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 R12.3689 per $1.00, which was the R/$
exchange rate reported by Oanda.com as of December 31,
2017.
Third Quarter
Highlights:
- Subscription revenue of R376 million
($30.4 million), up over 21% year over year on a constant currency
basis
- Net subscriber additions of 24,700,
bringing the total subscriber base to over 664,000, up 10% year
over year
- Operating profit of R53 million
($4.3 million), up 11% year over year
- Adjusted EBITDA of R115 million
($9.3 million), up 30% year over year
- Adjusted EBITDA margin of 25.9%
continues the quarterly improvement trend since the start of fiscal
2017. Reported Adjusted EBITDA margins were as follows: Q1 2017
15.9%, Q2 2017 18.0%, Q3 2017 21.9%, Q4 2017 22.3%, Q1 2018 23.1%,
Q2 2018 25.1%, Q3 2018 25.9%
- Company raises full-year guidance
for both revenue and profit
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 2018, which ended
December 31, 2017.
“In Q3, MiX Telematics delivered the strongest quarter in the
Company’s history. This is evidenced by over 21% year-on-year
subscription revenue growth on a constant currency basis and the
addition of 24,700 net new subscribers,” said Stefan Joselowitz,
Chief Executive Officer of MiX Telematics. “In addition, we
delivered record Adjusted EBITDA of R115 million at a margin of
close to 26%. This was the sixth consecutive quarter of margin
expansion and continues the great progress towards our longer-term
target of 30% plus. MiX remains well positioned to maintain the
momentum for the remainder of fiscal 2018 and beyond, given the
ongoing strong demand from new and existing customers, as well as
the growing pipeline of opportunities worldwide.”
Financial performance for the three
months ended December 31, 2017
Subscription Revenue: Subscription revenue was R376.4
million ($30.4 million), an increase of 21.1% compared with R310.7
million ($25.1 million) for the third quarter of fiscal 2017.
Subscription revenue increased more than 21% on a constant currency
basis. Subscription revenue benefited from an increase of over
59,000 subscribers, representing an increase in the subscriber base
of 9.8% from December 2016 to December 2017. Subscription revenue
has also benefited from higher average revenue per user.
Total Revenue: Total revenue was R442.1 million ($35.7
million), an increase of 10.2% compared to R401.4 million ($32.5
million) for the third quarter of fiscal 2017. Hardware and other
revenue was R65.8 million ($5.3 million), a decrease of 27.5%
compared to R90.7 million ($7.3 million) for the third quarter
of fiscal 2017.
Gross Margin: Gross profit was R288.6 million ($23.3
million), as compared to R267.3 million ($21.6 million) for the
third quarter of fiscal 2017. Gross profit margin was 65.3%,
compared to 66.6% for the third quarter of fiscal 2017.
Operating Margin: Operating profit was R53.0 million
($4.3 million), compared to R47.9 million ($3.9 million) for the
third quarter of fiscal 2017. Operating margin was 12.0%, compared
to 11.9% for the third quarter of fiscal 2017. Operating expenses
of R235.5 million ($19.0 million) have increased by R16.0 million
($1.3 million) or 7.3%, since the third quarter of fiscal 2017.
Adjusted EBITDA: Adjusted EBITDA, a non-IFRS measure, was
R114.5 million ($9.3 million) compared to R87.8 million
($7.1 million) for the third quarter of fiscal 2017. Adjusted
EBITDA margin, a non-IFRS measure, for the third quarter of fiscal
2018 was 25.9%, compared to 21.9% for the third quarter of fiscal
2017.
Profit for the Period and Earnings per Share: Profit for
the period was R58.8 million ($4.8 million), compared to
R35.1 million ($2.8 million) in the third quarter of
fiscal 2017. Profit for the period includes a net foreign exchange
loss of R2.1 million ($0.2 million) before tax. Profit for the
period for the third quarter of fiscal 2017 included a net foreign
exchange loss of R4.9 million ($0.4 million).
