References in this announcement to “R” are to South African Rand and references to “U.S. Dollars” and “$” are to United States Dollars. Unless otherwise stated MiX Telematics has translated U.S. Dollar amounts from South African Rand at the exchange rate of R10.6135 per $1.00, which was the R/$ exchange rate reported by the South African Reserve Bank as of June 30, 2014.
First Quarter Highlights:
- Total subscription revenue of R236.6 million ($22.3 million), grew 22% year over year
- Subscribers increased by 23% year over year, bringing the total to over 462,700 subscribers at June 30, 2014
- Adjusted EBITDA of R52.0 million ($4.9 million), representing a 16% Adjusted EBITDA margin
MIDRAND, South Africa--(BUSINESS WIRE)--MiX Telematics Limited (NYSE: MIXT, JSE: MIX), a leading global provider
of fleet and mobile asset management solutions delivered as
Software-as-a-Service (SaaS), today announced financial results for its
first quarter of fiscal year 2015, which ended June 30, 2014.
"MiX has started the year with solid sales momentum in many regions.
However, first quarter net additions to our vehicles under subscription
fell short of our expectations as we faced difficult macroeconomic
conditions in South Africa and political unrest in the Middle East,"
said Stefan Joselowitz, CEO of Mix Telematics. "We are pleased with our
investments in sales and marketing and the strengthening of our
management team which combined with our solid pipeline should aid us in
achieving our plan for the 2015 fiscal year. We are mindful that South
Africa is more than 50% of our revenue and are monitoring the
macroeconomic environment carefully.”
Joselowitz continued, "Our subscription business grew 22% year over year
and yielded over 16% adjusted EBITDA margin in the quarter. Our
bi-annual dealer summit enjoyed record attendance and the latest version
of our cloud-based fleet management platform has been released. Having
built what we believe to be the industry’s largest global distribution
capability and broadest line of solutions, we are confident we have what
it takes to capitalize on the growing demand for fleet management
solutions globally."
Financial Performance for the three months
ended June 30, 2014
Revenue: Total revenue was R319.2 million ($30.1 million), an
increase of 7.0% compared to R298.4 million ($28.1 million) for the
first quarter of fiscal year 2014. Subscription revenue was R236.6
million ($22.3 million), an increase of 21.8% compared with R194.2
million ($18.3 million) for the first quarter of fiscal year 2014.
Growth in subscription revenue was driven primarily by an increase of
over 85,000 subscribers, which resulted in an increase in subscribers of
22.8% from June 2013 to June 2014. Hardware and other revenue was R82.6
million ($7.8 million), a decrease of 20.8% compared to R104.2 million
($9.8 million) for the first quarter of fiscal year 2014.
Gross Margin: Gross profit was R211.6 million ($19.9 million), as
compared to R198.2 million ($18.7 million) for the first quarter of
fiscal year 2014. Gross profit margin was 66.3%, compared to 66.4% for
the first quarter of fiscal year 2014.
Operating Margin: Operating profit was R22.5 million ($2.1
million), compared to R37.3 million ($3.5 million) for the first quarter
of fiscal year 2014. Operating margin was 7.1%, compared to 12.5% for
the first quarter of fiscal year 2014. The Company is executing its
strategy of investing in sales and marketing and as a result sales and
marketing costs for the first quarter of fiscal 2015 increased by R11.2
million ($1.1 million) versus the first quarter of fiscal 2014.
Administration and other charges increased by R17.6 million ($1.7
million) primarily as a result of investments in headcount necessary to
support the Company's growth initiatives and additional costs pertaining
to regulatory and reporting compliance requirements for U.S. public
companies.
Adjusted EBITDA: Adjusted EBITDA, a non-IFRS measure, was R52.0
million ($4.9 million) compared to R65.2 million ($6.1 million) for the
first quarter of fiscal year 2014. Adjusted EBITDA margin, a non-IFRS
measure, for the first quarter of fiscal year 2015 was 16.3%, compared
to 21.9% for the first quarter of fiscal year 2014.
Profit for the period and earnings per share: Profit for the
period was R16.1 million ($1.5 million), compared to R26.3 million ($2.5
million) in the first quarter of fiscal year 2014. Earnings per diluted
ordinary share were 2 South African cents, compared to 4 South African
cents in the first quarter of fiscal year 2014. For the first quarter of
2015, the calculation was based on diluted weighted average ordinary
shares in issue of 804.4 million compared to 679.2 million diluted
weighted average ordinary shares in issue during the first quarter of
fiscal 2014.
The Company's effective tax rate for the quarter was 32.6% in comparison
to 28.2% in the first quarter of fiscal 2014.
On a U.S. Dollar basis, and using the June 30, 2014 exchange rate of
R10.6135 per U.S. Dollar, and at a ratio of 25 ordinary shares to one
American Depositary Share ("ADS"), profit for the period was $1.5
million, or 5 U.S. cents per diluted ADS.
