (non-current) R23.3 million $1.7 million
Capitalized lease liability (current) R8.8 million $0.6 million
Trade and other payables (2) (R0.2 million) ($0.01 million)
Deferred tax liabilities R7.9 million $0.6 million
Total liabilities R48.5 million $3.5 million
Net increase in equity R24.7 million $1.7 million
(1) Contract assets related to fixed escalations.
(2) Reversal of lease prepayment and lease accruals under IAS 17 Leases. These have been reflected in the measurement
of the lease liability under IFRS 16.
(3) Includes the current portion of additional recurring commission liability of R2.9 million ($0.2 million) and
increase in liabilities related to contracts with customers due to significant financing adjustments of
R1.8 million ($0.1 million).
Summary of impact on the first half of fiscal 2019 of adopting IFRS 9, IFRS 15 and IFRS 16:
Other than a R3.6 million ($0.3 million) increase in finance costs primarily as a result of IFRS 15 significant
financing activity interest expense and IFRS 16 capitalized lease liability interest, the impact on each line
item in the condensed consolidated income statement for the first half of fiscal 2019 was not material.
The only adjustment to the statement of cash flows was an outflow of R6.9 million ($0.5 million) in respect of lease
liability payments being recorded in cash flows from financing activities as a result of the adoption of IFRS 16. This
outflow was previously accounted for as an operating lease expense and included under cash generated from operations.
Summary of impact on the second quarter of fiscal 2019 of adopting IFRS 9, IFRS 15 and IFRS 16:
Other than a R1.8 million ($0.1 million) increase in finance costs primarily as a result of IFRS 15 significant
financing activity interest expense and IFRS 16 capitalized lease liability interest, the impact on each line item
in the condensed consolidated income statement for the second quarter of fiscal 2019 was not material.
3. Segment information
Our operating segments are based on the geographical location of our Regional Sales Offices ("RSOs") and also include
our Central Services Organization ("CSO"). CSO is our central services organization that wholesales our products and
services to our RSOs who, in turn, interface with our end-customers, distributors and dealers. CSO is also responsible
for the development of our hardware and software platforms and provides common marketing, product management, technical
and distribution support to each of our other operating segments.
The chief operating decision maker ("CODM") reviews the segment results on an integral margin basis as defined by
management. The CODM, who is responsible for allocating resources and assessing performance of the operating segments,
has been identified collectively as the executive committee and the Chief Executive Officer who make strategic decisions.
In respect of revenue, this method of measurement entails reviewing the segmental results based on external revenue only.
In respect of Adjusted EBITDA (the profit measure identified by the CODM), the margin generated by CSO, net of any
unrealized intercompany profit, is allocated to the geographic region where the external revenue is recorded by our RSOs.
The costs remaining in CSO relate mainly to research and development of hardware and software platforms, common marketing,
product management and technical and distribution support to each of the RSOs. CSO is a reportable segment of the Group
because it produces discrete financial information which is reviewed by the CODM and has the ability to generate external
revenues.
Each RSO's results therefore reflect the external revenue earned, as well as the Adjusted EBITDA earned (or loss
incurred) by each operating segment before the remaining CSO and corporate costs allocations. Segment assets are not
disclosed as segment information is not reviewed on such a basis by the CODM.
