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 R12.0907 per $1.00, which was the R/$
exchange rate reported by Oanda.com as at March 31, 2015.
Fourth quarter and fiscal year
highlights:
- Subscribers increased by 14% year on
year, bringing the total to over 512,000 subscribers
- Fourth quarter subscription revenue
of R266 million ($22 million), grew 14% year over year
- Fourth quarter Adjusted EBITDA of
R84 million ($7 million), representing a 23% margin
- Fiscal year subscription revenue of
R998 million ($83 million), grew 17% year over year
- Fiscal year Adjusted EBITDA of R275
million ($23 million), representing a 20% margin
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 fourth quarter and full fiscal year 2015, which ended March
31, 2015.
"We have closed out fiscal year 2015 with solid revenue growth,
strong profitability and excellent cash flow. We grew subscription
revenue 17%, posted a 20% Adjusted EBITDA margin and generated free
cash flow of nearly R90 million for the year," said Stefan
Joselowitz, Chief Executive Officer of MiX Telematics. "We were
delighted to break through the half-million subscribers level as
few telematics solutions providers have achieved this type of
critical mass. We are winning important new business, as well as
signing meaningful expansions with key customers. Throughout the
year we have made adjustments to our overhead cost structures that
we believe are suited to the current challenging conditions in some
markets, and enable us to maintain our balanced approach to
producing growth, profitability and cash flow."
Financial performance for the three months ended March 31,
2015
Revenue: Total revenue was R367.7 million ($30.4
million), an increase of 5.5% compared to R348.4 million ($28.8
million) for the fourth quarter of fiscal year 2014. Subscription
revenue was R266.3 million ($22.0 million), an increase of 14.5%
compared with R232.6 million ($19.2 million) for the fourth quarter
of fiscal year 2014. Growth in subscription revenue was driven
primarily by an increase of over 61,800 subscribers, which resulted
in an increase in subscribers of 13.7% from March 2014 to March
2015. Hardware and other revenue was R101.4 million ($8.4 million),
a decrease of 12.5% compared to R115.8 million ($9.6 million) for
the fourth quarter of fiscal year 2014.
Gross Margin: Gross profit was R257.4 million ($21.3
million), as compared to R241.0 million ($19.9 million) for the
fourth quarter of fiscal year 2014. Gross profit margin was 70.0%,
compared to 69.2% for the fourth quarter of fiscal year 2014.
Operating Margin: Operating profit was R59.2 million
($4.9 million), compared to R61.1 million ($5.1 million) for the
fourth quarter of fiscal year 2014. Operating margin was 16.1%,
compared to 17.5% for the fourth quarter of fiscal year 2014. The
fourth quarter of fiscal year 2015's operating margin has improved
from prior quarters in fiscal year 2015 as a result of the
restructuring activities implemented in the Middle East and
Australasia segment together with additional cost reduction
initiatives. The cost savings from the Africa restructuring
activities implemented in the third quarter of fiscal year 2015
will only be effective towards the end of the first quarter of the
2016 fiscal year.
Adjusted EBITDA: Adjusted EBITDA, a non-IFRS measure, was
R83.9 million ($6.9 million) compared to R84.6 million
($7.0 million) for the fourth quarter of fiscal year 2014.
Adjusted EBITDA margin, a non-IFRS measure, for the fourth quarter
of fiscal year 2015 was 22.8%, compared to 24.3% for the fourth
quarter of fiscal year 2014.
Profit for the period and earnings per share: Profit for
the period was R52.1 million ($4.3 million), compared to
R50.4 million ($4.2 million) in the fourth quarter of fiscal
year 2014. Earnings per diluted ordinary share were 7 South African
cents, compared to 6 South African cents in the fourth quarter of
fiscal year 2014. For the fourth quarter of fiscal 2015, the
calculation was based on diluted weighted average ordinary shares
in issue of 801.4 million compared to 808.9 million diluted
weighted average ordinary shares in issue during the fourth quarter
of fiscal 2014.
The Company's effective tax rate for the quarter was 37.1% in
comparison to 25.6% in the fourth quarter of fiscal 2014.
On a U.S. Dollar basis, and using the March 31, 2015 exchange
rate of R12.0907 per U.S. Dollar, and at a ratio of
25 ordinary shares to one American Depositary Share ("ADS"),
profit for the period was $4.3 million, or 14 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 R38.7 million ($3.2 million), compared to R46.6 million ($3.9
million) in the fourth quarter of the 2014 fiscal year and excludes
a net foreign exchange gain of R21.9 million ($1.8 million). The
net foreign exchange gain includes R26.9 million ($2.2 million)
relating to a foreign exchange gain on the IPO proceeds which are
maintained in U.S. Dollars and are therefore sensitive to R:$
exchange rate movements. Adjusted earnings per diluted ordinary
share, also a non-IFRS measure, were 5 South African cents,
compared to 6 South African cents in the fourth quarter of fiscal
year 2014.
On a U.S. Dollar basis, and using the March 31, 2015 exchange
rate of R12.0907 per U.S. Dollar, and at a ratio of 25 ordinary
shares to one ADS, adjusted profit for the period was $3.2 million,
or 10 U.S. cents per diluted ADS.
Statement of Financial Position and Cash Flow: At March
31, 2015, the Company had R945.4 million ($78.2 million) of cash
and cash equivalents, compared to R830.4 million ($68.7 million) at
March 31, 2014. The Company generated R89.7 million ($7.4
million) in net cash from operating activities for the three months
ended March 31, 2015 and invested R31.9 million ($2.6 million) in
capital expenditures during the quarter, leading to free cash flow
of R57.8 million ($4.8 million) for the fourth quarter of fiscal
year 2015, compared with free cash flow of R50.8 million ($4.2
million) for the fourth quarter of fiscal year 2014.
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.
Financial performance for the fiscal year ended March 31,
2015
Revenue: Total revenue for fiscal year 2015 was R1,389.4
million ($114.9 million), an increase of 9.3% compared to
R1,271.7 million ($105.2 million) for fiscal year 2014.
Subscription revenue increased to R998.3 million
($82.6 million), up 16.9% from R853.7 million ($70.6 million)
for fiscal year 2014. Subscription revenue growth was driven
primarily by the addition of over 61,800 subscribers since the end
of fiscal 2014. Hardware and other revenue was R391.0 million
($32.3 million), compared to R417.9 million ($34.6 million) for
fiscal year 2014.
Gross margin: Gross profit for fiscal year 2015 was
R939.7 million ($77.7 million), an increase compared to R849.6
million ($70.3 million) for fiscal year 2014. Gross profit margin
was 67.6%, up from 66.8% for fiscal year 2014. In fiscal 2015,
subscription revenue, which generates a higher gross profit margin
than hardware and other revenue, contributed 71.9% of total revenue
compared to 67.1% in fiscal 2014.
Operating margin: Operating profit for fiscal year 2015
was R149.9 million ($12.4 million), compared to R171.5 million
($14.2 million) posted in fiscal year 2014. The operating margin
for fiscal year 2015 was 10.8%, compared to the 13.5% posted in
fiscal year 2014. The Company is executing its strategy of
investing in sales and marketing and as a result sales and
marketing costs for fiscal 2015 increased by R23.9 million
($2.0 million) or 16.2% from fiscal 2014. Administration and other
costs increased by R89.4 million ($7.4 million) or 16.8%
primarily as a result of increased employee costs incurred to
support the Company's growth initiatives. The restructuring plans
implemented in the Middle East and Australasia segments in the
third quarter of fiscal 2015 together with other cost reduction
initiatives have already contributed towards an improvement in the
operating margin. The company expects further cost savings and
resultant operating margin improvement when the cost savings from
the Africa restructuring activities, implemented in the third
quarter of fiscal year 2015, take effect in the 2016 fiscal year.
Administration and other costs included non-recurring litigation
costs of R7.9 million ($0.7 million) and restructuring costs of
R11.3 million ($0.9 million) in fiscal year 2015 while fiscal year
2014 included non-recurring initial public offering costs of R8.5
million ($0.7 million).
Adjusted EBITDA: Adjusted EBITDA was R275.1 million
($22.8 million) compared to R282.2 million ($23.3 million) for
fiscal year 2014. The Adjusted EBITDA margin for fiscal year 2015
was 19.8%, compared with the 22.2% in fiscal year 2014.