Adjusted earnings for the period and adjusted earnings per share:
Adjusted earnings for the period, a non-IFRS measure, was R16.4 million
($1.5 million), compared to R27.1 million ($2.6 million) in the first
quarter of the 2014 fiscal year and excludes a net foreign exchange loss
of R0.2 million ($0.02 million). Adjusted earnings per diluted ordinary
share, also a non-IFRS measure, were 2 South African cents, compared to
4 South African cents in the first quarter of fiscal year 2014.
On a U.S. Dollar basis, and using the June 30, 2014 exchange rate of
R10.6135 per U.S. Dollar, and at a ratio of 25 ordinary shares to one
ADS, adjusted profit for the period was $1.5 million, or 5 U.S. cents
per diluted ADS.
Statement of Financial Position and Cash Flow: At June 30, 2014,
the Company had R829.8 million ($78.2 million) of cash and cash
equivalents, compared to R830.4 million ($78.2 million) in the fourth
quarter of fiscal year 2014. The Company generated R6.1 million ($0.6
million) in net cash from operating activities for the three months
ended June 30, 2014 and invested R28.2 million ($2.7 million) in capital
expenditures during the quarter, leading to negative free cash flow of
R22.1 million ($2.1 million) for the first quarter of fiscal year 2015,
compared with a negative free cash flow of R4.4 million ($0.4 million)
for the first quarter of fiscal year 2014. Free cash flow is determined
as net cash generated from operating activities less capital expenditure
per investing activities.
An explanation of non-IFRS measures used in this release is set out in
the Non-IFRS financial measures section of this press release. A
reconciliation of these non-IFRS measures to the most directly
comparable IFRS measures is provided in the financial tables that
accompany this release.
Business Outlook
MiX Telematics has translated U.S. Dollar amounts in this Business
Outlook paragraph from South African Rand at the exchange rate of
R10.6295 per $1.00, which was the R/$ exchange rate reported by the
South African Reserve Bank as of August 5, 2014.
Based on information as of today, August 7, 2014, the Company is issuing
the following financial guidance for the full 2015 fiscal year:
-
Revenue - R1,385 million to R1,410 million ($130.3 million to $132.6
million), which would represent revenue growth of 8.9% to 10.9%
compared to fiscal year 2014.
-
Subscription revenue - R1,020 million to R1,030 million ($96.0 million
to $96.9 million), which would represent subscription revenue growth
of 19.5% to 20.6% compared to fiscal year 2014.
-
Adjusted EBITDA - R295 million to R305 million ($27.8 million to $28.7
million), which would represent Adjusted EBITDA growth of 4.5% to 8.1%
compared to fiscal year 2014.
-
Adjusted earnings per diluted ordinary share of 17 to 18 South African
cents based on 810 million diluted ordinary shares in issue, and based
on an effective tax rate of 27% to 31%. At a ratio of 25 ordinary
shares to one ADS, this equates to adjusted earnings per diluted ADS
of 40 to 42 U.S. cents.
For the second quarter of fiscal year 2015 the Company expects
subscription revenue to be in the range of R240 million to R243 million
($22.6 million to $22.9 million) which would represent subscription
revenue growth of 15.9% to 17.4% compared to the second quarter of
fiscal year 2014.
The key assumptions used in deriving the forecast are as follows:
-
Growth in subscription revenue and vehicles under subscription are
based on expected growth rates related to market conditions and takes
into account growth rates achieved previously.
-
Achieving hardware sales according to expectations.
-
Costs have been increased to take into account the Company's strategy
of investing in sales and marketing and development and also include
costs necessary to operate as a U.S. listed company.
The forecast is the responsibility of the board of directors and has not
been reviewed or reported on by the Company’s external auditors. The
Company’s policy is to give guidance on a quarterly basis, if necessary,
and does not update guidance between quarters.
The information disclosed in this “Business Outlook” paragraph
complies with the disclosure requirements in terms of paragraph 8.38 of
the JSE Listings Requirements which deals with profit forecasts.
Quarterly Reporting Policy in respect of JSE
Listings Requirements
Following the listing of the Company’s ADSs on the New York Stock
Exchange, the Company has adopted a quarterly reporting policy. As a
result of such quarterly reporting the Company is, in terms of paragraph
3.4(b)(ix) of the JSE Listings Requirements, not required to publish
trading statements in terms of paragraph 3.4(b)(i) to (viii) of the JSE
Listings Requirements.
Conference Call Information
MiX Telematics management will also host a conference call and audio
webcast at 8:00 a.m. (Eastern Time) and 2:00 p.m. (South African Time)
on August 7, 2014 to discuss the Company's financial results and current
business outlook:
-
The live webcast of the call will be available at the “Investor
Information” page of the Company’s website, http://investor.mixtelematics.com.
-
To access the call, dial 1-877-852-6573 (within the United States) or
0 800 982 293 (within South Africa) or 1-719-325-4817 (outside of the
United States).
-
A replay of this conference call will be available for a limited time
at 1-877-870-5176 (within the United States) or 1-858-384-5517 (within
South Africa or outside of the United States). The replay conference
ID is 5379661.
-
A replay of the webcast will also be available for a limited time at http://investor.mixtelematics.com.
