· 2019-10-17 · 2015 2016 total active units 10. cartrack audited annual financial results 2016...
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www.cartrack.co.za
CartraCk Condensed annual financial results 2016 c
FLEEt MaNaGEMENt StOLEN VEHICLE rECOVErY INSUraNCE tELEMatICS
Audited AnnuAl FinAnCiAl ReSultS
2016
Aud
ited
An
nu
Al
Fin
AnCi
Al R
eSu
ltS
20
16
CartraCk Audited annual financial results 2016 1
NO
tES
FY16
RES
ULT
S PR
ESEN
TATI
ON
NO
tES
2 CartraCk Audited annual financial results 2016
NO
tES
TABL
E O
F C
ON
TEN
TS
O
verv
iew
Fi
nanc
ial r
evie
w
St
rate
gic
revi
ew
O
utlo
ok
A
nnex
ures
2
CartraCk Audited annual financial results 2016 3
NO
tES
HIGHLIGHTS
> R
1 bi
llion
in
reve
nue
A to
p gl
obal
te
lem
atic
s co
mpa
ny
> 50
0 00
0 su
bscr
iber
s
Ann
uity
bas
ed
busi
ness
Con
sist
ent
grow
th in
pr
ofita
bilit
y
3
Hig
hest
cas
h ge
nera
tor i
n its
cl
ass
4 CartraCk Audited annual financial results 2016
NO
tES
CA
RTRA
CK’
S VA
LUE
PRO
POSI
TION
TO
CUS
TOM
ERS
Incr
ease
fleet
prod
uctiv
ityIn
crea
se w
orkf
orce
effic
ienc
yRe
duce
oper
atio
nal
cost
s
Incr
ease
cust
omer
serv
ice
Incr
ease
safe
tyan
dse
curit
yIn
crea
sere
venu
e
EVEN MORE BENEFICIAL IN CHALLENGING TIMES
4
CartraCk Audited annual financial results 2016 5
NO
tES
cO
UR C
USTO
MER
S’ C
HALL
ENG
ES
High
Fue
l Cos
tsW
aste
ful
Vehi
cle
Idlin
gTim
ecar
d Fa
lsific
atio
nEx
cess
ive
Ove
rtim
eEx
cess
ive
Mai
nten
ance
Cos
ts
Exce
ssiv
e M
ileag
ePo
or D
river
Be
havi
our
Unpr
oduc
tive
Driv
ers
Unau
thor
ised
Vehi
cle
Use
Vehi
cle
Thef
t
5
6 CartraCk Audited annual financial results 2016
NO
tES
CA
RTRA
CK
CO
RE S
OLU
TION
S PE
R PR
ODU
CT
c
6
CartraCk Audited annual financial results 2016 7
NO
tES
Tota
l Exp
ecte
d Sa
ving
=
cC
ART
RAC
K –
SOUT
H A
FRIC
A R
OI C
USTO
MER
CA
LCUL
ATO
RFL
EET M
AN
AG
EMEN
T
600.
67
452.
6739
1.67
1056
.87
1024
.67%
Tota
l Cos
t =
191.
41
575.
42
Expe
cted
m
inim
umRO
I/m
onth
1,75
9.76
R280
R57
5
R19
1
R39
1
R1
056
R45
2
R60
0
R3
265
1066
%
7
8 CartraCk Audited annual financial results 2016
NO
tES
KEY
SEC
URITY
SER
VIC
ES A
ND
FEA
TURE
S
Life
time
War
rant
y
8
CartraCk Audited annual financial results 2016 9
NO
tES
Geo
-fenc
e Re
ports
Fuel
Effi
cien
cy
Repo
rtTr
ip R
epor
tsFu
el C
ard
Man
agem
ent
Driv
er S
core
card
cKE
Y C
ART
RAC
K FL
EET M
AN
AG
EMEN
T REP
ORT
S
Spee
din
g Re
port
Idlin
g Re
port
Toll r
oad
M
anag
emen
tO
per
atin
g Ho
urs
9
10 CartraCk Audited annual financial results 2016
NO
tES
STRO
NG
MO
MEN
TUM
IN S
UBSC
RIBE
R G
ROW
TH
209
680
246
366
144
224
378
778
430
386
502
849
0
100
000
200
000
300
000
400
000
500
000
600
000
2011
2012
2013
2014
2015
2016
TOTA
L ACT
IVE
UNIT
S
10
CartraCk Audited annual financial results 2016 11
NO
tES
PLA
TFO
RM F
OR
GRO
WTH
c
ASI
A&
ME
Reve
nue
+134
%Su
bscr
iber
s+1
51%
Ope
ratin
g lo
ss +
70%
SOUT
H A
FRIC
ARe
venu
e+1
9%Su
bscr
iber
s+1
6%O
pera
ting
prof
it +1
6%
EURO
PERe
venu
e+1
2%Su
bscr
iber
s+2
3%O
pera
ting
prof
it +5
3%
EURO
PE•
Slow
eco
nom
ic re
cove
ry•
Tele
met
ry c
omm
unic
atio
n co
sts
signi
fican
tly re
duc
ed•
Incr
ease
d e
ffici
enci
es h
ave
led
to
red
uced
ove
rhea
d e
xpen
ses
AFR
ICA
–O
THER
•C
omm
odity
cyc
le a
nd fo
rex
issue
s pro
vid
e sh
ort t
erm
ch
alle
nges
•Su
bsta
ntia
l gro
wth
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ortu
nitie
s re
mai
n in
the
long
er te
rm•
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ifica
nt c
hurn
in su
bscr
iber
s co
ntra
cted
to s
ervi
ces i
n lo
wer
en
d o
f the
pric
e sp
ectru
m•
We
belie
ve th
e m
arke
t rem
ains
un
pene
trate
d
SOUT
H A
FRIC
A•
Sign
ifica
nt in
vest
men
t in
dist
ribut
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yiel
din
g d
ivid
end
s•
We
belie
ve th
at g
row
th in
this
mar
ket r
emai
ns st
rong
ASI
A A
ND
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DLE
EAST
•W
e co
ntin
ue to
inve
st in
the
bran
d a
nd d
istrib
utio
n•
Star
ting
to s
ee so
me
tract
ion
AFR
ICA
Reve
nue
+22%
Subs
crib
ers
+10%
Ope
ratin
g pr
ofit
+29%
11
12 CartraCk Audited annual financial results 2016
NO
tES
+6
+16
%
A D
IVER
SIFI
ED S
UBSC
RIBE
R G
ROW
TH
12.1
K
8.5K
Item
C +16%
+6%
Stol
en
Vehi
cle
Reco
very
SA
Subs
crib
er
Base
+27%
Flee
t M
anag
emen
t
Subs
crib
er
Base
+17%
Inte
rnat
iona
l Su
bscr
iber
Ba
se
+21%
12
CartraCk Audited annual financial results 2016 13
NO
tES
D
iver
sifie
d ba
se –
pres
ent i
n 21
cou
ntrie
s, fle
et m
anag
emen
t as w
ell a
s SV
R pr
oduc
t of
ferin
gs
Secu
re a
nnui
ty-b
ased
mod
el –
84%
of r
even
ue
Long
evity
and
pre
dic
tabi
lity
-ave
rage
cus
tom
er li
fecy
cle
appr
oxim
atel
y 62
mon
ths
Sc
ale
–fe
w c
ompa
nies
glo
bally
hav
e a
subs
crib
er b
ase
> 50
0 00
0 co
ntra
cts
Hi
ghes
t mar
gins
in it
s cla
ss
A H
IGHL
Y SU
STA
INA
BLE
AN
D PR
EDIC
TABL
E M
ODE
L
-
200
400
600
800
1 0
00
1 2
00
2012
2013
2014
2015
2016
R million
Reve
nue
grow
th
Annu
ity R
even
ueRe
venu
e
13
74%
84%
84%
47%
43%
46%
0%10%
20%
30%
40%
50%
60%
70%
80%
90%
2014
2015
2016
Cons
isten
t rat
ios
Annu
ity re
venu
e %
EBIT
DA %
14 CartraCk Audited annual financial results 2016
NO
tES
Fina
ncia
l Rev
iew
CartraCk Audited annual financial results 2016 15
NO
tES
STRO
NG
YEA
R-O
N-Y
EAR
GRO
WTH
Item
A+2
0%R
even
ue
+28%
EB
ITD
A
+23%
Pro
fit b
efor
e ta
x
Pro
fit a
fter t
ax
+25%
Ope
ratin
g P
rofit
+19%
15
16 CartraCk Audited annual financial results 2016
NO
tES
254
290
345
254
294
362
296
362
463
633
835
1 005
-
200
400
600
800
1 0
00
1 2
00
2014
2015
2016
R million
Ope
ratin
g Pr
ofit
Prof
it be
fore
tax
EBITD
ARe
venu
e
STRO
NG
PRO
FITA
BILI
TY
16
CartraCk Audited annual financial results 2016 17
NO
tES
FORE
IGN
EXC
HAN
