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DigiCore turns eye to Africa

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 30 Sept 2014

DigiCore is seeking growth from Africa, which presents more exciting opportunities, as it comes out of a "challenging but rewarding" year.

The listed telematics company has continued to optimise its business, launch new products and create relationships with new clients, which it says bodes well for the future. Despite this internal focus, which also saw its balance sheet cleaned up, and a net profit for the year to June, investors sold off its stock, which lost 2.5% to close at 195c after the results were issued.

DigiCore reversed its previous loss-making position (R59.3 million), reporting an after-tax gain of R7.8 million, although this result includes non-recurring adjustments worth R63.2 million. It generated R148.9 million from operations, which was used to fund investment activities of R92.3 million, repaying previous loan and overdraft facilities.

The group is excited the new financial year will provide "a proverbial clean slate after optimising our business in the second half of the year". It notes systems, controls and strategies to manage stock, debtors and cash flow more effectively are in place, allowing the management team to focus externally on relationships, sales and marketing, and to identify new opportunities for growth.

DigiCore says while electronic fare collection on taxis and public transport is imminent in South Africa, this is unlikely before next year, and - as a result - new "opportunities in Africa seem more viable to us than the South African market for now".

The company has 18 distributors in Africa, representing as many countries, and, although growth has been slower than expected, the final quarter showed some improvement. "We have concluded a memorandum of understanding with a global, multinational company to further our footprint and service offering on the continent and build a more sustainable business model; this will eventually represent us in 27 African countries."

During the year, the group initiated several new products for the fleet and consumer/insurance markets, which it believes will help it win more contracts this year. Locally, it has launched products like Fleet Protector - an insurance offering - as well as Ctrack On-the-Road and is improving its Fleet Connect software.

DigiCore notes the economy in Europe improved in the second half of the year, which aided final quarter results, and the insurance telematics market is growing. In Australia and New Zealand, the group recorded growth, but closed its office in Asia, choosing to partner with Malaysian company, Mega Fortris Ctrack Solutions.

Its partnership in Dubai has grown progressively, although unit sales in Pakistan were "disappointing".

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