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 R13.7392 per $1.00, which was the R/$ exchange rate reported by Oanda.com as of December 31, 2016.
Third Quarter Highlights:
- Net subscriber additions of 20,300 in the quarter
- Subscribers increased by 10% year over year, bringing the total to over 605,000 subscribers at December 31, 2016
- Total subscription revenue of R311 million ($22.6 million), ahead of guidance
- Cash generated from operating activities of R97 million ($7.1 million)
- Adjusted EBITDA of R88 million ($6.4 million), representing a 22% Adjusted EBITDA margin
- Operating profit of R48 million ($3.5 million), representing a 12% margin
- Company raises guidance for subscription revenue and profitability for the full 2017 fiscal year which ends March 31, 2017
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 third quarter of fiscal 2017, which ended December 31, 2016.
“We are pleased with our strong execution during the third quarter and
we exceeded expectations across all key metrics,” said Stefan
Joselowitz, Chief Executive Officer of MiX Telematics. “Our results were
driven by general strength across the portfolio including a positive
contribution from energy sector customers, as well as the ongoing shift
toward bundled deals which increases the long-term value per subscriber.
We added over 20,000 net new subscribers during the quarter, resulting
in our ability to exceed the 600,000 mark for the first time in the
Company’s history. This base growth, combined with strict cost
management, allowed us to make progress in the quarter towards our
stated long-term goal of delivering normalized Adjusted EBITDA margins
in excess of 30%. We believe that MiX is well positioned to maintain the
momentum for the remainder of the year and beyond given our industry
leading integrated fleet management platform, product diversification,
ongoing traction in key verticals and geographies, as well as commitment
to sustain profitable growth.”
Financial performance for the three months
ended December 31, 2016
Subscription revenue: Subscription revenue was R310.7 million
($22.6 million), an increase of 5.5% compared with R294.5 million ($21.4
million) for the third quarter of fiscal 2016. Subscription revenue
benefited from an increase of over 54,600 subscribers, which resulted in
an increase in the subscriber base of 9.9% from December 2015 to
December 2016.
Total Revenue: Total revenue was R401.4 million ($29.2 million),
an increase of 6.0% compared to R378.6 million ($27.6 million) for the
third quarter of fiscal 2016. Hardware and other revenue was R90.7
million ($6.6 million), an increase of 7.8% compared to R84.1 million
($6.1 million) for the third quarter of fiscal 2016.
Gross Margin: Gross profit was R267.3 million ($19.5 million), as
compared to R257.6 million ($18.7 million) for the third quarter of
fiscal 2016. Gross profit margin was 66.6%, compared to 68.0% for the
third quarter of fiscal 2016. As reported in our previous results
announcements for the first and second quarters of fiscal 2017,
infrastructure costs have increased due to the Company commencing its
transition from legacy data centers, where we owned certain equipment,
towards cloud-based infrastructure and services. We have also made
additional investments to support the roll out of our new back-end
platform, MiX Lightning, and new products such as Journey Management,
Hours of Service and MiX Go, which we expect to drive increased ARPU as
well as subscriber growth over time.
Operating Margin: Operating profit was R47.9 million ($3.5
million), compared to R33.7 million ($2.5 million) for the third quarter
of fiscal 2016. Operating margin was 11.9%, compared to 8.9% for the
third quarter of fiscal 2016. The operating margin improvement was as a
result of the increased revenue described above and a R4.8 million ($0.3
million) decline in operating expenses which were R219.5 million ($16.0
million) in the third quarter of fiscal 2017 compared to R224.3 million
($16.3 million) in the third quarter of fiscal 2016. This was as a
result of strong cost management. Sales and marketing costs in the third
quarter of fiscal 2017 declined by R4.7 million ($0.3 million) to R48.7
million ($3.5 million) compared to R53.4 million ($3.9 million) in the
third quarter of fiscal 2016. Sales and marketing costs now represent
12.1% of revenue which is closely aligned with our estimates contained
in our Form 20-F for the fiscal year ended March 31, 2016 where we
advised that we expected these costs to remain relatively constant as a
percentage of revenue i.e. 11% to 12% of revenue.
Adjusted EBITDA: Adjusted EBITDA, a non-IFRS measure, was R87.8
million ($6.4 million) compared to R71.0 million ($5.2 million) for the
third quarter of fiscal 2016. Adjusted EBITDA margin, a non-IFRS
measure, for the third quarter of fiscal 2017 was 21.9%, compared to
18.8% for the third quarter of fiscal 2016.