GE
IMPA
CTS
ON
FIN
AN
CIA
L RE
SULT
SD
espi
teth
esh
arp
dec
line
inth
eSo
uth
Afri
can
Rand
,the
nete
ffect
ofcu
rrenc
yflu
ctua
tions
onC
artra
ck’s
glob
albu
sines
sov
erth
epa
stye
arha
sim
pact
edpo
sitiv
ely
onth
eco
nsol
idat
edpr
ofit
befo
reta
xby
anes
timat
edR1
3m
illion
.Th
em
ain
cont
ribut
ing
fact
orsa
re: R
mill
ions
no
nop
erat
ing
fore
ign
exch
ange
gain
+15,
5
op
erat
ing
fore
ign
exch
ange
gain
+11,
5
ha
rdw
are
cost
sin
cost
ofsa
les
-11,
0
th
eflu
ctua
tion
inth
eRa
ndag
ains
toth
erG
roup
trad
ing
curre
ncie
shad
ane
tneg
ativ
eim
pact
onco
nsol
idat
ion
-3,
0
R13,
017
18 CartraCk Audited annual financial results 2016
NO
tES
Fi
nal d
ivid
end
of 3
5 ce
nts p
er sh
are
To
tal d
ivid
end
for F
Y16
of 5
5 ce
nts p
er sh
are
D
ivid
end
cov
er o
f 1.4
7 tim
es
Div
iden
d c
over
targ
et -
1.25
to 1
.55
times
HEPS
EARN
ING
S A
ND
DIVI
DEN
DS
+20%
+27%
HEPS
DPS
46
55
64
81
- 10
20
30
40
50
60
70
80
90
2015
2016
Cents per share
Earn
ings
and
div
iden
ds
DPS
HEP
S
1818
CartraCk Audited annual financial results 2016 19
NO
tES
STRO
NG
BA
LAN
CE
SHEE
T PO
SITIO
NED
FO
R G
ROW
TH
No
gear
ing
Cle
an d
ebto
rs b
ook
–d
ebto
rs d
ays
33d
ays
Ad
equa
te st
ock
leve
ls of
6 to
9 m
onth
s tra
din
g
Cur
rent
ratio
1,4
Qui
ck ra
tio0,
9
19
20 CartraCk Audited annual financial results 2016
NO
tES
A
nnui
ty b
usin
ess w
ith st
rong
reve
nue
visib
ility
into
FY1
7
W
e ha
ve, s
ince
ince
ptio
n, fi
nanc
ed
our o
wn
grow
th in
bot
h ex
istin
g an
d
new
mar
kets
St
rong
trac
k re
cord
of r
etur
ning
exc
ess
cash
to th
e sh
areh
old
ers
C
artra
ckse
nior
man
agem
ent
invo
lved
in a
ll exp
ansio
ns to
min
imise
ris
k
- 50
100
150
200
250
300
350
400
2012
2013
2014
2015
2016
R million
Cas
h co
nver
sion
Op
erat
ing
pro
fitN
et c
ash
from
op
era
ting
act
iviti
es
A H
IGH
CA
SH G
ENER
ATO
R
20
CartraCk Audited annual financial results 2016 21
NO
tES
Shar
ehol
der V
alue
Stra
tegi
c Re
view
22 CartraCk Audited annual financial results 2016
NO
tES
TELE
MAT
ICS
DEM
AN
D
DR
IVER
S
CO
MM
ERC
IAL
CRI
ME
INSU
RAN
CE
TELE
MA
TICS
REG
ULA
TORY
RE
QUI
REM
ENTS
ORI
GIN
AL
EQUI
PMEN
T M
AN
UFA
CTU
RERS
(O
EM)
CO
NSU
MER
22
CartraCk Audited annual financial results 2016 23
NO
tES
Con
siste
nt w
ith p
rior y
ears
:
In
crea
sing
dem
and
for b
ig d
ata
usin
g So
ftwar
e-as
-a-S
ervi
ce (S
aaS)
to
optim
ise b
oth
fleet
s an
d w
orkf
orce
Be
rg In
sight
stat
es th
e gl
obal
mar
ket s
ize is
94
mill
ion
vehi
cles
with
on
ly a
14%
pen
etra
tion
as a
t end
of 2
015
G
loba
l com
mer
cial
tele
mat
ics m
arke
t is e
xpec
ted
to re
ach
$41
billio
n by
202
0 -c
ompo
unde
d gr
owth
rate
of 1
6% p
.a.f
or th
e ne
xt fi
ve y
ears
Incr
ease
in d
eman
d fo
r saf
ety
and
secu
rity
by g
over
nmen
ts, b
usin
ess
and
ind
ivid
uals
due
to th
e in
crea
se in
crim
e ra
tes,
the
need
to
impr
ove
road
safe
ty a
nd th
e ne
ed to
dec
reas
e po
llutio
n
Stro
ng in
crea
se in
veh
icle
pop
ulat
ions
La
rge
and
und
erpe
netra
ted
mar
kets
MA
RKET
DRI
VERS
INDI
CA
TE A
BUN
DAN
T GRO
WTH
PO
TEN
TIAL
23
24 CartraCk Audited annual financial results 2016
NO
tES
Shar
ehol
der v
alue
Robu
st s
ubsc
riber
an
dre
venu
e gr
owth
Sust
aina
ble
prof
it m
argi
nsSt
rong
cas
hflo
w a
nd d
iscip
lined
ca
pita
l allo
catio
ns
Low
pen
etra
tion
in h
igh
grow
th m
arke
t
OUR
STR
ATE
GY
–DR
IVIN
G S
HARE
HOLD
ER V
ALU
E
24
CartraCk Audited annual financial results 2016 25
NO
tES
Glo
bal b
rand
Dist
ribut
ion
Qua
lity
serv
ice
St
reng
then
bra
nd
awar
enes
s and
mar
ket
shar
e in
exi
stin
g m
arke
ts
Build
bra
nd a
nd tr
ust i
n ne
w m
arke
ts
Te
sted
expa
nsio
n m
odel
w
ith p
rud
ent o
rgan
ic
grow
th
Con
serv
ativ
e al
loca
tion
of fu
nds i
nto
new
ge
ogra
phie
s
Incr
ease
d sa
les
capa
bilit
ies i
n ex
istin
g an
d ne
w m
arke
ts
Imp
rove
d in
stal
latio
n m
anag
emen
t and
job
sche
dul
ing
St
ayin
g ah
ead
of
tech
nolo
gica
l tre
nds t
o en
hanc
e cu
stom
er
expe
rienc
e
Con
tinuo
us
impr
ovem
ents
of o
ur
inte
rnal
syst
ems a
nd
softw
are
to a
llow
our
st
aff t
o m
ake
quic
ker
and
mor
ein
form
ed
dec
ision
s
A W
ELL
DEFI
NED
AN
D A
LIG
NED
OPE
RATIO
NA
L ST
RATE
GY
25
26 CartraCk Audited annual financial results 2016
NO
tES
St
art t
o cr
oss s
ell a
dd
ition
al fe
atur
es a
nd v
alue
ad
ded
serv
ices
to
our e
xist
ing
cust
omer
bas
e
Con
tinue
to o
rgan
ical
ly g
row
in th
e co
untri
es w
here
alre
ady
esta
blish
ed
Del
iver
mor
e so
ftwar
e an
d se
rvic
es to
our
cus
tom
ers a
s to
be th
e in
timat
e te
chno
logy
par
tner
–w
e w
ill fo
cus o
n in
crea
sing
adop
tion
and
usag
e of
the
Car
track
app
licat
ions
C
ontin
ue to
enh
ance
our
alre
ady
diff
eren
tiate
d m
odus
ope
rand
i 26
GRO
WTH
STR
ATE
GY
2016
STR
ATE
GIC
INITI
ATIV
ES
26
CartraCk Audited annual financial results 2016 27
NO
tES
USA
OFF
ICE
OPE
NIN
G IM
MIN
ENT
Th
e US
A m
arke
t has
a 1
5% to
30%
pen
etra
tion
rate
of f
leet
s (fe
w
conf
lictin
g re
ports
)
With
the
man
dato
ry re
quire
men
t for
com
mer
cial
driv
ers t
o ke
ep a
Re
cord
of D
uty
Stat
us (R
OD
S) u
sing
Elec
troni
c D
river
Log
s by
Dec
embe
r 201
7, th
ere
are
still
over
3.1
mill
ion
vehi
cles
that
requ
ire
vehi
cle
tele
mat
ics (
Dris
coll
& A
ssoc
iate
s 201
6)
The
unit
mon
thly
sellin
g pr
ice
of e
xist
ing
prov
ider
s in
the
USA
re
flect
s a si
gnifi
cant
opp
ortu
nity
for C
artra
ckto
ent
er th
e m
arke
t an
d c
ompe
te a
ggre
ssiv
ely
C
artra
ck’s
softw
are
and
har
dw
are
has h
ighl
y co
mpe
titiv
e te
chno
logi
cal f
eatu
res,
cost
pric
ing
and
relia
bilit
y.
Car
track
’sst
rong
sale
s and
mod
us o
pera
ndit
rack
reco
rd, i
n hi
ghly
co
mpe
titiv
e an
d d
iver
se m
arke
ts, i
s wel
l sui
ted
for t
he U
SA m
arke
t.