Profit for the year and earnings per share: Profit for
fiscal year 2015 was R149.0 million ($12.3 million), compared to
R151.6 million ($12.5 million) in fiscal year 2014. Earnings per
diluted ordinary share were 19 South African cents,compared to 20
South African cents in fiscal year 2014. For fiscal year 2015, the
calculation was based on diluted weighted average ordinary shares
in issue of 804.4 million, compared to 768.3 million diluted
weighted average ordinary shares in issue during fiscal year
2014.
The Company's effective tax rate for fiscal year 2015 was 35.4%
in comparison to 28.6% in fiscal year 2014.
Adjusted earnings for the period and adjusted earnings per
share: Adjusted profit for fiscal year 2015, a non-IFRS
measure, was R102.0 million ($8.4 million), compared to R123.9
million ($10.3 million) in fiscal year 2014 and excludes a net
foreign exchange gain of R73.5 million ($6.1 million). The net
foreign exchange gain includes R85.6 million ($7.1 million)
relating to a foreign exchange gain on the IPO proceeds which are
maintained in U.S. Dollars and are therefore sensitive to R:$
exchange rate movements. Adjusted earnings per diluted ordinary
share were 13 South African cents, compared to 16 South African
cents in fiscal year 2014.
On a U.S. Dollar basis, and using the March 31, 2015 exchange
rate of R12.0907 per U.S. Dollar, and at a ratio of 25 ordinary
shares to one ADS, adjusted profit for fiscal year 2015 was $8.4
million, or 26 U.S. cents per diluted ADS, compared to
$10.3 million, or 33 U.S. cents per diluted ADS in fiscal year
2014.
Cash Flow: The Company generated R217.6 million ($18.0
million) in net cash from operating activities for fiscal year 2015
and invested R129.3 million ($10.7 million) in capital expenditures
during the period, leading to free cash flow of R88.3 million ($7.3
million) for fiscal year 2015, compared with free cash flow of
R75.0 million ($6.2 million) for fiscal year 2014. The increase in
free cash flow is primarily attributable to an increase in cash
generated from operating activities.
Segment commentary for the fiscal year
ended March 31, 2015
Segment
Revenue
Fiscal
2015
R'000
% change on
prior year
Adjusted EBITDA
Fiscal
2015
R'000
% change on
prior year
Adjusted EBITDA
Margin
Fiscal
2015
Africa 709,928 7.4%
201,750 1.4% 28.4% The
subscriber base has grown by 13.8% since March 31, 2014. This,
together with the additional subscription revenue of R11.0 million
($0.9 million) resulting from the Compass acquisition in November
2014, resulted in growth in subscription revenue of 13.2%. Total
revenue growth was lower at 7.4% as a result of lower hardware
revenues. The revenue mix shift towards bundled sales for fleet
products continued to gather momentum in fiscal year 2015 although
sales levels lagged those of fiscal year 2014. The segment
continues to perform well at an Adjusted EBITDA level reporting an
Adjusted EBITDA margin of 28.4%.
Europe 160,678
-
4,588 (37.0%) 2.9% The region's
subscriber base grew 18% from March 31, 2014 with improved growth
in the second half of fiscal year 2015. This resulted in
subscription revenue growth of 9.6% on a constant currency basis.
Total revenue declined on a constant currency basis due to lower
hardware revenues as a result of a significant upfront hardware
deal in fiscal year 2014. In Rand terms revenue growth was flat due
to the weakening of the Rand against the British Pound. The region
reported a positive Adjusted EBITDA margin of 2.9%.
Americas
166,359 24.0% (2,684) 59.0%
(1.6%) The subscriber base increased by 11.0% from
March 31, 2014 which included a transfer from the Middle East and
Australasia segment. Subscription revenue growth was 10.4% on a
constant currency basis and there was also 17.8% growth in hardware
and other revenue on a constant currency basis. The Rand based
revenue growth is also enhanced by the weakening of the Rand
against the U.S. Dollar in fiscal year 2015. During fiscal year
2015 both the management team and sales and distribution capacity
were strengthened in order to position the segment for future
growth in both North and South America and as a result the region
posted a negative Adjusted EBITDA margin.
Middle East and
Australasia
328,556 7.2% 22,304 (2.2%) 6.8%
Subscribers increased 10.2% from March 31,
2014 despite a subscriber transfer to the Americas segment. While
subscription revenue increased by 12.1% on a constant currency
basis, total revenue declined marginally on a constant currency
basis as a result of lower hardware revenues. However, in Rand
terms the segment showed growth as a result of Rand weakness in
fiscal year 2015. The segment's results improved significantly in
the second half of the 2015 fiscal year and the segment reported a
full year positive Adjusted EBITDA margin of 6.8% despite a
negative Adjusted EBITDA margin of 0.5% in the first half of fiscal
year 2015. This is primarily attributable to higher subscription
revenue, improved hardware sales and operating cost savings from
the restructuring activities.
Brazil 23,056 93.7% (12,567)
(8.1%) (54.5%)
The subscriber base increased by 48.8%
from March 31, 2014 while revenue grew at 93.7%. As the operation
is still in a start up phase it posted an expected Adjusted EBITDA
loss.
Central Services
Organization
375,836 4.8% 101,877 (0.9%)
27.1%
Central Services Organization ("CSO") is a
central services organization that wholesales our products and
services to our regional operations who, in turn, interface with
our end-customers and distributors. CSO is also responsible for the
development of our hardware and software platforms. CSO continues
to benefit from the subscriber growth throughout the Company and
delivered an adjusted EBITDA margin of 27.1%.
Business Outlook
MiX Telematics has translated U.S. Dollar amounts in this
Business Outlook paragraph from South African Rand at the exchange
rate of R11.9286 per $1.00, which was the R/$ exchange rate
reported by Oanda.com as at May 26, 2015.
Based on information as of today, May 28, 2015, the Company is
issuing the following financial guidance for the full 2016 fiscal
year:
- Revenue - R1,523 million to R1,558
million ($127.7 million to $130.6 million), which would represent
revenue growth of 9.6% to 12.1% compared to fiscal year 2015.
- Subscription revenue - R1,148 million
to R1,168 million ($96.2 million to $97.9 million), which would
represent subscription revenue growth of 15.0% to 17.0% compared to
fiscal year 2015.
- Adjusted EBITDA - R306 million to R327
million ($25.7 million to $27.4 million), which would represent
Adjusted EBITDA growth of 11.2% to 18.9% compared to fiscal year
2015.
- Adjusted earnings per diluted ordinary
share of 13.3 to 15.1 South African cents based on 807 million
diluted ordinary shares in issue, and based on an effective tax
rate of 30.0% to 34.0%. At a ratio of 25 ordinary shares to one
ADS, this equates to adjusted earnings per diluted ADS of 28 to 32
U.S. cents.
For the first quarter of fiscal year 2016 the Company expects
subscription revenue to be in the range of R270 million to R274
million ($22.6 million to $23.0 million) which would represent
subscription revenue growth of 14.1% to 15.8% compared to the first
quarter of fiscal year 2015.
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.
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
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 Daylight Time) and 2:00 p.m.
(South African Time) on May 28, 2015 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 1-877-857-6150
(within the United States) or 0 800 982 293 (within South Africa)
or 1-719-325-4895 (outside of the United States). The conference ID
is 5977267.
- A replay of this conference call will
be available for a limited time at 1-877-870-5176 (within the
United States) or 1-858-384-5517 (within South Africa or outside of
the United States). The replay conference ID is 5977267.
- 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 in more
than 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 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 first quarter and full year of fiscal
year 2016, 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, 2014, 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 our
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 interest
income/(expense), depreciation of property, plant and equipment
including capitalized customer in-vehicle devices, amortization of
intangible assets including capitalized in-house development costs,
share-based compensation costs, transaction costs arising from the
acquisition of a business, restructuring costs, profits/(losses) on
the disposal or impairments of assets or subsidiaries, insurance
reimbursements relating to impaired assets, certain litigation
costs, unrealized foreign exchange gains/(losses) and foreign
exchange gains/(losses) related to the cash proceeds raised through
the IPO.