About MiX Telematics Limited
MiX Telematics is a leading global provider of fleet and mobile asset
management solutions delivered as SaaS to customers in more than 120
countries. The Company’s products and services provide enterprise
fleets, small fleets and consumers with solutions for safety,
efficiency, risk and security. MiX Telematics was founded in 1996 and
has offices in South Africa, the United Kingdom, the United States,
Uganda, Brazil, Australia and the United Arab Emirates as well as a
network of more than 130 fleet partners worldwide. MiX Telematics shares
are publicly traded on the Johannesburg Stock Exchange (JSE: MIX) and
MiX Telematics American Depositary Shares are listed on the New York
Stock Exchange (NYSE: MIXT). For more information visit www.mixtelematics.com.
Forward-Looking Statements
This press release includes certain “forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995,
including without limitation, statements concerning our financial
guidance for the second quarter and full year of fiscal year 2015, our
position to execute on our growth strategy, and our ability to expand
our leadership position. These forward-looking statements reflect our
current views about our plans, intentions, expectations, strategies and
prospects, which are based on the information currently available to us
and on assumptions we have made. Actual results may differ materially
from those described in the forward-looking statements and will be
affected by a variety of risks and factors that are beyond our control
including, without limitation, those described under the caption “Risk
Factors” in the Company’s Annual Report on Form 20-F filed with the
Securities and Exchange Commission (the "SEC"), as updated by other
reports that the Company files with or furnishes to the SEC. The Company
assumes no obligation to update any forward-looking statements contained
in this press release as a result of new information, future events or
otherwise.
Non-IFRS financial measures
Adjusted EBITDA
To provide investors with additional information regarding its financial
results, the Company has disclosed within this press release, Adjusted
EBITDA. Adjusted EBITDA is a non-IFRS financial measure, it does not
represent cash flows from operations for the periods indicated and
should not be considered an alternative to net income as an indicator of
our results of operations or as an alternative to cash flows from
operations as an indicator of liquidity. Adjusted EBITDA is defined as
the profit for the period before income taxes, net interest
income/(expense), depreciation of property, plant and equipment
including capitalized customer in-vehicle devices, amortization of
intangible assets including capitalized in-house development costs,
share-based compensation costs, transaction costs arising from the
acquisition of a business, restructuring costs, profits/(losses) on the
disposal or impairments of assets or subsidiaries, certain litigation
costs, certain non-recurring initial public offering or "IPO" costs,
unrealized foreign exchange gains/(losses) and foreign exchange
gains/(losses) related to the cash proceeds raised through the IPO.
Adjusted EBITDA does not have a standardized meaning and, accordingly,
the Company's definition of Adjusted EBITDA may not be comparable to
Adjusted EBITDA as used by other companies.
The Company has included Adjusted EBITDA and Adjusted EBITDA margin in
this press release because they are key measures that the Company's
management and Board of Directors use to understand and evaluate its
core operating performance and trends; to prepare and approve its annual
budget; and to develop short- and long-term operational plans. In
particular, the exclusion of certain expenses in calculating Adjusted
EBITDA and Adjusted EBITDA margin can provide a useful measure for
period-to-period comparisons of the Company's core business.
Accordingly, the Company believes that Adjusted EBITDA and Adjusted
EBITDA margin provides useful information to investors and others in
understanding and evaluating its operating results.
The Company's use of Adjusted EBITDA has limitations as an analytical
tool, and you should not consider this performance measure in isolation
from or as a substitute for analysis of the Company's results as
reported under IFRS. Some of these limitations are:
-
although depreciation and amortization are non-cash charges, the
assets being depreciated and amortized may have to be replaced in the
future, and Adjusted EBITDA does not reflect cash capital expenditure
requirements for such replacements or for new capital expenditure
requirements;
-
Adjusted EBITDA does not reflect changes in, or cash requirements for,
our working capital needs;
-
Adjusted EBITDA does not consider the potentially dilutive impact of
equity-based compensation;
-
Adjusted EBITDA does not reflect tax payments that may represent a
reduction in cash available to the Company;
-
Adjusted EBITDA does not reflect the interest expense or the cash
requirements necessary to service interest payments on the Company's
debt or any losses on the extinguishment of our debt;
-
Adjusted EBITDA does not include interest earned on cash and cash
equivalents and other financial assets;
-
Adjusted EBITDA does not include certain foreign currency transaction
gains and losses;
-
Adjusted EBITDA does not include certain non-recurring IPO costs; and
-
other companies, including companies in our industry, may calculate
Adjusted EBITDA differently, which reduces its usefulness as a
comparative measure.
Because of these limitations, you should consider Adjusted EBITDA and
Adjusted EBITDA margin alongside other financial performance measures,
including operating profit, profit for the period and our other results.
