An explanation of non-IFRS measures used in this press 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.
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 R14.3960 per $1.00, which was the R/$ exchange rate reported by Oanda.com as of December 31, 2018.
Highlights:
Third quarter fiscal 2019:
- Subscription revenue of R439 million ($30.5 million), up 16% year over year on a constant currency basis
- Net subscriber additions of 22,100, bringing the total subscriber base to over 736,000, up 11% year over year
- Operating profit of R87 million ($6.0 million), up 63% year over year
- Adjusted EBITDA of R156 million ($10.8 million), up 36% year over year
- Adjusted EBITDA margin of 30.3%, up 440 basis points year over year
- Net cash generated from operating activities of R133 million ($9.2 million)
- Free cash flow of R60 million ($4.2 million), up from R17 million ($1.2 million) compared to the third quarter of fiscal 2018
Company raises full-year guidance:
- Subscription revenue - R1,693 million to R1,701 million ($124.1 million to $124.6 million)
- Total revenue - R1,951 million to R1,969 million ($143.0 million to $144.3 million)
- Adjusted EBITDA - R571 million to R584 million ($41.8 million to $42.8 million)
- Adjusted earnings per diluted ordinary share of 36.4 to 38.6 South African cents. At a ratio of 25 ordinary shares to one ADS, this equates to adjusted earnings per diluted ADS of 66.7 to 70.7 U.S. cents. Refer to the Business Outlook section below.
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 2019, which ended December 31, 2018.
“In Q3, MiX Telematics delivered another strong quarter, evidenced by
16% year over year subscription revenue growth, and Adjusted EBITDA
margins that again exceeded 30%, and we are now focused on our recently
revised long-term target of 35%-plus. Moreover, our attractive
combination of strong growth and a highly scalable business model is
leading to increased cash generation,” said Stefan Joselowitz, Chief
Executive Officer of MiX Telematics. “Our results were driven by ongoing
robust demand globally for our services from our customers across all
verticals. Additionally, we are already seeing early traction with our
newly announced light fleet solution, MiX Now, and have already closed
several deals. We are confident the strength of our diversified
portfolio of subscribers will enable us to maintain our market momentum
for the balance of fiscal 2019 and beyond.”
Financial performance for the three months
ended December 31, 2018
Subscription Revenue: Subscription revenue was R438.9 million
($30.5 million), an increase of 16.6% compared with R376.4 million
($26.1 million) for the third quarter of fiscal 2018. Subscription
revenue increased 15.6% on a constant currency basis. Subscription
revenue benefited from a net increase of over 71,200 subscribers from
January 2018 to December 2018, representing an increase in the
subscriber base of 10.7% during that period. Subscription revenue has
also benefited from higher average revenue per user.
Total Revenue: Total revenue was R514.4 million ($35.7 million),
an increase of 16.3% compared to R442.1 million ($30.7 million) for the
third quarter of fiscal 2018. Hardware and other revenue was R75.5
million ($5.2 million), an increase of 14.8% compared to R65.8 million
($4.6 million) for the third quarter of fiscal 2018.
Gross Margin: Gross profit was R337.8 million ($23.5 million), as
compared to R288.6 million ($20.0 million) for the third quarter of
fiscal 2018. Gross profit margin was 65.7%, compared to 65.3% for the
third quarter of fiscal 2018.
Operating Margin: Operating profit was R86.7 million ($6.0
million), compared to R53.0 million ($3.7 million) for the third quarter
of fiscal 2018. Operating margin was 16.8%, compared to 12.0% for the
third quarter of fiscal 2018. The margin expansion was attributable
primarily to improved economies of scale and ongoing cost management
initiatives. Operating expenses of R251.5 million ($17.5 million) have
increased by R16.0 million ($1.1 million) or 6.8% compared to total
revenue growth of 16.3% since the third quarter of fiscal 2018.
Operating expenses represented 48.9% of revenue compared to 53.3% of
revenue in the third quarter of fiscal 2018.
Adjusted EBITDA: Adjusted EBITDA, a non-IFRS measure, was R155.8
million ($10.8 million) compared to R114.5 million ($8.0 million) for
the third quarter of fiscal 2018. Adjusted EBITDA margin, a non-IFRS
measure, for the third quarter of fiscal 2019 was 30.3%, compared to
25.9% for the third quarter of fiscal 2018.
Profit for the Period and Earnings per Share: Profit for the
period was R56.6 million ($3.9 million), compared to R58.8 million
($4.1 million) in the third quarter of fiscal 2018. Profit for the
period includes a net foreign exchange gain of R0.2 million
($0.01 million) before tax. Profit for the period for the third quarter
of fiscal 2018 included a net foreign exchange loss of R2.1 million
($0.1 million).
Earnings per diluted ordinary share were 10 South African cents,
consistent with the third quarter of fiscal 2018. For the third quarter
of 2019, the calculation was based on diluted weighted average ordinary
shares in issue of 579.6 million compared to 577.6 million diluted
weighted average ordinary shares in issue during the third quarter of
fiscal 2018.
The Company’s effective tax rate for the quarter was 34.5% compared to
(12.3%) in the third quarter of fiscal 2018. Ignoring the impact of net
foreign exchange gains and losses, and related tax consequences, the tax
rate which is used in determining adjusted earnings below, was 28.3%
compared to 26.7% in the third quarter of fiscal 2018.
On a U.S. Dollar basis, and using the December 31, 2018 exchange rate of
R14.3960 per U.S. Dollar, and at a ratio of 25 ordinary shares to one
American Depositary Share (“ADS”), profit for the period was $3.9
million, or 17 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, were R63.5 million
($4.4 million), compared to R40.0 million ($2.8 million) in the third
quarter of fiscal 2018. Adjusted earnings per diluted ordinary share,
also a non-IFRS measure, were 11 South African cents, compared to 7
South African cents in the third quarter of fiscal 2018.
On a U.S. Dollar basis, and using the December 31, 2018 exchange rate of
R14.3960 per U.S. Dollar, and at a ratio of 25 ordinary shares to one
ADS, adjusted earnings for the period was $4.4 million, or 19 U.S. cents
per diluted ADS.
Statement of Financial Position and Cash Flow: At December 31,
2018, the Company had R284.1 million ($19.7 million) of net cash and
cash equivalents, compared to R290.5 million ($20.2 million) at March
31, 2018.
