MiX lifts annual revenue forecast

New York and JSE-listed MiX Telematics has raised its revenue and margin projections for the 2019 financial year thanks in part to a strong firsthalf performance.

“At the midpoint of our total revenue guidance, we expect fiscal 2019 revenue of R1.95bn, which would represent constant currency growth of 11.85%, an increase from our previous guidance for constant currency growth of 10%,” interim finance chief Paul Dell said in a conference call on Thursday.

MiX, which has 714,000 subscribers, offers fleet management, driver safety and vehicletracking services. Rival firm Cartrack has about 850,000 subscribers and is targeting 1million in its next financial year.

Dell said MiX could generate higher subscription revenues in financial year 2019 “given the first-half performance as well as our strong pipeline of firm orders and sales opportunities”.

For the first half to endSeptember, MiX reported a 16.7% increase in total revenue to R953.6m. Profit was R68.8m, up from R58.1m a year before.

Dell said the group was targeting adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) for the full year of R560m. This implied an adjusted ebitda margin of 28.8%, better than the previous target of 28.5%.

MiX plans to introduce a new employee share scheme. CEO Stefan Joselowitz said the board had approved the scheme based on more ambitious targets. “This grant is 100% performancebased and only vests on the achievement of dual targets for cumulative subscription revenue and adjusted ebitda in the fiscal 2019 and 2020 years.”

The scheme, based on “a stretch target”, would better align management and shareholder interests, he said.

Eligible employees would receive 8-million ordinary shares if the company generated cumulative subscription revenues in 2019 and 2020 of R3.6bn and cumulative adjusted ebitda of R1.3bn. Those numbers were attainable if market trends remained “favourable” and if the company “executes at an extremely high level”.

“To be clear, these incentive plan targets are well above our current financial forecasts and are by no means easily achievable ... The incentive targets are also well in excess of the current and implied guidance we have provided to investors,” Joselowitz said.

Meanwhile, he said, the group had repurchased the equivalent of 366,000 US depository shares for $5.2m under its share repurchase programme in October.

Joselowitz said MiX was expanding its sales team in the Americas and expected to more than double that sales force by the end of the calendar year.