MiX Telematics ups forecast after growth in subscriptions
Vehicle-tracking group expects subscription revenue to rise by as much as 6.7% to just more than R1.23bn on an increase in customers
Vehicle-tracking group MiX Telematics has revised its outlook for the full year, increasing its earlier forecasts, after a strong performance in the quarter to December.
The group expects subscription revenue to rise by as much as 6.7% to just more than R1.23bn on an increase in customers. In November, it had initially expected full-year subscription revenue to grow 5%-6% to R1.22bn-R1.23bn.
The group has surpassed the 600,000 subscriber mark after adding 20,000 new customers during the three months to December. This has resulted in a total subscription revenue increase of 5.5% to R311m, ahead of guidance.
MiX provides software that helps companies and individuals to track their vehicles in about 120 countries in Europe, Africa, the Middle East, the Americas, Australia and Brazil.
About half of the new subscribers come from sub-Saharan Africa, which contributes the bulk of MiX Telematics customers. The region is largely driven by the consumers who have installed MiX tracking devices such as Beame in their vehicles and other moveable assets. CEO Stefan Joselowitz said the group was aiming at introducing Beame, its low-subscription product, in other markets with similar requirements to SA’s.
MiX’s total revenue for the quarter was up 6% to R401.4m. Hardware and other revenue rose 7.8% to R90.7m.
"Our results were driven by general strength across the portfolio including a positive contribution from energy sector customers, as well as the ongoing shift towards bundled deals, which increases the long-term value per subscriber," said Joselowitz. The recovery of the oil price had resulted in new clients while existing customers added more fleets. "We started seeing improvement in September and the trend is continuing," said Joselowitz.
Subscriber growth combined with strict cost management had allowed the group to make progress in the quarter towards achieving normalised adjusted earnings before interest, tax, depreciation and amortisation margins in excess of 30%.
"We have good orders in the pipeline," said Joselowitz.