Car
track
has
a p
rove
n ha
nds o
n tra
ck re
cord
in c
usto
mer
serv
ice
whi
ch is
a fu
ndam
enta
l pilla
r to
a su
cces
sful
USA
ope
ratio
n
27
28 CartraCk Audited annual financial results 2016
NO
tES
Con
sider
able
focu
s and
effo
rt w
as p
lace
d on
tech
nolo
gy d
evel
opm
ent a
nd u
pgra
des
in 2
016
N
ext g
ener
atio
n te
lem
atic
s uni
ts a
t an
adva
nced
stag
e of
com
plet
ion
W
ill pr
ovid
e en
hanc
ed p
erfo
rman
ce a
nd a
dd
ition
al fe
atur
es
Su
bsta
ntia
llya
ligne
d th
e C
artra
ckte
chno
logy
to c
ount
ry sp
ecifi
c m
and
ator
y re
quire
men
ts
Will
cate
r for
con
nect
ivity
to n
etw
orks
glo
bally
Ad
diti
onal
pro
duc
ts w
ere
add
ed to
Car
track
’sra
nge
A
uni
t dev
elop
ed to
allo
w c
ontin
uous
and
cos
t effe
ctiv
e gl
obal
roam
ing
abilit
y fo
r tra
ckin
g as
sets
that
trav
el in
tern
atio
nally
N
ew m
obile
app
licat
ions
are
bei
ng d
evel
oped
for c
ontin
uous
con
nect
ivity
and
co
nven
ienc
e
Proj
ect i
nitia
ted
for d
ata
anal
ytic
s and
com
mer
cial
use
s of t
he v
ast v
olum
es o
f tel
emat
ics
dat
a st
ored
Su
pply
of n
on-p
erso
nalis
edd
ata
for t
raffi
c flo
w a
nd n
avig
atio
n se
rvic
es
SYST
EMS
ARE
BUI
LT O
N TH
E M
OST
ADV
AN
CED
TE
CHN
OLO
GIE
S A
VAIL
ABL
E
28
CartraCk Audited annual financial results 2016 29
NO
tES
Out
look
P 29
I Stri
ctly
priv
ate
and
con
fiden
tial
1
30 CartraCk Audited annual financial results 2016
NO
tES
Inve
stm
ent c
ase
A h
istor
y of
stro
ng
cash
flow
ge
nera
tion
and
ca
sh c
onve
rsio
n,
low
fina
ncia
l le
vera
ge a
nd
stro
ng d
ivid
end
s
A w
ell-
esta
blish
ed,
expe
rienc
ed
and
stab
le
man
agem
ent
team
A la
rge
and
ge
ogra
phic
ally
d
iver
se a
ctiv
e su
bscr
iber
bas
e
A p
rove
n tra
ck
reco
rd o
f pr
ofita
bilit
y an
d
stro
ng fi
nanc
ial
met
rics
An
ind
ustry
le
ader
in te
rms
of p
rofit
abilit
y an
d
com
petit
ive
pow
er
A w
ell-
esta
blish
ed
and
pro
ven
plat
form
for
grow
th in
a
high
gro
wth
in
dus
try
Ann
uity
bas
ed
busin
ess m
odel
pr
ovid
es st
rong
vi
sibilit
y of
ea
rnin
gsOUR
INVE
STM
ENT C
ASE
30
CartraCk Audited annual financial results 2016 31
NO
tES
Stro
ng p
rofit
and
cas
h flo
w e
xpec
ted,
con
siste
nt w
ith o
ur tr
ack
reco
rd
Su
bsta
ntia
l gro
wth
opp
ortu
nitie
s in
the
tele
mat
ics i
ndus
try re
mai
ns
C
ontin
ued
glo
bal e
cono
mic
and
fore
ign
exch
ange
unc
erta
intie
s exp
ecte
d
O
ppor
tuni
ties i
n ou
r cur
rent
foot
prin
t rem
ain
and
are
bei
ng a
ctiv
ely
purs
ued
C
ontin
ued
sust
aina
ble
grow
th in
Sou
th A
frica
is e
xpec
ted
des
pite
the
econ
omic
pre
ssur
es
G
ood
gro
wth
exp
ecte
d in
Asia
and
ME,
com
ing
off a
low
bas
e
Re
leas
ing
com
plem
enta
ry a
pplic
atio
n so
ftwar
e le
adin
g to
stro
nger
dem
and
for o
ur se
rvic
es
A R
OBU
ST O
UTLO
OK
FOR
2017
31
32 CartraCk Audited annual financial results 2016
NO
tES
1
THE
NEX
T GEN
ERA
TION
OF
CO
MPL
EMEN
TARY
TEC
HNO
LOG
Y
WO
RKFO
RCE
OPT
IMIS
ATIO
N
SALE
SFO
RCE
OPT
IMIS
ATIO
N
CartraCk Audited annual financial results 2016 33
NO
tES
International Offices
Bots
wan
aHo
ng K
ong
Indo
nesia
Keny
aM
alay
siaM
alaw
iM
ozam
biqu
eN
amib
iaN
ew Z
eala
ndN
iger
iaPh
ilippi
nes
Pola
ndPo
rtuga
lRw
and
aSi
ngap
ore
Sout
h A
frica
Spai
nSw
azila
ndTh
aila
ndTa
nzan
iaUA
EZim
babw
e
34 CartraCk Audited annual financial results 2016
NO
tES
Ann
exur
es
CartraCk Audited annual financial results 2016 35
NO
tES
A
lead
ing
glob
al p
rovi
der o
f Fle
et M
anag
emen
t, St
olen
Veh
icle
Reco
very
and
Insu
ranc
e Te
lem
atic
s
A
div
ersif
ied
subs
crib
er b
ase
with
503
000
act
ive
subs
crib
ers a
s at F
Y16
and
offi
ces i
n 21
coun
tries
A
mon
gst t
heto
p te
lem
atic
s com
pani
es g
loba
lly
A
lead
er in
a v
ery
larg
e an
d u
nder
pene
trate
d g
loba
l mar
ket
A
trus
ted
lead
er in
the
stol
en v
ehic
le a
nd re
cove
ry in
dus
try w
ith a
n
aud
ited
reco
very
rate
of 9
4%
Re
cove
red
in e
xces
s of 1
8 00
0 st
olen
veh
icle
s sin
ce in
cept
ion
St
rong
visi
bilit
y of
ear
ning
s d
ue to
the
annu
ity b
ased
bus
ines
s mod
el
A
ben
chm
ark
and
cons
isten
t lea
der i
n th
e gl
obal
tele
mat
ics i
ndus
try
CA
RTRA
CK
AT A
GLA
NC
E
36 CartraCk Audited annual financial results 2016
NO
tES
Fr
eere
gula
r pla
tform
upg
rade
s fo
r all c
usto
mer
s
Fr
eeda
ta st
orag
e fo
r up
to 5
yea
rs
Fr
eeon
-site
and
on-
line
train
ing
prov
ided
with
a 2
4/7
help
de
sk
Fr
eero
utin
e un
it he
alth
che
cks
M
obile
fitm
ent t
eam
s–
inst
alla
tion
at lo
catio
n of
you
r cho
ice
A
udite
d re
cove
ry ra
te o
f 94%
; ow
n re
cove
ry in
frast
ruct
ure;
24
/7co
ntro
l roo
m
Fi
rst c
ompa
ny in
the
wor
ld to
pro
vid
e a
R150
kre
cove
ry
war
rant
y in
the
unlik
ely
even
t of a
stol
en v
ehic
le n
ot b
eing
re
cove
red
cC
ART
RAC
K A
T A G
LAN
CE
(con
tinue
d)
CartraCk Audited annual financial results 2016 37
NO
tES
Syst
ems
and
serv
er u
ptim
eSy
stem
s bu
ilt w
ith th
e m
ost a
dvan
ced
tech
nolo
gies
Back
up
serv
ers i
n So
uth
Afric
a, H
olla
nd, U
K an
d Si
ngap
ore
Unit
heal
th
chec
ksPr
oact
ive
mon
itorin
g of
all
track
ing
devi
ces
Supp
ort
24/7
/365
op
erat
ion
Acce
ss
to F
leet
ons
ite
train
ing
and
supp
ort c
entre
c
Putti
ng y
ou in
con
trol
Re
al ti
me
track
ing
with
so
phis
ticat
edm
anag
emen
t re
ports
Us
e of
bot
h G
SM a
nd R
F te
chno
logi
es a
s a p
latfo
rm
Reco
very
Inde
pend
ently
au
dite
d 94
% re
cove
ry
rate
Ded
icat
ed in
-hou
se
reco
very
team
s
Tech
nici
ans
Ded
icat
ed in
-hou
se
tech
nici
ans
to in
stal
l at
a lo
catio
n of
you
r ch
oice
Life
Time
War
rant
yLif
e tim
e m
aint
enan
ce
war
rant
y of
fere
d on
Ha
rdw
are
Valu
e ad
ded
serv
ices
Vario
us P
rodu
cts a
nd V
AS
to m
eet y
our n
eeds
OUR
PRO
MIS
E TO
CUS
TOM
ERS
38 CartraCk Audited annual financial results 2016
NO
tES
SEG
MEN
TAL
GRO
WTH
FO
R 20
15 A
ND
2016
Segm
enta
l gro
wth
for 2
015
and
2016 Re
venu
e
Prof
it be
fore
tax
EBITD
A
2015
2016
2015
2015
2016
2016
75%
14%10
%1%
74%
14%9%
3%
SOUT
H AF
RICA
AFRI
CA-O
THER
EURO
PE
ASIA
& M
E
82%
13%7%
-2%
77%
13%9%
1%
SOUT
H AF
RICA
AFRI
CA-O
THER
EURO
PE
ASIA
& M
E
81%
16%5%
-2%
81%
16%5%
-2%
SOUT
H AF
RICA
AFRI
CA-O
THER
EURO
PE
ASIA
& M
E
R’00
020
1520
16%
chan
ge
Reve
nue
Sout
h Af
rica
628
547
748
600
19
Afric
a –
othe
r11
4 00
213
9 19
822
Euro
pe80
422
90 0
3712
