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 R13.0535 per $1.00, which was the R/$
exchange rate reported by Oanda.com as of June 30, 2017.
First Quarter
Highlights:
- Subscription revenue of R335 million
($25.7 million), up over 15% on a constant currency basis
- Operating profit of R43 million
($3.3 million), up 88% year over year
- Adjusted EBITDA of R94 million ($7.2
million), up 55% year over year
- Adjusted EBITDA margin of 23.1%
continues the quarterly improvement trend that was observed
throughout the prior year. 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%
- Total subscriber base of 625,600, up
8% year over year
- Company raises quarterly dividend to
2.5 South African cents per ordinary share (4.8 U.S. cents per
American Depositary Share)
- Company raises full year guidance
for Adjusted EBITDA to R375 million to R395 million ($28.6 million
to $30.1 million) and Adjusted earnings per diluted share to 19.7
to 21.8 South African cents. At a ratio of 25 ordinary shares to
one ADS, this equates to adjusted earnings per diluted ADS of 38 to
42 U.S. cents. Reiterates guidance for subscription revenue and
total revenue, for full fiscal 2018 year. Refer to the Business
Outlook section below.
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 first quarter of fiscal year 2018, which ended
June 30, 2017.
“We have booked a solid start to our new fiscal
year. In particular, we enjoyed strong performance from
our premium fleet portfolio globally which resulted in a return to
mid-teen subscription revenue growth on a constant currency basis,”
said Stefan Joselowitz, Chief Executive Officer of MiX Telematics.
“As is evidenced by our steadily improving bottom-line
performance, the company has reached an inflection point
in regards to margin accretion, particularly as MiX is moving out
of a heavy investment cycle into a phase where we are starting to
enjoy the returns on these investments. Looking forward, we are
confident in our ability to execute our strategic initiatives to
achieve our longer term targeted adjusted EBITDA margin of 30%
plus.”
Financial performance for the three
months ended June 30, 2017
Subscription revenue: Subscription revenue was R335.4
million ($25.7 million), an increase of 9.5% compared with
R306.2 million ($23.5 million) for the first quarter of fiscal
year 2017. Mid-teen subscription revenue growth was achieved on a
constant currency basis. Subscription revenue benefited from an
increase of over 47,000 subscribers, representing an increase in
subscribers of 8.2% from June 2016 to June 2017.
Total revenue: Total revenue was R405.7 million ($31.1
million), an increase of 7.0% compared to R379.1 million ($29.0
million) for the first quarter of fiscal year 2017. Hardware and
other revenue was R70.3 million ($5.4 million), a decrease of 3.6%
compared to R72.9 million ($5.6 million) for the first quarter
of fiscal year 2017.
Gross margin: Gross profit was R271.5 million ($20.8
million), as compared to R255.8 million ($19.6 million) for the
first quarter of fiscal year 2017. Gross profit margin was 66.9%,
compared to 67.5% for the first quarter of fiscal year 2017.
Operating margin: Operating profit was R42.9 million
($3.3 million), compared to R22.9 million ($1.8 million) for the
first quarter of fiscal year 2017. Operating profit margin was
10.6%, compared to 6.0% for the first quarter of fiscal year 2017.
The margin expansion is attributable primarily to the growth in
revenue reported above and strict cost management which began in
fiscal 2017. Operating expenses of R231.6 million ($17.7
million) have declined by R1.8 million ($0.1 million), or 0.8%,
since the first quarter of fiscal 2017.
Adjusted EBITDA: Adjusted EBITDA, a non-IFRS measure, was
R93.9 million ($7.2 million) compared to R60.4 million
($4.6 million) for the first quarter of fiscal year 2017.
Adjusted EBITDA margin, a non-IFRS measure, for the first quarter
of fiscal year 2018 was 23.1%, compared to 15.9% for the first
quarter of fiscal year 2017.
Profit for the period and earnings per share: Profit for
the period was R33.9 million ($2.6 million), compared to
R31.9 million ($2.4 million) for the first quarter of
fiscal year 2017. Profit for the period includes a net foreign
exchange loss of R5.0 million ($0.4 million) before tax,
relating primarily to U.S. Dollar cash reserves which are sensitive
to R:$ exchange rate movements. A net foreign exchange gain of
R19.9 million ($1.5 million), also relating primarily to U.S.