Adjusted Profit and Adjusted Earnings Per Share
Adjusted profit and adjusted earnings per share is defined as profit
attributable to owners of the parent excluding net foreign exchange
gains/(losses) net of tax for the relevant period.
|
|
|
|
|
|
MIX TELEMATICS LIMITED
|
|
|
|
|
CONDENSED CONSOLIDATED INCOME STATEMENTS
|
|
|
|
|
|
|
South African Rand
|
|
|
United States Dollar
|
|
|
Figures are in thousands unless otherwise stated
|
|
Three months
ended
June 30,
|
|
|
Three months
ended
June 30,
|
|
|
Three months
ended
June 30,
|
|
|
Three months
ended
June 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Revenue
|
|
319,210
|
|
|
298,447
|
|
|
30,076
|
|
|
28,120
|
|
|
Cost of sales
|
|
(107,628
|
)
|
|
(100,280
|
)
|
|
(10,141
|
)
|
|
(9,448
|
)
|
|
Gross profit
|
|
211,582
|
|
|
198,167
|
|
|
19,935
|
|
|
18,672
|
|
|
Other income/(expenses) - net
|
|
569
|
|
|
69
|
|
|
54
|
|
|
7
|
|
|
Operating expenses
|
|
(189,623
|
)
|
|
(160,915
|
)
|
|
(17,866
|
)
|
|
(15,162
|
)
|
|
-Sales and marketing
|
|
(45,306
|
)
|
|
(34,152
|
)
|
|
(4,269
|
)
|
|
(3,218
|
)
|
|
-Administration and other charges
|
|
(144,317
|
)
|
|
(126,763
|
)
|
|
(13,597
|
)
|
|
(11,944
|
)
|
|
Operating profit
|
|
22,528
|
|
|
37,321
|
|
|
2,123
|
|
|
3,517
|
|
|
Finance income/(costs) - net
|
|
1,316
|
|
|
(648
|
)
|
|
124
|
|
|
(61
|
)
|
|
-Finance income
|
|
2,068
|
|
|
1,147
|
|
|
195
|
|
|
108
|
|
|
-Finance costs
|
|
(752
|
)
|
|
(1,795
|
)
|
|
(71
|
)
|
|
(169
|
)
|
|
Profit before taxation
|
|
23,844
|
|
|
36,673
|
|
|
2,247
|
|
|
3,456
|
|
|
Taxation
|
|
(7,785
|
)
|
|
(10,338
|
)
|
|
(733
|
)
|
|
(974
|
)
|
|
Profit for the period
|
|
16,059
|
|
|
26,335
|
|
|
1,514
|
|
|
2,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the parent
|
|
16,082
|
|
|
26,335
|
|
|
1,516
|
|
|
2,482
|
|
|
Non-controlling interests
|
|
(23
|
)
|
|
*
|
|
|
(2
|
)
|
|
*
|
|
|
|
|
16,059
|
|
|
26,335
|
|
|
1,514
|
|
|
2,482
|
|
* Amounts less than $1,000/R1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIX TELEMATICS LIMITED
|
|
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
|
South African Rand
|
|
|
|
|
United States Dollar
|
|
|
Figures are in thousands unless otherwise stated
|
|
|
|
June 30,
|
|
|
|
March 31,
|
|
|
|
|
June 30,
|
|
|
|
March 31,
|
|
|
|
|
|
|
2014
|
|
|
|
2014
|
|
|
|
|
2014
|
|
|
|
2014
|
|
|
|
|
|
|
Unaudited
|
|
|
|
Audited
|
|
|
|
|
Unaudited
|
|
|
|
Audited
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
|
130,506
|
|
|
|
129,079
|
|
|
|
|
12,296
|
|
|
|
12,162
|
|
|
Intangible assets
|
|
|
|
697,118
|
|
|
|
692,190
|
|
|
|
|
65,682
|
|
|
|
65,218
|
|
|
Available-for-sale financial asset
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Finance lease receivable
|
|
|
|
4,913
|
|
|
|
6,677
|
|
|
|
|
463
|
|
|
|
629
|
|
|
Deferred tax assets
|
|
|
|
24,300
|
|
|
|
19,825
|
|
|
|
|
2,290
|
|
|
|
1,868
|
|
|
Total non-current assets
|
|
|
|
856,837
|
|
|
|
847,771
|
|
|
|
|
80,731
|
|
|
|
79,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
|
|
|
|
49,552
|
|
|
|
39,774
|
|
|
|
|
4,669
|
|
|
|
3,747
|
|
|
Trade and other receivables
|
|
|
|
252,163
|
|
|
|
234,839
|
|
|
|
|
23,759
|
|
|
|
22,126
|
|
|
Finance lease receivable
|
|
|
|
6,730
|
|
|
|
6,652
|
|
|
|
|
634
|
|
|
|
627
|
|
|
Taxation
|
|
|
|
99
|
|
|
|
7,336
|
|
|
|
|
9
|
|
|
|
691
|
|
|
Restricted cash
|
|
|
|
10,428
|
|
|
|
10,279
|
|
|
|
|
983
|
|
|
|
968
|
|
|
Cash and cash equivalents
|
|
|
|
829,800
|
|
|
|
830,449
|
|
|
|
|
78,183
|
|
|
|
78,245
|
|
|
Total current assets
|
|
|
|
1,148,772
|
|
|
|
1,129,329
|
|
|
|
|
108,237
|
|
|
|
106,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
2,005,609
|
|
|
|
1,977,100
|
|
|
|
|
188,968
|
|
|
|
186,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stated capital
|
|
|
|
1,431,992
|
|
|
|
1,429,250
|
|
|
|
|
134,922
|
|
|
|
134,663
|
|
|
Other reserves
|
|
|
|
(52,154
|
)
|
|
|
(58,335
|
)
|
|
|
|
(4,914
|
)
|
|
|
(5,496
|
)
|
|
Retained earnings
|
|
|
|
316,801
|
|
|
|
300,725
|
|
|
|
|
29,849
|
|
|
|
28,334
|
|
|
Equity attributable to owners of the parent
|
|
|
|
1,696,639
|
|
|
|
1,671,640
|
|
|
|
|
159,857
|
|
|
|
157,501
|
|
|
Non-controlling interest
|
|
|
|
(490
|
)
|
|
|
(10
|
)
|
|
|
|
(46
|
)
|
|
|
(1
|
)
|
|
Total equity
