MiX gunning for growth as its pipeline expands

After experiencing brisk trading in the first quarter, MiX Telematics, the global vehicle tracking and fleet management specialist, is gunning for doubledigit growth in subscription revenue and profits for the year to end-March 2019.

CEO Stefan Joselowitz said the quarterly results were driven by ongoing robust demand globally from premium fleet customers across all platforms. Aside from SA, MiX has operations in the UK, the US, Uganda, Brazil, Australia, Romania, Thailand and the United Arab Emirates.

The group made a stronger than expected start to the year, with first-quarter results released on Thursday showing subscription revenue up 18% to R390m, with the operating margin shifting up 450 basis points to 28%.

At the end of the 2018 financial year, the group initially expected subscription revenue to be in the range of R379mR383m. Net cash generated during the quarter was about R23m, with R225m cash on hand, underpinning a quarterly dividend payment of 3c a share.

MiX added 15,000 net subscribers in the quarter, which pushed the total client base to 691,922 subscribers (up 11% year on year). By comparison, MiX’s JSE rival Cartrack has about 750,000 subscribers.

Joselowitz said MiX, which has American depositary shares listed on the NYSE, was well positioned to deliver against its long-term goals, noting there were “multiple levers to generate further margin accretion”.

He told mainly American investors during a conference call that MiX’s pipeline was expanding, especially globally.

“Large [existing] customers are expanding their fleets. So for little sales effort we can grab substantial growth … we are really building a head of steam with existing clients.”

In guidance for the full financial year ahead, MiX pencilled in subscription revenue of between R1.62bn and R1.65bn, representing year-onyear growth of 13.5%-15%. This beats earlier forecasts of subscription revenue of between R1.6bn and R1.62bn.

Bottom line would veer between 31.2c a share and 33.2c a share.

The group’s shorter-term outlook predicted subscription revenue to grow by about 15% to between R401m and R406m for the second quarter to end June.