The Company generated R133.0 million ($9.2 million) in net cash from
operating activities for the three months ended December 31, 2018 and
invested R72.6 million ($5.0 million) in capital expenditures during the
quarter (including investments in in-vehicle devices of R47.8 million or
$3.3 million), leading to a free cash flow, a non-IFRS measure, of R60.4
million ($4.2 million), compared with free cash flow of R17.3 million
($1.2 million) for the third quarter of fiscal 2018. The Company
utilized R91.0 million ($6.3 million) in financing activities, compared
to R11.1 million ($0.8 million) utilized during the third quarter of
fiscal 2018. The cash utilized in financing activities during the third
quarter of fiscal 2019 mainly consisted of share repurchases of R73.6
million ($5.1 million), dividends paid of R16.8 million ($1.2 million)
and the payment of lease liabilities of R3.4 million ($0.2 million),
offset by proceeds from the issuance of shares in respect of employee
share options of R2.7 million ($0.2 million). The cash utilized in
financing activities during the third quarter of fiscal 2018 mainly
consisted of dividends paid of R14.0 million ($1.0 million) and the
acquisition of non-controlling interest of R1.4 million ($0.1 million),
offset by proceeds from the issuance of shares in respect of employee
share options of R4.2 million ($0.3 million).
Business Outlook
MiX Telematics has translated U.S. Dollar amounts in this Business
Outlook paragraph from South African Rand at the exchange rate of R13.6466
per $1.00, which was the R/$ exchange rate reported by Oanda.com as at
January 28, 2019.
Based on information as of today, January 31, 2019, the Company is
issuing the following financial guidance for the full 2019 fiscal year:
-
Subscription revenue - R1,693 million to R1,701 million ($124.1
million to $124.6 million), which would represent subscription revenue
growth of 18.0% to 18.6% compared to fiscal 2018. On a constant
currency basis, this would represent subscription revenue growth of
16.0% to 16.6%. Previous guidance was R1,683 million to R1,695 million.
-
Total Revenue - R1,951 million to R1,969 million ($143.0 million to
$144.3 million), which would represent revenue growth of 13.9% to
15.0% compared to fiscal 2018. On a constant currency basis, this
would represent revenue growth of 12.1% to 13.1%. Previous guidance
was R1,930 million to R1,963 million.
-
Adjusted EBITDA - R571 million to R584 million ($41.8 million to $42.8
million), which would represent Adjusted EBITDA growth of 29.2% to
32.2% compared to fiscal 2018. Previous guidance was R550 million to
R570 million.
-
Adjusted earnings per diluted ordinary share of 36.4 to 38.6 South
African cents based on 583 million diluted ordinary shares in issue
(previous guidance was 35.1 to 37.9 South African cents based on 583
million diluted ordinary shares in issue), and based on an effective
tax rate of 28.0% to 31.0%. At a ratio of 25 ordinary shares to one
ADS, this equates to adjusted earnings per diluted ADS of 66.7 to 70.7
U.S. cents.
For the fourth quarter of fiscal 2019 the Company expects
subscription revenue to be in the range of R443 million to R451 million
($32.5 million to $33.0 million), which would represent subscription
revenue growth of 18.6% to 20.7% compared to the fourth quarter of
fiscal 2018. On a constant currency basis, this represents subscription
revenue growth of 12.3% to 14.4% compared to the fourth quarter of
fiscal 2018.
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 2019 fiscal year of R13.8000
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 Company provides earnings guidance only on a non-IFRS basis and does
not provide a reconciliation of forward-looking Adjusted EBITDA and
Adjusted Earnings per Diluted Ordinary Share guidance to the most
directly comparable IFRS financial measures because of the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliations, including adjustments that could be
made for foreign exchange gains/(losses) and related tax consequences,
restructuring costs, share-based compensation costs, and other charges
reflected in the Company’s reconciliation of historic non-IFRS financial
measures, the amounts of which, based on past experience, could be
material.
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 Thursday, January 31, 2019 to discuss the Company’s
financial results and current business outlook:
-
To access the call, dial +1-877-451-6152 (within the United States) or
0 800 983 831 (within South Africa) or +1-201-389-0879 (outside of the
United States). The conference ID is 13686613.
-
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 13686613.
-
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
736,000 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 2019, 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, 2018, 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 and Adjusted EBITDA
margin are non-IFRS financial measures, and they do not represent cash
flows from operations for the periods indicated, and should not be
considered an alternative to net income 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 and right-of-use assets, amortization of intangible
assets including capitalized in-house development costs and intangible
assets identified as part of a business combination, share-based
compensation costs, restructuring costs, profits/(losses) on the
disposal or impairments of assets or subsidiaries, 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 provide 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 our 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 or the payment of lease
liabilities that may represent a reduction in cash available to the
Company; 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
alongside other financial performance measures, including operating
profit, profit for the period and our 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, excluding net foreign exchange
gains/(losses) net of tax and share based compensation costs related to
Performance Share Awards 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, as well as share based compensation costs
related to Performance Share Awards. Performance Share Awards were
awarded under the MiX Telematics Long-Term Incentive Plan for the first
time in November 2018 and are aimed at incentivising management to
achieve cumulative subscription revenue and Adjusted EBITDA targets for
the 2019 and 2020 fiscal years.
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 for 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.
Constant currency and U.S. Dollar financial information
Financial information presented in United States Dollars and constant
currency financial information presented as part of the commentary
constitute pro-forma financial information under the JSE Listings
Requirements. Unless otherwise stated, MiX Telematics has translated
U.S. Dollar amounts from South African Rand at the exchange rate of
R14.3960 per $1.00, which was the R/$ exchange rate reported by
Oanda.com as at December 31, 2018.
Constant currency information has been presented to illustrate the
impact of changes in currency rates on the Group’s results. The constant
currency information has been determined by adjusting the current
financial reporting period results to the prior period average exchange
rates, determined as the average of the monthly exchange rates
applicable to the period. The measurement has been performed for each of
the Group’s currencies, including the U.S. Dollar and British Pound. The
constant currency growth percentage has been calculated by utilizing the
constant currency results compared to the prior period results.
This pro-forma financial information is the responsibility of the
Group’s Board of Directors and is presented for illustrative purposes.
