MiX Telematics could be faced with a lawsuit if the Competition Tribunal finds it engaged in anti-competitive practices, while it was a member of the Vehicle Security Association of SA (VESA).
The company, which released its interim results for the period to September this morning, is one of those being investigated by the competition authorities for alleged anti-competitive practices. The tribunal has yet to issue a ruling on the matter.
MiX Telematics says that, even if the authorities find against it, the company does not expect to pay a fine. The tribunal can fine firms up to 10% of their turnover for the period under investigation.
The complaint was initially lodged by Tracetec, in 2005, on the basis that it had been unable to become VESA-accredited and was, as a result, unable to grow its network.
However, “in the advent of an adverse finding, there is the risk that the company [MiX] may be sued by third parties who believe they suffered prejudice”, it says.
“It should be noted that the complainant in this matter has acknowledged that they did not suffer any damages as their venture was not capable of commercial launch during the period in question,” the company adds.
Tough times
CEO Stefan Joselowitz says: “Global trading conditions remain tough and in some regions have deteriorated even further than last year.”
As a result, the company's focus is on “weathering the storm, while executing well on the basics,” Joselowitz adds. During the six months, the company turned over R431 million, slightly down from last year's R432 million. It reported a net profit of R23.8 million, a decline from last year's R36.6 million.
Joselowitz adds that the global economic crisis has affected the company, which has been hit by slowing car sales globally.
However, while no large deals were signed in the six months under review, it has garnered two contracts in the second half.
“Our efforts are starting to bear fruit and we are proud to have recently concluded significant deals,” says Joselowitz. The deals were signed with British Gas and Middle East Shell subsidiary PDO.
In addition, the company's annuity revenue, which accounts for 55% of income, helped limit the negative effect of “disappointing” new sales.
“While it is too early to call off the storm-watch, I remain very excited about the future of the group and believe the next two years will deliver the fruits of our current labours,” notes Joselowitz.
Related story:
Tracking firms in competition dispute
Share