|
|
|
|
1,696,149
|
|
|
|
1,671,630
|
|
|
|
|
159,811
|
|
|
|
157,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
|
|
2,133
|
|
|
|
2,462
|
|
|
|
|
201
|
|
|
|
232
|
|
|
Deferred tax liabilities
|
|
|
|
25,043
|
|
|
|
20,601
|
|
|
|
|
2,360
|
|
|
|
1,941
|
|
|
Provisions
|
|
|
|
2,513
|
|
|
|
2,282
|
|
|
|
|
237
|
|
|
|
215
|
|
|
Share based payment liability
|
|
|
|
1,950
|
|
|
|
—
|
|
|
|
|
184
|
|
|
|
—
|
|
|
Total non-current liabilities
|
|
|
|
31,639
|
|
|
|
25,345
|
|
|
|
|
2,982
|
|
|
|
2,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
|
205,057
|
|
|
|
228,961
|
|
|
|
|
19,319
|
|
|
|
21,572
|
|
|
Borrowings
|
|
|
|
1,308
|
|
|
|
1,279
|
|
|
|
|
123
|
|
|
|
121
|
|
|
Taxation
|
|
|
|
6,279
|
|
|
|
2,912
|
|
|
|
|
592
|
|
|
|
274
|
|
|
Provisions
|
|
|
|
20,012
|
|
|
|
19,163
|
|
|
|
|
1,886
|
|
|
|
1,806
|
|
|
Bank overdraft
|
|
|
|
45,165
|
|
|
|
27,810
|
|
|
|
|
4,255
|
|
|
|
2,620
|
|
|
Total current liabilities
|
|
|
|
277,821
|
|
|
|
280,125
|
|
|
|
|
26,175
|
|
|
|
26,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
309,460
|
|
|
|
305,470
|
|
|
|
|
29,157
|
|
|
|
28,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
|
|
2,005,609
|
|
|
|
1,977,100
|
|
|
|
|
188,968
|
|
|
|
186,281
|
|
* Amounts less than $1,000/R1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIX TELEMATICS LIMITED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
South African Rand
|
|
|
United States Dollar
|
|
Figures are in thousands unless otherwise stated
|
|
Three months
ended June 30,
|
|
|
Three months
ended June 30,
|
|
|
Three months
ended June 30,
|
|
|
Three months
ended June 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations
|
|
2,124
|
|
|
34,340
|
|
|
200
|
|
|
3,236
|
|
|
Net financing income
|
|
1,409
|
|
|
270
|
|
|
133
|
|
|
25
|
|
|
Taxation refunded/(paid)
|
|
2,596
|
|
|
(7,947
|
)
|
|
245
|
|
|
(749
|
)
|
|
Net cash generated from operating activities
|
|
6,129
|
|
|
26,663
|
|
|
578
|
|
|
2,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure
|
|
(28,197
|
)
|
|
(31,062
|
)
|
|
(2,657
|
)
|
|
(2,927
|
)
|
|
Deferred consideration paid
|
|
(300
|
)
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
Proceeds on sale of property, plant and equipment and intangible
assets
|
|
63
|
|
|
10
|
|
|
6
|
|
|
1
|
|
|
Increase in restricted cash
|
|
(152
|
)
|
|
(2,063
|
)
|
|
(14
|
)
|
|
(194
|
)
|
|
Net cash used in investing activities
|
|
(28,586
|
)
|
|
(33,115
|
)
|
|
(2,693
|
)
|
|
(3,120
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of ordinary shares
|
|
2,742
|
|
|
227
|
|
|
258
|
|
|
21
|
|
|
Share issue expenses incurred in anticipation of foreign listing
|
|
—
|
|
|
(4,305
|
)
|
|
—
|
|
|
(406
|
)
|
|
Repayment of borrowings
|
|
—
|
|
|
1,106
|
|
|
—
|
|
|
104
|
|
|
Net cash generated from/(used in) financing activities
|
|
2,742
|
|
|
(2,972
|
)
|
|
258
|
|
|
(281
|
)
|
|
Net decrease in cash and cash equivalents
|
|
(19,715
|
)
|
|
(9,424
|
)
|
|
(1,857
|
)
|
|
(889
|
)
|
|
Net cash and cash equivalents at the beginning of the period
|
|
802,639
|
|
|
91,697
|
|
|
75,625
|
|
|
8,640
|
|
|
Exchange gains/(losses) on cash and cash equivalents
|
|
1,711
|
|
|
(217
|
)
|
|
160
|
|
|
(20
|
)
|
|
Net cash and cash equivalents at the end of the period
|
|
784,635
|
|
|
82,056
|
|
|
73,928
|
|
|
7,731
|
|
* Amounts less than $1,000/R1,000
|
MIX TELEMATICS LIMITED
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER FINANCIAL AND OPERATING DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South African Rand
|
|
|
United States Dollar
|
|
Figures are in thousands except for subscribers
|
|
Three months
ended June 30,
|
|
|
Three months
ended June 30,
|
|
|
Three months
ended June 30,
|
|
|
Three months
ended June 30,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
Subscription revenue
|
|
236,613
|
|
|
194,208
|
|
|
22,294
|
|
|
18,298
|
|
Adjusted EBITDA
|
|
52,005
|
|
|
65,234
|
|
|
4,902
|
|
|
6,146
|
|
Cash and cash equivalents
|
|
829,800
|
|
|
150,250
|
|
|
78,183
|
|
|
14,156
|
|
Net cash
|
|
781,194
|
|
|
77,464
|
|
|
73,604
|
|
|
7,299
|
|
Capital expenditure
|
|
28,197
|
|
|
31,062
|
|
|
2,657
|
|
|
2,927
|
|
Subscribers
|
|
462,746
|
|
|
376,937
|
|
|
462,746
|
|
|
376,937
|
Notes to condensed consolidated income statements, statements of
financial position, statements of cash flows and other financial and
operating data
1. Accounting policies
The condensed consolidated statement of financial position, income
statement and statements of cash flows included in this announcement
have been prepared in accordance with IFRS accounting policies. The
accounting policies are consistent in all material respects with those
applied in the preparation of the consolidated financial statements for
the year ended March 31, 2014. No new or revised accounting standards
have been adopted by the Group in fiscal 2015.
The results have not been audited or reviewed by the Group's external
auditors.
2. Presentation currency and convenience translation
The Group’s presentation currency is South African Rand. In addition to
presenting these condensed consolidated financial results for the
quarter ended June 30, 2014 in South African Rand, supplementary
information in US Dollars has been prepared for the convenience of users
of this report. Unless otherwise stated, the Group has translated US
Dollar amounts from South African Rand at the exchange rate of R10.6135
per $1.00, which was the R/$ exchange rate reported by the South African
Reserve Bank as of June 30, 2014. The U.S. Dollar figures may not
compute as they are rounded independently.
3. Reclassification
Net foreign exchange gains/(losses)
During the 2014 fiscal year, the Group changed its classification of
foreign exchange gains and losses in the income statement. Foreign
exchange gains and losses, which were previously classified as part of
“Other income/(expenses) - net”, are now classified as part of “Finance
income/(costs) - net”. The change is considered a more relevant
presentation of such items in the income statement since the majority of
foreign exchange gains and losses relate to translation differences on
foreign currency cash and cash equivalents arising from the initial
public offering proceeds.
The reclassification has been adopted retrospectively and the
comparative amounts for the three months ended June 30, 2013 have been
adjusted accordingly. The impact of the reclassification results in an
increase of R1.2 million ($0.1 million) in "Operating profit" with a
corresponding additional cost in “Finance income/(costs) - net" of R1.2
million ($0.1 million). Profit before taxation and profit for the period
remain unchanged.
|
4. Earnings per share/ADS data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South African Rand
|
|
|
United States Dollar
|
|
|
|
Three months
ended June 30,
|
|
|
Three months
ended June 30,
|
|
|
Three months
ended June 30,
|
|
|
Three months
ended June 30,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (R/$)
|
|
0.02
|
|
|
0.04
|
|
|
#
|
|
|
#
|
|
Diluted (R/$)
|
|
0.02
|
|
|
0.04
|
|
|
#
|
|
|
#
|
|
Earnings per American Depositary Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (R/$)
|
|
0.51
|
|
|
1.00
|
|
|
0.05
|
|
|
0.09
|
|
Diluted (R/$)
|
|
0.50
|
|
|
0.97
|
|
|
0.05
|
|
|
0.09
|
|
Attributable adjusted earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (R/$)
|
|
0.02
|
|
|
0.04
|
|
|
#
|
|
|
#
|
|
Diluted (R/$)
|
|
0.02
|
|
|
0.04
|
|
|
#
|
|
|
#
|
|
Adjusted earnings per American Depositary Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (R/$)
|
|
0.52
|
|
|
1.03
|
|
|
0.05
|
|
|
0.10
|
|
Diluted (R/$)
|
|
0.51
|
|
|
1.00
|
|
|
0.05
|
|
|
0.09
|
|
Ordinary shares ('000)
|
|
|
|
|
|
|
|
|
|
|
|
|
In issue at June 30
|
|
787,513
|
|
|
660,213
|
|
|
787,513
|
|
|
660,213
|
|
Weighted average
|
|
784,696
|
|
|
660,204
|
|
|
784,696
|
|
|
660,204
|
|
Diluted weighted average
|
|
804,352
|
|
|
679,153
|
|
|
804,352
|
|
|
679,153
|
|
American Depositary Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
In issue at June 30
|
|
31,501
|
|
|
26,409
|
|
|
31,501
|
|
|
26,409
|
|
Weighted average
|
|
31,388
|
|
|
26,408
|
|
|
31,388
|
|
|
26,408
|
|
Diluted weighted average
|
|
32,174
|
|
|
27,166
|
|
|
32,174
|
|
|
27,166
|
# Amount less than $0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Reconciliation of Adjusted Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South African Rand
|
|
|
|
United States Dollar
|
|
Figures are in thousands unless otherwise stated
|
|
|
|
Three months
ended June 30,
|
|
|
|
Three months
ended June 30,
|
|
|
|
Three months
ended June 30,
|
|
|
|
Three months
ended June 30,
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
Unaudited
|
|
|
|
Unaudited
|
|
|
|
Unaudited
|
|
|
|
Unaudited
|
|
Profit for the period attributable to owners of the parent
|
|
|
|
16,082
|
|
|
|
26,335
|
|
|
|
1,516
|
|
|
|
2,482
|
|
|
Net foreign exchange losses
|
|
|
|
184
|
|
|
|
1,211
|
|
|
|
17
|
|
|
|
114
|
|
|
Income tax effect on the above component
|
|
|
|
128
|
|
|
|
(456
|
)
|
|
|
12
|
|
|
|
(43
|
)
|
|
Adjusted earnings attributable to owners of the parent
|
|
|
|
16,394
|
|
|
|
27,090
|
|
|
|
1,545
|
|
|
|
2,553
|
|
|
|
|
|
6. Reconciliation of Adjusted EBITDA to Profit for the Period
|
|
|
|
|
South African Rand
|
|
|
United States Dollar
|
|
Figures are in thousands unless otherwise stated
|
|
Three months
ended June 30,
|
|
|
Three months
ended June 30,
|
|
|
Three months
ended June 30,
|
|
|
Three months
ended June 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Adjusted EBITDA
|
|
52,005
|
|
|
65,234
|
|
|
4,902
|
|
|
6,146
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized foreign exchange losses
|
|
695
|
|
|
1,080
|
|
|
65
|
|
|
102
|
|
|
Net profit on sale of property, plant and equipment and intangible
assets
|
|
—
|
|
|
9
|
|
|
—
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation (1)
|
|
(13,656
|
)
|
|
(10,233
|
)
|
|
(1,287
|
)
|
|
(964
|
)
|
|
Amortization (2)
|
|
(11,269
|
)
|
|
(14,590
|
)
|
|
(1,062
|
)
|
|
(1,375
|
)
|
|
Share-based compensation costs
|
|
(3,021
|
)
|
|
(1,309
|
)
|
|
(285
|
)
|
|
(123
|
)
|
|
Net loss on sale of property, plant and equipment and intangible
assets
|
|
(118
|
)
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
Restructuring costs
|
|
—
|
|
|
(2,870
|
)
|
|
—
|
|
|
(270
|
)
|
|
Litigation costs (3)
|
|
(2,108
|
)
|
|
—
|
|
|
(199
|
)
|
|
—
|
|
|
Operating profit
|
|
22,528
|
|
|
37,321
|
|
|
2,123
|
|
|
3,517
|
|
|
Add: Finance income/(costs) - net
|
|
1,316
|
|
|
(648
|
)
|
|
124
|
|
|
(61
|
)
|
|
Less: Taxation
|
|
(7,785
|
)
|
|
(10,338
|
)
|
|
(733
|
)
|
|
(974
|
)
|
|
Profit for the period
|
|
16,059
|
|
|
26,335
|
|
|
1,514
|
|
|
2,482
|
|
(1) Includes depreciation of property, plant and equipment
(including in-vehicle devices).
(2) Includes amortization of intangible assets (including
product development costs).
(3) Costs relating to litigation described in Note 8:
Contingent Liabilities - Litigation.
|
|
|
|
|
|
|
|
|
|
7. Reconciliation of Adjusted EBITDA Margin to Profit for the
Period Margin
|
|
|
|
|
|
|
|
|
|
|
Three months
ended June 30,
|
|
|
Three months
ended June 30,
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
Adjusted EBITDA margin
|
|
16.3
|
%
|
|
|
21.9
|
%
|
|
Add:
|
|
|
|
|
|
|
|
|
Net realized foreign exchange losses
|
|
0.2
|
%
|
|
|
0.3
|
%
|
|
Net profit on disposal of property, plant and equipment and
intangible assets
|
|
—
|
|
|
|
0.0
|
%
|
|
Less:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
(4.3
|
%)
|
|
|
(3.4
|
%)
|
|
Amortization
|
|
(3.5
|
%)
|
|
|
(4.9
|
%)
|
|
Share-based compensation costs
|
|
(0.9
|
%)
|
|
|
(0.4
|
%)
|
|
Net loss on disposal of property, plant and equipment and intangible
assets
|
|
(0.0
|
%)
|
|
|
—
|
|
|
Restructuring costs
|
|
—
|
|
|
|
(1.0
|
%)
|
|
Litigation costs
|
|
(0.7
|
%)
|
|
|
—
|
|
|
Operating profit margin
|
|
7.1
|
%
|
|
|
12.5
|
%
|
|
Add: Finance income/(costs) - net
|
|
0.4
|
%
|
|
|
(0.2
|
%)
|
|
Less: Taxation
|
|
(2.5
|
%)
|
|
|
(3.5
|
%)
|
|
Profit for the period margin
|
|
5.0
|
%
|
|
|
8.8
|
%
|
8. Contingent Liabilities
Service agreement
In terms of an amended network services agreement with Mobile Telephone
Networks Proprietary Limited (“MTN”), MTN is entitled to claw back
payments from MiX Telematics Africa Proprietary Limited in the event of
early cancellation of the agreement or certain base connections not
being maintained over the term of the agreement. No connection
incentives will be received in terms of the amended network services
agreement. The maximum potential liability under the arrangement is
R56.4 million or $5.3 million. No loss is considered probable under this
arrangement.