Because of its nature, the pro-forma financial information may not
fairly present MiX Telematics’ financial position, changes in equity,
results of operations or cash flows. The pro-forma financial information
does not constitute pro-forma information in accordance with the
requirements of Regulation S-X of the SEC or generally accepted
accounting principles in the United States. In addition, the rules and
regulations related to the preparation of pro-forma financial
information in other jurisdictions may also vary significantly from the
requirements applicable in South Africa. The information contained in
this report has not been reviewed or audited by the Group’s auditors.
JSE Sponsor
Java Capital
January 31, 2019
|
MIX TELEMATICS LIMITED
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED INCOME STATEMENT
|
|
|
|
|
|
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
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Revenue
|
|
514,407
|
|
|
442,125
|
|
|
35,733
|
|
|
30,712
|
|
|
Cost of sales
|
|
(176,622
|
)
|
|
(153,526
|
)
|
|
(12,269
|
)
|
|
(10,664
|
)
|
|
Gross profit
|
|
337,785
|
|
|
288,599
|
|
|
23,464
|
|
|
20,048
|
|
|
Other income/(expenses) - net
|
|
367
|
|
|
(98
|
)
|
|
25
|
|
|
(7
|
)
|
|
Operating expenses
|
|
(251,481
|
)
|
|
(235,485
|
)
|
|
(17,469
|
)
|
|
(16,358
|
)
|
|
-Sales and marketing
|
|
(51,720
|
)
|
|
(49,739
|
)
|
|
(3,593
|
)
|
|
(3,455
|
)
|
|
-Administration and other charges
|
|
(199,761
|
)
|
|
(185,746
|
)
|
|
(13,876
|
)
|
|
(12,903
|
)
|
|
Operating profit
|
|
86,671
|
|
|
53,016
|
|
|
6,020
|
|
|
3,683
|
|
|
Finance (costs)/income - net
|
|
(245
|
)
|
|
(676
|
)
|
|
(17
|
)
|
|
(47
|
)
|
|
-Finance income
|
|
2,567
|
|
|
1,996
|
|
|
178
|
|
|
139
|
|
|
-Finance costs
|
|
(2,812
|
)
|
|
(2,672
|
)
|
|
(195
|
)
|
|
(186
|
)
|
|
Profit before taxation
|
|
86,426
|
|
|
52,340
|
|
|
6,003
|
|
|
3,636
|
|
|
Taxation
|
|
(29,855
|
)
|
|
6,439
|
|
|
(2,074
|
)
|
|
447
|
|
|
Profit for the period
|
|
56,571
|
|
|
58,779
|
|
|
3,929
|
|
|
4,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the parent
|
|
56,572
|
|
|
58,780
|
|
|
3,929
|
|
|
4,083
|
|
|
Non-controlling interest
|
|
(1
|
)
|
|
(1
|
)
|
|
*
|
|
|
*
|
|
|
|
|
56,571
|
|
|
58,779
|
|
|
3,929
|
|
|
4,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amount less than $1,000
|
|
MIX TELEMATICS LIMITED
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|
|
|
|
|
|
South African Rand
|
|
United States Dollar
|
|
|
|
December 31,
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
Figures are in thousands unless otherwise stated
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
|
|
|
Unaudited
|
|
Audited
|
|
Unaudited
|
|
Unaudited
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
476,217
|
|
|
334,038
|
|
|
33,080
|
|
|
23,204
|
|
|
Intangible assets
|
|
941,351
|
|
|
898,527
|
|
|
65,390
|
|
|
62,415
|
|
|
Deferred tax assets
|
|
44,737
|
|
|
40,717
|
|
|
3,108
|
|
|
2,828
|
|
|
Capitalized commission assets
|
|
52,653
|
|
|
—
|
|
|
3,657
|
|
|
—
|
|
|
Total non-current assets
|
|
1,514,958
|
|
|
1,273,282
|
|
|
105,235
|
|
|
88,447
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Assets classified as held for sale (Note 7)
|
|
17,058
|
|
|
17,058
|
|
|
1,185
|
|
|
1,185
|
|
|
Inventory
|
|
66,124
|
|
|
57,013
|
|
|
4,593
|
|
|
3,960
|
|
|
Trade and other receivables
|
|
361,094
|
|
|
286,406
|
|
|
25,083
|
|
|
19,895
|
|
|
Taxation
|
|
3,440
|
|
|
30,373
|
|
|
239
|
|
|
2,110
|
|
|
Restricted cash
|
|
23,211
|
|
|
20,935
|
|
|
1,612
|
|
|
1,454
|
|
|
Cash and cash equivalents
|
|
316,339
|
|
|
308,258
|
|
|
21,974
|
|
|
21,413
|
|
|
Total current assets
|
|
787,266
|
|
|
720,043
|
|
|
54,686
|
|
|
50,017
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
2,302,224
|
|
|
1,993,325
|
|
|
159,921
|
|
|
138,464
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
Stated capital
|
|
786,631
|
|
|
846,405
|
|
|
54,642
|
|
|
58,794
|
|
|
Other reserves
|
|
66,949
|
|
|
(51,614
|
)
|
|
4,651
|
|
|
(3,585
|
)
|
|
Retained earnings
|
|
821,694
|
|
|
722,380
|
|
|
57,078
|
|
|
50,179
|
|
|
Equity attributable to owners of the parent
|
|
1,675,274
|
|
|
1,517,171
|
|
|
116,371
|
|
|
105,388
|
|
|
Non-controlling interest
|
|
11
|
|
|
10
|
|
|
1
|
|
|
1
|
|
|
Total equity
|
|
1,675,285
|
|
|
1,517,181
|
|
|
116,372
|
|
|
105,389
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
139,348
|
|
|
82,658
|
|
|
9,680
|
|
|
5,742
|
|
|
Provisions
|
|
2,434
|
|
|
2,132
|
|
|
169
|
|
|
148
|
|
|
Recurring commission liability
|
|
2,243
|
|
|
—
|
|
|
156
|
|
|
—
|
|
|
Capitalized lease liability
|
|
34,433
|
|
|
—
|
|
|
2,392
|
|
|
—
|
|
|
Total non-current liabilities
|
|
178,458
|
|
|
84,790
|
|
|
12,397
|
|
|
5,890
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
371,810
|
|
|
350,519
|
|
|
25,827
|
|
|
24,348
|
|
|
Capitalized lease liability
|
|
9,675
|
|
|
—
|
|
|
672
|
|
|
—
|
|
|
Taxation
|
|
12,367
|
|
|
2,832
|
|
|
859
|
|
