Despite compound five-year revenue growth of 20%, fleet management and vehicle tracking group Cartrack CEO Zak Calisto is not as happy as one expects him to be.
“We want to grow faster than this. We are doing what the market is doing.”
Global growth in the industry has been around 20%, said Calisto on Wednesday at the company’s interim results function in Johannesburg.
The potential for growth is, however, significant.
According to research firm Gartner, global fleet telematics revenue is estimated to reach $55-billion by 2021, which is almost double the current market.
Calisto said while he slept well enough at night, he was concerned that Cartrack was not growing fast enough.
“If we don’t grow fast enough, we become an insignificant player. We can grow faster, but it is a question of human resources.”
Calisto said training and assimilating sufficient people to support Cartrack’s expansion had proven problematic.
Cartrack recorded a 14% increase in revenue, to R629.9-million, for the six months ended August 31 compared with the same period last year.
Operating profit increased from R168-million to R200-million.
Cartrack’s results were boosted by strong subscriber growth.
The company’s subscriber base grew by 115 000 to 666 422 active subscribers globally in the six months under review, with more than 500 000 of this number in South Africa.
Cartrack operates on five continents and in 24 countries.
The South African business delivered R470-million in revenue and R172-million in profit before tax for the six months ended August 31.
The business in the rest of Africa remained stable, with profit before tax at R19-million, with profit before tax down 8% in Europe, to R9-million.
Asia-Pacific improved its position, to a loss of R1-million, compared with a R4-million loss in the previous period.
The Asia-Pacific business did manage to deliver strong subscriber growth of 122%, from 19 100 to 42 385. However, start-up costs were incurred as the business expanded to include Thailand, Malaysia, Philippines and Indonesia, with breakeven point only anticipated in three to four years, said Calisto.
Singapore, currently in its fourth year of operation, was now consistently contributing towards growth in group revenue and operating profit.
Sales in the US had only recently started.
Looking ahead, Calisto said the South African market remained under-penetrated with lucrative opportunities in lower-end segments.
The order book in Europe remained strong while new sales were being actively pursued.
The African operations would be closely monitored and managed in anticipation of a more favourable economic environment.
Cartrack expected to continue double-digit subscriber and revenue growth “in the foreseeable future”.