JOHANNESBURG – Cartrack shot up by more than 7percent on the JSE yesterday after the fleet management and vehicle recovery services firm said it expected to reap benefits from crime in South Africa and other emerging markets with an increased subscriber base.
The company said it expected to shoot the lights out again in 2020 with revenue from subscription indicating double digit growth despite the subdued economic conditions.
The group said in a trading guidance to investors yesterday that it anticipated it would grow by more than 20percent in its subscriber base and revenue for the seventh consecutive time.
The company, headed by founding major shareholder Zak Calisto, attributed the exceptional performance in difficult times to the high crime rate in South Africa and other emerging markets, as well as it achieving economies of scale in the roll-out of its technological services.
It said its headline earnings per share were now projected to increase by between 69 and 75cents per share, up from 57c in the previous reporting period.
Basic earnings a share are expected in the same range, a growth from the 57.9c per share from the same period a year before.
Cartrack said that in the 2019 financial year its revenue grew by 28percent to R1.6 billion.
Cartrack recorded a 30percent subscription revenue growth to R1.5million.
It also grew earnings before interest, tax, depreciation and amortisation by 17percent in the period to R761m from R651m.
Return on equity though in that period declined to 50percent from 58percent in the previous period.
Cartrack, which has more than 2338 employees in 23 countries across five continents says that its industry-leading audited recovery rate of 92percent underpins the quality of its security technology in high-crime regions.
The group said that it was eyeing growth in the rest of the continent, as in the previous period it had delivered an improved performance, despite operating in a weak regional economic backdrop.
The subscriber base in Africa increased by 4percent, and sub- scription revenue grew by 5percent from R93m to R98m, while total revenue increased by 11percent from R105m to R116m, driven by an increase of new sales in the current year.
“Africa continues to play a critical role in ensuring a high level of service to customers who increasingly travel across their borders,” the group said.
Cartrack shares closed 7.44percent higher at R20.95 on the JSE yesterday.