MiX hauls in customers in US
• Fleet management and tracking specialist enjoys 19% gain in subscription revenue to R1.43bn during the year
Vehicle tracking and fleet management specialist MiX Telematics has targeted the US to be its biggest geographic market in the medium term.
Vehicle-tracking and fleet-management specialist MiX Telematics has targeted the US to be its biggest geographic market in the medium term.
Speaking after the release on Thursday of results for the year to the end of March, MiX CEO Stefan Joselowitz said the company’s rapidly growing US operations could represent a third of revenue within five years.
“We’d like to see a rough spread of a third of the business from the US, a third from Africa and a third from the rest of the world … with the US likely to become our biggest market.”
Joselowitz said the US operations had seen the fastest subscriber growth in the period under review, though off a low base. MiX’s JSE-listed rival Cartrack also entered the US market recently.
MiX reported R195m in subscriber revenue from the US operations, a 74% gain over the previous financial year on a constant-currency basis.
Subscriber numbers in the US rose 32% over the financial year with earnings before interest, tax, depreciation and amortisation (ebitda) rocketing to R79m on a sturdy margin of almost 35%.
Joselowitz said US subscription revenue was assisted by the market’s continuing preference for bundled deals across new and existing customers.
Asked whether successes in the US would spur considerations around seeking a listing on the New York Stock Exchange or Nasdaq, Joselowitz said the company continued to consider ways of streamlining operations and unlocking value.
“Some of the undervaluation of MiX is structural. As an interim step we are looking to report in dollars subject to US Gaap [generally accepted accounting practices].”
However, he believed a US listing might only be triggered by a meaningful corporate event – possibly a large acquisition or merger.
MiX’s core African operations continued to perform strongly with subscriber revenue up 13% to R872m on the back of a 7.3% increase in subscriber numbers. Total revenue from African operations rose 11% to R957m with ebitda coming in at R401m on a fatter margin of 46% (40% previously).
Joselowitz said enhanced scale and stringent cost controls drove the expansion in margin.
Overall, MiX – which also has operations in Australia, Brazil, Europe and the Middle East – saw a 19% gain in subscription revenue to R1.43bn on a constant currency basis.
Operating profit surged 56% to R215m with net cash from operations a reassuring R353m.
Joselowitz said MiX had made considerable progress towards achieving its long-term adjusted ebitda margin target of 30%.
MiX is not actively followed by institutional investors. But market watchers canvassed on Wednesday said the strong surge in its share price in recent months might signal greater mainstream market interest.