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 the
Company's 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;
- Adjusted EBITDA does not reflect the
interest expense or the cash requirements necessary to service
interest payments on the Company's debt or any losses on the
extinguishment of our debt;
- Adjusted EBITDA does not include
interest earned on cash and cash equivalents and other financial
assets;
- Adjusted EBITDA does not include
certain foreign currency transaction gains and losses;
- Adjusted EBITDA does not include
certain litigation costs; 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 and Adjusted EBITDA margin alongside other financial
performance measures, including operating profit, profit for the
period and our other results.
Headline Earnings
Headline earnings is a profit measure required for JSE-listed
companies as defined by the South African Institute of Chartered
Accountants. The profit measure is determined by taking the profit
for the year prior to separately identifiable re-measurements of
the carrying amount of an asset or liability that arose after the
initial recognition of such asset or liability net of related tax
(both current and deferred) and related non-controlling interest. A
reconciliation of headline earnings to profit for the period has
been included in the financial results section of this
announcement.
Adjusted Profit and Adjusted Earnings Per Share
Adjusted profit and adjusted earnings per share is defined as
profit attributable to owners of the parent excluding net foreign
exchange gains/(losses) net of tax for the relevant period. A
reconciliation of adjusted earnings to profit for the period has
been included in the financial results section of this
announcement.
Free cash flow
Free cash flow is determined as net cash generated from
operating activities less capital expenditure per investing
activities.
AUDITED GROUP FINANCIAL RESULTS FOR THE
FISCAL YEAR ENDED MARCH 31, 2015
SUMMARY CONSOLIDATED INCOME STATEMENTS
South African Rand
United States Dollar
Year ended
Year ended
Year ended Year ended Figures are in thousands unless
otherwise stated
March 31, March 31,
March 31, March
31,
2015 2014
2015 2014
Audited
Audited
Unaudited Unaudited
Revenue 1,389,380 1,271,658
114,913 105,177
Cost of sales
(449,663 ) (422,034 )
(37,191 ) (34,906 )
Gross profit
939,717 849,624
77,722 70,271 Other income/(expenses)
- net
3,795 2,151
314 178 Operating expenses
(793,651 ) (680,277 )
(65,642
) (56,265 ) -Sales and marketing
(171,948
) (148,012 )
(14,222 ) (12,242 )
-Administration and other charges
(621,703 )
(532,265 )
(51,420 ) (44,023 )
Operating profit 149,861 171,498
12,394 14,184
Finance income/(costs) - net
80,778
40,660
6,681 3,363
-Finance income
82,905 43,264
6,857 3,578 -Finance
costs
(2,127 ) (2,604 )
(176 ) (215 )
Profit before taxation
230,639 212,158
19,075 17,547 Taxation
(81,623 ) (60,574 )
(6,750
) (5,010 )
Profit for the year
149,016 151,584
12,325
12,537
Attributable to: Owners
of the parent
149,622 151,589
12,375 12,538
Non-controlling interests
(606 ) (5 )
(50 ) (1 )
149,016
151,584
12,325
12,537 Attributable earnings per share -basic (R/$)
0.19 0.21
0.02 0.02 -diluted (R/$)
0.19 0.20
0.02 0.02 Earnings per American Depositary Share
-basic (R/$)
4.74 5.18
0.39 0.43 -diluted (R/$)
4.65 4.93
0.38 0.41 Ordinary shares ('000) -in
issue at March 31
792,838 784,150
792,838 784,150
-weighted average
789,316 732,171
789,316 732,171
-diluted weighted average
804,385 768,306
804,385
768,306 Weighted average American Depositary Share ('000)
-in issue at March 31
31,714 31,366
31,714 31,366
-weighted average
31,573 29,287
31,573 29,287
-diluted weighted average
32,175 30,732
32,175 30,732
SUMMARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
South African Rand United States Dollar
Year ended Year ended
Year ended Year ended
Figures are in thousands unless otherwise stated
March 31,
March 31,
March 31, March 31,
2015 2014
2015
2014
Audited Audited
Unaudited Unaudited
Profit for the year
149,016 151,584
12,325 12,537 Other comprehensive
income/(losses): Items that may be subsequently reclassified to
profit or loss Exchange differences on translating foreign
operations
26,466 45,475
2,188 3,761 - Attributable to owners of
the parent
26,267 45,475
2,172 3,761 - Attributable
to non-controlling interests
199 —
16
—
Exchange differences on net investments in foreign
operations
1,487 3,540
123 293 Taxation relating to
components of other comprehensive income
3,010
(599 )
249 (50 )
Other
comprehensive income for the year, net of tax
30,963 48,416
2,560
4,004
Total comprehensive income for the
year 179,979 200,000
14,885 16,541
Attributable
to: Owners of the parent
180,386 200,005
14,919
16,542 Non-controlling interests
(407 )
(5 )
(34 ) (1 )
Total comprehensive
income for the year 179,979 200,000
14,885 16,541
HEADLINE
EARNINGS Reconciliation of headline earnings
South African Rand United States
Dollar Year ended Year ended
Year ended Year
ended Figures are in thousands unless otherwise stated
March
31, March 31,
March 31, March 31,
2015 2014
2015 2014
Audited Audited
Unaudited Unaudited
Profit for the year
attributable to owners of the parent 149,622 151,589
12,375 12,538 Adjusted for:
Loss/(profit) on disposal of property,
plant and equipment and intangible assets
456 (97 )
38 (8 ) Impairment of intangible assets
456 63
38 5 Impairment of property, plant and
equipment
1,190 316
98 26 Insurance proceeds on
impairment of Helicopter asset
(3,237 ) —
(268
) — Income tax effect on the above components
324 (85 )
27 (7 )
Headline earnings attributable to owners of the parent
148,811 151,786
12,308 12,554
Headline
earnings Headline earnings per share -basic (R/$)
0.19
0.21
0.02 0.02 -diluted (R/$)
0.18 0.20
0.02
0.02 Headline earnings per American Depositary Share -basic
(R/$)
4.71 5.18
0.39 0.43 -diluted (R/$)
4.62 4.94
0.38
0.41
ADJUSTED EARNINGS Reconciliation of
adjusted earnings South African Rand
United States Dollar Year ended Year ended
Year ended Year ended Figures are in thousands unless
otherwise stated
March 31, March 31,
March 31, March
31,
2015 2014
2015 2014
Audited
Audited
Unaudited Unaudited
Profit
for the year attributable to owners of the parent
149,622 151,589
12,375 12,538 Net foreign exchange
gains
(73,525 ) (38,128 )
(6,081 )
(3,153 ) Income tax effect on the above component
25,873 10,458
2,140
865
Adjusted earnings attributable to
owners of the parent 101,970
123,919
8,434 10,250
Adjusted earnings Attributable adjusted
earnings per share -basic (R/$)
0.13 0.17
0.01 0.01
-diluted (R/$)
0.13 0.16
0.01 0.01 Adjusted
earnings per American Depositary Share -basic (R/$)
3.23
4.23
0.27 0.35 -diluted (R/$)
3.17
4.03
0.26 0.33
MIX TELEMATICS LIMITED
SUMMARY CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
South African Rand United States Dollar Figures are
in thousands unless otherwise stated
March 31, March 31,
March 31, March 31,
2015 2014
2015 2014
Audited Audited
Unaudited
Unaudited
ASSETS Non-current assets Property, plant and
equipment
135,844 129,079
11,235 10,676 Intangible
assets
778,518 692,190
64,390 57,250
Available-for-sale financial asset
— —
— — Finance
lease receivable
1,002 6,677
83 552 Deferred tax
assets
23,607 19,825
1,952 1,640
Total non-current
assets 938,971 847,771
77,660 70,118
Current
assets Inventory
38,934 39,774
3,220 3,290 Trade
and other receivables
261,574 234,839
21,634 19,423
Finance lease receivable
5,607 6,652
464 550 Taxation
7,602 7,336
629 607 Restricted cash
30,539
10,279
2,526 850 Cash and cash equivalents
945,381 830,449
78,191
68,685
Total current assets
1,289,637 1,129,329
106,664 93,405
Total assets
2,228,608 1,977,100
184,324 163,523
EQUITY
Stated capital
1,436,993 1,429,250
118,851 118,211
