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MiX Telematics Reports First Half Of Fiscal Year 2023 Ifrs Financial Results

10/27/2022

First Half of Fiscal Year 2023 Highlights:

  • Total revenue of R1,145 million, up 8% year-over-year in constant currency
  • Subscription revenue of R1,004 million, up 9% year-over-year in constant currency
  • Concluded the acquisition of Trimble’s Field Service Management business (“FSM”)
  • Annual recurring revenue (“ARR”) of R2 252 million, up 17% year-over-year in constant currency
  • Organic net subscriber adds of 61,500 subscribers, including a record 38,300 in the second quarter
  • Ending total active subscriber base of 914,600, including 38,000 from the acquisition of FSM
  • Net cash and cash equivalents of R138 million at period end

Midrand, South Africa and Boca Raton, October 27, 2022 – MiX Telematics Limited (NYSE: MIXT, JSE: MIX), a leading global Software-as-a-Service (“SaaS”) provider of connected fleet management solutions, today announced financial results for its first half of fiscal year 2023, which ended on September 30, 2022.

Management Commentary

“In the first half of the fiscal year, we delivered solid results and further positioned MiX to take full advantage of the growing demand for cloud-based telematics solutions,” said CEO Stefan Joselowitz. “We organically added 61,500 subscribers to our platform, including a record 38,300 in the second quarter of our fiscal year. We also completed our acquisition of Trimble’s FSM business, which added 38,000 subscribers and $10.6 million of ARR to our USA business and serves to significantly expand our footprint outside of the energy sector in that geography. These are notable milestones as we execute on our dual-pronged organic growth and M&A strategy.

“For the second half of the fiscal year, in addition to maintaining our growth trajectory, we plan to continue to execute on ongoing cost savings initiatives and working-capital optimization, to improve operating margins and cash generation.”

Financial performance for the first half of fiscal year 2023

Subscription revenue: Subscription revenue increased to R1,003.8 million, an increase of 12.6% compared to R891.2 million for the first half of fiscal year 2022. The FSM business acquired on September 2, 2022 contributed R15.7 million to the subscription revenues for the first half of fiscal year 2023. On a constant currency basis, subscription revenue increased by 8.5%. 1.4% of this increase is attributable to the FSM business acquisition. During the first half of fiscal year 2023, the Company’s subscriber base increased by a net 99,500 subscribers. The group reported record organic net subscriber growth of 61,500 subscribers with contributions across all solution categories. 38,000 subscribers were added by MiX Telematics North America Inc., from the acquired FSM business. Subscription revenue represented 87.7% of total revenue during the first half of fiscal year 2023.

Total revenue: Total revenue was R1,144.7 million, an increase of 12.2% compared to R1,020.5 million for the first half of fiscal year 2022. Total revenue increased by 7.9% on a constant currency basis. Hardware and other revenue was R140.9 million, an increase of 8.9%, compared to R129.4 million for the first half of fiscal year 2022. Hardware and other revenues decreased by 1.7% on a constant currency basis.

Gross margin: Gross profit was R705.8 million, compared to R651.8 million for the first half of fiscal year 2022. Gross profit margin was 61.7%, compared to 63.9% for the first half of fiscal year 2022. The subscription revenue margin during the first half of fiscal year 2023 was 67.3%, compared to 70.0% for the first half of fiscal year 2022.

Operating profit: Operating profit was R71.5 million, compared to R122.7 million in the first half of fiscal year 2022.The operating margin was 6.2%, compared to 12.0% in the first half of fiscal year 2022. Operating expenses represented 55.6% of revenue compared to 52.0% in the first half of fiscal year 2022. The increase in operating expenses included acquisition-related costs of R12.8 million and also included a R30.3 million increase in sales and marketing investments.

