Cartrack owner Karooooo has reported record full-year results despite the stronger rand as it grew subscription revenue by almost a fifth.
The Singapore-based company reported on Thursday that Cartrack accelerated subscription revenue growth to 19%, from 15% in the year-earlier period. Annualised recurring revenue (ARR) increased 18% to R5.18bn.
The group increased Cartrack’s subscription revenue by expanding the distribution footprint in existing markets amid growing demand.
“Importantly, Cartrack subscription revenue growth in South Africa accelerated meaningfully, and we ended the year with South Africa ARR growing at 23%,” said Karooooo CEO Zak Calisto.
In the year to end-February, Cartrack subscribers increased 16% to 2.66-million, with record net subscriber additions of 359,986, up 9%.
By region, Cartrack subscribers grew 16% in South Africa, 23% in Asia Pacific and the Middle East, 14% in Europe and 1% in Africa.
Karooooo’s subscription revenue increased 19% to R4.84bn, with Cartrack providing the bulk of that at R4.83bn.
80%-owned Karooooo Logistics’s B2B delivery-as-a-service revenue increased 29% to R540m.
Total revenue was up 20% at R5.48bn, and operating profit increased 8% to R1.415bn.
Karooooo’s adjusted EPS increased 3% to R32.55 and was up 20% in dollar terms.
Considering the consistent strong earnings, healthy balance sheet and free cash flow, the company has declared an interim dividend of $1.50 per share to be paid on July 20.
“During the year, we continued to invest in our distribution network to support accelerated growth and are seeing good early-stage results,” said Calisto.
“Our continued development and product initiatives further strengthened our differentiated value proposition with an enhanced platform, further AI-powered video capabilities, and we commercially launched Cartrack-Tag.”
In FY27, the group aims to accelerate subscription revenue growth while delivering strong EPS growth.
“Despite providing a contracting gross profit margin outlook for FY27, our midpoint outlook for EPS growth in FY27 is 21% when compared to our FY26 EPS excluding the secondary offering costs,” he said.
The group envisages a slow-down in hiring in FY27 while it drives sales force efficiency and AI adoption.
“We enter FY27 with operating strength and remain confident in our ability to drive durable, profitable growth across our geographies. We continue to see that our strong owner-orientated culture, vertically integrated business model, continued innovation, and financial discipline drive our successful customer-centric execution.”
Its guidance for FY27 is for Cartrack subscription revenue of R5.7bn-R6bn, up between 18% and 24%. Cartrack’s gross profit margin is seen between 70% and 72% and operating profit margin between 27% and 30%.
Karooooo’s EPS is expected to be between R38.50 and R40, which implies EPS growth of 18%-23%.
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