Other reserves
(21,894 ) (58,335 )
(1,811
) (4,825 ) Retained earnings
450,347
300,725
37,248 24,873
Equity attributable to owners of the parent
1,865,446
1,671,640
154,288 138,259 Non-controlling interest
(874 ) (10 )
(74 )
(2 )
Total equity 1,864,572
1,671,630
154,214 138,257
LIABILITIES Non-current liabilities Borrowings
1,104 2,462
91 204 Deferred tax liabilities
63,425 20,601
5,246 1,704 Provisions
4,005
2,282
331 189 Share-based payment liability (note 11)
1,950 —
161
—
Total non-current liabilities 70,484
25,345
5,829 2,097
Current liabilities Trade and other payables
247,361 228,961
20,460
18,937
Borrowings
1,399 1,279
116 106 Taxation
3,586
2,912
297 241 Provisions
23,240 19,163
1,922
1,585 Bank overdraft
17,966 27,810
1,486 2,300
Total
current liabilities 293,552 280,125
24,281
23,169
Total liabilities 364,036
305,470
30,110
25,266
Total equity and liabilities 2,228,608
1,977,100
184,324
163,523
Net cash (note 6) 924,912
798,898
76,498 66,075 Net
asset value per share (R/$)
2.35 2.13
0.19 0.18 Net
tangible asset value per share (R/$)
1.37 1.25
0.11
0.10
Capital expenditure -incurred
125,429
135,309
10,374 11,191 -authorized but not spent
64,175 60,115
5,308
4,972
SUMMARY CONSOLIDATED STATEMENTS OF
CASH FLOWS South African Rand United
States Dollar Year ended Year ended
Year
ended Year ended
March 31, March 31,
March
31, March 31,
Figures are in thousands unless otherwise
stated
2015 2014
2015 2014
Audited
Audited
Unaudited Unaudited
Cash flows from operating
activities
Cash generated from operations
261,954 266,169
21,666
22,014 Net financing income
6,869 1,474
568 122
Taxation paid
(51,179 ) (63,866 )
(4,233 ) (5,282 )
Net cash generated
from operating activities 217,644
203,777
18,001 16,854
Cash flows from investing activities Capital
expenditure
(129,302 ) (128,745 )
(10,694
) (10,648 ) Proceeds on sale of property, plant and
equipment and intangible assets
605 978
50 81
Acquisition of business, net of cash acquired (note 13)
(40,000 ) (3,606 )
(3,308 ) (298 )
Deferred consideration paid
(1,241 ) (295 )
(103 ) (24 ) Increase in restricted cash
(19,907 ) (1,508 )
(1,646
) (125 )
Net cash used in investing activities
(189,845 ) (133,176 )
(15,701 ) (11,014 )
Cash flows from
financing activities Proceeds from issuance of ordinary shares
7,743 665,710
640 55,060 Share issue expenses paid
— (26,951 )
— (2,229 ) Dividends paid
—
(39,610 )
— (3,276 ) Repayment of borrowings
—
(3,436 )
— (284 )
Net
cash generated from financing activities 7,743
595,713
640 49,271
Net increase in cash and cash equivalents
35,542 666,314
2,940
55,111
Net cash and cash equivalents
at the beginning of the year 802,639 91,697
66,385 7,584 Exchange gains on cash and cash equivalents
89,234 44,628
7,380 3,690
Net cash and cash
equivalents at the end of the year 927,415
802,639
76,705 66,385
FREE CASH FLOW Reconciliation of free cash flow to
net cash generated from operating activities South
African Rand United States Dollar Year
ended Year ended
Year ended Year ended
Figures are in thousands unless otherwise stated
March 31,
March 31,
March 31, March 31,
2015 2014
2015
2014
Audited Audited
Unaudited Unaudited
Net cash generated from
operating activities 217,644 203,777
18,001
16,854 Capital expenditure payments
(129,302 )
(128,745 )
(10,694 ) (10,648 )
Free cash flow 88,342 75,032
7,307 6,206
SUMMARY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the parent South
African Rand
Figures are in thousands unless otherwise
stated
Stated
capital
Other
reserves
Retained
earnings
Total Non-
controlling
interest
Total
equity
Balance at April 1, 2013 (Audited) 790,491 (111,362 )
188,750 867,879 (5 ) 867,874
Total comprehensive
income — 48,416 151,589
200,005 (5 ) 200,000 Profit for
the year — — 151,589 151,589 (5 ) 151,584 Other comprehensive
income — 48,416 — 48,416
— 48,416
Transactions
with owners 638,759 4,611 (39,614 )
603,756 — 603,756 Shares
issued in relation to share options exercised 15,776 — — 15,776 —
15,776 Share-based payment — 4,611 — 4,611 — 4,611 Proceeds from
shares issued, net of share issue costs 622,983 — — 622,983 —
622,983 Dividend declared of 6 cents per share (note 7) —
— (39,614 ) (39,614 ) —
(39,614 )
Balance at March 31,
2014 (Audited) 1,429,250 (58,335 )
300,725 1,671,640 (10 )
1,671,630
Total comprehensive income
— 30,764 149,622
180,386 (407 )
179,979 Profit for the year
— —
149,622 149,622 (606 ) 149,016
Other comprehensive income
— 30,764
— 30,764
199 30,963 Transactions with
owners 7,743 5,677
— 13,420 (457
) 12,963 Shares issued in relation to
share options exercised
7,743 — — 7,743
— 7,743 Share-based payment
— 5,220
— 5,220 — 5,220 Transactions with non
controlling interests
— 457
— 457
(457 ) — Balance at March 31,
2015 (Audited) 1,436,993
(21,894 ) 450,347
1,865,446 (874 )
1,864,572 SUMMARY CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY Attributable to owners of
the parent United States Dollar
Figures are in thousands unless otherwise
stated
Statedcapital
Otherreserves Retainedearnings
Total Non-controlling
interest Totalequity
Balance at April 1, 2013 (Unaudited) 65,380 (9,210 )
15,611 71,781 (1 ) 71,780
Total comprehensive income
— 4,004 12,538 16,542
(1 ) 16,541 Profit for the year — —
12,538 12,538 (1 ) 12,537 Other comprehensive income —
4,004 — 4,004 —
4,004
Transactions with owners 52,831
381 (3,276 ) 49,936
— 49,936 Shares issued in relation to
share options exercised 1,305 — — 1,305 — 1,305 Share-based payment
— 381 — 381 — 381 Proceeds from shares issued, net of share issue
costs 51,526 — — 51,526 — 51,526 Dividend declared of 0.5 cents per
share (note 7) — — (3,276 )
(3,276 ) — (3,276 )
Balance at March 31, 2014 (Unaudited) 118,211
(4,825 ) 24,873 138,259
(2 ) 138,257
Total comprehensive
income — 2,544
12,375 14,919 (34
) 14,885 Profit for the year
—
— 12,375 12,375 (50 )
12,325 Other comprehensive income
—
2,544 — 2,544
16 2,560
Transactions with owners 640 470
— 1,110
(38 ) 1,072 Shares issued in
relation to share options exercised
640 — —
640 — 640 Share-based payment
—
432 — 432 — 432 Transactions
with non controlling interests
— 38
—
38 (38 ) —
Balance at March 31, 2015
(Unaudited) 118,851 (1,811
) 37,248 154,288
(74 ) 154,214
NOTES TO SUMMARY CONSOLIDATED FINANCIAL RESULTS
1. Independent audit
The summary consolidated annual financial statements for the
year ended March 31, 2015 have been derived from the audited
consolidated annual financial statements. The directors of MiX
Telematics Limited take full responsibility for the preparation of
the preliminary summary consolidated annual financial statements
and that the financial information has been correctly derived from
the underlying audited consolidated annual financial statements.
The summary consolidated financial statements for the year ended
March 31, 2015 have been audited by PricewaterhouseCoopers Inc.,
who expressed an unmodified opinion thereon. The auditor also
expressed an unmodified opinion on the annual financial statements
from which these summary consolidated financial statements were
derived.
A copy of the auditor’s report on the summary consolidated
financial statements and of the auditor’s report on the annual
consolidated financial statements are available for inspection at
MiX Telematics Limited’s registered office, together with the
financial statements identified in the respective auditor’s
reports.
The auditor’s report does not necessarily report on all of the
information contained in these financial results. Shareholders are
therefore advised that in order to obtain a full understanding of
the nature of the auditor’s engagement they should obtain a copy of
the auditor’s report together with the accompanying financial
information from MiX Telematics Limited’s registered office.