Profit for the period and earnings per share: Profit for the
period was R35.1 million ($2.6 million), compared to R57.9 million
($4.2 million) in the third quarter of fiscal 2016. Profit for the
period includes a net foreign exchange loss of R4.9 million
($0.4 million) before tax. Profit for the period for the third quarter
of fiscal 2016 included a net foreign exchange gain of R68.8 million
($5.0 million) of which R68.6 million ($5.0 million) related to U.S.
Dollar cash reserves which are sensitive to volatility in the R:$
exchange rate. Earnings per diluted ordinary share were 6 South African
cents, compared to 8 South African cents in the third quarter of fiscal
2016. For the third quarter of 2017, the calculation was based on
diluted weighted average ordinary shares in issue of 567.0 million
compared to 770.9 million diluted weighted average ordinary shares in
issue during the third quarter of fiscal 2016. The diluted weighted
average ordinary shares in issue during the third quarter of fiscal 2017
were lower than in the third quarter of fiscal 2016 due to the impact of
the repurchase of 200.8 million ordinary shares during the second
quarter of fiscal 2017.
The Company's effective tax rate for the quarter was 19.2% compared to
43.9% in the third quarter of fiscal 2016. During the third quarter of
fiscal 2017 the Company benefited from a change in an uncertain tax
position relating to research and development expenditure. The change in
this uncertain tax position reduced the Company's effective tax rate in
the quarter by 14.8%. Full details of this uncertain tax position are
disclosed in note 10 of the accompanying financial results.
On a U.S. Dollar basis, and using the December 31, 2016 exchange rate of
R13.7392 per U.S. Dollar, and at a ratio of 25 ordinary shares to one
American Depositary Share ("ADS"), profit for the period was $2.6
million, or 11 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 which excludes net
foreign exchange gains/(losses) from earnings, was R37.4 million ($2.7
million), compared to R16.4 million ($1.2 million) in the third quarter
of fiscal 2016. Adjusted earnings per diluted ordinary share, also a
non-IFRS measure, were 7 South African cents, compared to 2 South
African cents in the third quarter of fiscal 2016.
On a U.S. Dollar basis, and using the December 31, 2016 exchange rate of
R13.7392 per U.S. Dollar, and at a ratio of 25 ordinary shares to one
ADS, adjusted earnings for the period was $2.7 million, or 12 U.S. cents
per diluted ADS.
Statement of Financial Position and Cash Flow: At December 31,
2016, the Company had R358.7 million ($26.1 million) of cash and cash
equivalents, compared to R907.5 million ($66.0 million) in the third
quarter of fiscal 2016. The decline in cash and cash equivalents is
attributable to the repurchase of 200.8 million ordinary shares which
resulted in a cash outflow of R473.6 million ($34.5 million) during the
second quarter of fiscal 2017.
The Company generated R97.3 million ($7.1 million) in net cash from
operating activities for the three months ended December 31, 2016 and
invested R73.3 million ($5.3 million) in capital expenditures during the
quarter, leading to a free cash flow, a non-IFRS measure, of R24.0
million ($1.8 million), compared with negative free cash flow of
R40.0 million ($2.9 million) for the third quarter of fiscal 2016.
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
Based on information as of today, February 2, 2017, the Company is
issuing the following financial guidance for the full 2017 fiscal year:
-
Subscription revenue - R1,233 million to R1,236 million (previous
guidance was R1,220 million to R1,230 million), which would represent
subscription revenue growth of 6.5% to 6.7% compared to fiscal 2016.
-
Total Revenue - R1,513 million to R1,525 million (previous guidance
was R1,501 million to R1,525 million), which would represent revenue
growth of 3.3% to 4.1% compared to fiscal 2016.
-
Adjusted EBITDA - R275 million to R295 million (previous guidance was
R270 million to R290 million), which would represent a decline of 1%
at the lower end and 6% growth at the higher end compared to fiscal
2016.
-
Adjusted earnings per diluted ordinary share of 12.2 to 14.7 South
African cents based on 632 million diluted ordinary shares in issue,
and based on an effective tax rate of 29% to 32%. On a U.S. Dollar
basis, and using the January 30, 2017 exchange rate of R13.5273 per
U.S. Dollar, and at a ratio of 25 ordinary shares to one ADS, this
equates to adjusted earnings per diluted ADS of 23 to 27 U.S. cents.