South African Rand Subscription Hardware and Total Adjusted
Figures are in thousands unless otherwise stated revenue other revenue revenue EBITDA
Six months ended September 30, 2018 (unaudited)
Africa 470,565 37,031 507,596 230,200
Europe 64,784 43,624 108,408 37,403
Americas 136,223 14,786 151,009 74,858
Middle East and Australasia 109,168 46,280 155,448 67,762
Brazil 29,417 1,290 30,707 11,292
Total Regional Sales Offices 810,157 143,011 953,168 421,515
Central Services Organization 385 6 391 (82,283)
Total Segment Results 810,542 143,017 953,559 339,232
Corporate and consolidation entries - - - (59,879)
Total 810,542 143,017 953,559 279,353
Subscription Hardware and Total Adjusted
Six months ended September 30, 2017 (unaudited) revenue other revenue revenue EBITDA
Africa 423,157 46,392 469,549 209,392
Europe 55,923 33,482 89,405 29,443
Americas 83,012 12,868 95,880 24,958
Middle East and Australasia 98,900 37,096 135,996 49,570
Brazil 23,120 2,327 25,447 8,752
Total Regional Sales Offices 684,112 132,165 816,277 322,115
Central Services Organization 515 38 553 (68,849)
Total Segment Results 684,627 132,203 816,830 253,266
Corporate and consolidation entries - - - (56,070)
Total 684,627 132,203 816,830 197,196
United States Dollar Subscription Hardware and Total Adjusted
Figures are in thousands unless otherwise stated revenue other revenue revenue EBITDA
Six months ended September 30, 2018 (unaudited)
Africa 33,270 2,618 35,888 16,276
Europe 4,580 3,085 7,665 2,644
Americas 9,631 1,046 10,677 5,293
Middle East and Australasia 7,718 3,273 10,991 4,791
Brazil 2,080 91 2,171 798
Total Regional Sales Offices 57,279 10,113 67,392 29,802
Central Services Organization 27 * 27 (5,818)
Total Segment Results 57,306 10,113 67,419 23,984
Corporate and consolidation entries - - - (4,232)
Total 57,306 10,113 67,419 19,752
Subscription Hardware and Total Adjusted
Six months ended September 30, 2017 (unaudited) revenue other revenue revenue EBITDA
Africa 29,918 3,280 33,198 14,805
Europe 3,954 2,367 6,321 2,082
Americas 5,869 910 6,779 1,765
Middle East and Australasia 6,992 2,623 9,615 3,505
Brazil 1,635 164 1,799 619
Total Regional Sales Offices 48,368 9,344 57,712 22,776
Central Services Organization 37 3 40 (4,868)
Total Segment Results 48,405 9,347 57,752 17,908
Corporate and consolidation entries - - - (3,964)
Total 48,405 9,347 57,752 13,944
* Amount less than $1,000
4. Reconciliation of Adjusted EBITDA to Profit for the Period
Six months Six months Three months Three months
ended ended ended ended
South African Rand September 30, September 30, September 30, September 30,
Figures are in thousands 2018 2017 2018 2017
unless otherwise stated Unaudited Unaudited Unaudited Unaudited
Adjusted EBITDA 279,353 197,196 152,910 103,313
Add:
Net profit on sale of property, plant
and equipment and intangible assets 238 313 217 -
Less:
Depreciation (1) (86,180) (71,576) (45,522) (37,096)
Amortization (2) (32,454) (31,387) (16,359) (16,823)
Impairment of product development
costs capitalized (51) (127) (51) (35)
Share-based compensation costs (4,167) (6,226) (2,159) (4,079)
Equity-settled share-based
compensation costs (4,167) (4,874) (2,159) (2,727)
Cash-settled share-based
compensation costs - (1,352) - (1,352)
Net loss on sale of property, plant
and equipment and intangible assets - - - (19)
Increase in restructuring cost provision (2,308) (24) (2,330) (6)
Operating profit 154,431 88,169 86,706 45,255
Add: Finance income/(costs) - net 628 (84) 473 3,402
Less: Taxation (86,274) (29,941) (32,829) (24,417)
Profit for the period 68,785 58,144 54,350 24,240
(1) Includes depreciation of property, plant and equipment (including in-vehicle devices). The adoption of
IFRS 16 during the period resulted in depreciation of right-of-use assets of R5.1 million being recorded
in the first half of fiscal 2019 and R2.8 million in the three months ended September 30, 2018.
(2) Includes amortization of intangible assets (including product development costs and intangible assets
identified as part of a business combination).
Six months Six months Three months Three months
ended ended ended ended
United States Dollar September 30, September 30, September 30, September 30,
Figures are in thousands 2018 2017 2018 2017
unless otherwise stated Unaudited Unaudited Unaudited Unaudited
Adjusted EBITDA 19,752 13,944 10,814 7,303
Add:
Net profit on sale of property, plant
and equipment and intangible assets 17 22 15 -
Less:
Depreciation (1) (6,093) (5,061) (3,219) (2,623)
Amortization (2) (2,295) (2,219) (1,157) (1,189)
Impairment of product development
costs capitalized (4) (9) (4) (2)
Share-based compensation costs (295) (441) (153) (289)
Equity-settled share-based
compensation costs (295) (345) (153) (193)
Cash-settled share-based
compensation costs - (96) - (96)
Net loss on sale of property, plant
and equipment and intangible assets - - - (1)
Increase in restructuring cost provision (163) (2) (165) *
Operating profit 10,919 6,234 6,131 3,199
Add: Finance income/(costs) - net 44 (6) 33 240
Less: Taxation (6,100) (2,117) (2,321) (1,726)
Profit for the period 4,863 4,111 3,843 1,713
* Amount less than $1,000
(1) Includes depreciation of property, plant and equipment (including in-vehicle devices). The adoption of
IFRS 16 during the period resulted in depreciation of right-of-use assets of $0.4 million being recorded
in the first half of fiscal 2019 and $0.2 million in the three months ended September 30, 2018.