Dollar cash reserves was recorded in the first quarter of fiscal
2017. Earnings per diluted ordinary share were 6 South African
cents, compared to 4 South African cents in the first quarter of
fiscal year 2017. For the first quarter of fiscal year 2018, the
calculation was based on diluted weighted average ordinary shares
in issue of 567.0 million compared to 763.5 million diluted
weighted average ordinary shares in issue during the first quarter
of fiscal year 2017.
The Company's effective tax rate for the quarter was 14.0%
compared to 33.5% for the first quarter of fiscal year 2017.
On a U.S. Dollar basis, and using the June 30, 2017
exchange rate of R13.0535 per U.S. Dollar, and at a ratio of 25
ordinary shares to one American Depositary Share ("ADS"), profit
for the period was $2.6 million, or 12 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,
was R30.7 million ($2.3 million), compared to R17.3 million
($1.3 million) for the first quarter of fiscal year 2017 and
excludes a net foreign exchange loss of R5.0 million ($0.4
million). During the first quarter of fiscal year 2017, a net
foreign exchange gain of R19.9 million ($1.5 million) was
recorded. Adjusted earnings per diluted ordinary share, also a
non-IFRS measure, were 5 South African cents, compared to 2 South
African cents in the first quarter of fiscal year 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, was 30.8% compared to 38.5% in
fiscal 2017. The tax rate used in determining adjusted earnings in
the first quarter of fiscal 2018 has improved compared to the first
quarter of fiscal 2017 due to the mix of profits made in the
various jurisdictions in which we operate. In the first quarter of
fiscal 2017 the tax rate was elevated due to losses made in our
Middle East operation which is a low tax jurisdiction.
On a U.S. Dollar basis, and using the June 30, 2017
exchange rate of R13.0535 per U.S. Dollar, and at a ratio of 25
ordinary shares to one ADS, adjusted earnings for the period was
$2.3 million, or 10 U.S. cents per diluted ADS.
Statement of financial position and cash flow: At
June 30, 2017, the Company had R290.2 million ($22.2 million)
of cash and cash equivalents, compared to R375.8 million ($28.8
million) at the end of the fourth quarter of fiscal year 2017. The
Company generated R18.3 million ($1.4 million) in net cash
from operating activities for the three months ended June 30,
2017 and invested R82.3 million ($6.3 million) in capital
expenditures during the quarter, including investments in
in-vehicle devices, leading to negative free cash flow, a non-IFRS
measure, of R64.0 million ($4.9 million) for the first quarter of
fiscal year 2018, compared with negative free cash flow of
R34.1 million ($2.6 million) for the first quarter of fiscal
year 2017. The Company utilized R30.0 million ($2.3 million)
in financing activities in the first quarter of fiscal 2018,
compared to R10.7 million ($0.8 million) utilized during the first
quarter of fiscal 2017. The cash utilized in financing activities
in the first quarter of fiscal 2018 includes share repurchases of
R18.7 million ($1.4 million) and dividends paid of R11.3
million ($0.9 million).
An explanation of non-IFRS measures used in this press release
is set out in the Non-IFRS financial measures section. A
reconciliation of these non-IFRS measures to the most directly
comparable IFRS measures is provided in the financial tables that
accompany this press release.
Business Outlook
MiX Telematics has translated U.S. Dollar amounts in this
Business Outlook paragraph from South African Rand at the exchange
rate of R13.1130 per $1.00, which was the R/$ exchange rate
reported by Oanda.com as of July 31, 2017.
Based on information as of today, August 3, 2017, the
Company is issuing the following financial guidance for the full
2018 fiscal year:
- Subscription revenue - R1,401 million
to R1,421 million ($106.8 million to $108.4 million), which would
represent subscription revenue growth of 13.0% to 14.6% compared to
fiscal year 2017.
- Total revenue - R1,632 million to
R1,662 million ($124.5 million to $126.7 million), which would
represent revenue growth of 6.0% to 7.9% compared to fiscal year
2017.
- Adjusted EBITDA - R375 million to R395
million ($28.6 million to $30.1 million), which would represent an
increase in Adjusted EBITDA of 24.3% to 31.0% compared to fiscal
year 2017.