For the fourth quarter of fiscal 2017 the Company expects
subscription revenue to be in the range of R315 million to R318 million,
which would represent subscription revenue growth of 3% to 4% compared
to the fourth quarter of fiscal 2016.
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. Hardware sales are
dependent on the volumes of bundled solutions selected by customers.
-
An average forecast exchange rate for the 2017 fiscal year of R14.2000
per $1.
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 Standard Time) and 3:00 p.m. (South
African Time) on February 2, 2017 to discuss the Company's financial
results and current business outlook:
-
To access the call, dial 1-800-967-7141 (within the United States) or
0 800 980 989 (within South Africa) or 1-719-457-2634 (outside of the
United States). The conference ID is 9683947.
-
A replay of this conference call will be available for a limited time
at 1-844-512-2921 (within the United States) or 1-412-317-6671 (within
South Africa or outside of the United States). The replay conference
ID is 9683947.
-
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 managing over
600,000 assets in approximately 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, Romania, Thailand 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 fourth quarter and full year of fiscal 2017, 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") for the fiscal year ended
March 31, 2016, 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 and Adjusted EBITDA margin. 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
profit for the period as an indicator of the Company's 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 finance income/(costs) including foreign
exchange gains/(losses), depreciation of property, plant and equipment
including capitalized customer in-vehicle devices, amortization of
intangible assets including capitalized in-house development costs and
intangible assets identified as part of a business combination,
share-based compensation costs, transaction costs arising from the
acquisition of a business or investigating strategic alternatives,
restructuring costs, profits/(losses) on the disposal or impairments of
assets or subsidiaries, certain non-recurring initial public offering
("IPO") costs, insurance reimbursements relating to impaired assets and
certain litigation costs.
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,
the Company's 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; and
-
other companies, including companies in the Company's industry, may
calculate Adjusted EBITDA differently, which reduces its usefulness as
a comparative measure.
Because of these limitations, you should consider Adjusted EBITDA
alongside other financial performance measures, including operating
profit, profit for the period and the Company's other results.
Adjusted Earnings and Adjusted Earnings Per Share
Adjusted earnings per share is defined as profit attributable to owners
of the parent, MiX Telematics Limited, excluding net foreign exchange
gains/(losses) net of tax, divided by the weighted average number of
ordinary shares in issue during the period.
We have included Adjusted earnings per share in this press release
because it provides a useful measure for period-to-period comparisons of
the Company's core business by excluding net foreign exchange
gains/(losses) from earnings. Accordingly, we believe that Adjusted
earnings per share provides useful information to investors and others
in understanding and evaluating the Company's operating results.
Free cash flow
Free cash flow is determined as net cash generated from operating
activities less capital expenditure per investing activities. We believe
that free cash flow provides useful information to investors and others
in understanding and evaluating the Company’s cash flows as it provides
detail of the amount of cash the Company generates or utilizes after