Asia
and
Mid
dle
East
11
824
27 6
4713
4
Tota
l83
4 79
51
005
481
20
Prof
it be
fore
tax
Sout
h Af
rica
238
358
274
711
15Af
rica
–ot
her
46 4
9960
110
29
Euro
pe15
835
23 4
7745
Asia
and
Mid
dle
East
(7 0
78)
6 96
8n/
a
Tota
l29
3 61
436
2 26
625
EBIT
DA
Sout
h Af
rica
298
058
355
777
20
Afric
a –
othe
r45
710
59 1
6830
Euro
pe24
420
42 2
1271
Asia
and
Mid
dle
East
(6 5
86)
5 97
7n/
a
Tota
l36
1 60
246
3 13
429
CartraCk Audited annual financial results 2016 39
NO
TES
STRO
NG
FIN
AN
CIA
L G
ROW
TH20
1220
1320
1420
1520
16
Reve
nue
R m
illion
448
496
633
835
1005
Gro
ss p
rofit
R m
illion
348
404
503
649
819
Ope
ratin
g pr
ofit
R m
illion
162
211
254
290
345
EBITD
AR
milli
on16
211
296
362
463
Head
line
earn
ings
R m
illion
103
137
167
191
242
Head
ling
earn
ings
pe
r sha
reC
ents
--
5864
81Ea
rnin
gs p
er sh
are
excl
non
oper
atio
nal
fore
x lo
sses
/gai
nsC
ents
--
5864
75N
et c
ash
from
op
erat
ing
activ
ities
R m
illion
144
163
215
267
261
Mar
gins
and
ratio
s
Gro
ss p
rofit
mar
gin
%78
%82
%79
%78
%81
%O
verh
ead
s as a
% o
f sa
les
%43
%40
%41
%44
%48
%O
pera
ting
prof
it m
argi
n%
36%
43%
40%
35%
34%
EBITD
A m
argi
n%
--
47%
43%
46%
Ann
uity
reve
nue
as
% o
f tot
al re
venu
e%
73%
76%
74%
84%
84%
40 CartraCk Audited annual financial results 2016
NO
TES
Fast
fact
s
Fact
1C
artra
ck h
as d
evel
oped
tech
nolo
gy lo
cally
for t
he tr
ansp
ort i
ndus
try in
Indo
nesia
. Bu
ses
are
fitte
d w
ith a
tele
mat
ics u
nit t
hat r
elay
s rea
l tim
e in
form
atio
n to
con
sum
ers.
This
tech
nolo
gy p
rovi
des
ope
rato
rs w
ith fu
ll con
trol o
ver b
us ro
utes
, as i
t ale
rts th
em to
any
d
evia
tions
on
the
rout
e an
d m
ost i
mp
orta
ntly
opt
imise
sthe
serv
ice
for t
he e
nd u
ser –
the
cust
omer
. Thi
s inf
orm
atio
n in
clud
es th
e es
timat
ed ti
me
of a
rriva
l of t
he n
ext v
ehic
le to
bus
te
rmin
als t
hrou
ghou
t the
cou
ntry
as w
ell a
s sta
tions
of i
nfor
mat
ion
loca
ted
in m
alls
thro
ugho
ut th
e co
untry
.
Fact
2C
artra
ck m
ade
its in
tern
atio
nal d
ebut
of I
NTE
GRA
TE -
an e
nd-to
-end
man
aged
Ele
ctro
nic
Mon
itorin
g Se
rvic
es (E
MS)
solu
tion
at t
he IN
TERP
OL
WO
RLD
201
5 ex
hibi
tion
in S
inga
pore
in
May
201
5. I
NTE
GRA
TE a
llow
s law
enf
orce
men
t age
ncie
s to
effe
ctiv
ely
mon
itor p
erso
ns-o
f-in
tere
st, s
uch
as o
ffend
ers o
n ex
tend
ed su
perv
ision
, par
ole,
hom
e d
eten
tion
or
com
mun
ity d
eten
tion.
The
y ca
n al
so b
e pr
ison
inm
ates
goi
ng th
roug
h ha
lfway
ca
re a
nd
who
are
in th
e pr
oces
s of r
eint
egra
ting
into
soci
ety.
IN
TEG
RATE
is a
lread
y in
use
in
Sing
apor
e -o
ne o
f the
safe
st c
ities
in th
e w
orld
acc
ordi
ng to
The
Eco
nom
ist’s
Inte
lligen
ce
Unit
Repo
rt 20
15.
Fact
3C
artra
ck h
as re
cent
ly b
een
app
oint
ed th
e pr
efer
red
tele
mat
ics a
nd st
olen
veh
icle
re
cove
ry (S
VR)
pro
vid
er fo
r MA
N Tr
uck
& B
us in
Sou
th A
frica
. C
artra
ck h
as a
long
as
soci
atio
n w
ith M
AN
, ini
tially
sele
cted
as a
n ex
clus
ive
supp
lier o
f SV
R pr
oduc
ts a
nd
serv
ices
to M
AN
by
virtu
e of
Car
track
’s se
rvic
e re
cord
and
con
siste
ntly
hig
h re
cove
ry ra
te.
This
rela
tions
hip
has n
ow b
een
exte
nded
to in
corp
orat
e a
full f
leet
tele
mat
ics p
rod
uct
and
serv
ice
for u
se b
y M
AN
clie
nts.
The
agre
emen
t inc
lud
es th
e fit
men
t of a
Car
track
Fl
eet M
anag
emen
t pro
duc
t to
all M
AN
TG tr
ucks
ass
emb
led
dai
ly a
t the
Tru
ck &
Bus
C
hass
is Pl
ant i
n Pi
neto
wn,
Kw
aZul
u-N
atal
.
OUR
VA
LUE
TO C
USTO
MER
S
CartraCk Audited annual financial results 2016 41
Notes
Con
den
Sed
An
nu
Al
Fin
AnCi
Al R
eSu
ltS
20
16
42 CartraCk Condensed annual financial results 2016
CartraCk Condensed annual financial results 2016 43
ContentS
Con
den
Sed
An
nu
Al
Fin
An
CiA
l R
eSu
ltS
201
6
Highlights44 Commentary45Consolidated statement of financial position50Consolidated statement of profit or loss and other comprehensive income
51Consolidated statement of changes in equity52Consolidated statement of cash flows54 Accounting policies55notes to the consolidated financial statements56 Corporate informationIBc
Hig
Hli
gH
tS
44 cartrack Condensed annual financial results 2016
DPS for the full year of
55 cents, up
20%
Subscriber base of 502 849
units, up
17%
Final dividend of
35 cents per share
Operating profit margin of
34% (2015: 35%)
Operating profit of r344.8 million
up
19%
EBItDa margin of
46% (2015: 43%)
audited vehicle recovery rate at
94%, up
1%
Profit after tax of
r259.5 million, up
25%
EBItDa of r463.1 million,
up
28%
HEPS of 81 cents, up
27%
revenue of r1 billion, up
20%
CartraCk Condensed annual financial results 2016 45
group profileCartrack is a leading global provider of Fleet Management, Stolen Vehicle Recovery and insurance telematics services. the group’s activities are focused on the design, development and installation of telematics technology; data collection and analysis and the delivery of fleet and mobile asset management solutions delivered as Software-as-a-Service (“SaaS”) and the tracking and recovery of vehicles.
Cartrack has a presence in 21 countries in Africa, europe, Asia and the Middle east. With an active subscriber base of over 502 000 customers, the group ranks among the top telematics companies globally.
group performanceCartrack increased headline earnings by 27% to R241.9 million (2015: R191 million) and headline earnings per share by 27% to 81 cents (2015: 64 cents). A final cash dividend of 35 cents per share (2015: 30 cents) was declared, bringing the total dividend for the year to 55 cents per share, which represents a 20% increase on the prior year.
the group grew revenue by 20% to R1 billion with all regions contributing to this growth. the targeted revenue growth for 2016 has been substantially realised, despite the trading conditions experienced proving to be more adverse than originally forecast.
the global active subscriber base grew by 17% or some 72 000 units to 502 849 units. Contract subscription revenue grew by 20% and continues to represent 84% of total revenue. the Fleet Management subscriber base grew by 60 580 units, now representing 56% (2015: 51%) of the Cartrack active contract base.