Earnings per diluted ordinary share were 10 South African cents,
compared to 6 South African cents in the third quarter of fiscal
2017. For the third quarter of 2018, the calculation was based on
diluted weighted average ordinary shares in issue of 577.6 million
compared to 567.0 million diluted weighted average ordinary shares
in issue during the third quarter of fiscal 2017.
The Company's effective tax rate for the quarter was (12.3%)
compared to 19.2% in the third quarter of fiscal 2017. 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 26.7% compared to 22.6% in the third quarter of
fiscal 2017.
On a U.S. Dollar basis, and using the December 31, 2017
exchange rate of R12.3689 per U.S. Dollar, and at a ratio of 25
ordinary shares to one American Depositary Share (“ADS”), profit
for the period was $4.8 million, or 21 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 R40.0 million ($3.2 million), compared to R37.4 million
($3.0 million) in the third quarter of fiscal 2017 and exclude the
net foreign exchange losses of R2.1 million ($0.2 million)
referred to above. Adjusted earnings for the third quarter of
fiscal 2017 excluded the net foreign exchange loss of R4.9 million
($0.4 million) referred to above. Adjusted earnings per
diluted ordinary share, also a non-IFRS measure, were 7 South
African cents consistent with the third quarter of fiscal 2017.
On a U.S. Dollar basis, and using the December 31, 2017
exchange rate of R12.3689 per U.S. Dollar, and at a ratio of 25
ordinary shares to one ADS, adjusted earnings for the period was
$3.2 million, or 14 U.S. cents per diluted ADS.
Statement of Financial Position and Cash Flow: At
December 31, 2017, the Company had R247.1 million ($20.0
million) of net cash and cash equivalents, compared to R356.3
million ($28.8 million) at March 31, 2017.
The Company generated R109.5 million ($8.9 million) in net
cash from operating activities for the three months ended
December 31, 2017 and invested R92.2 million
($7.5 million) in capital expenditures during the quarter
(including investments in in-vehicle devices of R64.1 million
or $5.2 million), leading to a free cash flow, a non-IFRS measure,
of R17.3 million ($1.4 million), compared with free cash flow of
R24.0 million ($1.9 million) for the third quarter of fiscal
2017. Capital expenditures were R18.9 million ($1.5 million) higher
than in the third quarter of fiscal 2017 primarily as a result of
increased investments in in-vehicle devices due to the continued
increase in the number of bundled subscription contracts.
Business Outlook
MiX Telematics has translated U.S. Dollar amounts in this
Business Outlook paragraph from South African Rand at the exchange
rate of R11.9355 per $1.00, which was the R/$ exchange rate
reported by Oanda.com as at January 29, 2018.
Based on information as of today, February 1, 2018, the
Company is issuing the following financial guidance for the full
2018 fiscal year:
- Subscription revenue - R1,432 million
to R1,436 million ($120.0 million to $120.3 million), which would
represent subscription revenue growth of 15.5% to 15.8% compared to
fiscal 2017. Previous guidance was R1,420 million to R1,432
million.
- Total Revenue - R1,690 million to
R1,695 million ($141.6 million to $142.0 million), which would
represent revenue growth of 9.7% to 10.1% compared to fiscal 2017.
Previous guidance was R1,661 million to R1,687 million.
- Adjusted EBITDA - R417 million to R428
million ($34.9 million to $35.9 million), which would represent
Adjusted EBITDA growth of 38.3% to 41.9% compared to fiscal 2017.
Previous guidance was R403 million to R421 million.
- Adjusted earnings per diluted ordinary
share of 23.1 to 24.8 South African cents based on 572 million
diluted ordinary shares in issue (previous guidance was 22.0 to
23.5 South African cents based on 568 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 48.4 to 51.9 U.S. cents.
For the fourth quarter of fiscal 2018 the Company expects
subscription revenue to be in the range of R371 million to R375
million ($31.1 million to $31.4 million), which would represent
subscription revenue growth of 15.3% to 16.6% compared to the
fourth quarter of fiscal 2017. On a constant currency basis, this
represents subscription revenue growth of 17.8% to 19.1% compared
to the fourth quarter of fiscal 2017.
