Cartrack CEO Zak Calisto. Picture: SUPPLIED.
Cartrack CEO Zak Calisto. Picture: SUPPLIED.

Cartrack, which provides fleet-management and stolen-vehicle-recovery services, says it has cut its final dividend for the year to end-February, despite higher profits, as it plans to “invest for growth”.

The company said on Tuesday its subscriber base grew 28% to 960,798 in the year, helping it lift profit after tax by 16.3% to R361m. Total revenue was up 28% at R1.7bn.

But Cartrack cut its final gross dividend to 12c a share, from 28c previously.

“The group will continue to invest heavily in research and development, data analysis skills and distribution channels to expand and grow the subscriber base significantly,” it said.

Higher sales were expected to generate more bundled contracts, which would require funding.

While the group would remain “highly cash generative”, it would need to retain funds for investments in the business and to maintain a debt-free balance sheet.

Management had re-evaluated the dividend policy, which had previously targeted a cover ratio of two to four-times headline earnings per share (heps).

The revised dividend policy targeted a cover ratio of two to six-times heps in financial year 2020.

Cartrack founder and CEO Zak Calisto said the year to end-February “marks the sixth year of consecutive double-digit total company revenue and subscription revenue growth”.

Subscription revenue as a percentage of total revenue reached 90%, he said.

“We are equally excited about the continued growth and adoption of our advanced fleet management platform by a number of large corporate fleets in both Asia Pacific and mainland Europe,” Calisto said.

Cartrack said it expected to generate double-digit annuity revenue and subscriber growth “for the foreseeable future”.