Profit before tax increased by 23% to R362.3 million. good profitability was experienced in all regions, apart from the new country start-ups in Asia and the Middle east. As part of its international expansion drive, Cartrack opened new operations in six countries in Asia and the Middle east at the end of 2015, using the established Singapore business as the central hub for the region. As expected, the costs associated with such an expansion impacted negatively on the combined profitability of the international businesses. no new international businesses were acquired or started during 2016 as the group focused on establishing the new operations in Asia. Revenue from international operations grew 25% to R256.9 million, which represents 26% (2015: 25%) of global revenue. new expansion opportunities continue to be a focus point and are investigated on merit.
impact of foreign exchange rate changes on financial performancedespite the sharp decline in the South African Rand, the net effect of currency fluctuations on Cartrack’s global business over the past year has impacted positively on the consolidated profit before tax by an estimated R13 million. the main contributing factors are:
R million
• non-operating foreign exchange gain +15.5
• operating foreign exchange gain +11.5
• impact on costs of components procured for hardware included in cost of sales -11.0
• the fluctuation in the Rand against other group trading currencies had a net negative impact on consolidation -3.0
13.0
CoMMentARY
46 CartraCk Condensed annual financial results 2016
Segmental contributionSouth africathis segment accounts for 74% of total revenue. despite the economic slowdown evidenced by declining new vehicle sales and lower consumer confidence, this region achieved record annual unit sales and increased the subscriber base by 16% to 391 000 units.
Revenue grew by 19%, with all distribution channels recording strong growth. Relationships with a number of key sales channels were strengthened, with Cartrack becoming the preferred supplier for fitments to stock vehicles for a significant motor dealership group, and being selected to provide a customised telematics solution for the South African arm of MAn truck and Bus, the major european manufacturer.
operating expenses increased at a faster rate than revenue due primarily to:
• a build in sales and distribution channels; and
• a higher incidence of debtor defaults by cash-strapped consumers (being mostly individuals rather than corporate clients). Strict credit controls and measures to mitigate write-offs are integral to Cartrack’s business model.
operating profit increased by a satisfactory 16%, although contribution to group operating profit reduced to 80% (2015: 82%).
africa – OtherAfrica is being affected by the declining global demand and subdued commodity prices and was also impacted by the unexpected high and rapid depreciation of local currencies and inflation. these economic conditions resulted in higher debtor defaults, specifically in respect of subscribers who contracted for services at the lower end of the price spectrum. While trading conditions were challenging, the subscriber base in Africa nevertheless grew by 10% after considerable churn and revenue increased by a satisfactory 22%. operating profit increased 29% to R56.5 million.
global resource prices have already shown some recovery since year-end and continued support of normal operations in these countries remains a management priority.
EuropeCartrack recorded a healthy growth of 23% in the subscriber base, despite the slow recovery in europe after the 2010 financial crisis. Price pressures impacted substantially on revenue growth, however management believes that prices have stabilised. Revenue grew by 12% and the european segment share of global revenue decreased marginally to 9% (2015: 10%). However, stringent cost management and the strengthening of the euro against the Rand contributed to an increase of 53% in operating profit, which resulted in the contribution to global operating profit rising to 7% (2015: 5%).
asia & Middle East2016 was the first full year of operation for six of the Asian entities, with only Singapore being fully operative for three years. the primary challenges were to establish Cartrack’s credentials in the new territories, to obtain all the appropriate technical approvals for our product range and to recruit and train quality staff. this has been substantially achieved and the operations are now able to place a concerted emphasis on the distribution and service aspects of the business.
this segment grew its subscriber base in line with expectations and lifted revenue 134% to R27.6 million. the well-established Singapore operation increased its profitability this year on the back of solid subscriber growth. As expected, the other newly established entities recorded losses, as the overhead expenditure on the infrastructure build of each operation was increased to support the planned sales growth, culminating in operating losses of R12 million in 2016.
CoMMentARY (continued)
CartraCk Condensed annual financial results 2016 47
the operating losses of these recently established entities are being closely managed during this establishment stage and have been controlled within management’s expectations. Sales have commenced in all operations and a steady monthly increase is anticipated. Breakeven is only expected to be achieved within approximately three years of commencement of trading.
Funding and capital managementWorking capital and cash generation are key financial objectives and have received even greater focus during 2016 given the slowdown in the global economy and the exchange rate volatility.
our current ratio at 1.4 (2015: 1.3) and quick ratio at .9 (2015: 1), both indicate consistently healthy cash generation and cash management. inventory value has increased by R26 million, mainly attributable to the acquisition of Cartrack Manufacturing (Pty) limited in March 2015. An increase in defaulting debtors has been experienced during 2016, and debtors’ write-offs and provisions for bad debts have been increased appropriately. the net debtor’s book at the end of 2016 reflects an average debtors days outstanding of one month, a deterioration of approximately ten days.
low fixed asset infrastructure requirements to sustain growth, together with the tight working capital controls, result in Cartrack being highly cash generative. Cash generated from operating activities during 2016, at R392 million, represents a 14% increase over 2015, despite the stock and trade receivable increases of R79 million referred to above and higher tax payments made.
acquisitionsAs indicated in the interim results announcement, Cartrack purchased 100% of the shares in Cartrack Manufacturing (Pty) limited (formerly onecell Manufacturing (Pty) limited) from onecell Holdings (Pty) limited on 1 March 2015 for R100, being the nominal share capital value. this acquisition places Cartrack in full control of the supply chain for its products, from procurement of components to manufacture, testing and repair.
Cartrack also acquired 100% of the shares in Cartrack Management Services (Pty) limited (formerly Bonito Recruitment Services (Pty) limited) from onecell Holdings (Pty) limited on 1 March 2015 for R100, being the nominal share capital value. this company provides the services of executive management and the non-executive directors to the group.
Investing for tomorrowConsiderable focus and effort was placed on technology innovation during the year. next generation telematics units are at an advanced stage of testing and will provide for enhanced performance and additional features. Additional products were added to our range, in particular a unit which allows continuous and cost-effective tracking of assets that travel internationally. new mobile applications are being developed to foster a more intimate relationship with clients. the analysis of the vast volumes of telematics data received and the commercial uses for such data analytics remain key to business sustainability well into the future.
Cartrack has also done substantial work in europe, Asia and the Middle east over the past year to integrate its technology and comply with the latest legislation in each region. the group received approvals in several markets and are far advanced in achieving approval in others. Compliance will provide the platform to further increase Cartrack’s addressable market and therefore sales in those regions.
48 CartraCk Condensed annual financial results 2016
outlookthe telematics industry is experiencing tremendous opportunity through significant and growing applications, not only in vehicles but also the tracking of other assets and mobile technology. While our key focus remains on vehicles, we are keeping abreast of these opportunities by keeping our developments and platforms flexible enough to accommodate other applications as and when we choose to further broaden our product offering.
despite the global economic and foreign exchange uncertainties, we expect to continue to see solid growth in keeping with our track record. opportunities in all segments remain and are being actively pursued. We foresee excellent potential for growth in the uSA and will consider suitable acquisitions on merit.
Auditors’ reportthe accompanying condensed financial statements have been extracted from the audited annual financial statements but have not themselves been audited. grant thornton Chartered Accountants (SA), Johannesburg Partnership, the group’s independent auditors, have audited the consolidated financial statements for the year ended 28 February 2015 and have issued an unqualified audit opinion. the auditor’s report does not necessarily report on all of the information contained in this announcement/financial results. Shareholders are therefore advised that, in order to obtain a full understanding of the nature of the auditor’s engagement, they should obtain a copy of the auditor’s report, together with the accompanying financial information, from the issuer’s registered office. the directors take full responsibility for the preparation of the condensed report and that the financial information has been correctly extracted from the underlying annual financial statements.
Basis of accountingthe consolidated financial statements are prepared in compliance with JSe listings Requirements, international Financial Reporting Standards (iFRS) and interpretations of those standards, as issued by the international Accounting Standards Board (iASB), the financial reporting pronouncements as issued by the FRSC (Financial Reporting Standards Council) that are relevant to its operations and have been effective for the annual reporting period ending 29 February 2016, and the SAiCA Financial Reporting guides as issued by the Accounting Practices Committee and the South African Companies Act, no 71 of 2008, as amended. the annual financial statements were approved for issue by the board of directors on 30 May 2016 and are subject to approval by the annual general meeting of shareholders, on 21 July 2016.
during the year Cartrack identified that the accounting treatment of subscriptions billed in advance has been incorrectly applied in that the deferral of revenue from advance billings has not been properly applied in all circumstances. in the past, revenue has consistently been recognised on annual contracts in full in the year of invoice. on the other hand, certain monthly subscription billing was being incorrectly deferred to the subsequent month although it was in fact due in respect of the invoicing month.
With effect from the 2016 year this incorrect accounting treatment has been rectified such that the proportion of revenue invoiced in any accounting period is now deferred to the period to which it relates and recorded in the balance sheet as a current liability.
in giving effect to this change in accounting treatment, the financial statements in respect of the two previous financial years have been restated.
Accounting policies and their application are consistent with those used by the company in the previous financial year.
dividend declarationordinary shareholders are advised that the board of directors has declared a final gross cash dividend of 35 cents per ordinary share (29.75 cents net of dividend withholding tax) for year to 29 February 2016 (the cash dividend). no secondary tax on companies (StC) credits were utilised as part of the ordinary cash dividend declaration. the cash dividend will be paid out of profits of the company.