(2) Includes amortization of intangible assets (including product development costs and intangible assets
identified as part of a business combination).
5. Reconciliation of Adjusted EBITDA margin to Profit for the Period margin
Six months Six months Three months Three months
ended ended ended ended
September 30, September 30, September 30, September 30,
2018 2017 2018 2017
Unaudited Unaudited Unaudited Unaudited
Adjusted EBITDA margin 29.3% 24.1% 30.8% 25.1%
Add:
Net profit on sale of property, plant
and equipment and intangible assets 0.0% 0.0% 0.0% -
Less:
Depreciation (9.0%) (8.7%) (9.1%) (9.0%)
Amortization (3.5%) (3.8%) (3.3%) (4.1%)
Impairment of product development
costs capitalized (0.0%) (0.0%) (0.0%) (0.0%)
Share-based compensation costs (0.4%) (0.8%) (0.4%) (1.0%)
Equity-settled share-based
compensation costs (0.4%) (0.6%) (0.4%) (0.7%)
Cash-settled share-based
compensation costs - (0.2%) - (0.3%)
Net loss on sale of property, plant
and equipment and intangible assets - - - (0.0%)
Increase in restructuring cost provision (0.2%) 0.0% (0.5%) (0.0%)
Operating profit margin 16.2% 10.8% 17.5% 11.0%
Add: Finance income/(costs) - net 0.1% (0.0%) 0.1% 0.8%
Less: Taxation (9.1%) (3.7%) (6.7%) (5.9%)
Profit for the period margin 7.2% 7.1% 10.9% 5.9%
6. Assets Classified as Held for Sale
The assets classified as held for sale relate to the property owned by the Central Services Organization,
a division of MiX Telematics International Proprietary Limited. No impairment loss was recognized on
reclassification of the property as held for sale as the fair value (estimated based on the recent market
prices of similar properties in similar locations) less costs to sell is higher than the carrying amount.
Management anticipate that the sale will be completed by the end of fiscal 2019.
7. Reconciliation of Free Cash Flow to Net Cash generated from Operating Activities
Six months Six months Three months Three months
ended ended ended ended
South African Rand September 30, September 30, September 30, September 30,
Figures are in thousands 2018 2017 2018 2017
unless otherwise stated Unaudited Unaudited Unaudited Unaudited
Net cash generated from operating
activities 201,469 122,284 178,711 103,960
Capital expenditure payments (164,192) (182,516) (85,886) (100,172)
Free cash flow 37,277 (60,232) 92,825 3,788
Six months Six months Three months Three months
ended ended ended ended
United States Dollar September 30, September 30, September 30, September 30,
Figures are in thousands unless 2018 2017 2018 2017
otherwise stated Unaudited Unaudited Unaudited Unaudited
Net cash generated from operating
activities 14,245 8,646 12,635 7,350
Capital expenditure payments (11,609) (12,904) (6,072) (7,082)
Free cash flow 2,636 (4,258) 6,563 268
8. Share Repurchase
Fiscal 2018
On May 23, 2017, the MiX Telematics Board approved a share repurchase program of up to R270 million ($19.1 million)
under which the Company may repurchase its ordinary shares, including American Depositary Shares ("ADSs"). The Company
may repurchase its shares from time to time at its discretion through open market transactions and block trades, based
on ongoing assessments of the capital needs of the Company, the market price of its securities and general market
conditions. This share repurchase program may be discontinued at any time by the Board of Directors, and the Company
has no obligation to repurchase any amount of its securities under the program. The repurchase program will be funded
out of existing cash resources.
At September 30, 2017, the following purchases had been made under the share repurchase program:
Total value Maximum value
of shares of shares that
purchased could be
as part of purchased under
Shares canceled publicly the program at
Total number Average price under the share announced September 30,
of shares paid per share repurchase program 2017
South African Rand repurchased (R)(1) program (R'000) (R'000)
June 2017 5,015,660 3.72 5,015,660 18,666 251,334
5,015,660 5,015,660 18,666 251,334
Total value Maximum value
of shares of shares that
purchased could be
as part of purchased under
Shares canceled publicly the program at
Total number Average price under the share announced September 30,
of shares paid per share repurchase program 2017
United States Dollar repurchased ($)(1) program ($'000) ($'000)
June 2017 5,015,660 0.26 5,015,660 1,320 17,770
5,015,660 5,015,660 1,320 17,770
(1) Including transaction costs.
Subsequent to the repurchase, the shares were delisted and now form part of the authorized unissued share
capital of the Company. No repurchases were made under the share repurchase program during the second half
of fiscal 2018.
Fiscal 2019
No purchases were made under the share repurchase program during the first half of fiscal 2019. Refer to
note 14 for details of share repurchases made in October 2018 under this share repurchase program.
9. Dividends Paid
The following dividends were declared by the Company during the six months ended September 30, 2018 (excluding
dividends paid on treasury shares):
- In respect of the fourth quarter of fiscal year 2018, a dividend of R16.9 million ($1.2 million) was declared
on May 8, 2018 and paid on June 4, 2018. Using shares in issue of 564,420,145 (excluding 40,000,000 treasury
shares), this equated to a dividend of 3 South African cents or 0.2 U.S. cents per ordinary share; and
- In respect of the first quarter of fiscal 2019, a dividend of R16.9 million ($1.2 million) was declared on
July 31, 2018 and paid on August 27, 2018. Using shares in issue of 564,634,076 (excluding 40,000,000
treasury shares), this equated to a dividend of 3 South African cents or 0.2 U.S. cents per share.
10. Contingent Liabilities
Service agreement
In terms of an amended network services agreement with Mobile Telephone Networks Proprietary Limited ("MTN"),
MTN is entitled to claw back payments from MiX Telematics Africa Proprietary Limited in the event of early
cancellation of the agreement or certain base connections not being maintained over the term of the agreement.
No connection incentives will be received in terms of the amended network services agreement. The maximum
potential liability under the arrangement is R41.4 million or $2.9 million. No loss is considered probable
under this arrangement.
11. Other Operating and Financial Data
Six months Six months Three months Three months
ended ended ended ended
South African Rand September 30, September 30, September 30, September 30,
Figures are in thousands 2018 2017 2018 2017
except for subscribers Unaudited Unaudited Unaudited Unaudited
Total revenue 953,559 816,830 496,737 411,167
Subscription revenue 810,542 684,627 420,152 349,262
Hardware revenue 122,900 106,810 66,369 49,837
Driver training, installation and
other revenue 20,117 25,393 10,216 12,068
Adjusted EBITDA 279,353 197,196 152,910 103,313
Cash and cash equivalents 347,253 283,526 347,253 283,526
Net cash (1) 312,276 256,864 312,276 256,864
Capital expenditure incurred 168,093 177,127 85,349 98,003
Property, plant and equipment expenditure (2) 125,368 127,452 61,245 72,846
Intangible asset expenditure 42,725 49,675 24,104 25,157
Capital expenditure authorized but not spent 48,389 50,488 48,389 50,488
Total development cost incurred 68,091 67,342 33,983 34,167
Development cost capitalized 34,816 32,804 17,571 16,148
Development cost expensed within
administration and other charges 33,275 34,538 16,412 18,019
Subscribers 714,011 640,158 714,011 640,158
September 30, March 31,
2018 2018
South African Rand Unaudited Audited
Net asset value per share 2.97 2.69
Net tangible asset value per share 1.24 1.10
(1) Net cash is calculated as being net cash and cash equivalents, excluding restricted cash.
(2) Excludes non-cash additions related to the initial recognition of right-of-use assets arising from the
adoption of IFRS 16 Leases. The adoption of IFRS 16 during the period resulted in the recognition of
right-of-use assets of R12.4 million in the six months ended September 30, 2018 and R5.2 million in
the three months ended September 30, 2018.
Six months Six months Three months Three months
ended ended ended ended
United States Dollar September 30, September 30, September 30, September 30,
Figures are in thousands 2018 2017 2018 2017
except for subscribers Unaudited Unaudited Unaudited Unaudited
Total revenue 67,419 57,752 35,121 29,071
Subscription revenue 57,306 48,405 29,706 24,694
Hardware revenue 8,689 7,552 4,692 3,524
Driver training, installation and
other revenue 1,424 1,795 723 853
Adjusted EBITDA 19,752 13,944 10,814 7,303
Cash and cash equivalents 24,552 20,046 24,552 20,046
Net cash 22,079 18,161 22,079 18,161
Capital expenditure incurred 11,885 12,523 6,034 6,929
Property, plant and equipment expenditure (2) 8,864 9,011 4,330 5,150
Intangible asset expenditure 3,021 3,512 1,704 1,779
Capital expenditure authorized but not spent 3,421 3,570 3,421 3,570
Total development cost incurred 4,815 4,761 2,402 2,416
Development cost capitalized 2,462 2,319 1,242 1,142
Development cost expensed within
administration and other charges 2,353 2,442 1,160 1,274
Subscribers 714,011 640,158 714,011 640,158
September 30, March 31,
2018 2018
United States Dollar Unaudited Unaudited
Net asset value per share 0.21 0.19
Net tangible asset value per share 0.09 0.08
(1) Net cash is calculated as being net cash and cash equivalents, excluding restricted cash.
(2) Excludes non-cash additions related to the initial recognition of right-of-use assets arising from the
adoption of IFRS 16 Leases. The adoption of IFRS 16 during the period resulted in the recognition of
right-of-use assets of $0.9 million in the six months ended September 30, 2018 and $0.4 million in the
three months ended September 30, 2018.
11. Other operating and financial data (continued)
Six months Six months Three months Three months
ended ended ended ended
September 30, September 30, September 30, September 30,
2018 2017 2018 2017
Unaudited Unaudited Unaudited Unaudited
Exchange Rates
The following major rates of exchange were used:
South African Rand: United States Dollar
- closing 14.14 13.56 14.14 13.56
- average 13.34 13.18 14.07 13.17
South African Rand: British Pound
- closing 18.43 18.13 18.43 18.13
- average 17.75 17.05 18.33 17.23
12. Fair Value of Financial Assets and Liabilities Measured at Amortized Cost
The fair values of trade and other receivables, restricted cash, cash and cash equivalents, trade payables,
accruals, bank overdraft and other payables approximate their book values as the impact of discounting is
not considered material due to the short-term nature of both the receivables and payables.
13. Performance Share Award under the MiX Telematics Limited Long-Term Incentive Plan
The MiX Telematics Board of Directors has authorized a supplemental performance share award under the MiX
Telematics Limited Long-Term Incentive Plan. In terms of this award the Board has designated 8,000,000 ordinary
shares (equivalent to 320,000 ADSs), to be awarded to eligible employees if the Company achieves both of the
following constant currency targets at March 31, 2020:
- Cumulative subscription revenue for the 2019 and 2020 fiscal years of R3,588 million, and
- Cumulative Adjusted EBITDA for the 2019 and 2020 fiscal years of R1,322 million.
The targets have been derived using an average forecast exchange rate of R13.8000 per $1.00.
Half of this supplemental equity grant is being made now and the remaining half will be awarded at the beginning
of fiscal 2020 if the Board of Directors believes the Company remains on track to meet the vesting targets listed
above. Furthermore, these performance shares will not vest unless both targets are fully achieved in the specified
time-frame.
The incentive targets are in excess of the current and implied guidance we have provided to investors. The
incentive targets should be viewed by investors as stretch targets that the Board and management believe may
potentially be achievable if market trends remain favorable and the Company executes at an extremely high level.
Whether or not the incentive targets will be achievable requires consideration of the assumptions underlying the
financial guidance provided by the Company for the 2019 fiscal year and consideration of further assumptions
being the achievement of substantial additional growth in subscription revenue and subscribers and exceeding
hardware sales targets while simultaneously accelerating adjusted EBITDA margin expansion. The setting of the
incentive targets by the Board of Directors for the award of the performance shares, does not substitute for the
fiscal 2019 guidance and shareholders are advised to refer to the guidance provided in the Business outlook
section for the guidance for fiscal 2019. The incentive targets relating to the performance share awards and the
assumptions underlying them are the responsibility of the board of directors and have not been reviewed or
reported on by the Company’s external auditors.
14. Events after the reporting dates
Other than the item below, the directors are not aware of any matter material or otherwise arising since
September 30, 2018 and up to the date of this report, not otherwise dealt with herein.
Share Repurchase
During October 2018, the following share purchases were made under the share repurchase program:
Value
of shares
purchased Maximum value
as part of of shares that
Shares canceled publicly may yet be
Total number Average price under the share announced purchased under
of shares paid per share repurchase program the program at
South African Rand repurchased (R)(1) program (R'000) (R'000)
October 2018 9,143,795 8.03 7,869,954 73,440 177,894
9,143,795 7,869,954 73,440 177,894
Value
of shares
purchased Maximum value
as part of of shares that
Shares canceled publicly may yet be
Total number Average price under the share announced purchased under
of shares paid per share repurchase program the program at
United States Dollar repurchased ($)(1) program ($'000) ($'000)
October 2018 9,143,795 0.57 7,869,954 5,192 12,578
9,143,795 7,869,954 5,192 12,578
(1) Including transaction costs.
Subsequent to the repurchase, 7,869,954 of the shares repurchased were delisted and now form part of the
authorized unissued share capital of the Company. The Company intends to delist all shares repurchased
under this repurchase program.
15. Dividend Declared
On October 30, 2018 the Board declared in respect of the second quarter of fiscal year 2019, which ended
on September 30, 2018, a dividend of 3 South African cents (0.2 U.S. cents) per ordinary share to be
paid on Monday, November 26, 2018.
The details with respect to the dividends declared for ordinary shareholders are as follows:
Last day to trade cum dividend Tuesday, November 20, 2018
Securities trade ex dividend Wednesday, November 21, 2018
Record date Friday, November 23, 2018
Payment date Monday, November 26, 2018
Share certificates may not be dematerialized or rematerialized between Wednesday, November 21, 2018
and Friday, November 23, 2018, both days inclusive.
Shareholders are advised of the following additional information:
- the dividend has been declared out of income reserves;
- the local dividends tax rate is 20%;
- the gross local dividend amounts to 3 South African cents per ordinary share;
- the net local dividend amount is 2.4 South African cents per ordinary share for shareholders liable to
pay dividends tax;
- the issued ordinary share capital of MiX Telematics is 601,886,499 ordinary shares of no par value; and
- the Company's tax reference number is 9155/661/84/7.
The details with respect to the dividends declared for holders of our ADSs are as follows:
Ex dividend on New York Stock Exchange (NYSE) Wednesday, November 21, 2018
Record date Friday, November 23, 2018
Approximate date of currency conversion Monday, November 26, 2018
Approximate dividend payment date Tuesday, December 11, 2018
16. Changes to the Board
Enos Banda resigned as an independent non-executive director of MiX Telematics and a member of the Audit and
Risk Committee with effect from July 4, 2018. With effect from July 4, 2018, Fikile Futwa was appointed as an
independent non-executive director to the Board of Directors and as a member of the Audit and Risk Committee.
17. Changes to the Company Secretary
With effect from July 1, 2018, Statucor Proprietary Limited has been appointed as company secretary to
MiX Telematics taking over from Java Capital who had been previously appointed on an interim basis.
18. Development costs historical data
The table below sets out development costs incurred and capitalized for each of the last eight quarters including
the period ended September 30, 2018.
South African Rand
Figures are in thousands (Unaudited) Three months ended
September 30, June 30, March 31, December 31, September 30, June 30, March 31, December 31,
2018 2018 2018 2017 2017 2017 2017 2016
Total
development
costs incurred 33,983 34,108 30,488 32,336 34,167 33,175 32,152 36,696
Development
costs
capitalized 17,571 17,245 16,543 15,996 16,148 16,656 17,268 20,415
Development costs
expensed within
administration
and other charges 16,412 16,863 13,945 16,340 18,019 16,519 14,884 16,281
United States Dollar
Figures are in thousands (Unaudited) Three months ended
September 30, June 30, March 31, December 31, September 30, June 30, March 31, December 31,
2018 2018 2018 2017 2017 2017 2017 2016
Total
development
costs incurred 2,402 2,413 2,156 2,286 2,416 2,345 2,273 2,594
Development
costs
capitalized 1,242 1,220 1,170 1,131 1,142 1,177 1,221 1,443
Development costs
expensed within
administration
and other charges 1,160 1,193 986 1,155 1,274 1,168 1,052 1,151
19. Taxation
Section 11D Allowances relating to tax assets recognized
MiX Telematics International Proprietary Limited ("MiX International"), a subsidiary of the Group, historically
claimed a 150% allowance for research and development spend in terms of section 11D ("S11D") of the South African
Income Tax Act No. 58 of 1962 ("the Act"). As of October 1, 2012, the legislation relating to the allowance was
amended. The amendment requires pre-approval of development project expenditure on a project specific basis by
the South African Department of Science and Technology ("DST") in order to claim a deduction of the additional
50% over and above the expenditure incurred (150% allowance). Since the amendments to S11D of the Act, MiX
International had been claiming the 150% deduction resulting in a recognized tax benefit. MiX International
has complied with the amended legislation by submitting all required documentation to the DST in a timely
manner, commencing in October 2012.