- Adjusted earnings per diluted ordinary
share of 19.7 to 21.8 South African cents based on 567 million
diluted ordinary shares in issue, and based on an effective tax
rate of 28% to 31%. At a ratio of 25 ordinary shares to one ADS,
this equates to adjusted earnings per diluted ADS of 38 to 42 U.S.
cents.
For the second quarter of fiscal year 2018 the Company expects
subscription revenue to be in the range of R339 million to R344
million ($25.9 million to $26.2 million) which would represent
subscription revenue growth of 12.5% to 14.2% compared to the
second quarter of fiscal year 2017.
The key assumptions used in deriving the forecast are as
follows:
- Growth in subscription revenue and
subscribers 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 R13.8000 per $1.00.
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 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
As a NYSE listed company, we have 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 Daylight Time) and 2:00 p.m.
(South African Time) on August 3, 2017 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 1-800-289-0498
(within the United States) or 0-800-982-293 (within South Africa)
or 1-719-457-2607 (outside of the United States). The conference ID
is 7193353.
- 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 7193353.
- 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 625,000 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 second 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, transaction costs arising from the acquisition
of a business or investigating strategic alternatives,
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 per 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.
JSE Sponsor
Java Capital
MIX TELEMATICS LIMITED
CONDENSED CONSOLIDATED INCOME STATEMENTS
South African Rand United States Dollar Three
months Three months Three months Three
months ended ended ended ended
June 30, June 30, June 30, June 30,
Figures are in thousands unless otherwise stated
2017
2016 2017 2016 Unaudited
Unaudited Unaudited Unaudited Revenue
405,662 379,096 31,077 29,042 Cost of
sales (134,132 ) (123,319 ) (10,276 ) (9,447 )
Gross profit
271,530 255,777 20,801 19,595 Other
income/(expenses) - net 2,943 459 225 35 Operating expenses
(231,559 ) (233,366 ) (17,739 ) (17,878 ) -Sales and marketing
(48,979 ) (48,530 ) (3,752 ) (3,718 ) -Administration and other
charges (182,580 ) (184,836 ) (13,987 ) (14,160 )
Operating
profit 42,914 22,870 3,287 1,752
Finance (costs)/income - net
(3,485 ) 25,115 (267 ) 1,924 -Finance income 2,001
25,401 153 1,946 -Finance costs (5,486 ) (286 ) (420 ) (22 )
Profit before taxation 39,429 47,985
3,020 3,676 Taxation (5,523 ) (16,065 ) (423 ) (1,231
)
Profit for the period 33,906 31,920
2,597 2,445
Attributable to: Owners of the parent 33,837 31,925 2,592
2,445 Non-controlling interests 69 (5 ) 5 *
33,906 31,920 2,597
2,445
* Amounts less than $1,000
MIX TELEMATICS LIMITED CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION South
African Rand United States Dollar June 30,
March 31, June 30, 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 308,312 294,120 23,619
22,532 Intangible assets 889,794 881,900 68,165 67,560 Finance
lease receivable 6 22 * 2 Deferred tax assets 30,364 28,130
2,326 2,155
Total non-current assets
1,228,476 1,204,172 94,110
92,249 Current assets Inventory
40,811 26,449 3,126 2,026 Trade and other receivables 295,143
260,576 22,610 19,962 Finance lease receivable 96 140 7 11 Taxation
24,411 26,302 1,870 2,015 Restricted cash 13,701 13,268 1,050 1,016
Cash and cash equivalents 290,161 375,782 22,229
28,788