|
197
|
|
|
Provisions
|
|
22,405
|
|
|
20,283
|
|
|
1,556
|
|
|
1,409
|
|
|
Bank overdraft
|
|
32,224
|
|
|
17,720
|
|
|
2,238
|
|
|
1,231
|
|
|
Total current liabilities
|
|
448,481
|
|
|
391,354
|
|
|
31,152
|
|
|
27,185
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
626,939
|
|
|
476,144
|
|
|
43,549
|
|
|
33,075
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
2,302,224
|
|
|
1,993,325
|
|
|
159,921
|
|
|
138,464
|
|
|
MIX TELEMATICS LIMITED
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT 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
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
Cash generated from operations
|
|
136,892
|
|
|
112,099
|
|
|
9,509
|
|
|
7,787
|
|
|
Net financing income
|
|
1,938
|
|
|
1,438
|
|
|
135
|
|
|
100
|
|
|
Taxation paid
|
|
(5,861
|
)
|
|
(4,012
|
)
|
|
(407
|
)
|
|
(279
|
)
|
|
Net cash generated from operating activities
|
|
132,969
|
|
|
109,525
|
|
|
9,237
|
|
|
7,608
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
Capital expenditure payments
|
|
(72,619
|
)
|
|
(92,239
|
)
|
|
(5,044
|
)
|
|
(6,407
|
)
|
|
Proceeds on sale of property, plant and equipment and intangible
assets
|
|
430
|
|
|
261
|
|
|
30
|
|
|
18
|
|
|
Increase in restricted cash
|
|
(455
|
)
|
|
(7,764
|
)
|
|
(32
|
)
|
|
(539
|
)
|
|
Decrease in restricted cash
|
|
5
|
|
|
24
|
|
|
*
|
|
|
2
|
|
|
Net cash utilized in investing activities
|
|
(72,639
|
)
|
|
(99,718
|
)
|
|
(5,046
|
)
|
|
(6,926
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of ordinary shares
|
|
2,706
|
|
|
4,235
|
|
|
188
|
|
|
294
|
|
|
Share repurchase (Note 10)
|
|
(73,550
|
)
|
|
—
|
|
|
(5,109
|
)
|
|
—
|
|
|
Dividends paid to Company’s owners (Note 9)
|
|
(16,819
|
)
|
|
(13,964
|
)
|
|
(1,168
|
)
|
|
(970
|
)
|
|
Repayment of capitalized lease liability
|
|
(3,381
|
)
|
|
—
|
|
|
(235
|
)
|
|
—
|
|
|
Acquisition of non-controlling interest
|
|
—
|
|
|
(1,353
|
)
|
|
—
|
|
|
(94
|
)
|
|
Net cash utilized in financing activities
|
|
(91,044
|
)
|
|
(11,082
|
)
|
|
(6,324
|
)
|
|
(770
|
)
|
|
Net decrease in cash and cash equivalents
|
|
(30,714
|
)
|
|
(1,275
|
)
|
|
(2,133
|
)
|
|
(88
|
)
|
|
Net cash and cash equivalents at the beginning of the period
|
|
312,276
|
|
|
256,864
|
|
|
21,692
|
|
|
17,843
|
|
|
Exchange gains/(losses) on cash and cash equivalents
|
|
2,553
|
|
|
(8,493
|
)
|
|
177
|
|
|
(591
|
)
|
|
Net cash and cash equivalents at the end of the period
|
|
284,115
|
|
|
247,096
|
|
|
19,736
|
|
|
17,164
|
|
|
|
|
|
* Amount less than $1,000
|
|
|
|
|
|
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
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Total revenue
|
|
514,407
|
|
|
442,125
|
|
|
35,733
|
|
|
30,712
|
|
Subscription revenue
|
|
438,913
|
|
|
376,364
|
|
|
30,489
|
|
|
26,144
|
|
Hardware revenue
|
|
65,912
|
|
|
51,684
|
|
|
4,578
|
|
|
3,590
|
|
Driver training, installation and other revenue
|
|
9,582
|
|
|
14,077
|
|
|
666
|
|
|
978
|
|
Adjusted EBITDA
|
|
155,801
|
|
|
114,515
|
|
|
10,822
|
|
|
7,955
|
|
Cash and cash equivalents
|
|
316,339
|
|
|
267,152
|
|
|
21,974
|
|
|
18,557
|
|
Net cash (1)
|
|
284,115
|
|
|
247,096
|
|
|
19,736
|
|
|
17,164
|
|
Capital expenditure incurred
|
|
75,291
|
|
|
92,645
|
|
|
5,230
|
|
|
6,435
|
|
Property, plant and equipment expenditure (2)
|
|
54,686
|
|
|
66,688
|
|
|
3,799
|
|
|
4,632
|
|
Intangible asset expenditure
|
|
20,605
|
|
|
25,957
|
|
|
1,431
|
|
|
1,803
|
|
Total development costs incurred
|
|
32,707
|
|
|
32,336
|
|
|
2,272
|
|
|
2,246
|
|
Development costs capitalized
|
|
17,907
|
|
|
15,996
|
|
|
1,244
|
|
|
1,111
|
|
Development costs expensed within administration and other charges
|
|
14,800
|
|
|
16,340
|
|
|
1,028
|
|
|
1,135
|
|
Subscribers (number)
|
|
736,085
|
|
|
664,816
|
|
|
736,085
|
|
|
664,816
|
|
(1)
|
|
Net cash is calculated as being net cash and cash equivalents,
excluding restricted cash.
|
|
(2)
|
|
Excludes non-cash additions related to the initial recognition of
right-of-use assets arising from the adoption of IFRS 16 Leases.
The adoption of IFRS 16 during the period resulted in the
recognition of right-of-use assets of R2.4 million in the three
months ended December 31, 2018.
|
Notes to the condensed consolidated income statement, statement of
financial position, statement of cash flows and other financial and
operating data
1. Accounting policies
The condensed consolidated statement of financial position, income
statement and statement of cash flows included in these financial
results have been prepared in accordance with International Financial
Reporting Standards (“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, 2018 except for the adoption of IFRS 9 Financial
Instruments (“IFRS 9”), IFRS 15 Revenue from Contracts with
Customers (“IFRS 15”) and IFRS 16 Leases (“IFRS 16”) during
the period under review.
Adoption of IFRS 9, IFRS 15 and IFRS 16:
IFRS 9 is effective for the Group from April 1, 2018.