CoMMentARY (continued)
CartraCk Condensed annual financial results 2016 49
timetable
Share code CtK
iSin ZAe000198305
Company registration number 2005/036316/06
Company tax reference number 9108121162
dividend number 4
gross cash dividend per share 35 cents
issued share capital as at declaration date 300 000 000
declaration date tuesday, 31 May 2016
last date to trade cum dividend Friday, 1 July 2016
Shares commence trading ex dividend Monday, 4 July 2016
Record date Friday, 8 July 2016
dividend payment date Monday, 11 July 2016
Share certificates may not be dematerialised or rematerialised between Monday, 4 July 2016 and Friday, 8 July 2016, both dates inclusive.
tax implicationsthe cash dividend is likely to have tax implications for both resident and non-resident shareholders. Shareholders are therefore encouraged to consult their professional tax advisers should they be in any doubt as to the appropriate action to take.
in terms of the income tax Act, the cash dividend will, unless exempt, be subject to dividend withholding tax (dWt). South African resident shareholders that are liable for dWt, will be subject to dWt at a rate of 15% of the cash dividend and this amount will be withheld from the cash dividend. non-resident shareholders may be subject to dWt at a rate of less than 15% depending on their country of residence and the applicability of any double tax treaty between South Africa and their country of residence.
on behalf of the board
David Brown Zak CalistoChairman global chief executive officer
Johannesburg
31 May 2016
Sponsorinvestec Bank limited
50 CartraCk Condensed annual financial results 2016
ConSolidAted StAteMent oF FinAnCiAl PoSition as at 29 February 2016
Figures in Rand thousand note(s) 2016Restated
2015Restated
2014
aSSEtS
Non-current assets
Property, plant and equipment 207 534 150 530 104 489
goodwill 3 156 011 144 269 99 433
deferred tax 34 517 20 410 13 036
398 062 315 209 216 958
Current assets
inventories 88 318 62 532 32 740
loans to related parties 1 624 5 263 35 040
trade and other receivables 128 655 81 705 55 904
Current tax receivable 5 500 449 352
Cash and cash equivalents 45 181 110 047 41 657
269 278 259 996 165 693
total assets 667 340 575 205 382 651
EqUItY aND LIaBILItIES
Equity
Share capital 4 42 488 42 488 42 488
Reserves 26 314 32 251 21 051
Retained income 375 306 285 632 145 956
equity attributable to equity holders of parent
444 108 360 371 209 495
non-controlling interest 16 387 13 391 25 666
460 495 373 762 235 161
Liabilities
Non-current liabilities
Finance lease obligation 7 789 5 618 4 169
deferred tax 1 040 236 1
8 829 5 854 4 170
Current liabilities
trade and other payables 159 085 149 282 110 234
loans from related parties 1 478 1 235 738
Finance lease obligation 6 604 6 218 3 527
Current tax payable 26 652 38 740 28 821
Share based payment liability 4 010 – –
Bank overdraft 187 114 –
198 016 195 589 143 320
total liabilities 206 845 201 443 147 490
total equity and liabilities 667 340 575 205 382 651
CartraCk Condensed annual financial results 2016 51
ConSolidAted StAteMent oF PRoFit oR loSS And otHeR CoMPReHenSiVe inCoMefor the year ended 29 February 2016
Figures in Rand thousand note(s) 2016Restated
2015Restated
2014
Revenue 1 005 481 834 795 632 757
Cost of sales (186 749) (185 536) (130 004)
Gross profit 818 732 649 259 502 753
other income 12 091 6 852 11 946
operating expenses (486 017) (366 106) (260 837)
Operating profit 344 806 290 005 253 862
investment revenue 6 256 4 533 1 742
net foreign exchange gain 15 667 – –
Finance costs (4 463) (924) (1 211)
Profit before taxation 362 266 293 614 254 393
taxation (102 779) (85 646) (72 708)
Profit for the year 259 487 207 968 181 685
OtHEr COMPrEHENSIVE INCOME:
Items that may be reclassified to profit or loss:
exchange differences on translating foreign operations
3 399 (7 372) 18 276
Other comprehensive income for the year net of taxation
3 399 (7 372) 18 276
total comprehensive income for the year 262 886 200 596 199 961
Profit attributable to:
owners of the parent 239 674 191 811 170 764
non-controlling interest 19 813 16 157 10 921
259 487 207 968 181 685
total comprehensive income attributable to:
owners of the parent 245 842 181 884 180 252
non-controlling interest 17 044 18 712 19 709
262 886 200 596 199 961
EarNINGS PEr SHarE
Basic earnings per share (cents) 6 80 64 59
52 CartraCk Condensed annual financial results 2016
ConSolidAted StAteMent oF CHAngeS in equitY for the year ended 29 February 2016
Figures in Rand thousandShare
capitalShare
premiumtotal share
capital
Foreign currency
translation reserve
treasuryshares
total reserves
Retained income
total attributable to equity holders of the group/
Company
non-controlling
interesttotal
equity
opening balance as previously reported * 42 488 42 488 21 005 – 21 005 157 307 220 800 33 713 254 513
adjustments
Prior period error (refer note 2) – – – 46 – 46 (11 351) (11 305) (8 047) (19 352)
Balance at 1 March 2014 as restated – 42 488 42 488 21 051 – 21 051 145 956 209 495 25 666 235 161
Profit for the year – – – – – – 191 811 191 811 16 157 207 968
other comprehensive income – – – (4 817) – (4 817) – (4 817) (2 555) (7 372)
total comprehensive income for the year – – – (4 817) – (4 817) 191 811 186 994 13 602 200 596
Foreign currency translation movements within equity
– – – 16 017 – 16 017 – 16 017 (16 017) –
Acquisition of subsidiary with nCi portion – – – – – – – – 1 838 1 838
Share issue 42 488 (42 488) – – – – – – – –
Buyback and cancellation of shares (510 000) – (510 000) – – – – (510 000) – (510 000)
issue of new shares 510 000 – 510 000 – – – – 510 000 – 510 000
dividends – – – – – – (48 000) (48 000) (10 832) (58 832)
increase in interest of subsidiary – – – – – – (4 135) (4 135) (866) (5 001)
total contributions by and distributions to owners of company recognised directly in equity 42 488 (42 488) – 16 017 – 16 017 (52 135) (36 118) (25 877) (61 995)
Balance at 1 March 2015 as restated 42 488 – 42 488 32 251 – 32 251 285 632 360 371 13 391 373 762
Profit for the year – – – – – – 239 674 239 674 19 813 259 487
other comprehensive income – – – 6 168 – 6 168 – 6 168 (2 769) 3 399
total comprehensive income for the year – – – 6 168 – 6 168 239 674 245 842 17 044 262 886
Purchase of shares for Share incentive – – – – (12 105) (12 105) – (12 105) – (12 105)
Scheme (treasury shares)
dividends – – – – – – (150 000) (150 000) (14 048) (164 048)
total contributions by and distributions to owners of company recognised directly in equity – – – – (12 105) (12 105) (150 000) (162 105) (14 048) (176 153)
Balance at 29 February 2016 42 488 – 42 488 38 419 (12 105) 26 314 375 306 444 108 16 387 460 495
note(s) 4 4 4
* R142 is not displaying due to rounding.
CartraCk Condensed annual financial results 2016 53
Figures in Rand thousandShare
capitalShare
premiumtotal share
capital
Foreign currency
translation reserve
treasuryshares
total reserves
Retained income
total attributable to equity holders of the group/
Company
non-controlling
interesttotal
equity
opening balance as previously reported * 42 488 42 488 21 005 – 21 005 157 307 220 800 33 713 254 513
adjustments
Prior period error (refer note 2) – – – 46 – 46 (11 351) (11 305) (8 047) (19 352)
Balance at 1 March 2014 as restated – 42 488 42 488 21 051 – 21 051 145 956 209 495 25 666 235 161
Profit for the year – – – – – – 191 811 191 811 16 157 207 968
other comprehensive income – – – (4 817) – (4 817) – (4 817) (2 555) (7 372)
total comprehensive income for the year – – – (4 817) – (4 817) 191 811 186 994 13 602 200 596
Foreign currency translation movements within equity
– – – 16 017 – 16 017 – 16 017 (16 017) –
Acquisition of subsidiary with nCi portion – – – – – – – – 1 838 1 838
Share issue 42 488 (42 488) – – – – – – – –
Buyback and cancellation of shares (510 000) – (510 000) – – – – (510 000) – (510 000)
issue of new shares 510 000 – 510 000 – – – – 510 000 – 510 000
dividends – – – – – – (48 000) (48 000) (10 832) (58 832)
increase in interest of subsidiary – – – – – – (4 135) (4 135) (866) (5 001)
total contributions by and distributions to owners of company recognised directly in equity 42 488 (42 488) – 16 017 – 16 017 (52 135) (36 118) (25 877) (61 995)
Balance at 1 March 2015 as restated 42 488 – 42 488 32 251 – 32 251 285 632 360 371 13 391 373 762
Profit for the year – – – – – – 239 674 239 674 19 813 259 487
other comprehensive income – – – 6 168 – 6 168 – 6 168 (2 769) 3 399
total comprehensive income for the year – – – 6 168 – 6 168 239 674 245 842 17 044 262 886
Purchase of shares for Share incentive – – – – (12 105) (12 105) – (12 105) – (12 105)
Scheme (treasury shares)
dividends – – – – – – (150 000) (150 000) (14 048) (164 048)
total contributions by and distributions to owners of company recognised directly in equity – – – – (12 105) (12 105) (150 000) (162 105) (14 048) (176 153)
Balance at 29 February 2016 42 488 – 42 488 38 419 (12 105) 26 314 375 306 444 108 16 387 460 495
note(s) 4 4 4
* R142 is not displaying due to rounding.