Total current assets 664,323
702,517 50,892 53,818
Total assets
1,892,799 1,906,689 145,002
146,067 EQUITY Stated capital
835,679 854,345 64,020 65,449 Other reserves (14,887 ) (4,370 )
(1,140 ) (335 ) Retained earnings 617,080 594,514
47,273 45,544
Equity attributable to owners of the
parent 1,437,872 1,444,489 110,153
110,658 Non-controlling interest (1,367 ) (1,558 ) (105 )
(119 )
Total equity 1,436,505 1,442,931
110,048 110,539
LIABILITIES Non-current liabilities Deferred tax
liabilities 98,222 100,067 7,525 7,666 Provisions 1,840
1,833 141 140
Total non-current
liabilities 100,062 101,900
7,666 7,806 Current
liabilities Trade and other payables 291,749 309,110 22,349
23,681 Taxation 8,634 4,521 661 346 Provisions 22,847 28,778 1,750
2,205 Bank overdraft 33,002 19,449 2,528 1,490
Total current liabilities 356,232
361,858 27,288 27,722
Total liabilities 456,294
463,758 34,954 35,528
Total equity and
liabilities 1,892,799 1,906,689
145,002 146,067
* Amounts less than $1,000
MIX TELEMATICS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS South
African Rand United States Dollar Three months
Three months Three months Three months
ended ended ended ended June 30,
June 30, June 30, June 30, Figures are in
thousands unless otherwise stated
2017 2016
2017 2016 Unaudited Unaudited
Unaudited Unaudited Operating activities Cash
generated from operations 20,562 29,073 1,575 2,227 Net financing
income 1,511 3,354 116 257 Taxation paid (3,749 ) (4,326 ) (287 )
(331 )
Net cash generated from operating activities
18,324 28,101 1,404
2,153 Cash flows from investing
activities Capital expenditure (82,344 ) (62,227 ) (6,308 )
(4,767 ) Deferred consideration paid — (362 ) — (28 ) Proceeds on
sale of property, plant and equipment 581 — 45 — Decrease in
restricted cash 35 16 3 1 Increase in restricted cash (603 ) (1,570
) (46 ) (120 )
Net cash used in investing activities
(82,331 ) (64,143 ) (6,306
) (4,914 ) Cash flows from financing
activities Proceeds from issuance of ordinary shares — 4,528 —
347 Share repurchase (Note 8) (18,666 ) — (1,430 ) — Dividends paid
to Company's shareholders (Note 9) (11,292 ) (15,212 ) (865 )
(1,165 )
Net cash used in financing activities
(29,958 ) (10,684 ) (2,295
) (818 ) Net decrease in cash and cash
equivalents (93,965 ) (46,726 )
(7,197 ) (3,579 ) Net cash and cash
equivalents at the beginning of the period 356,333 860,762 27,298
65,941 Exchange (losses)/gains on cash and cash equivalents (5,209
) 19,145 (400 ) 1,466
Net cash and cash
equivalents at the end of the period 257,159
833,181 19,701 63,828
MIX TELEMATICS LIMITED
OTHER FINANCIAL AND OPERATING
DATA
South African Rand United States Dollar Three
months Three months Three months Three
months ended ended ended ended
June 30, June 30, June 30, June 30,
Figures are in thousands except for subscribers
2017
2016 2017 2016 Unaudited
Unaudited Unaudited Unaudited Subscription
revenue
335,367 306,174
25,692 23,455 Adjusted EBITDA
93,880 60,449
7,190 4,632 Cash and cash equivalents
290,161 845,804
22,229 64,795 Net cash (1)
257,159 832,440
19,701 63,771 Capital expenditure
incurred
79,124 62,830
6,061
4,813 Property, plant and equipment expenditure
54,606
39,292
4,183 3,010 Intangible asset expenditure
24,518 23,538
1,878 1,803 Total
development costs incurred
33,175 37,230
2,541 2,852 Development costs capitalized
16,656 19,309
1,276 1,479 Development costs expensed
within administration and other charges
16,519 17,921
1,265 1,373 Subscribers (number)
625,602 577,950
625,602 577,950
(1) Net cash is calculated as being net
cash and cash equivalents, excluding restricted cash less interest
bearing borrowings.
