Karooooo adds 59% new subscribers in the fourth quarter

KAROOOOO, which owns 100 percent of Cartrack Holdings, added 59 percent or 59 911 net new subscribers in the fourth quarter to February 28, 2021, year-on-year, chief executive Zak Calisto said yesterday.

He said the fourth quarter was traditionally the weakest of their financial year, but the group, which makes and distributes fleet asset management software in 23 countries, had the best fourth quarter in its history, and the first quarter of the new financial year was also looking strong.

“We are feeling good about the business at this stage,” he said in an interview. “We are committed to our mission, to build the leading mobility Software-as-a-Service (SaaS) platform that maximises the value of data, which drove our strong fourth quarter and full year 2021 result.” He said the focus remained essentially to grow organically, particularly in the uncertain global economic environment where supply chains were still impacted by the Covid-19 pandemic.

A robust subscription-based business model, a strategic broad industry approach, low customer and industry concentration risk, with prudent capital allocation enabled revenue and earnings to grow in the unprecedented economic environment, he said.

Looking ahead, the focus was also on achieving scale and investing in ithe digital platform.

“Our Nasdaq (initial public offering) IPO is a stepping stone in this journey – we feel like a start-up and are excited about the future,” he said.

Total fourth quarter revenue increased 21 percent to R616 million and subscription revenue rose 14 percent to R574m.

Adjusted net income was up 12 percent to R128m and adjusted fourth-quarter earnings a share increased 12 percent to R4.17.

At the February 28, 2021 year end, Karooooo was a private company owned by Calisto and Cartrack, was listed as a public company on the JSE. Karooooo’s only asset was 68.1 percent of Cartrack.

Karooooo listed on the Nasdaq on April 1, 2021, and had 21.54 million shares in issue, of which more than 20.3 million were founder held.

Karooooo did an inward secondary listing on the JSE on April 21 and issued a further 9.4 million shares to eligible Cartrack shareholders.

The full year results for the year to February 28 for the since-delisted Cartrack, saw 179 485 subscriber additions, up 8 percent on the new additions in the 2020 financial year.

The total number of subscribers was 1.31 million, up 16 percent yearon-year. Total revenue increased 18 percent to R2.29bn. Subscription revenue increased 17 percent to R2.21bn. Net Income increased 19 percent to R542m. For illustrative purposes, Cartrack’s earnings per share increased 20 percent to R17.86,

Cartrack, listed on the JSE since 2014, has delivered a consistent strong historical growth trajectory, with compound annual growth in its subscriber base of 21 percent per year for the five years to February 28, 2020.

“We continue to experience an increase in demand for our SaaS platform, as our customers similarly continue to derive intelligent and materially valuable solutions for their day-to-day challenges, giving them an edge on their competitors,” he said.

Sales and collections improved significantly in the last two quarters of the year, during which the highest number of net new subscribers was added over a six-month period in the history of the group.

Karooooo’s share price closed 1.89 percent higher at R590.99 on the JSE yesterday.