DigiCore looks abroad for growth

VEHICLE tracking group DigiCore Holdings — which yesterday skipped its dividend for the year after reporting a 74% drop in headline earnings per share — is looking to Asia for growth.

VEHICLE-tracking group DigiCore Holdings, which yesterday skipped its dividend for the year ended June after reporting a 74% drop in headline earnings per share to 3.3c, is looking to Australia and Asia for new growth.

The company has invested substantially in research and development, and as a result has delivered a number of new products for commercialisation during the 2014 financial year.

DigiCore reported that its headline earnings per share plummeted to 3.3c from 12.7c last year, hit by impairments of goodwill at its European and UK oper- ations and interests on loan for financing devices.

“Although this was one of the most difficult periods, we have come through with a new technology platform firmly in place, new products for the marketplace, streamlined processes and the necessary sales and marketing strategies in place to drive top line growth over the coming year,” said CEO Nick Vlok.

Mr Vlok sees growth coming from SA, Australia and Asia, where the group had entered into a partnership. In SA, investment in the sales structure had provided new opportunities in the motor dealership and insurance channels, he said.

“Australia should give us some nice growth,” Mr Vlok said. He added that the partnership it entered into in Malaysia would enable the group to reach a large part of Asia.

In Australia, DigiCore expects to continue increasing revenues and profitability through several projects under development with the carrier and insurance sectors. “While there has been some slowdown in the Australian economy, the targeted industry segments of mining, insurance, fleet and heavy vehicles continue to provide growth opportunities for the group,” Mr Vlok said.

In Malaysia, the insurance sector was beginning to gain traction as Malaysia moved to a deregulated model in 2015.

In Australia and New Zealand, the launch of the long-haul solution for cross-border logistics later in the new year will meet the demands of the market for trailers, cold-chain and cargo tracking.

DigiCore grew its installed base 17% to 89,228 systems. About 60% of the installed base came from SA.

Group revenue increased 2% to R863m.

Mr Vlok said the UK and European operations were still under pressure, but performance for the year to June had improved. “We reacted too slow to the downturn and there were also management changes.”

Mr Vlok is confident about DigiCore turning around its performance.