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 2018 fiscal year of R13.0300 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 February 1, 2018 to discuss the
Company's financial results and current business outlook:
- The live webcast of the call will be
available at the “Investor Information” page of the Company’s
website, http://investor.mixtelematics.com.
- To access the call, dial
+1-888-378-4439 (within the United States) or 0 800 998 654 (within
South Africa) or +1-323-701-0225 (outside of the United States).
The conference ID is 7605713.
- 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 7605713.
- 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 664,000 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
2018, 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, 2017, 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 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, 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 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 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, our 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
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 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 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.
February 1, 2018
JSE Sponsor
Java Capital Trustees and Sponsors Proprietary Limited
MIX TELEMATICS LIMITED
CONDENSED CONSOLIDATED INCOME STATEMENTS South African
Rand United States Dollar
Three monthsended
Three monthsended Three monthsended
Three monthsended December 31, December
31, December 31, December 31, Figures are in
thousands unless otherwise stated
2017 2016
2017 2016 Unaudited Unaudited
Unaudited Unaudited Revenue 442,125
401,375 35,745 32,450 Cost of sales (153,526 )
(134,032 ) (12,412 ) (10,836 )
Gross profit 288,599
267,343 23,333 21,614 Other (expenses)/income
- net (98 ) 31 (8 ) 3 Operating expenses (235,485 ) (219,520 )
(19,038 ) (17,747 ) -Sales and marketing (49,739 ) (48,688 ) (4,021
) (3,936 ) -Administration and other charges (185,746 ) (170,832 )
(15,017 ) (13,811 )
Operating profit 53,016
47,854 4,287 3,870 Finance (costs)/income -
net (676 ) (4,463 ) (55 ) (361 ) -Finance income 1,996 1,216 161 98
-Finance costs (2,672 ) (5,679 ) (216 ) (459 )
Profit before
taxation 52,340 43,391 4,232 3,509
Taxation 6,439 (8,314 ) 521 (672 )
Profit for the
period 58,779 35,077 4,753
2,837 Attributable to: Owners of
the parent 58,780 35,082 4,753 2,837 Non-controlling interests (1 )
(5 )
*
*
58,779 35,077 4,753
2,837
* 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
2017 2017 2017 2017 Unaudited
Audited Unaudited Unaudited ASSETS
Non-current assets Property, plant and equipment 355,414
294,120 28,734 23,779 Intangible assets 901,651 881,900 72,897
71,300 Finance lease receivable — 22 — 2 Deferred tax assets 39,843
28,130 3,221 2,274
Total non-current
assets 1,296,908 1,204,172
104,852 97,355 Current
assets Inventory 54,356 26,449 4,395 2,138 Trade and other
receivables 290,366 260,576 23,475 21,067 Finance lease receivable
— 140 — 11 Taxation 24,203 26,302 1,957 2,126 Restricted cash
21,319 13,268 1,724 1,073 Cash and cash equivalents 267,152
375,782 21,599 30,381
Total current
assets 657,396 702,517
53,150 56,796
Total assets 1,954,304 1,906,689
158,002 154,151
EQUITY Stated capital 841,239 854,345 68,012 69,072 Other
reserves (33,707 ) (4,370 ) (2,725 ) (353 ) Retained earnings
672,167 594,514 54,343 48,065
Equity
attributable to owners of the parent 1,479,699
1,444,489 119,630 116,784 Non-controlling
interest 12 (1,558 ) 1 (126 )
Total equity
1,479,711 1,442,931 119,631
116,658 LIABILITIES
Non-current liabilities Deferred tax liabilities 96,084
100,067 7,768 8,090 Provisions 1,768 1,833 143
148
Total non-current liabilities 97,852
101,900 7,911 8,238
Current liabilities Trade and other payables
327,031 309,110 26,442 24,990 Taxation 9,517 4,521 769 366
Provisions 20,137 28,778 1,628 2,327 Bank overdraft 20,056
19,449 1,621 1,572
Total current
liabilities 376,741 361,858
30,460 29,255
Total liabilities 474,593
463,758 38,371 37,493
Total equity and liabilities
1,954,304 1,906,689 158,002
154,151 MIX TELEMATICS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS South African Rand United States