IFRS 15 permits a modified retrospective cumulative catch-up approach
for the adoption, which the Group has decided to apply. Under this
approach, the Group has recognized transitional adjustments in retained
earnings on the date of initial application (i.e. April 1, 2018),
without restating the comparative period. Under the practical expedient,
the new requirements were only applied to contracts that were not
completed as of April 1, 2018.
IFRS 16 applies to annual reporting periods beginning on or after
January 1, 2019, but can be early adopted. Given that the Group applied
IFRS 15 from April 1, 2018, the Group decided to early adopt IFRS 16
from this date.
The Group has chosen to apply the ‘simplified approach’ on adoption of
IFRS 16 that includes certain relief related to the measurement of the
right-of-use asset and the lease liability at April 1, 2018, rather than
full retrospective application. Furthermore, the ‘simplified approach’
does not require a restatement of comparatives.
Refer to Note 2.1.1.2 of our consolidated financial statements for the
year ended March 31, 2018 for further details on the adoption of the
above mentioned standards.
|
Summary of the impact at April 1, 2018 of adopting IFRS 9, IFRS
15 and IFRS 16:
|
|
|
|
|
|
South African Rand
|
|
United States Dollar
|
|
IFRS 9 Assets
|
|
(R3.2 million)
|
|
($0.2 million)
|
|
Trade and other receivables
|
|
(R3.2 million)
|
|
($0.2 million)
|
|
|
|
|
|
|
|
IFRS 15 Assets
|
|
R46.5 million
|
|
$3.2 million
|
|
Capitalized commission assets
|
|
R45.3 million
|
|
$3.1 million
|
|
Trade and other receivables (1)
|
|
R1.2 million
|
|
$0.1 million
|
|
|
|
|
|
|
|
IFRS 16 Assets
|
|
R29.9 million
|
|
$2.1 million
|
|
Property, plant and equipment
|
|
R30.6 million
|
|
$2.1 million
|
|
Trade and other receivables (2)
|
|
(R0.7 million)
|
|
($0.04 million)
|
|
|
|
|
|
|
|
Total Assets
|
|
R73.2 million
|
|
$5.1 million
|
|
|
|
|
|
|
|
IFRS 15 Liabilities
|
|
R8.7 million
|
|
$0.6 million
|
|
Recurring commission liability (non-current)
|
|
R4.0 million
|
|
$0.3 million
|
|
Trade and other payables (3)
|
|
R4.7 million
|
|
$0.3 million
|
|
|
|
|
|
|
|
IFRS 16 Liabilities
|
|
R31.9 million
|
|
$2.2 million
|
|
Capitalized lease liability (non-current)
|
|
R23.3 million
|
|
$1.6 million
|
|
Capitalized lease liability (current)
|
|
R8.8 million
|
|
$0.6 million
|
|
Trade and other payables (2)
|
|
(R0.2 million)
|
|
($0.01 million)
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
R7.9 million
|
|
$0.5 million
|
|
Total liabilities
|
|
R48.5 million
|
|
$3.3 million
|
|
|
|
|
|
|
|
Net increase in equity
|
|
R24.7 million
|
|
$1.8 million
|
|
(1)
|
|
Contract assets related to fixed escalations.
|
|
(2)
|
|
Reversal of lease prepayment and lease accruals under IAS 17 Leases.
These have been reflected in the measurement of the lease liability
under IFRS 16.
|
|
(3)
|
|
Includes the current portion of additional recurring commission
liability of R2.9 million ($0.2 million) and increase in liabilities
related to contracts with customers due to significant financing
adjustments of R1.8 million ($0.1 million).
|
Summary of the impact on the third quarter of fiscal 2019 of adopting
IFRS 9, IFRS 15 and IFRS 16:
Other than a R2.2 million ($0.2 million) increase in finance costs
primarily as a result of IFRS 15 significant financing activity interest
expense and IFRS 16 capitalized lease liability interest, the impact on
each line item in the condensed consolidated income statement for the
third quarter of fiscal 2019 was not material.
The only adjustment to the statement of cash flows was an outflow of
R3.4 million ($0.2 million) in respect of lease liability payments being
recorded in cash flows from financing activities as a result of the
adoption of IFRS 16. This outflow was previously accounted for as an
operating lease expense and included under cash generated from
operations.
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, 2018 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 R14.3960 per $1.00, which was the R/$ exchange rate reported by
Oanda.com as of December 31, 2018. 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,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
Basic (R/$)
|
|
0.10
|
|
|
0.10
|
|
|
0.01
|
|
|
0.01
|
|
Diluted (R/$)
|
|
0.10
|
|
|
0.10
|
|
|
0.01
|
|
|
0.01
|
|
Earnings per American Depositary Share
|
|
|
|
|
|
|
|
|
|
Basic (R/$)
|
|
2.52
|
|
|
2.62
|
|
|
0.17
|
|
|
0.18
|
|
Diluted (R/$)
|
|
2.44
|
|
|
2.54
|
|
|
0.17
|
|
|
0.18
|
|
Adjusted earnings per share
|
|
|
|
|
|
|
|
|
|
Basic (R/$)
|
|
0.11
|
|
|
0.07
|
|
|
0.01
|
|
|
#
|
|
Diluted (R/$)
|
|
0.11
|
|
|
0.07
|
|
|
0.01
|
|
|
#
|
|
Adjusted earnings per American Depositary Share
|
|
|
|
|
|
|
|
|
|
Basic (R/$)
|
|
2.82
|
|
|
1.78
|
|
|
0.20
|
|
|
0.12
|
|
Diluted (R/$)
|
|
2.74
|
|
|
1.73
|
|
|
0.19
|
|
|
0.12
|
|
Ordinary shares ('000) (1)
|
|
|
|
|
|
|
|
|
|
In issue at December 31
|
|
561,808
|
|
|
562,231
|
|
|
561,808
|
|
|
562,231
|
|
Weighted average
|
|
561,934
|
|
|
560,282
|
|
|
561,934
|
|
|
560,282
|
|
Diluted weighted average
|
|
579,633
|
|
|
577,579
|
|
|
579,633
|
|
|
577,579
|
|
American Depositary Shares ('000) (1)
|
|
|
|
|
|
|
|
|
|
In issue at December 31
|
|
22,472
|
|
|
22,489
|
|
|
22,472
|
|
|
22,489
|
|
Weighted average
|
|
22,477
|
|
|
22,411
|
|
|
22,477
|
|
|
22,411
|
|
Diluted weighted average
|
|
23,185
|
|
|
23,103
|
|
|
23,185
|
|
|
23,103
|
|
#
|
|
Amounts less than $0.01
|
|
|
|
|
|
(1)
|
|
December 31, 2018 figure excludes 40,000,000 (December 31, 2017:
40,000,000) treasury shares held by MiX Telematics Investments
Proprietary Limited, a wholly owned subsidiary of the Group.
|
|
4. Reconciliation of Adjusted Earnings
|
|
|
|
South African Rand
|
|
|
United States Dollar
|
|
|
|
|
Three months
ended
|
|
|
Three months
ended
|
|
|
Three months
ended
|
|
|
Three months
ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
Figures are in thousands unless otherwise stated
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Profit for the period attributable to owners of the parent
|
|
56,572
|
|
|
58,780
|
|
|
3,929
|
|
|
4,083
|
|
|
Net foreign exchange (gains)/losses
|
|
(164
|
)
|
|
2,139
|
|
|
(11
|
)
|
|
149
|
|
|
IFRS 2 charge on performance share awards (Note 12)
|
|
2,241
|
|
|
—
|
|
|
156
|
|
|
—
|
|
|
Income tax effect on the above components
|
|
4,841
|
|
|
(20,959
|
)
|
|
336
|
|
|
(1,456
|
)
|
|
Adjusted earnings attributable to owners of the parent
|
|
63,490
|
|
|
39,960
|
|
|
4,410
|
|
|
2,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of earnings per share to adjusted earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (R/$)
|
|
0.10
|
|
|
0.10
|
|
|
0.01
|
|
|
0.01
|
|
|
Net foreign exchange (gains)/losses
|
|
#
|
|
|
#
|
|
|
#
|
|
|
#
|
|
|
IFRS 2 charge on performance share awards
|
|
#
|
|
|
—
|
|
|
#
|
|
|
—
|
|
|
Income tax effect on the above components
|
|
0.01
|
|
|
(0.03)
|
|
|
#
|
|
|
#
|
|
|
Basic adjusted earnings per share (R/$)
|
|
0.11
|
|
|
0.07
|
|
|
0.01
|
|
|
0.01
|
|
|
# Amount less than R0.01/$0.01
|
|
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
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Adjusted EBITDA
|
|
155,801
|
|
|
114,515
|
|
|
10,822
|
|
|
7,955
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Net profit on sale of property, plant and equipment and intangible
assets
|
|
327
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Depreciation (1)
|
|
(48,271
|
)
|
|
(41,301
|
)
|
|
(3,353
|
)
|
|
(2,869
|
)
|
|
Amortization (2)
|
|
(17,168
|
)
|
|
(17,661
|
)
|
|
(1,193
|
)
|
|
(1,227
|
)
|
|
Impairment of property, plant and equipment
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
*
|
|
|
Equity-settled share-based compensation costs
|
|
(3,984
|
)
|
|
(2,326
|
)
|
|
(277
|
)
|
|
(162
|
)
|
|
Net loss on sale of property, plant and equipment
|
|
—
|
|
|
(202
|
)
|
|
—
|
|
|
(14
|
)
|
|
Increase in restructuring cost provision
|
|
(34
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
*
|
|
|
Operating profit
|
|
86,671
|
|
|
53,016
|
|
|
6,020
|
|
|
3,683
|
|
|
Add: Finance (costs)/income - net
|
|
(245
|
)
|
|
(676
|
)
|
|
(17
|
)
|
|
(47
|
)
|
|
Less: Taxation
|
|
(29,855
|
)
|
|
6,439
|
|
|
(2,074
|
)
|
|
447
|
|
|
Profit for the period
|
|
56,571
|
|
|
58,779
|
|
|
3,929
|
|
|
4,083
|
|
|
(1)
|
|
Includes depreciation of property, plant and equipment (including
in-vehicle devices and right-of-use assets). The adoption of IFRS 16
during the period resulted in depreciation of right-of-use assets of
R3.3 million ($0.2 million) being recorded in the three months ended
December 31, 2018.
|
|
(2)
|
|
Includes amortization of intangible assets (including capitalized
in-house development costs and intangible assets identified as part
of a business combination).
|
|
|
|
|
|
*
|
|
Amount less than $1,000
|
|
6. Reconciliation of Adjusted EBITDA Margin to Profit for the
Period Margin
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2018
|
|
2017
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Adjusted EBITDA margin
|
|
30.3
|
%
|
|
25.9
|
%
|
|
Add:
|
|
|
|
|
|
Net profit on sale of property, plant and equipment and intangible
assets
|
|
0.1
|
%
|
|
—
|
|
|
Less:
|
|
|
|
|
|
Depreciation
|
|
(9.4
|
%)
|
|
(9.3
|
%)
|
|
Amortization
|
|
(3.4
|
%)
|
|
(4.0
|
%)
|
|
Impairment of property, plant and equipment
|
|
—
|
|
|
(0.0
|
%)
|
|
Equity-settled share-based compensation costs
|
|
(0.8
|
%)
|
|
(0.6
|
%)
|
|
Net loss on sale of property, plant and equipment
|
|
—
|
|
|
(0.0
|
%)
|
|
Increase in restructuring cost provision
|
|
(0.0
|
%)
|
|
(0.0
|
%)
|
|
Operating profit margin
|
|
16.8
|
%
|
|
12.0
|
%
|
|
Add: Finance (costs)/income - net
|
|
(0.0
|
%)
|
|
(0.2
|
%)
|
|
Less: Taxation
|
|
(5.8
|
%)
|
|
1.5
|
%
|
|
Profit for the period margin
|
|
11.0
|
%
|
|
13.3
|
%
|
7. Assets Classified as Held for Sale
The assets classified as held for sale relate to the property owned by
the Central Services Organization, a division of MiX Telematics
International Proprietary Limited. No impairment loss was recognized on
reclassification of the property as held for sale as the fair value
(estimated based on the recent market prices of similar properties in
similar locations) less costs to sell is higher than the carrying
amount. MiX Telematics has concluded agreements pertaining to a
Broad-Based Black Economic Empowerment (“B-BBEE”) transaction in which
the sale of this property is included, refer to note 13 for additional
information. The transaction is subject to certain conditions precedent
of which not all have been fulfilled by December 31, 2018.
|
8. 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
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Net cash generated from operating activities
|
|
132,969
|
|
|
109,525
|
|
|
9,237
|
|
|
7,608
|
|
|
Capital expenditure payments
|
|
(72,619
|
)
|
|
(92,239
|
)
|
|
(5,044
|
)
|
|
(6,407
|
)
|
|
Free cash flow
|
|
60,350
|
|
|
17,286
|
|
|
4,193
|
|
|
1,201
|
|
9. Dividends Paid
In respect of the second quarter of fiscal 2019, a dividend of R16.8
million ($1.2 million) was declared on October 30, 2018 and paid on
November 26, 2018. Using shares in issue of 561,807,639 (excluding
40,000,000 treasury shares), this equated to a dividend of 3 South
African cents or 0.2 U.S. cents per share.
10. Share Repurchase
On May 23, 2017, the MiX Telematics Board approved a share repurchase
program of up to R270 million ($18.8 million) under which the Company
may repurchase its ordinary shares, including American Depositary Shares
(“ADSs”). The Company may repurchase its shares from time to time at its
discretion through open market transactions and block trades, based on
ongoing assessments of the capital needs of the Company, the market
price of its securities and general market conditions. This share
repurchase program may be discontinued at any time by the Board of
Directors, and the Company has no obligation to repurchase any amount of
its securities under the program. The repurchase program will be funded
out of existing cash resources.
Fiscal 2018
During fiscal 2018, the following repurchases were made under the share
repurchase program:
|
South African Rand
|
|
Total number of
shares
repurchased
|
|
|
Average
price paid
per share
(R)
(1)
|
|
|
Shares canceled
under the share
repurchase
program
|
|
Total value of shares
purchased as part of
publicly
announced
program
(R'000)
|
|
Maximum value of
shares that may yet
be
purchased under
the program
(R'000)
|
|
June 2017
|
|
5,015,660
|
|
|
3.72
|
|
|
5,015,660
|
|
18,666
|
|
251,334
|
|
|
|
5,015,660
|
|
|
|
|
|
5,015,660
|
|
18,666
|
|
251,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States Dollar
|
|
Total number of
shares
repurchased
|
|
|
Average
price paid
per share
($)
(1)
|
|
|
Shares canceled
under the share
repurchase
program
|
|
Total value of shares
purchased as part of
publicly
announced
program
($'000)
|
|
Maximum value of
shares that may yet
be
purchased under
the program
($'000)
|
|
June 2017
|
|
5,015,660
|
|
|
0.26
|
|
|
5,015,660
|
|
1,297
|
|
17,459
|
|
|
|
5,015,660
|
|
|
|
|
|
5,015,660
|
|
1,297
|
|
17,459
|
|
(1)
Including transaction costs.
|
Subsequent to the repurchase, the shares were de-listed and now form
part of the authorized unissued share capital of the Company. No
repurchases were made under the share repurchase program during the
second half of fiscal 2018.
Fiscal 2019
No repurchases were made under the share repurchase program during the
first half of fiscal 2019. During the third quarter of fiscal 2019, the
following repurchases were made under the share repurchase program:
|
South African Rand
|
|
Total number of
shares
repurchased
|
|
|
Average
price paid
per share
(R)
(1)
|
|
Shares canceled
under the share
repurchase
program
|
|
Total value of shares
purchased as part of
publicly
announced
program
(R'000)
|
|
Maximum value of
shares that may yet
be
purchased under
the program
(R'000)
|
|
October 2018
|
|
9,157,695
|
|
|
8.03
|
|
9,157,695
|
|
73,550
|
|
177,784
|
|
|
|
9,157,695
|
|
|
|
|
9,157,695
|
|
73,550
|
|
177,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States Dollar
|
|
Total number of
shares
repurchased
|
|
|
Average
price paid
per share
($)
(1)
|
|
Shares canceled
under the share
repurchase
program
|
|
Total value of shares
purchased as part of
publicly
announced
program
($'000)
|
|
Maximum value of
shares that may yet
be
purchased under
the program
($'000)
|
|
October 2018
|
|
9,157,695
|
|
|
0.56
|
|
9,157,695
|
|
|
5,109
|
|
12,350
|
|
|
|
9,157,695
|
|
|
|
|
9,157,695
|
|
|
5,109
|
|
12,350
|
|
(1)
Including transaction costs.
|
Subsequent to the repurchase, the shares were de-listed and now form
part of the authorized unissued share capital of the Company.
11. 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, a subsidiary of
the Group, 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 R40.3 million ( $2.8 million). No loss is
considered probable under this arrangement.
12. Performance Share Award under the MiX Telematics Limited
Long-Term Incentive Plan
The MiX Telematics Board of Directors has authorized a supplemental
performance share award under the MiX Telematics Limited Long-Term
Incentive Plan. In terms of this award the Board has designated
8,000,000 ordinary shares (equivalent to 320,000 ADSs), to be awarded to
eligible employees if the Company achieves both of the following
constant currency targets at March 31, 2020:
-
cumulative subscription revenue for the 2019 and 2020 fiscal years of
R3,588 million, and
-
cumulative Adjusted EBITDA for the 2019 and 2020 fiscal years of
R1,322 million.
The targets have been derived using an average forecast exchange rate of
R13.8000 per $1.00.
Half of this supplemental equity grant, 4,000,000 ordinary
shares (equivalent to 160,000 ADSs), was made during November 2018 and
the remaining half will be awarded at the beginning of fiscal 2020 if
the Board of Directors believes the Company remains on track to meet the
vesting targets listed above. Furthermore, these performance shares will
not vest unless both targets are fully achieved in the specified
time-frame. An IFRS 2 charge of R2.2 million ($0.2 million) was
recognized on these performance share awards in the third quarter of
fiscal 2019.
The incentive targets are in excess of the current and implied guidance
we have provided to investors. The incentive targets should be viewed by
investors as stretch targets that the Board and management believe may
potentially be achievable if market trends remain favorable and the
Company executes at an extremely high level. Whether or not the
incentive targets will be achievable requires consideration of the
assumptions underlying the financial guidance provided by the Company
for the 2019 fiscal year and consideration of further assumptions being
the achievement of substantial additional growth in subscription revenue
and subscribers and exceeding hardware sales targets while
simultaneously accelerating Adjusted EBITDA margin expansion. The
setting of the incentive targets by the Board of Directors for the award
of the performance shares, does not substitute for the fiscal 2019
guidance and shareholders are advised to refer to the guidance provided
in the Business outlook section for the guidance for fiscal 2019. The
incentive targets relating to the performance share awards and the
assumptions underlying them are the responsibility of the Board of
Directors and have not been reviewed or reported on by the Company’s
external auditors.
13. B-BBEE Property Transaction
MiX Telematics has concluded agreements pertaining to a B-BBEE
transaction which is subject to certain conditions precedent of which
not all have been fulfilled by December 31, 2018. The transaction
involves the following:
-
Acquiring Erf 1335 Vorna Valley Extension 21 Township, Registration
Division IR, Province of Gauteng situated in Midrand (“the Midrand
property”) for R44.0 million ($3.1 million) from TPF Investments (Pty)
Ltd (“TPF”), which Midrand property is currently being leased from
TPF. TPF is an associate of Robin Frew, the non-executive chairman of
MiX Telematics and therefore the acquisition is a small related party
transaction under the JSE Listings Requirements.
-
In a back-to-back transaction, selling the Midrand property for R44.0
million ($3.1 million), as well as the Group’s property in
Stellenbosch currently classified as held for sale (refer to note 7)
for R23.5 million ($1.6 million) to Black Industrialists Group
Property Management Company (Pty) Ltd (“BIG”). The Group will also
provide loan funding to BIG for R9.0 million ($0.6 million).
-
Leasing both properties from BIG for an initial period of 5 years with
an option to renew the lease for a further 5 year period.
14. Taxation
Section 11D allowances relating to tax assets recognized
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 in the 2013 and 2014 fiscal years did
not, in the DST’s opinion, constitute qualifying expenditure in terms of
the Act. MiX International, through due legal process, had formally
requested a review of the DST’s decision not to approve this
expenditure. While approvals were obtained for a portion of this project
expenditure as a result of a further review performed by the DST in
February 2017, we continue to seek approval for the remaining projects
and as such the legal process is ongoing. In addition to the approvals
that were subject to the legal process, 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.
Since the introduction of the DST pre-approval process, the Group has
recognized in the income statement cumulative tax incentives in addition
to the incurred cost of R23.0 million ($1.6 million) in respect of S11D
deductions, of which R2.5 million ($0.2 million) was recognized as at
December 31, 2018. R20.2 million ($1.4 million) relates to deductions in
respect of development project expenditure which has been approved by
the DST. R2.8 million ($0.2 million) relates to an uncertain tax
position in respect of projects where approvals have not yet been
received from the DST. If the Group is unsuccessful in this regard, the
Group will not recover the R2.8 million ($0.2 million) raised at
December 31, 2018.
15. Dividend Declared
The Board declared that in respect of the third quarter of fiscal 2019,
which ended on December 31, 2018, a dividend of 3 South African cents
(0.2 U.S. cents) per ordinary share to be paid on Monday, February 25,
2019.
The details with respect to the dividends declared for ordinary
shareholders are as follows:
|
Last day to trade cum dividend
|
|
|
|
Tuesday, February 19, 2019
|
|
Securities trade ex dividend
|
|
|
|
Wednesday, February 20, 2019
|
|
Record date
|
|
|
|
Friday, February 22, 2019
|
|
Payment date
|
|
|
|
Monday, February 25, 2019
|
Share certificates may not be dematerialized or rematerialized between
Wednesday, February 20, 2019 and Friday, February 22, 2019, both days
inclusive.
Shareholders are advised of the following additional information:
-
the dividend has been declared out of income reserves;
-
the local dividends tax rate is 20%;
-
the gross local dividend amounts to 3 South African cents per ordinary
share;
-
the net local dividend amount is 2.4 South African cents per ordinary
share for shareholders liable to pay dividends tax;
-
the issued ordinary share capital of MiX Telematics is 601,807,639
ordinary shares of no par value; and
-
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)
|
|
|
|
Thursday, February 21, 2019
|
|
Record date
|
|
|
|
Friday, February 22, 2019
|
|
Approximate date of currency conversion
|
|
|
|
Monday, February 25, 2019
|
|
Approximate dividend payment date
|
|
|
|
Thursday, March 7, 2019
|
16. 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,
2018.
|
|
|
|
|
|
|
South African Rand
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Figures are in thousands (Unaudited)
|
|
Three months ended
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
|
Total
development
costs incurred
|
|
32,707
|
|
33,983
|
|
34,108
|
|
30,488
|
|
32,336
|
|
34,167
|
|
33,175
|
|
32,152
|
|
Development
costs capitalized
|
|
17,907
|
|
17,571
|
|
17,245
|
|
16,543
|
|
15,996
|
|
16,148
|
|
16,656
|
|
17,268
|
|
Development
costs expensed
within
administration
and
other
charges
|
|
14,800
|
|
16,412
|
|
16,863
|
|
13,945
|
|
16,340
|
|
18,019
|
|
16,519
|
|
14,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States Dollar
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Figures are in thousands (Unaudited)
|
|
Three months ended
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
|
2017
|
|
2017
|
|
2017
|
|
2017
|
|
Total
development
costs incurred
|
|
2,272
|
|
2,361
|
|
2,369
|
|
2,118
|
|
2,246
|
|
2,374
|
|
2,304
|
|
2,233
|
|
Development
costs capitalized
|
|
1,244
|
|
1,221
|
|
1,198
|
|
1,149
|
|
1,111
|
|
1,122
|
|
1,157
|
|
1,199
|
|
Development
costs expensed
within
administration
and other
charges
|
|
1,028
|
|
1,140
|
|
1,171
|
|
969
|
|
1,135
|
|
1,252
|
|
1,147
|
|
1,034
|
For more information please visit our website at: www.mixtelematics.com
MiX Telematics Limited
(Incorporated in the Republic of
South Africa)
(Registration number: 1995/013858/06)
JSE share
code: MIX NYSE code: MIXT ISIN: ZAE000125316
(“MiX Telematics” or
“the Company” or “the Group”)
Registered office
Matrix Corner, Howick Close, Waterfall
Park, Midrand
Directors
RA Frew* (Chairman), SB Joselowitz (CEO), SR Bruyns*#
(Lead Independent Director), PM Dell, F Futwa*#, IV Jacobs*#,
F Roji-Maplanka*#, CWR Tasker, AR Welton*#
*
Non-executive
# Independent
Contact: