Mix Telematics grew earnings in the year to March and is now focused on growing its international business after having restructured its business units.
Chairman Richard Bruyns says, despite “a significantly worse global economic climate than what was expected at the beginning of the financial year”, the group grew adjusted headline earnings per share 25%, to 15.9c a share, from 12.7c a share on a pro forma basis last year.
“This is considered a very sound performance and creates a solid base from which the group will operate into the future,” says Bruyns. The group declared a 4c a share dividend.
Mix Telematics is a global group focused on all levels of vehicle telematics, combining vehicle tracking, driver and passenger safety and recovery services with a range of fleet management products and services.
Imara SP Reid analyst Warwick Lucas says the company could face the global challenge of slowing motor vehicle sales.
Revenue growth
Mix says revenue grew from R504.5 million to R958 million during the year. Net profit went from R52.5 million to R69 million.
CEO Stefan Joselowitz says annuity revenue grew 21%, to R419 million, accounting for almost 44% of the group's total revenue. Foreign revenue grew 45%, to R426 million, and “is a solid indicator that our global ambitions are taking traction”, he says.
Cash generation from operating activities is R139 million for the year and its net debt position, of total borrowings, including overdraft, excluding cash on hand, reduced from R154 million last year to R89 million this year, an improvement of R65 million.
“So, having concluded our first full year of operations as a merged and listed entity, I can report that I am satisfied with the progress that the group has made towards achieving both our short and medium-term objectives,” says Joselowitz.
“Forgive me for pointing out the obvious, but global trading conditions remain extremely tough and in some regions have deteriorated even further than last year. For now, our focus will remain on weathering the storm, while executing well on the basics”
Restructured
Mix was formed in 1996 from a fleet management and vehicle tracking background. It is now bedding down recent acquisitions and has restructured the company to reflect this. Joselowitz says the original businesses, Mix Africa, Mix EuropeUK and Mix International performed ahead of expectations.
Its two large projects - debis in SA and Go-Ahead Bus in the UK - have been fully implemented. After acquiring Tripmaster last year, Mix North America has been transitioned into the group. The business has already signed deals, with the first having been rolled out, and the unit is in the process of finalising customisation for Chevron.
Its most recent purchase, SDI, is showing promise, and synergies have already surpassed expectations as it fits in with the US business, the company says.
Clouds
However, Mix has listed a few contingent liabilities, among them the unlikely event that the MTN contractors Mix signed up, terminate before the end of the contract; R78.9 million would have to be paid out.
Mix could face Competition Tribunal sanction as a result of a complaint that VESA - of which Mix Telematics Africa was a member - had engaged in anti-competitive practises. The complaint is being heard by the tribunal and will continue over the next few months.
Mix is still in a dispute with the vendors of OmniBridge RSA and OmniBridge Europe regarding the fair value of net working capital in the businesses at the effective date of acquisition. The dispute is being resolved in terms of the sale of shares agreement. Any award made will have no material impact on earnings, says Mix.
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