The Group’s preliminary audited summary consolidated annual
financial statements have been independently audited by the Group’s
external auditors. The preparation of the Group’s preliminary
audited summary consolidated annual financial statements were
prepared under the supervision of the Group Chief Financial
Officer, ML Pydigadu CA(SA). The results were made available on May
28, 2015.
2. Basis of preparation and accounting policies
The summary consolidated financial statements are prepared in
accordance with the requirements of the JSE Limited Listings
Requirements for preliminary reports, and the requirements of the
Companies Act applicable to summary financial statements. The JSE
Limited Listings Requirements require preliminary reports to be
prepared in accordance with the framework concepts and the
measurement and recognition requirements of International Financial
Reporting Standards ("IFRS") and the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and
Financial Pronouncements as issued by the Financial Reporting
Standards Council and to also, as a minimum, contain the
information required by IAS 34 Interim Financial Reporting. The
accounting policies applied in the preparation of the consolidated
financial statements from which the summary consolidated financial
statements were derived are in terms of International Financial
Reporting Standards and are consistent with those accounting
policies applied in the preparation of the previous consolidated
annual financial statements, with the exception of where the Group
has adopted new or revised accounting standards, as described below
and the change in segment presentation as disclosed in note 3.
IAS 32 Financial instruments: Presentation - This amendment
clarifies that the right of set-off must not be contingent on a
future event. It must also be legally enforceable for all
counterparties in the normal course of business, as well as in the
event of default, insolvency or bankruptcy. The amendment also
considers settlement mechanisms. The amendment did not have a
significant effect on the summary consolidated financial
statements.
IAS 36 Impairment of assets - This amendment removed certain
disclosures of the recoverable amount of cash-generating units
(“CGU”) which had been included in IAS 36 by the issue of IFRS 13
'Fair value measurement'. The amendment had no impact on the
summary consolidated financial statements.
IFRIC 21 Levies - This interpretation sets out the accounting
for an obligation to pay a levy if that liability is within the
scope of IAS 37 ‘Provisions’. The interpretation addresses what the
obligating event is that gives rise to pay a levy and when a
liability should be recognized. The Group is not subjected to
significant levies so the impact on the Group is not material.
Presentation currency and convenience translation
The Group’s presentation currency is South African Rand. In
addition to presenting these preliminary summary consolidated
financial results in South African Rand, supplementary information
in U.S. Dollars has been prepared for the convenience of users of
the Group financial results. Unless otherwise stated, the Group has
translated U.S. Dollars amounts from South African Rand at the
exchange rate of R12.0907 per $1.00, which was the R/$ exchange
rate reported by Oanda.com as at March 31, 2015. The U.S. Dollar
figures may not compute as they are rounded independently.
3. Segment information
During the 2014 fiscal year the Group saw strong uptake of both
its high-end fleet management solutions and the low-end Beam-e
track and trace solution (a consumer product) in the Africa fleet
solutions segment. Given the convergence among the brands in Africa
consumer solutions and Africa fleet solutions, these businesses
were combined in June 2014 and the Group is reporting Africa as a
whole from fiscal year 2015 onwards. This is consistent with the
manner in which segment information is reviewed by the chief
operating decision maker.
Additionally, the Group has noted a blending of product and
service types in the various geographies in which it operates. As a
result, the segment descriptions have been updated to only refer to
the geography and not to a specific product or service. This does
not represent a change to the segment reporting as the chief
operating decision maker continues to assess performance based on
geography. The Group's product range consists of asset tracking and
fleet solutions.
The tables below present the segment information on this revised
basis, with the prior year amended to conform to the current year
presentation as shown below.
SUMMARY SEGMENTAL ANALYSIS
South African Rand
Figures are in thousands unless otherwise
stated
Total
revenue
Inter-
segment
revenue
AdjustedEBITDA
Assets Year ended March 31, 2015 (Audited)
Africa
709,928 —
201,750 530,309 Europe
160,678 (429
) 4,588 93,972 Americas
166,359
— (2,684 ) 76,669 Middle East and
Australasia
328,556 (29 ) 22,304
184,152 Brazil
23,056 (5 )
(12,567 ) 16,054 Central Services
Organization*
375,836
(374,570 ) 101,877
307,645 Total
1,764,413 (375,033
) 315,268 1,208,801 Corporate and
consolidation entries
— — (40,202 )
1,318,435 Inter-segment elimination
(375,033 ) 375,033
— (298,628 ) Total
1,389,380 —
275,066 2,228,608
Year ended March 31, 2014 (Audited) Africa
661,006 (3,654 ) 198,867 401,581 Europe 160,639 (977 ) 7,285 88,086
Americas 134,213 — (6,550 ) 74,970 Middle East and Australasia
306,450 (1,569 ) 21,834 162,848 Brazil 11,901 (56 ) (11,621 ) 9,695
Central Services Organization 358,538
(354,833 ) 102,778 285,825 Total
1,632,747 (361,089 ) 312,593 1,023,005 Corporate and consolidation
entries — — (30,370 ) 1,137,533 Inter-segment elimination
(361,089 ) 361,089 —
(183,438 )
Total 1,271,658
— 282,223 1,977,100
* This segment was previously named
"International".
MIX TELEMATICS LIMITED
SUMMARY SEGMENTAL ANALYSIS
United States Dollar
Figures are in thousands unless otherwise
stated
Totalrevenue
Inter-segment revenue
AdjustedEBITDA
Assets Year ended March 31, 2015
(Unaudited) Africa
58,717 — 16,686
43,861 Europe
13,289 (35 ) 379
7,772 Americas
13,759 — (222 )
6,341 Middle East and Australasia
27,174 (2
) 1,845 15,231 Brazil
1,906 (1
) (1,039 ) 1,328 Central Services
Organization
31,085
(30,979 ) 8,426
25,445 Total
145,930 (31,017 )
26,075 99,978 Corporate and consolidation entries
— — (3,325 ) 109,045
Inter-segment elimination
(31,017 )
31,017 — (24,699
) Total 114,913
— 22,750
184,324
Year ended March 31,
2014 (Unaudited) Africa 54,671 (302 ) 16,448 33,214 Europe
13,286 (81 ) 603 7,285 Americas 11,101 — (542 ) 6,201 Middle East
and Australasia 25,346 (130 ) 1,806 13,469 Brazil 985 (5 ) (962 )
802 Central Services Organization 29,654
(29,348 ) 8,501 23,640
Total 135,043 (29,866 ) 25,854 84,611 Corporate and consolidation
entries — — (2,512 ) 94,083 Inter-segment elimination
(29,866 ) 29,866 —
(15,172 )
Total 105,177 —
23,342 163,522
The prior year segment information has
been amended to conform to the current year presentation as
follows:
South African Rand
Figures are in thousands unless otherwise
stated
Totalrevenue
Inter-segmentrevenue
AdjustedEBITDA
Assets
Year ended March 31, 2014 (Audited) Africa (As previously
reported) Consumer solutions 355,084 (17,632 ) 105,162 276,643
Fleet solutions 325,400 (5,500 )
95,209 131,286 680,484 (23,132 )
200,371 407,929
Adjustments: Inter-segment revenue
eliminations (19,478 ) 19,478 — — Inter-segment unrealized profit
eliminations
—
— (1,504 ) (969 ) Inter-segment investments and intercompany
receivable eliminations — — —
(5,379 ) Africa (Restated)
661,006 (3,654 ) 198,867 401,581
Corporate and consolidation entries (As previously
reported) — — (31,874 ) 1,136,564
Adjustments: Inter-segment
unrealized profit eliminations — —
1,504 969 Corporate and consolidation
entries (Restated) — — (30,370 )
1,137,533 Inter-segment elimination (As
previously reported) (380,567 ) 380,567 — (188,817 )
Adjustments: Inter-segment revenue eliminations 19,478
(19,478 ) — — Inter-segment investments and intercompany receivable
eliminations — — —
5,379 Inter-segment elimination (Restated) (361,089 )