54 CartraCk Condensed annual financial results 2016
ConSolidAted StAteMent oF CASH FloWS for the year ended 29 February 2016
Figures in Rand thousand note(s) 2016Restated
2015Restated
2014
CaSH FLOwS FrOM OPEratING aCtIVItIES
Cash generated from operations 391 752 343 834 276 326
interest income 6 256 4 533 1 742
Finance costs (3 502) (360) (739)
tax paid (133 120) (81 491) (62 410)
Net cash from operating activities 261 386 266 516 214 919
CaSH FLOwS FrOM INVEStING aCtIVItIES
Purchase of property, plant and equipment (158 216) (119 700) (80 470)
Sale of property, plant and equipment 3 923 4 651 3 170
Acquisition of subsidiaries, net of cash acquired
(15) (53 428) 2 367
Net cash from investing activities (154 308) (168 477) (74 933)
CaSH FLOwS FrOM FINaNCING aCtIVItIES
Proceeds on share issue* 4 – * –
increase in loans from related parties 243 497 –
decrease in loans to related parties 3 639 29 777 95 875
Finance lease (payments)/ receipts (1 596) 3 576 212
Purchase of shares for Share incentive Scheme (treasury shares)
(12 105) – –
dividends paid (164 048) (58 832) (205 665)
Acquisitions resulting in increase in control of subsidiaries
– (5 001) –
Buyback of company’s own shares – (510 000) –
Proceeds of share issue – 510 000 –
Net cash from financing activities (173 867) (29 983) (109 578)
tOtaL CaSH MOVEMENt FOr tHE PErIOD
(66 789) 68 056 30 408
Cash at the beginning of the period 109 933 41 657 12 826
effect of exchange rate movement on cash balances
1 850 220 (1 577)
total cash at end of the period 44 994 109 933 41 657
* R300 not displaying due to rounding.
CartraCk Condensed annual financial results 2016 55
ACCounting PoliCieS
1. PrESENtatION OF GrOUP aND COMPaNY FINaNCIaL StatEMENtS
reporting entity
Cartrack Holdings limited is a Company domiciled in the Republic of South Africa. these consolidated financial statements for the year ended 29 February 2016 comprise the Company and its subsidiaries (collectively the “group” and individually “group companies”). the group is primarily involved in the design, development and installation of telematics technology, data collection and analysis and the delivery of fleet and mobile asset management solutions delivered as Software-as-a-Service (‘SAAS’) and the tracking and recovery of vehicles.
Statement of compliance
the consolidated financial statements are prepared in compliance with JSe listings Requirements, international Financial Reporting Standards (iFRS) and interpretations of those standards, as issued by the international Accounting Standards Board (iASB), the financial reporting pronouncements as issued by the FRSC (Financial Reporting Standards Council) that are relevant to its operations and have been effective for the annual reporting period ending 29 February 2016, and the SAiCA Financial Reporting guides as issued by the Accounting Practices Committee and the South African Companies Act, no 71 of 2008, as amended. the annual financial statements were approved for issue by the Board of directors on 30 May 2016 and are subject to approval by the Annual general Meeting of shareholders, on 21 July 2016.
Basis of measurement
the consolidated financial statements have been prepared on the historical cost basis, except for the measurement of certain financial assets and liabilities at fair value.
Functional and presentation currency
these consolidated financial statements are presented in South African Rand (ZAR), which is the Company’s functional currency. All financial information presented has been rounded off to the nearest thousand Rand.
Going concern
the consolidated financial statements are prepared on the going-concern basis as the directors believe that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.
during the year there has been a correction of an accounting error which is detailed in note 2.
56 CartraCk Condensed annual financial results 2016
noteS to tHe ConSolidAted AnnuAl FinAnCiAl StAteMentS
2. COrrECtION OF aCCOUNtING ErrOr
group practice is to invoice subscriptions in advance and to defer recognising such subscriptions in revenue to the subsequent accounting period(s) to which they relate. during 2016 it has been identified that the deferral of advance billings has not been applied correctly in all circumstances.
in the ordinary course of business in South Africa and certain other African countries, a proportion of subscriber contracts are entered into on an annual basis and are invoiced, and paid, annually in advance. in the past, revenue has consistently been recognised on these annual contracts in full in the year of invoice. on the other hand, certain subscription billing was being incorrectly deferred to the subsequent month although it was in fact due in respect of the invoicing month.
With effect from the 2016 year this incorrect accounting treatment has been rectified such that the proportion of revenue invoiced in any accounting period is now deferred to the period to which it relates and recorded in the balance sheet as a current liability.
in giving effect to this correction in accounting treatment, the financial statements in respect of the two previous financial years have been restated.
Figures in Rand thousand 2015 2014
Consolidated Statement of Financial Position
assetDeferred tax asset net of liabilityPreviously stated 8 674 5 047Adjustment 11 500 7 988
20 174 13 035trade and other receivablesPreviously stated 68 177 45 081Adjustment 13 528 10 823
81 705 55 904Liabilitiestrade and other payablesPreviously stated (101 135) (73 750)Adjustment (48 147) (36 484)
(149 282) (110 234)Income tax asset net of liabilityPreviously stated (35 872) (26 790)Adjustment (2 419) (1 679)
(38 291) (28 469)Equityretained Earnings ClosingPreviously stated (300 413) (157 307)Adjustment 14 781 11 351
(285 632) (145 956)Foreign currency translation reservePreviously stated (32 317) (21 005)Adjustment 66 (46)
(32 251) (21 051)
CartraCk Condensed annual financial results 2016 57
Figures in Rand thousand 2015 2014
Non-controlling interestPreviously stated (24 082) (33 713)Adjustment 10 691 8 047
(13 391) (25 666)2014 Opening retained EarningsPreviously stated – (204 587)Adjustment – 10 524
– (194 063)2014 Non-controlling interestPreviously stated – (32 080)Adjustment – (6 110)
– (38 190)2014 Opening Foreign currency translation reservePreviously stated – (11 452)Adjustment – (77)
– (11 529)Consolidated Statement of Comprehensive IncomerevenuePreviously stated 843 701 637 020Adjustment (8 906) (4 263)
834 795 632 757taxationPreviously stated (88 442) (74 130)Adjustment 2 796 1 422
(85 646) (72 708)Profit attributable to:Owners of the parent 191 811 170 765Previously stated 195 244 171 591Adjustment (3 433) (826)
Non-controlling interest 16 157 10 920Previously stated 18 834 12 935Adjustment (2 677) (2 015)
207 968 181 685Basic earnings per share (cents)Previously stated 65 59Adjustment (1) –
64 59Headline earnings per share (cents)
Previously stated 65 58
Adjustment (1) –
64 58
58 CartraCk Condensed annual financial results 2016
noteS to tHe ConSolidAted FinAnCiAl StAteMentS (continued)
3. GOODwILL
goodwill is allocated to cash generating units (Cgus) within the reportable segments.
South Africa Africa – other europeAsia &
Middle east total
Balance 1 March 2013 1 499 80 756 – – 82 255
Additions – 1 763 – 899 2 662
translation adjustments – 14 400 – 116 14 516
28 February 2014 1 499 96 919 – 1 015 99 433
Additions – 382 45 041 471 45 894
translation adjustments – 1 955 (3 390) 377 (1 058)
28 February 2015 1 499 99 256 41 651 1 863 144 269
Additions 157 – – – 157
translation adjustments – (3 074) 14 031 628 11 585
29 February 2016 1 656 96 182 55 682 2 491 156 011
Impairment testing
the group performs goodwill impairment testing on an annual basis.
the recoverable amount of the cash generating units is determined using a discounted cash flow technique, which requires the use of assumptions. the cash flow projections are based on financial budgets and forecasts covering a five-year period. the cash flow projections include specific estimates for five years and a terminal growth rate thereafter.
the key assumptions used for the projection of cash flows are:
Assumption Approach used in determining values
Compound annual growth rate (CAg%) of subscriber base
this is the average annual compound growth rate in the subscriber base that is derived from the forecast acquisition of new subscribers less cancellations (“churn”) from year 1 (the budget period) through to year 5. thereafter a terminal value has been calculated assuming a 3% per annum growth rate in net cash flow after year 5. the growth rate applied for the acquisition of new subscribers is considered to be the main driver of revenue, profitability and hence free cash flow. Cgus are at different maturity levels in their business cycles and hence will reflect considerably different growth rates; the various geographical markets the Cgus operate within also have differences in their economics which have been taken into consideration. the growth rate determined by management is based on historical data from both external and internal sources and is consistent with reported global telematics growth forecasts for the medium to long term and with the assumptions that a market participant would make.
