Karooooo, the Singapore-headquartered owner of Cartrack Holdings, said on Friday that strong demand for among businesses supported good growth in the number of connected vehicles and platform-using subscribers in the third quarter to November 30, 2022.
The number of Cartrack subscribers increased to 1 678 606 at November 30, 2022, up 14% from 1 470 385 in the third quarter of 2022.
Net Cartrack subscriber additions of 78 593 represented a 27% increase on 61 776 in the third quarter of the 2022 financial year, the group, which is listed in New York and on the JSE, said in its results on Friday.
CEO and founder Zak Calisto said in a telephone interview that demand from businesses - the group has more than 100 000 commercial clients currently - continued to boost subscriber numbers, which reflected the need among them to improve compliance functions and digitally transform their businesses to become more efficient and competitive.
Cartrack’s net subscriber additions for the third quarter exceeded 78 000, which was well above that recorded for any prior quarter.
He said the group’s cash position also remained strong, and the group had never been able to achieve as much net cash flow as it had done over the past financial year. There had been a 42% increase in free cash flow to the end of the nine-month period.
In response to a question about whether their multinational operations might be affected by forecasts among many economists of lower global growth in 2023, Calisto said they had continued to strongly grow subscriber numbers during many other economic downturns and there appeared, at this stage, no reason this trend would not continue into the future.
“We believe our vertically integrated business model and focus on product improvement and innovation differentiates us from our peers. This should keep us competitive and reinforce our long-term success,” he said.
He said they managed to navigate microchip shortages globally by strong inventories, careful management and by redesigning their digital units.
He said he had anticipated that employment trends might normalise after the Covid-19 pandemic, but it had remained difficult to find staff through 2021 and he anticipated the situation might only normalise over the next 12 months.
“The situation is starting to change somewhat as many tech companies are laying off staff,” he said.
Karooooo’s total revenue increased 29% to R930 million compared with the third quarter of 2021, and it increased 28% on a constant currency basis.
Subscription revenue increased 16% to R772m, and by 15% on a constant currency basis. As expected, after substantial investment for future growth in all business segments, earnings per share for the period were similar to last year at R4.70 compared with R4.72 at the same time last year.
Karooooo’s share price increased 0.97% to R408 on Friday morning on the JSE. It later closed unchanged from the prior close.
BUSINESS REPORT