361,089 — (183,438 )
United
States Dollar Totalrevenue
Inter-segmentrevenue
AdjustedEBITDA
Assets Figures are in thousands unless otherwise stated
Year ended March 31, 2014
(Unaudited) Africa (As previously reported) Consumer
solutions 29,368 (1,458 ) 8,698 22,881 Fleet
solutions 26,913 (454 ) 7,875
10,858 56,281 (1,912 ) 16,573 33,739
Adjustments: Inter-segment revenue eliminations (1,610 )
1,610 — — Inter-segment unrealized profit eliminations — — (125 )
(80 ) Inter-segment investments and intercompany receivable
eliminations — — —
(445 ) Africa (Restated) 54,671
(302 ) 16,448 33,214 Corporate
and consolidation entries (As previously reported) — — (2,637 )
94,003
Adjustments: Inter-segment unrealized profit
eliminations — — 125
80 Corporate and consolidation entries (Restated)
— — (2,512 ) 94,083
Inter-segment elimination (As previously
reported) (31,476 ) 31,476 — (15,617 )
Adjustments:
Inter-segment revenue eliminations 1,610 (1,610 ) — — Inter-segment
investments and intercompany receivable eliminations —
— — 445
Inter-segment elimination (Restated) (29,866 ) 29,866
— (15,172 )
4. Reconciliation of
Adjusted EBITDA to Profit for the year South African
Rand United States Dollar Year ended
Year ended
Year ended Year ended Figures are
in thousands unless otherwise stated
March 31, March 31,
March 31, March 31,
2015 2014
2015 2014
Audited Audited
Unaudited
Unaudited
Adjusted EBITDA 275,066 282,223
22,750 23,342 Add: Net profit on sale of property, plant and
equipment and intangible assets
— 97
— 8 Net realized
foreign exchange losses
7,928 —
655 — Insurance
reimbursement (1)
3,237 —
268 — Less: Depreciation
(2)
(61,099 ) (47,887 )
(5,053 ) (3,961
) Amortization (3)
(46,294 ) (44,941 )
(3,829
) (3,717 ) Impairment (4)
(1,646 ) (379 )
(136 ) (31 ) Share-based compensation costs (5)
(7,578 ) (4,611 )
(627 ) (381 ) Net
loss on sale of property, plant and equipment and intangible assets
(456 ) —
(38 ) — Restructuring costs
(6)
(11,267 ) (2,745 )
(932 ) (227 )
Transaction costs arising from acquisition of a business
(93
) (211 )
(8 ) (17 ) Non-recurring initial
public offering costs
— (8,503 )
— (703 ) Net
realized foreign exchange gains
— (1,545 )
— (129 )
Net litigation costs (7)
(7,937 ) —
(656 ) —
Operating
profit 149,861 171,498
12,394 14,184 Add: Finance
income/(costs) - net
80,778 40,660
6,681 3,363 Less:
Taxation
(81,623 ) (60,574 )
(6,750 ) (5,010 )
Profit for the year
149,016 151,584
12,325 12,537
(1)
Insurance reimbursement related to the helicopter asset
impaired during the second quarter of the 2015 fiscal year. (2)
Includes depreciation of property, plant and equipment (including
in-vehicle devices). (3) Includes amortization of intangible assets
(including product development costs). (4) Includes R0.5 million
($0.04 million) impairment of computer equipment and furniture and
fittings which is related to the restructuring described in note 9.
Also includes R0.6 million ($0.05 million) related to the
helicopter asset and R0.5 million ($0.04 million) impairment of
capitalized product development costs. (5) Share-based compensation
costs include R2.4 million ($0.2 million) related to cash-settled
share-based payments described in note 11 and R5.2 million ($0.4
million) related to equity-settled share-based payments. (6)
Restructuring costs incurred are described in note 9. (7) Net costs
relating to litigation and the related insurance proceeds are
described in note 12.
5. Reconciliation of Adjusted EBITDA
margin to Profit for the year margin Year ended
Year ended
March 31, March 31,
2015 2014
Unaudited Unaudited
Adjusted EBITDA
margin 19.8 % 22.2 % Add: Net profit on sale of
property, plant and equipment and intangible assets
— 0.0 %
Net realized foreign exchange losses
0.6 % —
Insurance reimbursement
0.2 % — Less:
Depreciation
(4.4 %) (3.8 %) Amortization
(3.3
%) (3.5 %) Impairment of property, plant and equipment
(0.1 %) (0.0 %) Share-based compensation costs
(0.6 %) (0.4 %) Net loss on sale of property, plant
and equipment and intangible assets
(0.0 %) —
Restructuring costs
(0.8 %) (0.2 %) Transaction costs
arising from acquisition of a business
(0.0 %) —
Non-recurring initial public offering costs
— (0.7 %) Net
realized foreign exchange gains
— (0.1 %) Net litigation
costs
(0.6 %) —
Operating
profit margin 10.8 % 13.5 % Add: Finance
income/(costs) - net
5.8 % 3.2 % Less: Taxation
(5.9 %) (4.8 %)
Profit for the year
margin 10.7 % 11.9 %
6. Net Cash
Net cash is calculated as being net cash and cash equivalents,
excluding restricted cash less interest bearing borrowings.
7. Dividends
No dividend was declared during the year. A final dividend of
R39.6 million or $3.3 million was declared during the first half of
fiscal year 2014 and paid on July 8, 2013. Using shares in issue of
660.2 million, this equated to a dividend of 6.0 South African
cents or $0.5 cents per share.
Following the completion of its initial public offering of ADSs,
the Company discontinued its policy of declaring regular dividends
in order to increase the funds available to pursue opportunities
for more rapid growth.
8. Fair value of financial assets and liabilities measured at
amortized cost
The fair values of trade and other receivables, trade payables,
accruals and other payables approximate their book values as the
impact of discounting is not considered material due to the
short-term nature of both the receivables and payables.
9. Restructuring
During November 2014, the Africa and the Middle East and
Australasia segments implemented restructuring plans. The total
cost of the restructuring plans is expected to be approximately
R11.3 million ($0.9 million). An agreement has been reached with
the affected staff and the amount to be paid was agreed prior to
the financial year end. The total estimated staff restructuring
costs to be incurred are R8.3 million ($0.7 million) at March 31,
2015. Other direct costs attributable to the restructuring,
including lease termination costs, are R3.0 million ($0.2 million).
By March 31, 2015, R6.7 million ($0.6 million) of the expected
restructuring costs had been incurred.
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 R51.1 million ($4.2 million) (2014: R58.1
million or $4.8 million). No loss is considered probable under this
arrangement.
11. Share-based payment transaction
In June 2014, the Group entered into an agreement with Edge
Gestao Empresarial Ltda. ("Edge"), whereby Edge has been granted a
5% holding in the equity interests of MiX Brazil. At March 31, 2014
Edge held a non-controlling interest in MiX Brazil of 0.0025%. Edge
is a Brazilian based investment company controlled by Luiz Munhoz,
the Managing Director of MiX Brazil. The increase in the equity
interests granted to Edge is in respect of services provided by
Luiz Munhoz to MiX Brazil, in his role as Managing Director of MiX
Brazil. As part of the arrangement, Edge has an option to transfer
its interest in MiX Brazil back to the Group at fair value during
the period of the agreement.
The transaction with Edge represents a cash-settled share-based
payment. The award was fully vested on grant date and a share-based
payment expense of R2.4 million ($0.2 million) relating to this
transaction has been recognized in the income statement in the
current year. The amount expensed represents the fair value of the
award that was issued.
South African Rand United States Dollar
Year ended Year ended
Year ended Year
ended Figures are in thousands unless otherwise stated
March
31, March 31,
March 31, March 31,
2015 2014
2015 2014
Audited Audited
Unaudited Unaudited
Movement in share-based
payment liability for the year Share-based payment expense
recognized during the year
2,358 —
195
—
Foreign currency translation differences
(408
) —
(34 ) —
Closing balance 1,950 —
161 —
The above share-based payment liability has been valued using
discounted cash flow analysis. The fair value is determined by the
use of cash flow projections based on approved budgets covering a
five year period. These cash flows are based on the current market
conditions and near-term expectations.
