MiX Telem­at­ics sees global reach as a huge as­set

Finweek English Edition - - TECHNOLOGY - BY GUGU LOURIE

South African- based f l eet man­age­ment Soft­ware-as-aSer­vice (SaaS) provider, MiX Telem­at­ics, con­tin­ues to rely on its globa l reac h t o r e mai n com­pet­i­tive in a tough mar­ket.

The com­pany – which in Au­gust 2013 l isted on the New York Stock Ex­change – de­liv­ered solid rev­enue growth, strong prof­itabil­ity and cash f low in the 2015 f inan­cial year.

MiX Telem­at­ics grew its sub­scrip­tion rev­enue by 17% to R998m in the year to end March, with the num­ber of ve­hi­cles cov­ered up 14% to 512 000. The com­pany also ended the fis­cal year with a big­ger cash pile of R945m, up from R876m the pre­vi­ous year.

MiX Telem­at­ics de­vel­ops its f leet man­age­ment so­lu­tions us­ing a SaaS model in South Africa, where it takes ad­van­tage of sav­ings on costs of hir­ing soft­ware en­gi­neers. In Europe and the US th­ese pro­fes­sion­als cost more.

MiX Telem­at­ics has off ices i n Australia, Brazil, SA, Uganda, the United Arab Emi­rates, the UK and the US. Thou­sands of South African cus­tomers rely on its stolen ve­hi­cle re­cov­ery ser­vice, Ma­trix Ve­hi­cle Track­ing.

“We were de­lighted to break t hrough t he level of half a mil­lion sub­scribers as few telem­at­ics so­lu­tions providers have achieved this t ype of crit­i­cal mass,” says pres­i­dent and CEO Ste­fan Joselowitz. “We are win­ning i mpor­tant new busi­ness, as well as sign­ing mean­ing­ful ex­pan­sions with key cus­tomers. The pen­e­tra­tion of telem­at­ics so­lu­tions over­all re­mains at a paltry 10% of the global com­mer­cial ve­hi­cle f leet.

“Mar­ket re­search in­di­cates that this pen­e­tra­tion will likely dou­ble in the next four to five years. It’s for this rea­son we be­lieve our scale, our broad-based prod­uct port­fo­lio and our global reach is a tremen­dous as­set.” Mi X Te l e mat i c s ser v ices cus­tomers in 120 coun­tries and has an ad­van­tage of op­er­at­ing across six con­ti­nents. It also has a net­work of more than 130 f leet part­ners glob­ally.

“While this does ex­pose us to some­what more volatile e c onomies, mult i - na­tional clients are i ncreas­ingly pre­fer­ring to con­tract with a sin­gle ven­dor ver­sus a dozen re­gional play­ers,” says Joselowitz.

It hasn’t all been smooth sail­ing, how­ever. MiX Telem­at­ics says it is in the process of ne­go­ti­at­ing an “am­i­ca­ble exit” from its “dis­ap­point­ing” joint ven­ture in Brazil with Sas­car, which was l aunched i n Septem­ber 2013. At t he t i me t he com­pany i ndi­cated t hat t he move sig­nif ied its fo­cus on i ncreas­ing its mar­ket pen­e­tra­tion and growth in Brazil and the greater Latin Amer­i­can re­gion.

How­ever, MiX Telem­at­ics is not giv­ing up on Brazil. Joselowitz says the move to exit the joint ven­ture could “open up an op­por­tu­nity to ei­ther go it alone or with a new part­ner”.

MiX Telem­at­ics man­age­ment says it sees more growth op­por­tu­ni­ties in the Amer­i­cas and has re­newed big con­tracts with its global clients there. As a re­sult, the com­pany pre­dicts that rev­enue will grow by up to 12.1% in the 2016 f inan­cial year.

Could it be t he c om­pany is be­ing dressed up by man­age­ment in an­tic­i­pa­tion of a global suitor?

MiX Telem­at­ics is cur­rently trad­ing un­der cau­tionar y stat­ing t hat t he com­pany’s board is in­ves­ti­gat­ing strate­gic al­ter­na­tives for the global firm.

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