Loss for the period and earnings per share: Loss for the period was R2.2 million, compared to a profit of R74.2 million in the first half of fiscal year 2022. Loss for the period included a net foreign exchange gain of R24.4 million before tax, as well as a R60.0 million deferred tax charge on a U.S. Dollar intercompany loan Between MiX Telematics and MiX Telematics Investments Proprietary Limited (“MiX Investments”), a wholly owned subsidiary of the Company. During the first half of fiscal year 2022, a net foreign exchange loss of R0.2 million was recognized, as well as a R3.9 million deferred tax charge on a U.S. Dollar intercompany loan between MiX Telematics and MiX Investments.

Earnings per diluted ordinary share was negative 0.4 South African cents, compared to positive 13 South African cents in the first half of fiscal year 2022. For the first half of fiscal year 2023, the calculation was based on diluted weighted average ordinary shares in issue of 556.2 million, compared to 565.5 million diluted weighted average ordinary shares in issue during the first half of fiscal year 2022.

Adjusted Effective Tax Rate: The Company’s effective tax rate was 102.3%, compared to 36.1% for the first half of fiscal year 2022. Adjusted effective tax rate, which excludes the impact of net foreign exchange gains and losses net of tax and acquisition-related costs, is the tax rate, which is used in calculating adjusted earnings below. Adjusted effective tax rate was 45.4% compared to 32.1% in the first half of fiscal year 2022.

Adjusted EBITDA: Adjusted EBITDA was R217.1 million compared to R254.6 million for the first half of fiscal year 2022. Adjusted EBITDA margin was 19.0%, compared to 24.9% in the first half of fiscal year 2022.

Adjusted earnings for the period and adjusted earnings per share: Adjusted earnings for the period were R47.0 million, compared to R78.9 million in the first half of fiscal year 2022. Adjusted earnings per diluted ordinary share were 8 South African cents, compared to 14 South African cents for the first half of fiscal year 2022.

Statement of Financial Position and Cash Flow: At September 30, 2022, the Company had R138.1 million of net cash and cash equivalents, compared to R407.8 million at March 31, 2022.

The Company generated R47.9 million in net cash from operating activities for the first half of fiscal year 2023 and invested R240.1 million in capital expenditures during the period (including investments in in-vehicle devices of R173.2 million), leading to a negative free cash flow of R192.2 million, compared to a negative free cash flow of R32.5 million for the first half of fiscal year 2022. Capital expenditures in the first half of fiscal year 2022 were R203.1 million and included in-vehicle devices of R140.1 million.

Net cash used in investing activities for the first half of fiscal year 2023 was R302.3 million, which includes R64.6 million paid by MiX Telematics North America for the acquisition of Trimble’s FSM business, compared to R203.0 million net cash used in investing activities for the first half of fiscal year 2022.

The Company utilized R56.8 million in financing activities, compared to R51.2 million utilized during the first half of fiscal year 2022. The cash utilized in financing activities during the first half of fiscal year 2023 mainly consisted of dividends paid of R44.1 million, the payment of lease liabilities of R10.9 million, and the repurchase of shares of R1.7 million. The cash utilized during the first half of fiscal year 2022 consisted primarily of dividends paid of R44.0 million and the payment of lease liabilities of R7.2 million.

SUMMARIZED CONSOLIDATED INCOME STATEMENT

 

Six months ended
September 30,
2022

 

 

Six months ended
September 30,
2021

 

Figures are in thousands unless otherwise stated

 

 

 

Revenue

1,144,747

 

1,020,517

 

Operating profit

71,498

 

122,689

 

Adjusted EBITDA

217,112

 

254,581

 

(Loss)/profit for the period attributable to owners of the parent

(2,214)

 

74,195

 

Adjusted earnings attributable to owners of the parent 1

46,961

 

78,891

 

Headline (loss)/earnings attributable to owners of the parent

(2,656)

 

74,037

 

Basic (loss)/earnings per share - (R)

(0.004)

 

0.13

 

Basic adjusted earnings per share - (R) 1

0.09

 

0.14

 

Basic headline (loss)/earnings per share - (R)

(0.005)

 

0.13

 

Dividends per share - (R)

0.08

 

0.08

 

Ordinary shares ('000) 2

 

 

 

   -in issue at September 30

552,086

 

552,618

 

   -weighted average

551,792

 

552,124

 

   -diluted weighted average

556,206

 

565,465

 

 

 

 

1 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 and acquisition-related costs net of tax, divided by the weighted average number of ordinary shares in issue during the period.

2 September 30, 2022 figure excludes 53,816,750 (September 30, 2021: 53,816,750) treasury shares held by MiX Investments, a wholly owned subsidiary of the Group.


SUMMARIZED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

 


September 30,
2022

 


March 31,
2022

Figures are in thousands unless otherwise stated

 

 

 

 

ASSETS

 

 

 

 

Non-current assets

 

 

1,925,521

 

1,606,775

Current assets

 

 

1,127,638

 

1,082,141

Total assets

 

 

3,053,159

 

2,688,916

EQUITY AND LIABILITIES


 

 

 

 

Equity

 

 

1,948,753

 

1,898,283

Non-current liabilities

 

 

284,900

 

203,001

Current liabilities

 

 

819,506

 

587,632

Total equity and liabilities

 

 

3,053,159

 

2,688,916

Net cash

 

 

138,074

 

407,805

Cash and cash equivalents


 

 

353,637

 

488,921

Net asset value per share (R)

 

 

3.53

 

3.44

 

 

 

 

 

 

Dividend declared

The Board of Directors declared in respect of the second quarter of fiscal year 2023, which ended on September 30, 2022, a dividend of 4 South African cents per ordinary share to be paid on Monday, November 21, 2022.

The details with respect to the dividends declared for ordinary shareholders are as follows:

Last day to trade cum dividend Tuesday, November 15, 2022
Securities trade ex dividend Wednesday, November 16, 2022
Record date Friday, November 18, 2022
Payment date Monday, November 21, 2022

Share certificates may not be dematerialized or rematerialized between Wednesday, November 16, 2022 and

Friday, November 18, 2022, 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 4 South African cents per ordinary share;
  • the net local dividend amount is 3.2 South African cents per ordinary share for shareholders liable to pay dividends tax;
  • the issued ordinary share capital of MiX Telematics is 605,902,682 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, November 17, 2022
Record date Friday, November 18, 2022
Approximate date of currency conversion Monday, November 21, 2022
Approximate dividend payment date Thursday, December 1, 2022

Short-form announcement

This short-form announcement is the responsibility of the Board of Directors and the contents have been approved by the Board of Directors on October 25, 2022. This short-form announcement is a summary of the full announcement released on SENS and published on the Group’s website (https://www.mixtelematics.com/investor-relations/sens) on October 27, 2022. This short-form announcement does not contain the complete or full announcement details. Any investment decision by investors and/or shareholders should be based on consideration of the full announcement. The short-form announcement has not been audited or reviewed by the Group’s external auditors. A copy of the full announcement may be requested from the Company Secretary at Herman@statucor.co.za or the sponsor, Java Capital at sponsor@javacapital.co.za. Any investment decision should be based on the full announcement available on the Company’s website.

The full announcement is available at https://senspdf.jse.co.za/documents/2022/jse/isse/MIX/FY-Q22023.pdf.

Directors

RA Frew* (Chairman), SB Joselowitz (CEO), SR Bruyns*# (Lead Independent Director), P Dell (CFO), F Futwa*#, IV Jacobs*#, CD Flemming*#, CWR Tasker

* Non-executive
# Independent

Company secretary

Registered office

Statucor Proprietary Limited

Matrix Corner, Howick Close, Waterfall Park, Midrand

 

 

Auditors

Sponsor

Deloitte & Touche

Java Capital

 

October 27, 2022

 

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