Dollar Three monthsended Three
monthsended Three monthsended Three
monthsended December 31, December 31,
December 31, December 31, Figures are in thousands
unless otherwise stated
2017 2016 2017
2016 Unaudited Unaudited Unaudited
Unaudited Operating activities Cash generated from
operations 112,099 99,124 9,063 8,014 Net financing income 1,438
448 116 36 Taxation paid (4,012 ) (2,243 ) (324 ) (181 )
Net
cash generated from operating activities 109,525
97,329 8,855 7,869
Cash flows from investing activities Capital expenditure
(92,239 ) (73,305 ) (7,457 ) (5,927 ) Deferred consideration paid —
(368 ) — (30 ) Proceeds on sale of property, plant and equipment
261 571 21 46 Decrease in restricted cash 24 604 2 49 Increase in
restricted cash (7,764 ) (434 ) (628 ) (35 )
Net cash utilized
in investing activities (99,718 ) (72,932
) (8,062 ) (5,897 )
Cash flows from financing activities Proceeds from issuance
of ordinary shares 4,235 2,543 342 206 Share repurchase — (81 ) —
(7 ) Dividends paid (13,964 ) (11,253 ) (1,129 ) (910 ) Acquisition
of non-controlling interest (1,353 ) — (109 ) —
Net cash utilized in financing activities (11,082
) (8,791 ) (896 ) (711
) Net (decrease)/increase in cash and cash
equivalents (1,275 ) 15,606 (103
) 1,261 Net cash and cash equivalents at the
beginning of the period 256,864 311,328 20,767 25,170 Exchange
losses on cash and cash equivalents (8,493 ) (3,682 ) (686 ) (297 )
Net cash and cash equivalents at the end of the period
247,096 323,252 19,978
26,134 MIX TELEMATICS LIMITED
OTHER FINANCIAL AND OPERATING DATA
South African Rand United States Dollar Three
monthsended Three monthsended Three
monthsended Three monthsended December
31, December 31, December 31, December 31,
Figures are in thousands except for subscribers
2017
2016 2017 2016 Unaudited
Unaudited Unaudited Unaudited Subscription
revenue
376,364 310,695
30,428 25,119 Adjusted EBITDA
114,515 87,822
9,258 7,101 Cash and cash equivalents
267,152 358,654
21,599 28,996 Net cash (1)
247,096 323,252
19,978 26,134 Capital expenditure
incurred
92,645 61,163
7,490
4,944 Property, plant and equipment expenditure
66,688
28,281
5,392 2,286 Intangible asset expenditure
25,957 32,882
2,098 2,658 Total
development costs incurred
32,336 36,696
2,614 2,967 Development costs capitalized
15,996 20,415
1,293 1,651 Development costs expensed
within administration and other charges
16,340 16,281
1,321 1,316 Subscribers (number)
664,816 605,317
664,816 605,317
(1)
Net cash is calculated as being net cash
and cash equivalents, excluding restricted cash less interest
bearing borrowings.
Notes to the 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 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,
2017. No new or revised accounting pronouncements that became
effective during fiscal 2018 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, 2017 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 R12.3689
per $1.00, which was the R/$ exchange rate reported by Oanda.com as
of December 31, 2017. 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 Three months Three months
Three months ended ended ended
ended December 31, December 31, December
31, December 31, 2017 2016 2017
2016 Unaudited Unaudited
Unaudited Unaudited Earnings per share Basic (R/$)
0.10 0.06 0.01 0.01 Diluted (R/$) 0.10 0.06 0.01 0.01 Earnings per
American Depositary Share Basic (R/$) 2.62 1.56 0.21 0.13 Diluted
(R/$) 2.54 1.55 0.21 0.13 Adjusted earnings per share Basic (R/$)
0.07 0.07 0.01 0.01 Diluted (R/$) 0.07 0.07 0.01 0.01 Adjusted
earnings per American Depositary Share Basic (R/$) 1.78 1.66 0.14
0.13 Diluted (R/$) 1.73 1.65 0.14 0.13 Ordinary shares ('000) (1)
In issue at December 31 562,231 563,435 562,231 563,435 Weighted
average 560,282 562,858 560,282 562,858 Diluted weighted average
577,579 567,005 577,579 567,005 American Depositary Shares ('000)
(1) In issue at December 31 22,489 22,537 22,489 22,537 Weighted
average 22,411 22,514 22,411 22,514 Diluted weighted average 23,103
22,680 23,103 22,680
(1)
December 31, 2017 figure excludes
40,000,000 (December 31, 2016: 40,000,000) treasury shares held by
MiX Telematics Investments Proprietary Limited ("MiX Investments"),
a wholly owned subsidiary of the Group.