Notes to 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 year 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 June 30, 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 R13.0535 per $1.00,
which was the R/$ exchange rate reported by Oanda.com as of
June 30, 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 June 30, June 30, June 30,
June 30, 2017 2016 2017 2016
Unaudited Unaudited Unaudited
Unaudited Earnings per share Basic (R/$) 0.06 0.04 # #
Diluted (R/$) 0.06 0.04 # # Earnings per American Depositary Share
Basic (R/$) 1.50 1.05 0.12 0.08 Diluted (R/$) 1.49 1.05 0.11 0.08
Adjusted earnings per share Basic (R/$) 0.05 0.02 # # Diluted (R/$)
0.05 0.02 # # Adjusted earnings per American Depositary Share Basic
(R/$) 1.36 0.57 0.10 0.04 Diluted (R/$) 1.35 0.57 0.10 0.04
Ordinary shares ('000)(1) In issue at June 30 558,499 763,088
558,499 763,088 Weighted average 562,552 760,078 562,552 760,078
Diluted weighted average 567,033 763,479 567,033 763,479 American
Depositary Shares ('000)(1) In issue at June 30 22,340 30,524
22,340 30,524 Weighted average 22,502 30,403 22,502 30,403 Diluted
weighted average 22,681 30,539 22,681 30,539 # Amounts less
than $0.01 (1)
June 30, 2017 figure excludes 40,000,000
treasury shares held by MiX Telematics Investments Proprietary
Limited ("MiX Investments"), a wholly owned subsidiary of the
Group, and 5,015,660 shares repurchased by the Company under the
share repurchase program (Note 8). June 30, 2016 excluded
40,000,000 treasury shares held by MiX Investments.
4. Reconciliation of Adjusted Earnings Reconciliation of
Adjusted Earnings to Profit for the Period
South African Rand United States Dollar Three
months Three months Three months
Three months ended ended ended
ended June 30, June 30, June 30,
June 30, Figures are in thousands unless otherwise stated
2017 2016 2017 2016
Unaudited Unaudited Unaudited Unaudited
Profit for the period attributable to owners of the parent 33,837
31,925 2,592 2,445 Net foreign exchange loss/(gain) 4,992 (19,917 )
382 (1,526 ) Income tax effect on the above component (8,161 )
5,256 (625 ) 403
Adjusted earnings attributable to
owners of the parent 30,668 17,264
2,349 1,322 Reconciliation of
earnings per share to adjusted earnings per share Basic
earnings per share (R/$) 0.06 0.04 # # Net foreign exchange
loss/(gain) 0.01 (0.03 ) # # Income tax effect on the above
component (0.02 ) 0.01 # #
Basic adjusted earnings per
share (R/$) 0.05 0.02 #
#
# 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 June 30, June
30, June 30, June 30, Figures are in thousands
unless otherwise stated
2017 2016 2017
2016 Unaudited Unaudited
Unaudited Unaudited Adjusted EBITDA
93,880 60,449 7,190 4,632 Add: Net
profit on sale of property, plant and equipment and intangible
assets 333 — 26 — Decrease in restructuring costs provision — 431 —
33 Less: Depreciation (1) (34,476 ) (20,939 ) (2,641 ) (1,604 )
Amortization (2) (14,564 ) (13,532 ) (1,116 ) (1,037 ) Impairment
of product development costs capitalized (95 ) — (7 ) — Share-based
compensation costs (2,146 ) (3,479 ) (164 ) (267 ) Equity-settled
share-based compensation costs (2,146 ) (2,415 ) (164 ) (185 )
Cash-settled share-based compensation costs — (1,064 ) —
(82 ) Net loss on sale of property, plant and equipment —
(60 ) — (5 ) Increase in restructuring costs provision (18 ) —
(1 ) —
Operating profit 42,914
22,870 3,287 1,752
Add: Finance (costs)/income - net
(3,485 ) 25,115 (267 ) 1,924 Less: Taxation (5,523 ) (16,065 ) (423
) (1,231 )
Profit for the period 33,906
31,920 2,597 2,445 (1)
Includes depreciation of property, plant and equipment
(including in-vehicle devices). (2) Includes amortization of
intangible assets (including product 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 June 30,
June 30, 2017 2016 Unaudited
Unaudited Adjusted EBITDA margin 23.1 %
15.9 % Add: Net profit on sale of property, plant and
equipment and intangible assets 0.1 % — Decrease in restructuring
costs provision — 0.1 % Less: Depreciation (8.4 %) (5.5 %)
Amortization (3.7 %) (3.6 %) Impairment of product development
costs capitalized (0.0 %) — Share-based compensation costs (0.5 %)
(0.9 %) Equity-settled share-based compensation costs (0.5 %) (0.6
%) Cash-settled share-based compensation costs — (0.3 %) Net
loss on sale of property, plant and equipment — (0.0 %) Increase in
restructuring cost provision (0.0 %) —
Operating profit
margin 10.6 % 6.0 %
Add: Finance (costs)/income - net
(0.8 %) 6.6 % Less: Taxation (1.4 %) (4.2 %)
Profit for the
period margin 8.4 % 8.4 %
7. Reconciliation of Free Cash Flow to Net Cash Generated from
Operating Activities South African Rand
United States Dollar Three months
Three months Three months Three months
ended ended ended ended June 30,
June 30, June 30, June 30, Figures are in
thousands unless otherwise stated
2017 2016
2017 2016 Unaudited Unaudited
Unaudited Unaudited Net cash generated from
operating activities 18,324 28,101 1,404
2,153 Capital expenditure (82,344 ) (62,227 ) (6,308 )
(4,767 )
Free cash flow (64,020 )
(34,126 ) (4,904 ) (2,614
)
8. Share Repurchase
As of May 23, 2017, the MiX Telematics Board approved a share
repurchase program of up to R270 million ($20.7 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 in 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 June 30, 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 — 18,666
251,334 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 0.29 — 1,430
19,254 5,015,660 — 1,430 19,254
(1) Including transaction costs.