The key assumptions used in the discounted cash flow analysis
were:
Year ended Year ended
March 31, March
31,
2015 2014
Audited
Audited
Discount rate — pre-tax discount rate applied to the cash
flow projections (%)
23.4 — Growth rate — growth rate used
to extrapolate cash flow beyond the budget period (%)
3.1 —
12. Net litigation costs
On June 6, 2014, Inthinc Technology Solutions, Inc. (“Inthinc”)
commenced a lawsuit in the U.S. District Court, District of Utah,
Central Division, against the Group's wholly-owned subsidiary, MiX
Telematics North America, Inc. (“MiX North America”) and Charles
“Skip” Kinford, whom the Group hired in May 2014 as President and
CEO of MiX North America. Inthinc is Mr. Kinford’s previous
employer. The claims against MiX North America included
misappropriation of trade secrets under Utah state law and tortious
interference with a contract. The claims against Mr. Kinford
included breach of a non-competition, non-solicitation and
confidentiality provisions in his employment agreement with
Inthinc, misappropriation of trade secrets under Utah state law and
breach of contract. Inthinc voluntarily dismissed MiX North America
without prejudice on June 12, 2014, due to its decision to file the
lawsuit in Texas discussed below.
On June 12, 2014, Inthinc commenced a lawsuit in the 48th
Judicial District of Tarrant County, Texas against MiX North
America ("Texas Lawsuit"). Inthinc alleged that MiX North America
tortuously interfered with Mr. Kinford’s employment agreement and
post-employment restrictive covenants and misappropriated
unidentified trade secrets when MiX North America hired Mr.
Kinford.
On August 21, 2014, the parties agreed to consolidate the
related lawsuits into the Texas Lawsuit. In both of the lawsuits
discussed above, Inthinc sought injunctive relief and unspecified
money damages.
On or about October 17, 2014, the parties entered into a
confidential settlement and release agreement. Pursuant to the
terms of the agreement, the parties have filed an Agreed Motion to
Dismiss to effectuate the dismissal of all claims, with prejudice,
in the Texas Lawsuit as well as the dissolution of any injunctions
as issued to Mr. Kinford and MiX North America. The settlement, net
of insurance proceeds, had been paid in full by the end of the 2015
fiscal year.
13. Business combination
On November 1, 2014, the Group acquired the operating business
of Compass Fleet Management Proprietary Limited (“Compass”), a
South Africa based provider of specialized fleet management
solutions in Southern Africa that are delivered off the Group’s
hardware and software platform. These specialized fleet management
solutions complement the Group's existing fleet management
solutions and the acquisition broadens the array of services
offered to current and future fleet management customers.
The acquisition was considered to be a business combination as
defined by International Financial Reporting Standards, and as a
result has been accounted for under the requirements of IFRS 3. The
Group acquired the power to direct the operating and financial
activities of the acquired business on November 1, 2014, and the
assets acquired and liabilities assumed have been recorded at their
fair values.
The following table summarizes the consideration paid for
Compass and the fair value of assets acquired and liabilities
assumed at the acquisition date.
R’000 $'000
Consideration at November 1, 2014 Total consideration
payable
58,000 4,797 Cash consideration transferred
at effective date
(40,000 )
(3,308 ) Contingent consideration
18,000 1,489
Recognized amounts of identifiable assets acquired and
liabilities assumed Fair value
R'000 $'000 Inventory
355
29 Property, plant and equipment
6,254 517
Software
1,180 98
Customer relationships
40,166 3,322 Patents and trademarks
2,155
178 Deferred tax liability raised
(11,850
) (980 ) Total identifiable net
assets
38,260 3,164 Goodwill
19,740
1,633 Acquisition date fair
value of consideration paid
58,000
4,797
Acquisition-related expenses of R0.1 million ($0.01 million)
were incurred and have been charged to administrative and other
expenses in the consolidated income statement for the 2015 fiscal
year. The goodwill of R19.7 million ($1.6 million) arising from the
acquisition is attributable to the workforce acquired and the
synergies expected from combining the business acquired and the
Group. None of the goodwill recognized is expected to be deductible
for income tax purposes.
Payment of the contingent consideration was contingent on the
achievement of agreed revenue and profit targets for the period
November 1, 2014 to March 31, 2015. Subsequent to year end it has
been determined that the agreed revenue and profit targets have
been achieved and the R18.0 million ($1.5 million) is expected to
be paid to the former owners by the end of May 2015.
As at the acquisition date, it was considered virtually certain
that the aforementioned profit and revenue targets would be met and
therefore, the contingent consideration payable was recognized at
fair value which was considered to be R18.0 million ($1.5
million). The fair value estimates were not discounted as the
impact of discounting was not material. This is a level 3 fair
value measurement.
Cash in respect of the contingent consideration payable of R18.0
million ($1.5 million), was held in trust and is disclosed within
Restricted cash on the statement of financial position.
From the acquisition date, revenue of R24.5 million ($2.0
million) has been recorded by the business acquired and profits of
R1.5 million ($0.1 million), including IFRS 3 amortization, have
been included in profit or loss. Had the business been consolidated
from April 1, 2014 the consolidated income statement would show
R58.8 million ($4.9 million) unaudited pro-forma revenue and an
unaudited pro-forma net profit of R3.6 million ($0.3 million) in
respect of this business.
14. Taxation
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 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 of R8.5 million ($0.7
million). 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 did not, in the
DST’s opinion, constitute qualifying expenditure in terms of the
Act. MiX International continues, through due legal process, to
formally seek a review of the DST’s decision not to approve the
expenditure. This process is unresolved. Consequently, at March 31,
2015, MiX International has an uncertain tax position relating to
S11D deductions. MiX International has paid the R8.5 million ($0.7
million) related to the S11D deductions to the South African
Revenue Service. The Group has considered this uncertain tax
position and recognized a tax asset of R8.5 million ($0.7 million)
at March 31, 2015. If the Group is unsuccessful in obtaining DST
approval in this specific matter, the Group will not recover the
tax asset and will incur an additional taxation expense of up to
R8.5 million ($0.7 million) relating to the additional 50%
claimed.
15. Other operating and financial data South
African Rand United States Dollar Year
ended Year ended
Year ended Year ended
Figures are in thousands except for subscribers
March 31,
March 31,
March 31, March 31,
2015 2014
2015
2014
Audited Audited
Unaudited Unaudited Subscription revenue
998,335 853,716
82,570 70,609 Adjusted EBITDA
275,066 282,223
22,750 23,342 Cash and cash
equivalents
945,381 830,449
78,191 68,685 Net cash
924,912 798,898
76,498 66,075 Capital expenditure
125,429 135,309
10,374 11,191 Subscribers
512,344 450,502
512,344 450,502
Exchange Rates The following major rates of exchange were
used: South African Rand: United States Dollar -closing
12.09 10.60 -average
11.06 10.12 South African Rand:
British Pound -closing
17.94 17.60 -average
17.82 16.11
16. Subsequent events
The directors are not aware of any matter material or otherwise
arising since March 31, 2015 and up to the date of this report, not
otherwise dealt with herein.
17. Changes to the board
The following changes to the board of directors were effective
from November 5, 2014:
- Hubert Brody (non-independent
non-executive director) who served on the board since August 2010
retired from the board of directors of MiX Telematics due to other
commitments; and
- Fundiswa Roji who has been a member of
the board since August 2007 and who had more recently served as
Hubert Brody's alternate on behalf of Imperial Holdings Limited
(“Imperial”), has resigned from Imperial and therefore from the
board of MiX Telematics.
With effect from November 19, 2014, Mark Lamberti was appointed
as a non-independent non-executive director of MiX and Mr Mohammed
Akoojee was appointed as an alternate non-executive director to
Mark Lamberti.
18. Annual general meeting
The annual general meeting of shareholders of MiX Telematics
Limited will be held at Matrix Corner, Howick Close, Waterfall
Park, Midrand, Johannesburg on Wednesday, September 16, 2015 at
11:30 a.m. (South African time). For South African shareholders,
the last day to trade in order to be eligible to participate in and
vote at the annual general meeting is Friday, September 4, 2015 and
the record date for voting purposes is Friday, September 11,
2015.
