Covid-19 fails to derail Cartrack


Covid-19 fails to derail Cartrack

Published Date: 2021-01-14 | Source: Stephen Gunnion | Author: Stephen Gunnion

Covid-19 fails to derail Cartrack

The vehicle telematics group continues to grow subscribers as it targets a Nasdaq listing.

Cartrack has reported continued growth in subscriber numbers as it prepares to delist from the JSE and float under a new holding company on the Nasdaq market in the US. It says the growth has come despite distribution restrictions as a result of Covid-19.

In a business update for the nine months to end-November, the vehicle telematics group said it grew subscriber numbers by 14% to 1.25-million over the period, illustrating increasing demand for its Software-as-a-Service (SaaS) platform. Subscription revenue increased by 18% to R1.64 billion, while total revenue rose 17% to R1.68 billion. Operating profit grew 18% to R566 million as its operating profit margin improved to 34%, although that was due to lower than planned growth due to the pandemic related constraints. Profit after tax came in 20% higher.

Last week, Cartrack announced plans to delist and float Calisto's Singapore-registered holding group, Karooooo, on the US's Nasdaq exchange. It is offering minority shareholders R42 per share but has given them the option to remain invested in Cartrack by accepting shares in Karooooo instead of the cash.

It said the deal would align its corporate and operating structure with its growing international operations and global growth strategy, while providing access to global technology infrastructure and research and development. It will also help expand its investor base, provide access to global capital markets and potentially lead to a rerating of its valuation.

If the deal goes ahead, Karooooo will apply for a listing on the Nasdaq Global Select Market, with a secondary inward listing on the JSE. Current Cartrack shareholders will be entitled to utilise up to a maximum of the proceeds they receive from the offer to subscribe for Karooooo shares.

Calisto and Karooooo, who own a combined 68% of Cartrack's stock, won't vote in the scheme of arrangement. Shareholders holding about 80% of the remaining stock have undertaken to support the transaction, as well as the reinvestment option.

Cartrack's shares rose 4.5% to R51.10 yesterday.

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