Subsequent to the repurchase, the shares were delisted and now
form part of the authorized unissued share capital of the Company,
which results in the Company having 558,498,901 ordinary shares of
no par value in issue (excluding 40,000,000 treasury shares held by
MiX Investments).
9. Dividend Paid
In respect of the fourth quarter of fiscal year 2017 which ended
on March 31, 2017, a dividend of 2 South African cents
(0.2 U.S. cents) per ordinary share was declared during the period
and paid on June 19, 2017. In respect of the fourth quarter of
fiscal year 2016, a dividend of 2 South African cents or 0.2 U.S.
cents per share was paid on June 20, 2016.
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 R47.2 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 R19.0 million ($1.5
million) in respect of S11D deductions, of which R0.8 million
($0.1 million) was recognized in the quarter ended June 30, 2017.
R16.2 million ($1.2 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 June 30,
2017.
12. Dividend Declared
On August 1, 2017, the Board declared in respect of the first
quarter of fiscal year 2018, which ended on June 30, 2017, a
dividend of 2.5 South African cents (0.2 U.S. cents) per ordinary
share to be paid on Monday, August 28, 2017.
The details with respect to the dividends declared for ordinary
shareholders are as follows:
Last day to trade cum dividend
Tuesday, August 22, 2017
Securities trade ex dividend Wednesday, August 23, 2017 Record date
Friday, August 25, 2017 Payment date Monday, August 28, 2017
Share certificates may not be dematerialized or rematerialized
between Wednesday, August 23, 2017 and Friday, August 25,
2017, 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 598,498,901 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)
Wednesday, August
23, 2017 Record date Friday, August 25, 2017 Approximate date of
currency conversion Monday, August 28, 2017 Approximate dividend
payment date Tuesday, September 12, 2017
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 ending June 30, 2017.
South African Rand Three months ended Figures
are in thousands (Unaudited)
June March December
September June March December
September 30, 31, 31, 30,
30, 31, 31, 30, 2017 2017
2016 2016 2016 2016 2015
2015 Total development costs incurred
33,175
32,152 36,696 36,034 37,230 28,693
28,016 31,806 Development costs capitalized
16,656 17,268 20,415 21,028 19,309 12,136 16,308 18,892
Development costs expensed within administration and other charges
16,519 14,884 16,281 15,006
17,921 16,557 11,708 12,914
United States Dollar Three months
ended Figures are in thousands (Unaudited)
June March
December September June March
December September 30, 31, 31,
30, 30, 31, 31, 30, 2017
2017 2016 2016 2016 2016
2015 2015 Total development costs incurred
2,541 2,463 2,811 2,761 2,852
2,198 2,146 2,436 Development costs
capitalized
1,276
1,323 1,564 1,611 1,479 930 1,249 1,447 Development costs expensed
within administration and other charges
1,265 1,140
1,247 1,150 1,373 1,268 897
989
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*, CH Ewing*, SR Bruyns* (Lead Independent Director), PM
Dell, IV Jacobs, CWR Tasker, AR Welton*
* Non-executive
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170803005130/en/
Investors:ICR for MiX TelematicsSeth Potter,
1-855-564-9835ir@mixtelematics.com
MiX Telematics (NYSE:MIXT)
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