Litigation
On June 6, 2014, Inthinc Technology Solutions, Inc. (“Inthinc”)
commenced a lawsuit in the U.S. District Court, District of Utah,
Central Division, against the Group's wholly-owned subsidiary, MiX
Telematics North America, Inc. (“MiX North America”) and Charles “Skip”
Kinford, whom the Group hired in May 2014 as President and Chief
Executive Officer of MiX North America. Inthinc is Mr. Kinford’s
previous employer. The claims against MiX North America included
misappropriation of trade secrets under Utah state law and tortious
interference with contract. The claims against Mr. Kinford include
breach of a non-competition agreement and non-disclosure agreement,
misappropriation of trade secrets under Utah state law and breach of
contract. Inthinc voluntarily dismissed MiX North America without
prejudice on June 12, 2014. Mr. Kinford remains a defendant. On June 17,
2014, the Court denied the temporary restraining order sought by Inthinc
and entered a corresponding order on June 19, 2014.
On June 12, 2014, Inthinc commenced a lawsuit in the 48th Judicial
District of Tarrant County, Texas against MiX North America. Inthinc
alleges that MiX North America tortiously interfered with Mr. Kinford's
employment agreement and post-employment restrictive covenants and
misappropriated unidentified trade secrets when MiX North America hired
Mr. Kinford. The Court entered an ex-parte temporary restraining order
against MiX North America on June 26, 2014, which was subsequently
extended through to the preliminary injunction hearing on August 11,
2014. The Court has issued an expedited discovery order and a
confidentiality order.
In each of the lawsuits, Inthinc is seeking injunctive relief and
unspecified monetary damages. We believe that MiX North America and Mr.
Kinford have meritorious defenses to Inthinc’s claims and intend to
vigorously defend the Group and Mr. Kinford against them. However, the
Group is in the early stages of this litigation and cannot yet predict
its outcome.
Taxation
MiX Telematics International Proprietary Limited (MiX International), a
subsidiary of the Group, claims a 150% allowance for research and
development spend in terms of section 11D (S11D) of the South African
Income Tax Act of 1962 (the Act). As of October 1, 2012, the legislation
relating to the allowance was amended. The amendment requires
pre-approval of development project expenditure on a project specific
basis by the South African Department of Science and Technology (DST) in
order to claim a deduction of the additional 50% over and above the
expenditure incurred (150% allowance). Since the amendments to S11D of
the Act, MiX International had been claiming the 150% deduction
resulting in a recognized tax benefit of R8.5 million or $0.8 million.
MiX International has complied with the amended legislation by
submitting all required documentation to the DST timeously, commencing
in October 2012.
In June 2014, correspondence was received from the DST indicating that
the research and development expenditure on certain projects for which
the 150% allowance was claimed did not constitute qualifying expenditure
in terms of the Act. MiX International is currently in the process of
formally objecting to the DST’s decision to disallow the expenditure
(for which a tax asset benefit of R2.7 million or $0.3 million has been
recognized). If the Group is unsuccessful in defending this specific
matter, and if the same principles are applied to other projects, the
Group may incur an additional taxation expense of up to R8.5 million or
$0.8 million relating to the additional 50% claimed, with a
corresponding increase in current taxation payable.
9. Share-based payment transaction
In June 2014, the Group entered into an agreement with Edge Gestao
Empresarial Ltda. (“Edge”), whereby Edge has been granted a 5% holding
in the equity interests of MiX Telematics Serviços De Telemetria E
Rastreamento De Veículos Do Brazil Limitada (“MiX Brazil”). At March 31,
2014 Edge held a non-controlling interest in MiX Brazil of 0.0025%. Edge
is a Brazilian based investment company controlled by Luiz Munhoz, the
Managing Director of MiX Brazil. The increase in the equity interests
granted to Edge is in respect of services provided by Luiz Munhoz to MiX
Brazil, in his role as Managing Director of MiX Brazil.
The above transaction falls into the ambit of IFRS 2: Share-based
payments, and qualifies for recognition as a cash-settled share-based
payment. The cost of this share-based payment award recorded during the
quarter amounted to R2.0 million ($0.2 million).
Contact: