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Premium fleet subscriptions lift MiX Telematics

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Stefan Joselowitz, CEO of MiX Telematics.
Stefan Joselowitz, CEO of MiX Telematics.

MiX Telematics, a global provider of fleet and mobile asset management solutions delivered as software-as-a-service (SaaS), today announced financial results for its fourth quarter and its full fiscal year 2019, which ended 31 March.

"Our fourth quarter marked a solid continuation of trends we have experienced throughout the year. The strong performance was driven by the continued growth in our premium fleet subscriptions globally, improvements in ARPU [average revenue per user] and ongoing operating leverage in the business," says Stefan Joselowitz, CEO of MiX Telematics.

"During fiscal 2019, we upwardly revised our long-term adjusted EBITDA [earnings before interest, tax, depreciation and amortisation] margin target to 35%-plus, as we expanded our margins by almost 500 basis points to 30.5% and generated record positive free cash flow of R177 million.

"We remain confident in our ability to achieve our long-term goals given our strong pipeline and ability to further enhance margin accretion across the business."

The company's financial performance for the three months ended 31 March shows subscription revenue was R443.8 million, an increase of 18.8% compared with R373.6 million for the fourth quarter of fiscal 2018.

Subscription revenue increased by 13.1% on a constant currency basis, year-over-year. Subscription revenue benefited from an increase of 73 600 subscribers from April 2018 to March 2019, representing an increase in the subscriber base of 10.9% during that period.

According to the company, subscription revenue also benefited from higher average revenue per user.

Total revenue was R507.9 million, an increase of 12% compared to R453.5 million for the fourth quarter of fiscal 2018. Total revenue increased by 6.3% on a constant currency basis, year-over-year.

Hardware and other revenue was R64.1 million, a decrease of 19.8%, compared to R79.9 million for the fourth quarter of fiscal 2018.

Gross profit was R339.8 million, compared to R296 million for the fourth quarter of fiscal 2018. Gross profit margin was 66.9%, compared to 65.3% for the fourth quarter of fiscal 2018.

Operating profit was R97.8 million, compared to R73.8 million for the fourth quarter of fiscal 2018. Operating margin was 19.3%, compared to 16.3% for the fourth quarter of fiscal 2018.

In addition to the gross margin improvement, the margin expansion was attributable to improved economies of scale and ongoing cost management initiatives. Operating expenses of R242.3 million increased by R18.6 million, or 8.3%, compared to the fourth quarter of fiscal 2018. Operating expenses represented 47.7% of revenue compared to 49.3% of revenue in the fourth quarter of fiscal 2018.

MiX Telematics says adjusted EBITDA, a non-IFRS measure, was R167.6 million, compared to R130.2 million for the fourth quarter of fiscal 2018. Adjusted EBITDA margin, a non-IFRS measure, for the fourth quarter of fiscal 2019 was 33%, compared to 28.7% for the fourth quarter of fiscal 2018.

Profit for the period was R77 million, compared to R64.3 million in the fourth quarter of fiscal 2018. Profit for the period included a net foreign exchange loss of R0.1 million before tax. During the fourth quarter of fiscal 2018, profit for the period included a net foreign exchange loss of R1.2 million.

Earnings per diluted ordinary share were 13c, compared to 11c in the fourth quarter of fiscal 2018. For the fourth quarter of fiscal 2019, the calculation was based on diluted weighted average ordinary shares in issue of 580.1 million, compared to 580.8 million diluted weighted average ordinary shares in issue during the fourth quarter of fiscal 2018, the company says.

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