Cartrack looks for acquisitions

CARTRACK Holdings sees potential for 100 percent penetration of the South African market and plans to launch a cheaper vehicle tracking and dash mesh device for lower priced cars.

Zak Calisto, the global chief executive of Cartrack, said yesterday that the South African market was also ripe for consolidation and Cartrack would like to do an acquisition to get to a 1million subscriber base.

Cartrack, which is represented in 24 countries, grew its subscriber base by 19 percent to 551000 subscribers in the six months to August.

Calisto said with the new device, they would be able to fit stolen vehicle and recovery and low-level data collection in a vehicle that was worth only R20000. “We are going to come to the market to address vehicles that are worth R20000 to R50000 (and where people) cannot afford our type of technology.

Calisto said the device was a significant evolution of a product the group launched in 2013 that used radio frequency and was not wired into the vehicle.

He said it was a very cheap device with very little ongoing cost to maintain it on the system and would be a big driver of Cartrack’s subscriber base.

The guys aren’t growing and if you don’t grow you lose value. We are keen… to do acquisitions.

Calisto believes consolidation will take place in the South African stolen vehicle recovery and fleet management market because many firms were struggling and it was becoming increasingly difficult to get the appropriate management. “The guys aren’t growing and if you don’t grow you lose value. We are… keen to do acquisitions.”

Cartrack yesterday reported a 2.7percent growth in headline earnings a share to 38c in the six months to August from 37c in the previous corresponding period.

Group revenue gained 18 percent to R554m from R469.7m. Operating profit rose 2.5percent to R168.1m from R163.9m.

But Calisto said without the R19m impact on the consolidated group results of the considerable exchange rate volatility and fluctuations in Cartrack’s operating currencies, operating profit would have increased by 14 percent to R187m.

Cash generated from operating activities grew by 83percent to R211.6m from R115.3m.

An unchanged dividend of 20c a share was declared.

Calisto said the South African segment grew revenue by 16 percent, its African operations remained highly profitable in local currency terms despite experiencing continued economic headwinds and it had performed well in Europe. The group’s greenfields operations in the Middle East and Asia Pacific region showed strong growth and it would be launching its new operations in the US next month.

Calisto forecast double digit growth in normalised earnings a share for the full year despite the group achieving only 6 percent growth in the first six months.

Shares in Cartrack closed unchanged yesterday at R10.20.