CartraCk Condensed annual financial results 2016 59
Assumption Approach used in determining values
discount rates the rate reflects the specific risks relating to the country and industry in which the entity operates.
other cashflow assumptions
Revenue forecasts are based on 2016 selling price structures without any inflationary impact. operating costs assume appropriate increases for both inflationary and infrastructural increases. Capital expenditure and working capital requirements to support the forecast growth have been taken into account. exchange rates ruling at 29 February 2016 have been applied throughout the five-year forecast period.
the following CAg and discount rates have been applied to the Cgus within each operating segment:
29 February 2016
South Africa %
Africa – other %
europe %
Asia %
Compound annual growth rate in subscribers
12 19 25 38
discount rates 20 34 19 10
28 February 2015
South Africa %
Africa – other %
europe %
Asia %
Compound annual growth rate in subscribers
10 8 10 10
discount rates 20 20 20 20
Management has reassessed the risks applicable to each operating segment and the projections for growth of each Cgu within the segments. this has resulted in a greater variability in both projected growth rates and discount (risk) rates being applied in the 2016 goodwill impairment testing process compared to 2015 and is considered more comprehensive and appropriate.
Based on the above assumptions and calculations it was determined that there was sufficient headroom above goodwill, therefore no impairment was necessary.
Sensitivity analysis
to test the sensitivity of the two key assumptions, being the future compound subscriber growth rate and the discount rate (i.e risk profile), the following changes have been made to these factors:
• Compound annual subscriber growth rate: the projected growth rates per segment have been adjusted downwards in South Africa by 2%, Africa by 4%, europe by 2% and Asia by 2%.
• discount rate: the projected discount rates per segment have been increased by 5%.
60 CartraCk Condensed annual financial results 2016
the adjusted growth and discount rates on which the sensitivity has been based are shown in the table below:
Key assumptions – sensitivity analysis
29 February 2016
South Africa %
Africa – other %
europe %
Asia %
Compound annual growth rate in subscribers
10 15 23 36
discount rates 25 39 24 15
Based on these independently downward adjusted growth rate assumptions and increased risk assumptions, there remains sufficient headroom above goodwill so as not to require any impairment.
4. SHarE CaPItaL
Authorised 2016 2015 2014
1 000 000 000 ordinary shares of no par value 1 000 000 1 000 000 –
1 000 ordinary shares of R1 each at par value – – 1
1 000 000 1 000 000 1
700 000 000 Unissued shares are under the control of the directors in terms of a resolution passed at the aGM on 25 august 2015.reconciliation of number of shares issued:
Reported as at beginning of year 300 000 * *
issue of no par value – 300 000 –
issue of par value shares – ordinary shares – – *
300 000 300 000 *
* Amounts not displaying due to rounding
Issued
300 000 000 ordinary shares of no par value 42 488 42 488 42 488
3. GOODwILL (continued)
noteS to tHe ConSolidAted FinAnCiAl StAteMentS (continued)
CartraCk Condensed annual financial results 2016 61
5. DIrECtOrS’ aND kEY MaNaGEMENt EMOLUMENtS
29 February 2016
emoluments Bonusesother
benefitsProvident
funddirectors’
fees total
Directors
iJ Calisto (executive) 2 852 160 – – – 3 012
JR edmeston (executive) 1 872 1 370 102 – – 3 344
dJ Brown (non-executive) – – – – 957 957
At ikalafeng (non-executive) – – – – 540 540
K White (non-executive) – – – – 531 531
key management
Paid by subsidiary companies 3 956 689 120 120 – 4 885
8 680 2 219 222 120 2 028 13 269
28 February 2015
emoluments Bonusesother
benefitsProvident
funddirectors’
fees total
Directors
iJ Calisto (executive) 1 712 160 – – – 1 872
JR edmeston (executive) 1 758 1 387 96 – – 3 241
J Marais (executive) 1 452 131 120 – – 1 703
C Sanderson (executive) 1 017 211 – 53 – 1 281
dJ Brown (non-executive) – – – – 319 319
At ikalafeng (non-executive) – – – – 189 189
K White (non-executive) – – – – 168 168
5 939 1 889 216 53 676 8 773
62 CartraCk Condensed annual financial results 2016
28 February 2014
emoluments Bonusesother
benefitsProvident
funddirectors’
fees total
Directors
JR edmeston (executive) 1 654 1 115 96 – – 2 865
J Marais (executive) 1 363 114 120 – – 1 597
C Sanderson (executive) 720 47 – – – 767
3 737 1 276 216 – – 5 229
directors and Key Management emoluments are paid for through subsidiary companies of the group.
6. BaSIC EarNINGS PEr SHarE
2016 2015 2014
Basic earnings per share (cents) 80 64 59
the calculation of basic earnings per share has been based on the following profit attributable to ordinary shareholders and the weighted average number of shares in issue.
Figures in Rand thousand 2016 2015 2014
Weighted average number of ordinary shares (‘000) at the beginning of the year 300 000 300 000 –
issued ordinary shares at 1 March 2013 – – 211 268
effect of shares issued in April 2013 – – 78 279
effect of treasury shares (51) – –
299 949 300 000 289 547
Basic earnings 239 674 191 811 170 764
in 2014 and 2015 the 300 000 000 shares in issue, weighted accordingly, were treated as a share split for earnings per share purposes. this provides the user with more comparable and relevant information.
5. DIrECtOrS’ aND kEY MaNaGEMENt EMOLUMENtS (continued)
noteS to tHe ConSolidAted FinAnCiAl StAteMentS (continued)
CartraCk Condensed annual financial results 2016 63
7. HEaDLINE EarNINGS PEr SHarE
2016 2015 2014
Headline earnings per share (cents) 81 64 58
the calculation of headline earnings per share has been based on the following profit attributable to ordinary shareholders and the weighted average number of ordinary shares in issue as determined above in note 6.
Figures in Rand thousand 2016 2015 2014
reconciliation between basic earnings and headline earnings
Basic earnings 239 674 191 811 170 764
Adjusted for:
Reversal of bargain purchase 3 279 – –
Bargain purchase – – (3 353)
gain on disposal of assets net of tax (1 019) (738) (833)
241 934 191 073 166 578
8. DILUtED EarNINGS PEr SHarE
there are no dilutive instruments and therefore diluted earnings per share is the same as basic earnings per share.
64 CartraCk Condensed annual financial results 2016
9. NOrMaLISED EarNINGS PEr SHarE
2016 2015 2014
normalised earnings per share (cents) 75 64 58
the calculation of normalised earnings per share has been based on the following profit attributable to ordinary shareholders and the weighted average number of shares in issue as determined above in note 6 .
Figures in Rand thousand 2016 2015 2014
reconciliation between headline earnings and normalised earnings
Headline earnings 241 934 191 073 166 578
net foreign exchange gain on intercompany financing arrangements (15 667) – –
226 267 191 073 166 578
10. SEGMENt rEPOrtING
the group is organised into geographical business units and has four reportable segments. the group monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment information is evaluated based on profit or loss and is measured consistently with consolidated financial statements.
Segment Report – 29 February 2016 South Africa Africa – other europe
Asia &Middle east total
Revenue 748 600 139 198 90 036 27 647 1 005 481
intersegment elimination of revenue* 195 551 271 841 1 899 198 562
Revenue before segment elimination 944 151 139 469 90 877 29 546 1 204 043
Profit before taxation includes the following items: 274 711 60 110 23 477 3 968 362 266
investment revenue 2 987 3 268 – 1 6 256
Finance costs 4 360 10 78 15 4 463
net foreign exchange gain 2 830 3 891 498 19 780 26 999
depreciation 79 692 2 317 18 657 1 994 102 660
total tangible assets 188 102 79 049 83 273 160 905 511 329
total liabilities (84 377) (54 544) (53 355) (14 569) (206 845)
goodwill 156 011
equity 460 495
noteS to tHe ConSolidAted FinAnCiAl StAteMentS (continued)
CartraCk Condensed annual financial results 2016 65
Segment Report – 28 February 2015 South Africa Africa – other europe
Asia & Middle east total
Revenue 628 547 114 002 80 422 11 824 834 795
intersegment elimination of revenue 34 974 – – – 34 974
Revenue before segment elimination 663 521 114 002 80 422 11 824 869 769
Profit before taxation includes the following items: 238 358 46 499 15 835 (7 078) 293 614
investment revenue 1 617 2 916 – – 4 533
Finance costs 693 210 8 13 924
net foreign exchange gain** 35 307 8 83 433
depreciation 58 816 1 917 10 389 475 71 597
total tangible assets 291 359 88 837 36 605 14 135 430 936
total liabilities (134 009) (49 060) (13 097) (5 277) (201 443)
goodwill 144 269
equity 373 762
* the amount of R195 551 in the South African segment includes Cartrack Manufacturing (Pty) ltd which was acquired on 1 March 2015.
** includes operating and non-operating exchange gains.
Notes
66 CartraCk Condensed annual financial results 2016
CoRPoRAte inFoRMAtion
Registered office Cartrack Holdings limited
11 Keyes Avenue
Rosebank
2196
(Po Box 4709, Rivonia, 2128)
directors Independent Non-executive Directorsdavid Brown (independent Chairman)
thebe ikalafeng
Kim White
Executive Directorsisaias Jose Calisto (global Chief executive officer)
John Richard edmeston (global Chief Financial officer)
Company SecretaryAnname de Villiers
Cartrack Corner
11 Keyes Road
Rosebank
Johannesburg
2196
(Po Box 4709, Rivonia, 2128)
Sponsorinvestec Bank limited
2nd Floor
100 grayston drive
Sandown
Sandton
2196
(Po Box 785700, Sandton, 2146)
transfer SecretaryComputershare investor Services Proprietary limited
70 Marshall Street
Johannesburg
2001
(Po Box 61051, Marshalltown, 2107)