accounting for all capital expenditures including investments in
in-vehicle devices and development expenditure.
February 2, 2017
JSE Sponsor
Java Capital
MIX TELEMATICS LIMITED
|
|
CONDENSED CONSOLIDATED INCOME STATEMENTS
|
|
|
|
South African Rand
|
|
United States Dollar
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
Figures are in thousands unless otherwise stated
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
Revenue
|
|
401,375
|
|
|
378,615
|
|
|
29,214
|
|
|
27,557
|
|
Cost of sales
|
|
(134,032
|
)
|
|
(121,048
|
)
|
|
(9,755
|
)
|
|
(8,810
|
)
|
Gross profit
|
|
267,343
|
|
|
257,567
|
|
|
19,459
|
|
|
18,747
|
|
Other income/(expenses) - net
|
|
31
|
|
|
430
|
|
|
2
|
|
|
31
|
|
Operating expenses
|
|
(219,520
|
)
|
|
(224,340
|
)
|
|
(15,978
|
)
|
|
(16,328
|
)
|
-Sales and marketing
|
|
(48,688
|
)
|
|
(53,380
|
)
|
|
(3,544
|
)
|
|
(3,885
|
)
|
-Administration and other charges
|
|
(170,832
|
)
|
|
(170,960
|
)
|
|
(12,434
|
)
|
|
(12,443
|
)
|
Operating profit
|
|
47,854
|
|
|
33,657
|
|
|
3,483
|
|
|
2,450
|
|
Finance (costs)/income - net
|
|
(4,463
|
)
|
|
69,597
|
|
|
(324
|
)
|
|
5,065
|
|
-Finance income
|
|
1,216
|
|
|
70,195
|
|
|
89
|
|
|
5,109
|
|
-Finance costs
|
|
(5,679
|
)
|
|
(598
|
)
|
|
(413
|
)
|
|
(44
|
)
|
Profit before taxation
|
|
43,391
|
|
|
103,254
|
|
|
3,159
|
|
|
7,515
|
|
Taxation
|
|
(8,314
|
)
|
|
(45,321
|
)
|
|
(605
|
)
|
|
(3,299
|
)
|
Profit for the period
|
|
35,077
|
|
|
57,933
|
|
|
2,554
|
|
|
4,216
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
Owners of the parent
|
|
35,082
|
|
|
57,947
|
|
|
2,554
|
|
|
4,217
|
|
Non-controlling interests
|
|
(5
|
)
|
|
(14
|
)
|
|
*
|
|
|
(1
|
)
|
|
|
35,077
|
|
|
57,933
|
|
|
2,554
|
|
|
4,216
|
|
* Amount less than $1,000
MIX TELEMATICS LIMITED
|
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
|
South African Rand
|
|
United States Dollar
|
|
|
December 31,
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
Figures are in thousands unless otherwise stated
|
|
2016
|
|
2016
|
|
2016
|
|
2016
|
|
|
Unaudited
|
|
Audited
|
|
Unaudited
|
|
Unaudited
|
ASSETS
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
276,892
|
|
|
235,584
|
|
|
20,153
|
|
|
17,147
|
|
Intangible assets
|
|
864,135
|
|
|
846,851
|
|
|
62,896
|
|
|
61,638
|
|
Available-for-sale financial asset
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Finance lease receivable
|
|
40
|
|
|
167
|
|
|
3
|
|
|
12
|
|
Deferred tax assets
|
|
36,048
|
|
|
30,005
|
|
|
2,624
|
|
|
2,184
|
|
Total non-current assets
|
|
1,177,115
|
|
|
1,112,607
|
|
|
85,676
|
|
|
80,981
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Inventory
|
|
44,526
|
|
|
64,489
|
|
|
3,241
|
|
|
4,694
|
|
Trade and other receivables
|
|
258,805
|
|
|
293,045
|
|
|
18,837
|
|
|
21,329
|
|
Finance lease receivable
|
|
183
|
|
|
984
|
|
|
13
|
|
|
72
|
|
Taxation
|
|
22,138
|
|
|
8,886
|
|
|
1,611
|
|
|
647
|
|
Restricted cash
|
|
14,201
|
|
|
21,134
|
|
|
1,034
|
|
|
1,538
|
|
Cash and cash equivalents
|
|
358,654
|
|
|
877,136
|
|
|
26,104
|
|
|
63,842
|
|
Total current assets
|
|
698,507
|
|
|
1,265,674
|
|
|
50,840
|
|
|
92,122
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
1,875,622
|
|
|
2,378,281
|
|
|
136,516
|
|
|
173,103
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
Stated capital
|
|
854,345
|
|
|
1,320,955
|
|
|
62,183
|
|
|
96,145
|
|
Other reserves
|
|
6,029
|
|
|
74,262
|
|
|
439
|
|
|
5,405
|
|
Retained earnings
|
|
574,537
|
|
|
526,082
|
|
|
41,817
|
|
|
38,291
|
|
Equity attributable to owners of the parent
|
|
1,434,911
|
|
|
1,921,299
|
|
|
104,439
|
|
|
139,841
|
|
Non-controlling interest
|
|
(1,543
|
)
|
|
(1,491
|
)
|
|
(112
|
)
|
|
(109
|
)
|
Total equity
|
|
1,433,368
|
|
|
1,919,808
|
|
|
104,327
|
|
|
139,732
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
109,551
|
|
|
120,981
|
|
|
7,974
|
|
|
8,806
|
|
Provisions
|
|
1,822