4. Reconciliation of Adjusted Earnings to Profit for the
Period
South African Rand United States Dollar
Three months Three months Three months
Three months ended ended ended
ended December 31, December 31, December
31, December 31, Figures are in thousands unless
otherwise stated
2017 2016 2017 2016
Unaudited Unaudited Unaudited
Unaudited Profit for the period attributable to owners of
the parent 58,780 35,082 4,753 2,837 Net foreign exchange losses
2,139 4,915 173 397 Income tax effect on the above component
(20,959 ) (2,592 ) (1,695 ) (210 )
Adjusted earnings
attributable to owners of the parent 39,960
37,405 3,231 3,024
Reconciliation of earnings per share to adjusted earnings per
share Basic earnings per share (R/$) 0.10 0.06 0.01 0.01 Net
foreign exchange losses # 0.01 # # Income tax effect on the above
component (0.03 ) # # #
Basic adjusted
earnings per share (R/$)
0.07
0.07
0.01
0.01
# Amount less than $0.01
5. Reconciliation of Adjusted EBITDA to Profit for the
Period
South African Rand United States Dollar
Three months Three months Three months
Three months ended ended ended
ended December 31, December 31, December
31, December 31, Figures are in thousands unless
otherwise stated
2017 2016 2017 2016
Unaudited Unaudited Unaudited
Unaudited Adjusted EBITDA 114,515
87,822 9,258 7,101 Less: Depreciation (1)
(41,301 ) (25,881 ) (3,339 ) (2,092 ) Amortization (2) (17,661 )
(13,391 ) (1,428 ) (1,083 ) Impairment of property, plant and
equipment (6 ) — — — Impairment of product development costs
capitalized — (11 ) — (1 ) Equity settled share-based compensation
costs (2,326 ) (557 ) (188 ) (45 ) Net loss on sale of property,
plant and equipment (202 ) (128 ) (16 ) (10 ) Increase in
restructuring cost provision (3 ) — — —
Operating profit 53,016 47,854 4,287
3,870 Add: Finance (costs)/income - net (676 ) (4,463 ) (55
) (361 ) Less: Taxation 6,439 (8,314 ) 521 (672 )
Profit for the period 58,779 35,077
4,753 2,837
(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 Three months ended
ended December 31, December 31, 2017
2016 Unaudited Unaudited Adjusted
EBITDA margin 25.9 % 21.9 % Less:
Depreciation (9.3 %) (6.5 %) Amortization (4.0 %) (3.4 %)
Impairment of property, plant and equipment (0.0 %) — Impairment of
product development costs capitalized — (0.0 %) Equity settled
share-based compensation costs (0.6 %) (0.1 %) Net loss on sale of
property, plant and equipment (0.0 %) (0.0 %) Increase in
restructuring cost provision (0.0 %) —
Operating profit
margin 12.0 % 11.9 % Add: Finance
(costs)/income - net (0.2 %) (1.1 %) Less: Taxation 1.5 % (2.1 %)
Profit for the period margin 13.3 % 8.7
%
7. Reconciliation of Free Cash Flow to Net Cash Generated
from Operating Activities
South African Rand United States Dollar
Three monthsended Three
monthsended Three monthsended
Three monthsended December 31, December
31, December 31, December 31, Figures are in
thousands unless otherwise stated
2017 2016
2017 2016 Unaudited Unaudited
Unaudited Unaudited Net cash generated from
operating activities 109,525 97,329 8,855
7,869 Capital expenditure (92,239 ) (73,305 ) (7,457 )
(5,927 )
Free cash flow 17,286 24,024
1,398 1,942
8. Dividends Paid
In respect of the second quarter of fiscal 2018, a dividend of
R14.0 million ($1.1 million) was declared on October 31, 2017 and
paid on November 27, 2017. Using shares in issue of 559,380,738
(excluding 40,000,000 treasury shares), this equated to a dividend
of 2.5 South African cents or 0.2 U.S. cents per share.
