South African-based fleet management Software-as-a-Service (SaaS) provider, Mix Telematics, continues to rely on its global reach to remain competitive in a tough market.
The company – which in August 2013 listed on the New York Stock Exchange – delivered solid revenue growth, strong profitability and cash flow in the financial year 2015.
Mix Telematics grew its subscription revenue 17% to R998m in the year 2015, with the number of vehicles covered up 14% to 512 000. The company also ended the fiscal year with a bigger cash pile of R945m up fromR876m in the previous year.
Mix Telematics develops its fleet management solutions using a SaaS model in South Africa, where it takes advantage of savings on costs of hiring software engineers. In Europe and the US these professionals cost more.
Mix Telematics has offices in Australia, Brazil, South Africa, Uganda, the United Arab Emirates, the UK and the US. Thousands of South African customers rely on its stolen-vehicle recovery service, Matrix Vehicle Tracking.
“We were delighted to break through the half million subscribers’ level as few telematics solutions providers have achieved this type of critical mass,” says president and CEO of Mix Telematics Stefan Joselowitz. “We are winning important new business, as well as signing meaningful expansions with key customers. The penetration of telematics solutions overall remain at a paltry 10% of the global commercial vehicle fleet.
“Market research indicates that this penetration will likely double in the next four to five years. It’s for this reasons we believe our scale, our broad-based product portfolio and our global reach is a tremendous asset.”
MiX Telematics services customers in 120 countries and has an advantage of operating across six continents. It also has a network of more than 130 fleet partners globally.
“While this does expose us to somewhat more volatile economies, multinational clients are increasingly preferring to contract with a single vendor versus a dozen regional players,” says Joselowitz.
It hasn’t been smooth sailing, however.
Mix Telematics says is in a process of negotiating an “amicable exit” from its “disappointing” joint venture in Brazil with Sascar, which was launched in September 2013. At the time the company indicated that the move signified its focus on increasing its market penetration and growth in Brazil and the greater Latin America region.
However, Mix Telematics is not giving up on Brazil.
Joselowitz says the move to exit the joint venture could “open up an opportunity to either go it alone or with a new partner”.
Mix Telematics management says it sees more growth opportunities in the Americas and has renewed big contracts with its global clients there.
As a result, the company predicts that revenue will grow up to 12.1% in the 2016 financial year.
Could it be the company is being dressing up by management in anticipation of a global suitor?
Mix Telematics is currently trading under cautionary stating that the company’s board is investigating strategic alternatives for the global firm.