|
|
|
3,514
|
|
|
133
|
|
|
256
|
|
Share-based payment liability
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total non-current liabilities
|
|
111,373
|
|
|
124,495
|
|
|
8,107
|
|
|
9,062
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
257,841
|
|
|
282,647
|
|
|
18,766
|
|
|
20,573
|
|
Borrowings
|
|
—
|
|
|
1,103
|
|
|
—
|
|
|
80
|
|
Taxation
|
|
18,004
|
|
|
2,795
|
|
|
1,310
|
|
|
203
|
|
Provisions
|
|
19,634
|
|
|
31,059
|
|
|
1,429
|
|
|
2,261
|
|
Bank overdraft
|
|
35,402
|
|
|
16,374
|
|
|
2,577
|
|
|
1,192
|
|
Total current liabilities
|
|
330,881
|
|
|
333,978
|
|
|
24,082
|
|
|
24,309
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
442,254
|
|
|
458,473
|
|
|
32,189
|
|
|
33,371
|
|
|
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
1,875,622
|
|
|
2,378,281
|
|
|
136,516
|
|
|
173,103
|
|
MIX TELEMATICS LIMITED
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
South African Rand
|
|
United States Dollar
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
Figures are in thousands unless otherwise stated
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
Operating activities
|
|
|
|
|
|
|
|
|
Cash generated from operations
|
|
99,124
|
|
|
27,945
|
|
|
7,215
|
|
|
2,034
|
|
Net financing income
|
|
448
|
|
|
825
|
|
|
33
|
|
|
60
|
|
Taxation paid
|
|
(2,243
|
)
|
|
(2,127
|
)
|
|
(163
|
)
|
|
(155
|
)
|
Net cash generated from operating activities
|
|
97,329
|
|
|
26,643
|
|
|
7,085
|
|
|
1,939
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
Capital expenditure
|
|
(73,305
|
)
|
|
(66,623
|
)
|
|
(5,335
|
)
|
|
(4,849
|
)
|
Deferred consideration paid
|
|
(368
|
)
|
|
(344
|
)
|
|
(27
|
)
|
|
(25
|
)
|
Proceeds on sale of property, plant and equipment
|
|
571
|
|
|
194
|
|
|
42
|
|
|
14
|
|
Increase in restricted cash
|
|
(434
|
)
|
|
(2,078
|
)
|
|
(32
|
)
|
|
(151
|
)
|
Decrease in restricted cash
|
|
604
|
|
|
—
|
|
|
44
|
|
|
—
|
|
Net cash utilized in investing activities
|
|
(72,932
|
)
|
|
(68,851
|
)
|
|
(5,308
|
)
|
|
(5,011
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Proceeds from issuance of ordinary shares
|
|
2,543
|
|
|
2,407
|
|
|
185
|
|
|
175
|
|
Share repurchase
|
|
(81
|
)
|
|
(31,076
|
)
|
|
(6
|
)
|
|
(2,262
|
)
|
Dividends paid
|
|
(11,253
|
)
|
|
(12,868
|
)
|
|
(819
|
)
|
|
(937
|
)
|
Net cash utilized in financing activities
|
|
(8,791
|
)
|
|
(41,537
|
)
|
|
(640
|
)
|
|
(3,024
|
)
|
Net increase/(decrease) in cash and cash equivalents
|
|
15,606
|
|
|
(83,745
|
)
|
|
1,137
|
|
|
(6,096
|
)
|
Net cash and cash equivalents at the beginning of the period
|
|
311,328
|
|
|
885,887
|
|
|
22,660
|
|
|
64,479
|
|
Exchange (losses)/gains on cash and cash equivalents
|
|
(3,682
|
)
|
|
76,959
|
|
|
(270
|
)
|
|
5,602
|
|
Net cash and cash equivalents at the end of the period
|
|
323,252
|
|
|
879,101
|
|
|
23,527
|
|
|
63,985
|
|
MIX TELEMATICS LIMITED
|
OTHER FINANCIAL AND OPERATING DATA
|
|
|
South African Rand
|
|
United States Dollar
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
Figures are in thousands except for subscribers
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
Subscription revenue
|
|
310,695
|
|
294,466
|
|
22,614
|
|
21,433
|
Adjusted EBITDA
|
|
87,822
|
|
71,046
|
|
6,393
|
|
5,171
|
Cash and cash equivalents
|
|
358,654
|
|
907,463
|
|
26,104
|
|
66,049
|
Net cash (1)
|
|
323,252
|
|
877,645
|
|
23,527
|
|
63,879
|
Capital expenditure incurred
|
|
61,163
|
|
69,425
|
|
4,452
|
|
5,053
|
Total development costs incurred
|
|
36,696
|
|
28,016
|
|
2,671
|
|
2,039
|
Development costs capitalized
|
|
20,415
|
|
16,308
|
|
1,486
|
|
1,187
|
Development costs expensed within administration and other charges
|
|
16,281
|
|
11,708
|
|
1,185
|
|
852
|
Subscribers (number)
|
|
605,317
|
|
550,765
|
|
605,317
|
|
550,765
|
(1)
Net cash is calculated as being net cash and
cash equivalents, excluding restricted cash less interest bearing
borrowings.