In June 2014, correspondence was received from the DST indicating that the research and development expenditure
on certain projects for which the 150% allowance was claimed in the 2013 and 2014 fiscal years did not, in the
DST's opinion, constitute qualifying expenditure in terms of the Act. MiX International, through due legal
process, had formally requested a review of the DST's decision not to approve this expenditure. While approvals
were obtained for a portion of this project expenditure as a result of a further review performed by the DST
in February 2017, we continue to seek approval for the remaining projects and as such the legal process is
ongoing. In addition to the approvals that were subject to the legal process, further approvals have been
obtained for certain project expenditure, relating to both current and prior financial years. However, at
period end, an uncertain tax position remains in relation to S11D deductions in respect of which approvals
remain pending.
Since the introduction of the DST pre-approval process, the Group has recognized in the income statement
cumulative tax incentives in addition to the incurred cost of R22.2 million ($1.6 million) in respect of
S11D deductions, of which R1.7 million ($0.1 million) was recognized during the six months ended
September 30, 2018. R19.4 million ($1.4 million) relates to deductions in respect of development project
expenditure which has been approved by the DST. R2.8 million ($0.2 million) relates to an uncertain tax
position in respect of projects where approvals have not yet been received from the DST. If the Group is
unsuccessful in this regard, the Group will not recover the R2.8 million ($0.2 million) raised at
September 30, 2018.
Impact of foreign exchange movements
The impact of foreign exchange movements and the related tax effects on the Group's effective tax rate is shown below:
South African Rand Six months ended September 2018 Six months ended September 2017
Unaudited Unaudited
Profit Foreign Profit Foreign
for the exchange Adjusted for the exchange Adjusted
period gains earnings period losses earnings
Profit before tax 155,059 (309) 154,750 88,085 1,784 89,869
Taxation (86,274) 41,434 (44,840) (29,941) 1,692 (28,249)
Profit after tax 68,785 41,125 109,910 58,144 3,476 61,620
Attributable to:
Owners of the parent 68,786 41,125 109,911 58,084 3,476 61,560
Non-controlling interests (1) - (1) 60 - 60
68,785 41,125 109,910 58,144 3,476 61,620
Effective tax rate 55.6% - 29.0% 34.0% - 31.4%
United States Dollar Six months ended September 2018 Six months ended September 2017
Unaudited Unaudited
Profit Foreign Profit Foreign
for the exchange Adjusted for the exchange Adjusted
period gains earnings period losses earnings
Profit before tax 10,963 (22) 10,941 6,228 126 6,354
Taxation (6,100) 2,930 (3,170) (2,117) 120 (1,997)
Profit after tax 4,863 2,908 7,771 4,111 246 4,357
Attributable to:
Owners of the parent 4,863 2,908 7,771 4,107 246 4,353
Non-controlling interests * * * 4 * 4
4,863 2,908 7,771 4,111 246 4,357
Effective tax rate 55.6% - 29.0% 34.0% - 31.4%
* Amount less than $1,000
Excluding the impact of foreign exchange gains and losses and its related tax consequences, the effective
tax rate is 2.4% lower than the first six months of fiscal 2018.
For and on behalf of the Board:
RA Frew SB Joselowitz
Midrand
October 30, 2018
For more information please visit our website at: www.mixtelematics.com
Registered office
Matrix Corner, Howick Close, Waterfall Park, Midrand
Directors
RA Frew* (Chairman), SB Joselowitz (CEO), SR Bruyns* (Lead Independent Director), PM Dell,
F Futwa*, IV Jacobs*, F Roji-Maplanka*, CWR Tasker, AR Welton*
* Non-executive
Company secretary
Statucor Proprietary Limited
Auditors
Deloitte & Touche
Sponsor
Java Capital
November 1, 2018
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