9. Share Repurchase
On May 23, 2017, the MiX Telematics Board approved a share
repurchase program of up to R270 million ($21.8 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.
As of December 31, 2017, the following purchases had been made
under the share repurchase program:
Figures are in thousands unless otherwise stated
South
African Rand Period
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
Maximum value of shares that may
yet be purchased under the program
Month June 2017 5,015,660 3.72
5,015,660 18,666 251,334 5,015,660 5,015,660
18,666 251,334 Figures are in thousands unless
otherwise stated
United States Dollar Period
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
Maximum value of shares that may
yet be purchased under the program
Month June 2017 5,015,660 0.30 5,015,660 1,509
20,320 5,015,660 5,015,660 1,509 20,320
(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.
At December 31, 2017, the Company had 562,231,288 ordinary shares
of no par value in issue (excluding 40,000,000 treasury shares held
by MiX Investments). No share repurchases were made during the
quarter under review.
10. 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 R44.9 million or $3.6 million. No loss is
considered probable under this arrangement.
11. 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 R20.1 million ($1.6
million) in respect of S11D deductions, of which R0.4 million
($0.03 million) was recognized during the three months ended
December 31, 2017. R17.3 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, 2017.
12. Dividend Declared
On January 30, 2018 the Board declared that in respect of the
third quarter of fiscal 2018, which ended on December 31, 2017, a
dividend of 2.5 South African cents (0.2 U.S. cents) per ordinary
share to be paid on Monday, February 26, 2018.
The details with respect to the dividends declared for ordinary
shareholders are as follows:
Last day to trade cum
dividend
Tuesday, February 20, 2018 Securities trade ex
dividend Wednesday, February 21, 2018 Record date Friday, February
23, 2018 Payment date Monday, February 26, 2018
Share certificates may not be dematerialized or rematerialized
between Wednesday, February 21, 2018 and Friday, February 23,
2018, 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 2.5
South African cents per ordinary share;
- the net local dividend amount is 2.0
South African cents per ordinary share for shareholders liable to
pay dividends tax;
- the issued ordinary share capital of
MiX Telematics is 602,231,288 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 22, 2018 Record date
Friday, February 23, 2018 Approximate date of currency conversion
Monday, February 26, 2018 Approximate dividend payment date
Thursday, March 8, 2018
13. 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, 2017.
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, 2017 2017
2017 2017 2016 2016 2016
2016 Total development costs incurred 32,336 34,167 33,175
32,152 36,696 36,034 37,230 28,693 Development costs capitalized
15,996 16,148 16,656 17,268 20,415 21,028 19,309 12,136 Development
costs expensed within administration and other charges 16,340
18,019 16,519 14,884 16,281 15,006 17,921 16,557
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, 2017
2017 2017 2017 2016 2016
2016 2016 Total development costs incurred 2,614
2,763 2,683 2,599 2,967 2,913 3,010 2,320 Development costs
capitalized 1,293 1,306 1,347 1,396 1,651 1,700 1,561 981
Development costs expensed within administration and other charges
1,321 1,457 1,336 1,203 1,316 1,213 1,449 1,339
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), EN Banda*, SR Bruyns*
(Lead Independent Director), PM Dell, IV Jacobs*, F Roji-Maplanka*,
CWR Tasker, AR Welton* * Non-executive
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180201005143/en/
Investors:ICR for MiX TelematicsSeth Potter,
+1-855-564-9835ir@mixtelematics.com
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