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 statements of financial position, income
statements and statements of cash flows included in these financial
results have been prepared in accordance with our accounting policies
under IFRS. 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, 2016. No new or
revised accounting pronouncements that became effective during fiscal
year 2017 have had a material impact on the Group.
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 December 31, 2016 in South African Rand, supplementary
information in U.S. Dollars has been prepared for the convenience of
users of these financial results. Unless otherwise stated, the Group has
translated U.S. Dollar amounts from South African Rand at the exchange
rate of R13.7392 per $1.00, which was the R/$ exchange rate reported by
Oanda.com as of December 31, 2016. The U.S. Dollar figures may not
compute as they are rounded independently.
3. Earnings per share/ADS data
|
|
|
|
|
|
|
|
|
|
|
South African Rand
|
|
United States Dollar
|
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
Three months
ended
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
Earnings per share
|
|
|
|
|
|
|
|
|
Basic (R/$)
|
|
0.06
|
|
0.08
|
|
#
|
|
0.01
|
Diluted (R/$)
|
|
0.06
|
|
0.08
|
|
#
|
|
0.01
|
Earnings per American Depositary Share
|
|
|
|
|
|
|
|
|
Basic (R/$)
|
|
1.56
|
|
1.90
|
|
0.11
|
|
0.14
|
Diluted (R/$)
|
|
1.55
|
|
1.88
|
|
0.11
|
|
0.14
|
Adjusted earnings per share
|
|
|
|
|
|
|
|
|
Basic (R/$)
|
|
0.07
|
|
0.02
|
|
#
|
|
#
|
Diluted (R/$)
|
|
0.07
|
|
0.02
|
|
#
|
|
#
|
Adjusted earnings per American Depositary Share
|
|
|
|
|
|
|
|
|
Basic (R/$)
|
|
1.66
|
|
0.54
|
|
0.12
|
|
0.04
|
Diluted (R/$)
|
|
1.65
|
|
0.53
|
|
0.12
|
|
0.04
|
Ordinary shares ('000) 1
|
|
|
|
|
|
|
|
|
In issue at December 31
|
|
563,435
|
|
754,888
|
|
563,435
|
|
754,888
|
Weighted average
|
|
562,858
|
|
762,955
|
|
562,858
|
|
762,955
|
Diluted weighted average
|
|
567,005
|
|
770,929
|
|
567,005
|
|
770,929
|
American Depositary Shares ('000) 1
|
|
|
|
|
|
|
|
|
In issue at December 31
|
|
22,537
|
|
30,196
|
|
22,537
|
|
30,196
|
Weighted average
|
|
22,514
|
|
30,518
|
|
22,514
|
|
30,518
|
Diluted weighted average
|
|
22,680
|
|
30,837
|
|
22,680
|
|
30,837
|
# Amount less than $0.01
1
Excludes 40,000,000 treasury shares held by MiX
Telematics Investments Proprietary Limited ("MiX Investments"), a wholly
owned subsidiary of the Group (December 2015: 40,000,000).
4. Reconciliation of Adjusted Earnings to Profit for the Period
|
|
|
South African Rand
|
|
United States Dollar
|
|
|
Three months
ended
|
|
|
Three months
ended
|
|
|
Three months
ended
|
|
|
Three months
ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
Figures are in thousands unless otherwise stated
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
Profit for the period attributable to owners of the parent
|
|
35,082
|
|
|
57,947
|
|
|
2,554
|
|
|
4,217
|
|
Net foreign exchange losses/(gains)
|
|
4,915
|
|
|
(68,769
|
)
|
|
358
|
|
|
(5,005
|
)
|
Income tax effect on the above component
|
|
(2,592
|
)
|
|
27,229
|
|
|
(189
|
)
|
|
1,982
|
|
Adjusted earnings attributable to owners of the parent
|
|
37,405
|
|
|
16,407
|
|
|
2,723
|
|
|
1,194
|
|
5. Reconciliation of Adjusted EBITDA to Profit for the Period
|
|
South African Rand
|
|
United States Dollar
|
|
|
Three months
ended
|
|
|
Three months
ended
|
|
|
Three months
ended
|
|
|
Three months
ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
Figures are in thousands unless otherwise stated
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
Adjusted EBITDA
|
|
87,822
|
|
|
71,046
|
|
|
6,393
|
|
|
5,171
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit on sale of property, plant and equipment and intangible
assets
|
|
—
|
|
|
39
|
|
|
—
|
|
|
3
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation (1)
|
|
(25,881
|
)
|
|
(20,021
|
)
|
|
(1,884
|
)
|
|
(1,457
|
)
|
Amortization (2)
|
|
(13,391
|
)
|
|
(14,782
|
)
|
|
(975
|
)
|
|
(1,076
|
)
|
Impairment of product development costs capitalized
|
|
(11
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
Equity settled share-based compensation costs
|
|
(557
|
)
|
|
(2,235
|
)
|
|
(41
|
)
|
|
(163
|
)
|
Net loss on sale of property, plant and equipment
|
|
(128
|
)
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
Restructuring costs
|
|
—
|
|
|
(390
|
)
|
|
—
|
|
|
(28
|
)
|
Operating profit
|
|
47,854
|
|
|
33,657
|
|
|
3,483
|
|
|
2,450
|
|
Add: Finance (costs)/income - net
|
|
(4,463
|
)
|
|
69,597
|
|
|
(324
|
)
|
|
5,065
|
|
Less: Taxation
|
|
(8,314
|
)
|
|
(45,321
|
)
|
|
(605
|
)
|
|
(3,299
|
)
|
Profit for the period
|
|
35,077
|
|
|
57,933
|
|
|
2,554
|
|
|
4,216
|
|
(1)
Includes depreciation of property, plant and
equipment (including in-vehicle devices).
(2)
Includes amortization of intangible assets
(including capitalized in-house development costs and intangible assets
identified as part of a business combination).
6. Reconciliation of Adjusted EBITDA Margin to Profit for the
Period Margin
|
|
|
Three months
ended
|
|
Three months
ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
|
Unaudited
|
|
Unaudited
|
Adjusted EBITDA margin
|
|
21.9
|
%
|
|
18.8
|
%
|
Add:
|
|
|
|
|
Net profit on sale of property, plant and equipment and intangible
assets
|
|
—
|
|
|
0.0
|
%
|
Less:
|
|
|
|
|
Depreciation
|
|
(6.5
|
%)
|
|
(5.3
|
%)
|
Amortization
|
|
(3.4
|
%)
|
|
(3.9
|
%)
|
Impairment of product development costs capitalized
|
|
(0.0
|
%)
|
|
—
|
|
Equity settled share-based compensation costs
|
|
(0.1
|
%)
|
|
(0.6
|
%)
|
Net loss on sale of property, plant and equipment
|
|
(0.0
|
%)
|
|
—
|
|
Restructuring costs
|
|
—
|
|
|
(0.1
|
%)
|
Operating profit margin
|
|
11.9
|
%
|
|
8.9
|
%
|
Add: Finance (costs)/income - net
|
|
(1.1
|
%)
|
|
18.4
|
%
|
Less: Taxation
|
|
(2.1
|
%)
|
|
(12.0
|
%)
|
Profit for the period margin
|
|
8.7
|
%
|
|
15.3
|
%
|
7. Reconciliation of Free Cash Flow to Net Cash Generated from
Operating Activities
|
|
|
South African Rand
|
|
United States Dollar
|
|
|
Three months
ended
|
|
|
Three months
ended
|
|
|
Three months
ended
|
|
|
Three months
ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
Figures are in thousands unless otherwise stated
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
Net cash generated from operating activities
|
|
97,329
|
|
|
26,643
|
|
|
7,085
|
|
|
1,939
|
|
Capital expenditure
|
|
(73,305
|
)
|
|
(66,623
|
)
|
|
(5,335
|
)
|
|
(4,849
|
)
|
Free cash flow
|
|
24,024
|
|
|
(39,980
|
)
|
|
1,750
|
|
|
(2,910
|
)
|
8. Dividends Paid
In respect of the second quarter of fiscal 2017, a dividend of R11.3
million ($0.9 million) was declared on November 3, 2016 and paid on
November 28, 2016. Using shares in issue of 563,434,240 (excluding
40,000,000 treasury shares), this equated to a dividend of 2 South
African cents or 0.1 U.S. cents per share.
9. 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
R49.5 million or $3.6 million. No loss is considered probable under this
arrangement.
10. Uncertain tax position
MiX Telematics International Proprietary Limited (“MiX International”),
a subsidiary of the Group, historically claimed a 150% allowance for
research and development spend in terms of section 11D (“S11D”) of the
South African Income Tax Act No. 58 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. MiX International
has complied with the amended legislation by submitting all required
documentation to the DST in a timely manner, 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, in the DST’s opinion, constitute
qualifying expenditure in terms of the Act. MiX International continues,
through due legal process, to formally seek a review of the DST’s
decision not to approve the expenditure. Although this process is
ongoing, during the period, further approvals have been obtained for
certain project expenditure, relating to both current and prior
financial years. However, at period end, an uncertain tax position
remains in relation to S11D deductions in respect of which approvals
remain pending.
The Group has considered this tax position and recognized a tax asset of
R16.7 million ($1.2 million) in respect of S11D deductions at December
31, 2016. R11.2 million ($0.8 million) relates to deductions in respect
of development project expenditure which has been approved by the DST.
If the Group is unsuccessful in obtaining DST approvals on the balance
relating to the uncertain tax position, the Group will not recover the
R5.5 million ($0.4 million) raised and an additional taxation expense of
the same amount may be incurred.
This change in the tax position resulted in a R6.1 million ($0.4
million) reduction in the income tax expense recorded during the quarter.
11. Dividend Declared
On February 2, 2017 the Board has declared that in respect of the third
quarter of fiscal 2017, which ended on December 31, 2016 a dividend of 2
South African cents (0.1 U.S. cents) per ordinary share to be paid on
February 27, 2017.
The details with respect to the dividends declared for ordinary
shareholders are as follows:
Last day to trade cum dividend
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Tuesday, February 21, 2017
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Securities trade ex dividend
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Wednesday, February 22, 2017
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Record date
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Friday, February 24, 2017
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Payment date
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Monday, February 27, 2017
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Share certificates may not be dematerialized or rematerialized between
Wednesday, February 22, 2017 and Friday, February 24, 2017, both days
inclusive.
Shareholders are advised of the following additional information:
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the dividend has been declared out of income reserves;
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the local dividends tax rate is 15%;
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the gross local dividend amounts to 2 South African cents per ordinary
share;
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the net local dividend amount is 1.7 South African cents per ordinary
share for shareholders liable to pay dividends tax;
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the issued ordinary share capital of MiX Telematics is 603,434,240
ordinary shares of no par value; and
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the Company’s tax reference number is 9155/661/84/7.
The details with respect to the dividends declared for holders of our
ADSs are as follows:
Ex dividend on New York Stock Exchange (NYSE)
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Wednesday, February 22, 2017
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Record date
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Friday, February 24, 2017
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Approximate date of currency conversion
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Monday, February 27, 2017
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Approximate dividend payment date
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Monday, February 27, 2017
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12. Development costs historical data
The table below sets out development costs incurred and capitalized for
each of the last eight quarters including the period ended
December 31, 2016.
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South African Rand
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Figures are in thousands (Unaudited)
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Three months ended
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December 31,
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September 30,
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June 30,
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March 31,
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December 31,
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September 30,
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June 30,
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March 31,
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2016
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2016
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2016
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2016
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2015
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2015
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2015
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2015
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Total development costs incurred
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36,696
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36,034
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37,230
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28,693
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28,016
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31,806
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27,387
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28,765
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Development costs capitalized
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20,415
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21,028
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19,309
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12,136
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16,308
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18,892
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11,533
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18,621
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Development costs expensed within administration and
other charges
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16,281
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15,006
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17,921
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16,557
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11,708
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12,914
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15,854
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10,144
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United States Dollar
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Figures are in thousands (Unaudited)
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Three months ended
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December 31,
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September 30,
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June 30,
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March 31,
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December 31,
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September 30,
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June 30,
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March 31,
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2016
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2016
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2016
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2016
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2015
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2015
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2015
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2015
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Total development costs incurred
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2,671
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2,623
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2,709
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2,088
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2,039
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2,315
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1,993
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2,093
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|
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|
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Development costs capitalized
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1,486
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1,531
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1,405
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883
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1,187
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1,375
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839
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1,355
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Development costs expensed within administration and
other charges
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1,185
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1,092
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1,304
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1,205
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852
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940
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1,154
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738
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Contact: