Cartrack Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2005/036316/06)
Share Code: CTK ISIN:ZAE000198305
(“Cartrack”, “the Group” or “the company”)
BUSINESS UPDATE INCLUDING FINANCIAL HIGHLIGHTS FOR THE NINE MONTHS ENDED 30
NOVEMBER, 2020 (“CURRENT PERIOD”) AND THE IMPACT OF COVID-19
YEAR-ON-YEAR HIGHLIGHTS COMPARED TO THE NINE MONTHS ENDED 30 NOVEMBER 2019 (“PRIOR
PERIOD”, WHICH APPEAR IN BRACKETS)
• Strong new subscriber additions show an increasing demand for Cartrack’s SaaS platform
• In the face of a full nine months of limitations to install the in-vehicle IoT technology caused by
the imposed Covid-19 operating restrictions, Cartrack was still able to achieve a robust year-on-
year subscriber growth of 14% to 1,246,089 (1,088,745)
• Subscription revenue of R1,635 million (R1,385 million), up 18%
• Subscription revenue is 98% of the total revenue and growing (97%)
• Total revenue of R1,675 million (R1,431 million), up 17%
• Operating profit of R566 million (R479 million), up 18%
• Profit before tax up 21%
• Profit after tax up 20%
• Operating profit margin of 34% (33%)
Zak Calisto, founder and Group Chief Executive Officer, commented, “As a result of the limitations to
distribute the Cartrack in-vehicle IoT technology caused by the Covid-19 operating restrictions, our
growth in the current financial year has been severely impacted. However, our continuous innovation,
adaptability and resilience has resulted in Cartrack achieving solid results despite the pandemic.
Our robust and predictable subscription based business model, combined with our strategic broad
industry approach and low customer and industry concentration risk has resulted in Cartrack
delivering consistently strong year-on-year subscriber, subscription revenue and earnings growth.
As we continue to experience an increase in demand for our Software-as-a-Service “SaaS” platform,
our customers similarly continue to derive intelligent and materially valuable up-to-date solutions for
their day-to-day challenges, giving them an edge on their competitors.
Sales and collections improved significantly over the latest quarter of the nine months under review
and our balance sheet and prudent capital allocation remain key strengths.
We continue to enhance and optimise the Cartrack platform for the evolving future of mobility and
we are excited about the uptake of our artificial intelligence video solution.”
• The newly introduced next generation technology and solutions on our platform continue to
enhance customer experience and retention
• The upgraded proprietary internal platform improved our operational ability to acquire new
customers and to service customers
• Artificial Intelligence and data analytics continue to be a significant focus which is now
delivering tangible results
• Innovative business practices continue to deliver industry leading results
• Significant investment and advances in Research and Development are driving rapid
expansion of our mobility platform and solutions
FINANCIAL PERFORMANCE FOR THE CURRENT PERIOD
Cartrack delivered a strong performance across its key-growth-metrics, with subscription revenue
growing by 18%, from R1,385 million to R1,635 million. Subscription revenue now represents 98%
(97%) of total revenue as the trend of customers choosing the bundled SaaS platform contracts with
no up-front fees continues. The number of total subscribers increased by 14% from 1,088,745 to
1,246,089 despite the distribution challenges that the Covid-19 pandemic posed.
Cartrack experienced margin expansion as a result of lower than planned growth due to the pandemic
related constraints. Though the business experienced strong free cash flows, management’s
preference would have been to invest significantly into higher growth.
Despite the operational restrictions and the Covid-19 associated costs, South Africa delivered solid
subscription revenue growth of 17% from R1,013 million to R1,182 million and a subscriber growth of
Asia Pacific is the second largest revenue contributor and the fastest growing segment in the Group,
with subscription revenue up by 26% from R167 million to R211 million and a subscriber growth of
25%. The lockdown resulted in a number of new managerial and senior operational staff destined for
deployment into our Asian territories being stranded in Singapore for over 9 months, unable to
effectively drive the growth plans on the ground in those territories.
The European segment delivered subscription revenue growth of 32% from R124 million to R164
million with a subscriber growth of 13%.
Cartrack continues to evaluate its strategy to expand into the rest of Europe.
The subscriber base in Africa grew by 3%.
Cartrack’s investment in the US continues to remains strategic in nature.
