Cartrack is one of South Africa’s biggest tech success stories. Founded in 2004 offering stolen vehicle recovery in South Africa, it grew to a multinational powerhouse with operations in 23 countries.
The company is now offering fleet management, stolen vehicle recovery, and insurance telematics to 1.175 million subscribers.
The robustness of Cartrack’s business was clearly illustrated in the company’s recent financial results from the half-year ended 31 August 2020.
While many companies struggled during lockdown, Cartrack continued its strong performance and increased its subscribers by 13% year-on-year.
Cartrack’s subscription revenue grew by 19% to R1.068 billion, while its operating profit grew by 16% to R368 million.
These strong results were achieved despite the limited capacity to install the in-vehicle IoT technology due to the imposed COVID-19 operating restrictions.
Cartrack founder and CEO Zak Calisto said the reporting period was materially affected by many their customers facing cash flow and operational difficulties due to the severe global lockdowns and travel restrictions.
“Despite this, we have continued to experience strong demand for our software-as-a-service platform. The latter months of the period have seen us record two of our best months of new subscriber additions,” Calisto said.
So healthy are the company’s finances that it has quadrupled its interim dividend to 87 cents per share.
Share price growth
Many South African companies struggled during the lockdown and their share prices reflected the tough economic conditions.
Cartrack, in comparison, performed extremely well, with its share price increasing from R20.99 when the lockdown started to R44.01 at the time of writing.
This big share price growth is expected. Cartrack said disruptions caused by COVID-19 will have less of an impact for the rest of the year, which means new subscriber add-ons and subscription revenues will likely experience solid growth.
This bodes well for the company, which operates as a key “must-have” service to its customers and is at the forefront of vehicle tracking and security.
The image below shows the share price growth of Cartrack in 2020.