MiX Telematics expects to keep growing its subscriber base in the future, as the company reports strong interim subscriber growth.
It saw interim subscriber numbers grow by 13% year-on-year for the period ended 30 September. The fleet management solutions company says it had a total of over 540 000 subscribers at the close of the second quarter of the 2016 financial year.
The vehicle tracking company predicts subscription revenue for the full 2016 fiscal year will be up by 16% to 17%, while overall revenue is expected to grow by 4% to 6% when compared to the previous year.
CEO Stefan Joselowitz says the company had a very solid second quarter boosted by subscription revenue growth of 18%.
"We also added 18 000 net new subscribers, up over 60% from the prior quarter. Additionally, we continue to see strong uptake of our solutions in the bus and coach vertical globally, and are seeing increased attachment of our MiX Vision add-on," says Joselowitz.
"We have built the industry's largest global distribution capability and with our broad range of cloud-based solutions, we remain confident we have what it takes to capitalise on the growing demand for fleet and mobile asset management solutions worldwide," he adds.
The company's first half subscription revenue grew 16% to R557 million, while the company's African business saw a 14% increase in subscribers since September 2014.
"This, together with the additional subscription revenue arising from the Compass acquisition in November 2014, resulted in subscription revenue growth of 16% which was the primary driver of revenue growth in the segment."
MiX says it paid R18 million to the former owners of Compass in May this year, after determining that pre-agreed upon revenue and profit targets between November and March had been achieved.
Compass Fleet Management is a South Africa-based provider of specialised fleet management solutions in Southern Africa that are delivered off the group's hardware and software platform.
Total revenue for African operations increased by 17.2% to R400.2 million in the first half.
Global growth
The company says it has entered into a multi-year agreement with New York-listed Halliburton, to provide fleet management, safety and compliance solutions for Halliburton's North American fleet of more than 15 000 vehicles. The roll-out of these units is expected to begin in the third quarter.
The company hopes this will help boost its American segment, which saw its interim subscriber base decline by 6% year-on-year "due to customer fleet size contraction in the oil and gas vertical". This saw subscription revenue decline by almost 4% on a constant currency basis, while total revenue declined by 25% due primarily to lower hardware sales.
The European business grew its subscriber base by 19% but still saw total revenue decline on a constant currency basis by almost 12% due to lower hardware revenue. In rand terms, total revenue was R74.7 million, an 8.9% decline from the previous year, due to the weakening of the rand against the British pound.
MiX's Brazil business saw a 30% rise in subscribers, with subscription revenue growing almost 64%, on a constant currency basis, "due to an increase in the number of bundled subscriptions" in the region. However, the strengthening of the rand against the Brazilian real was a major contributor to a 21.8% drop in reported revenue of R9.5 million for Brazil.
MiX Telematics is a global provider of fleet and mobile asset management solutions, and operates in more than 120 countries. The company was founded in 1996 and has offices in South Africa, the UK, the US, Uganda, Brazil, Australia, Romania, Thailand and the United Arab Emirates.
Its shares are publicly traded on the Johannesburg Stock Exchange and MiX Telematics American Depositary Shares are listed on the New York Stock Exchange.
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