MANAGING OUR BALANCE SHEET
Capital allocation and cash management are particularly important in a high-growth phase with
accelerated investment in customer acquisition. Prudent capital management remains a key focus
area and is monitored and managed on an ongoing basis.
The new generation smart telematic devices have been engineered with enhanced features at a lower
cost, allowing the Group to carry a higher device inventory at a lower real value. These new devices
capture richer data, allowing for a further expansion of Cartrack’s data offerings as it continues to
position itself at the forefront of smart transportation. The inventory levels are prudently optimised
to meet distribution and production lead times and as a result the Group took a strategic decision to
increase inventory levels as a risk mitigation measure.
Cash generated by operations was R730 million and free cash flow was R393 million. The Group ended
the period with R66 million in cash and cash equivalents after paying an interim dividend of R260
million in November 2020 and increasing inventory levels to R231 million from R152 million at 29
February 2020 (“FY20”).
The debtors’ days (after provisioning for expected credit losses due to Covid-19) stand at 33 days
(FY20: 34 days), opposed to 40 days at the end the first quarter of this financial year. This is a key
metric indicating the quality of sales, operational effectiveness, trading environment and credit
management. Debtor’s days have trended back to historical levels as we manage the continual
improvement in the collection cycle with trading conditions improving towards the end of the period.
The current ratio and quick ratios of 1.1 (FY20: 1.4) and 0.7 (FY20: 1.0) remain within a healthy range
as a result of positive cash generation and a focussed drive on working capital management despite
the increase in inventory.
OUTLOOK FOR FY21 WITH COVID-19
Cartrack’s global operations are subject to risks associated with actions taken by governmental
authorities as a result of the COVID-19 pandemic.
The duration and spread of the COVID-19 pandemic, the severity of the impact of the pandemic on
economic activity and the impact of changing actions of governmental authorities across the globe
have affected the Group’s results for the nine months, predominantly as a result of limited capacity
to install the in-vehicle IoT technology and the inability to deploy talent currently in Singapore into the
Asia Pacific region.
Cartrack is actively monitoring these ongoing and potential impacts of COVID-19, and taking measures
where possible to mitigate and minimise the impact on its business.
The Group is well positioned to weather the COVID-19 storm with 98% of revenues being recurring in
nature, industry leading margins, strong cash flows and an unleveraged balance sheet. The debtor
collection is tightly managed and the Group remains highly liquid. In addition, the Group has sufficient
inventory on hand to last for 8 months at current sales volumes and as a prudent measure, is
contemplating increasing the inventory. In addition to this, Cartrack is cautiously balancing its costs
with the opportunities that may present themselves when the pandemic passes.
While it is anticipated that the COVID-19 pandemic will impact Cartrack’s performance for the year
ending 28 February 2021, it is not responsible at this juncture, given all the uncertainties, to share a
firm outlook for FY21.
Cartrack is a leading global provider of real-time mobility data analytics solutions for smart
We offer a comprehensive, cloud-based smart mobility platform for connected vehicles and other
assets. Our software-as-a-service (“SaaS”) platform provides our customers with differentiated
insights and analytics to optimise their business and workforce, increase efficiency and decrease costs,
improve safety, monitor environmental impact, assist with regulatory compliance and manage risk.
Our business is vertically-integrated, which affords us complete autonomy with regards to the
development of the capabilities and features that differentiate our applications as well as the speed
of our innovation.
We serve customers in 23 countries across five continents, supporting more than 1,246 million
subscribers and our highly scalable platform serves large multinational enterprises and individual
consumers alike, enabling us to address a large, growing and underpenetrated global market.
The information contained in this announcement has not been reviewed or reported on by the
Group’s external auditors.
On behalf of the board
David Brown Zak Calisto
Chairman Group Chief Executive Officer
13 January 2021
The Standard Bank of South Africa Limited
11 Keyes Road
(PO Box 4709, Rivonia, 2128)
Independent Non-Executive Directors
David Brown (Independent Chairman)
Isaias Jose Calisto (Group Chief Executive Officer)
Morne Grundlingh (Group Chief Financial Officer)
Anname de Villiers
11 Keyes Road
(PO Box 4709, Rivonia, 2128)
The Standard Bank of South Africa Limited
30 Baker Street
(PO Box x, Rosebank, 2109)
Computershare Investor Services Proprietary Limited
15 Biermann Street
(PO Box 61051, Marshalltown, 2107)
Date: 13-01-2021 04:43:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.