For and on behalf of the board:
SR Bruyns SB
Joselowitz Midrand May 26, 2015
UNAUDITED GROUP CONSOLIDATED FINANCIAL
RESULTS FOR THE QUARTER ENDED MARCH 31, 2015
MIX TELEMATICS LIMITED
CONDENSED CONSOLIDATED INCOME STATEMENTS South African
Rand United States Dollar
Three months
ended
Three months
ended
Three months
ended
Three months
ended
Figures are in thousands unless otherwise stated
March 31,
March 31,
March 31, March 31,
2015 2014
2015
2014
Unaudited Unaudited
Unaudited Unaudited
Revenue 367,686
348,427
30,411 28,818 Cost of sales
(110,264
) (107,471 )
(9,120 )
(8,889 )
Gross profit 257,422 240,956
21,291
19,929 Other income/(expenses) - net
(26 ) 236
(2 ) 20 Operating expenses
(198,215
) (180,080 )
(16,394 )
(14,894 ) -Sales and marketing
(41,507 ) (42,594 )
(3,433 ) (3,523 ) -Administration and other charges
(156,708 ) (137,486 )
(12,961 ) (11,371 )
Operating profit
59,181 61,112
4,895 5,055 Finance income/(costs) -
net
23,701 6,614
1,960 547 -Finance income
24,082
7,219
1,992 597 -Finance costs
(381 )
(605 )
(32 ) (50 )
Profit
before taxation 82,882 67,726
6,855 5,602
Taxation
(30,771 ) (17,347 )
(2,545 ) (1,435 )
Profit for the year
52,111 50,379
4,310 4,167
Attributable
to: Owners of the parent
52,440 50,384
4,337
4,168 Non-controlling interests
(329 )
(5 )
(27 ) (1 )
52,111 50,379
4,310
4,167 Attributable earnings per share
-basic (R/$)
0.07 0.06
0.01 0.01 -diluted (R/$)
0.07 0.06
0.01 0.01 Earnings per American Depositary
Share -basic (R/$)
1.65 1.62
0.14 0.13 -diluted (R/$)
1.64 1.56
0.14 0.13 Attributable adjusted earnings
per share -basic (R/$)
0.05 0.06
#
#
-diluted (R/$)
0.05 0.06
#
#
Adjusted earnings per American Depositary Share -basic (R/$)
1.22 1.50
0.10 0.12 -diluted (R/$)
1.21 1.44
0.10 0.12 Ordinary shares ('000) -in issue at March 31
792,838 784,150
792,838 784,150 -weighted average
792,838 778,720
792,838 778,720 -diluted weighted
average
801,398 808,871
801,398 808,871 Weighted
average American Depositary Share ('000) -in issue at March 31
31,714 31,366
31,714 31,366 -weighted average
31,714 31,149
31,714 31,149 -diluted weighted average
32,056 32,355
32,056 32,355
# Amount less than $0.01.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL RESULTS
1. Basis of preparation and accounting policies
Financial results for the fourth quarter of fiscal year
2015
In addition to the Group’s financial results for the year ended
March 31, 2015, additional financial information in respect of the
fourth quarter of fiscal year 2015 has been presented together with
the relevant comparative information. The quarterly information
comprises a condensed consolidated income statement, a
reconciliation of adjusted earnings to profit for the period (note
3), a reconciliation of Adjusted EBITDA to profit for the period
(note 4 and 5) and other financial and operating data (note 6).
The accounting policies used in preparing the financial results
for the fourth quarter of fiscal year 2015 are consistent in all
material respects with those applied in the preparation of the
Group’s annual financial statements for the year ended
March 31, 2014.
The quarterly financial results have not been audited or
reviewed by the Group’s external auditors.
The condensed unaudited Group quarterly financial results do not
include all the information and disclosures required in the annual
financial statements and should be read in conjunction with the
Group’s annual financial statements for the year ended March 31,
2015, which have been prepared in accordance with IFRS.
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 March 31, 2015 in South African Rand,
supplementary information in U.S. Dollars has been prepared for the
convenience of users of this report. Unless otherwise stated, the
Group has translated U.S. Dollar amounts from South African Rand at
the exchange rate of R12.0907 per $1.00, which was the R/$ exchange
rate reported by Oanda.com as at March 31, 2015. The U.S. Dollar
figures may not compute as they are rounded independently.
3. Reconciliation of adjusted
earnings
South African Rand United States
Dollar
Three months
ended
Three months
ended
Three months
ended
Three months
ended
Figures are in thousands unless otherwise stated
March 31,
March 31,
March 31, March 31,
2015 2014
2015
2014
Unaudited Unaudited
Unaudited Unaudited
Profit for the period
attributable to owners of the parent 52,440 50,384
4,337 4,168 Net foreign exchange gains
(21,887
) (5,408 )
(1,810 ) (447 ) Income tax effect
on the above component
8,194 1,619
678 134
Adjusted
earnings attributable to owners of the parent
38,747 46,595
3,205
3,855 Attributable adjusted earnings
per share -basic (R/$)
0.05 0.06
#
#
-diluted (R/$)
0.05 0.06
#
#
Adjusted earnings per American Depositary Share -basic (R/$)
1.22 1.50
0.10 0.12 -diluted (R/$)
1.21
1.44
0.10 0.12
# Amount less than $0.01.
4. Reconciliation of Adjusted EBITDA to Profit for the
Period South African Rand United States
Dollar
Three months
ended
Three months
ended
Three months
ended
Three months
ended
Figures are in thousands unless otherwise stated
March 31,
March 31,
March 31, March 31,
2015 2014
2015
2014
Unaudited Unaudited
Unaudited Unaudited
Adjusted EBITDA
83,937 84,601
6,940 6,994 Add: Net realized foreign
exchange losses
5,866 —
487 — Decrease in provision
for restructuring costs
— 17
— 1 Less:
Depreciation (1)
(16,993 ) (12,803 )
(1,405
) (1,059 ) Amortization (2)
(11,232 ) (8,343 )
(929 ) (690 ) Impairment of property, plant and
equipment
4 35
*
3 Share-based compensation costs
(1,637 ) (843 )
(135 ) (70 ) Net loss on sale of property, plant and
equipment and intangible assets
(142 ) (74 )
(12 ) (6 ) Restructuring costs
(622 ) —
(51 ) — Non-recurring initial public offering costs
— (166 )
— (14 ) Net realized foreign exchange gains
— (1,312 )
—
(104 )
Operating profit 59,181 61,112
4,895 5,055 Add: Finance income/(costs) - net
23,701
6,614
1,961 547 Less: Taxation
(30,771
) (17,347 )
(2,545 )
(1,435 )
Profit for the period 52,111
50,379
4,310 4,167
(1) Includes
depreciation of property, plant and equipment (including in-vehicle
devices).
(2) Includes
amortization of intangible assets (including product development
costs).
* Amount less than $1,000
5. Reconciliation of Adjusted EBITDA margin to Profit for the
Period margin
Three months
ended
Three months
ended
March 31, March 31,
2015 2014
Unaudited Unaudited
Adjusted EBITDA margin
22.8 % 24.3 % Add: Net realized foreign exchange
losses
1.6 % — Decrease in provision for
restructuring costs
— 0.0 % Less: Depreciation
(4.6 %) (3.7 %) Amortization
(3.1 %)
(2.4 %)
Impairment of property, plant and
equipment
0.0
%
0.0 % Share-based compensation costs
(0.4 %) (0.2 %)
Net loss on sale of property, plant and equipment and intangible
assets
(0.0 %) (0.0 %) Restructuring costs
(0.2 %) — Net realized foreign exchange gains
— (0.4 %)
Operating profit margin
16.1 % 17.6 % Add: Finance income/(costs) - net
6.5 % 1.9 % Less: Taxation
(8.4
%) (5.0 %)
Profit for the period margin
14.2 % 14.5 %
6. Other operating and
financial data South African
Rand United States Dollar
Three months
ended
Three months
ended
Three months
ended
Three months
ended
Figures are in thousands except for subscribers
March 31,
March 31,
March 31, March 31,
2015 2014
2015
2014
Unaudited Unaudited
Unaudited Unaudited Subscription revenue
266,292 232,609
22,025 19,239 Adjusted EBITDA
83,937 84,601
6,940 6,994 Cash and cash equivalents
945,381 830,449
78,191 68,685 Net cash
924,912
798,898
76,498 66,075
Capital expenditure incurred
30,573 31,925
2,529 2,640 Subscribers
512,344 450,502
512,344 450,502
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
SR Bruyns* (Chairman), SB Joselowitz (CEO), EN Banda*, CH Ewing*,
RA Frew*, MJ Lamberti*, ML Pydigadu, CWR Tasker, AR Welton* *
Non-executive
Company secretary
Java Capital Trustees and Sponsors Proprietary Limited
Auditors
PricewaterhouseCoopers Inc.
Sponsor
Java Capital May 26, 2015
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150528005144/en/
ICR for MiX TelematicsInvestor Contact:Sheila
Ennis, 1-855-564-9835ir@mixtelematics.com
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