Buoyed by success in all units, dual-listed technology firm Karooooo recorded double-digit growth in revenue and earnings in second quarter and half-year results for fiscal year 2023.
Karooooo, which owns 100% of Cartrack, 100% of Carzuka and 70.1% of Karooooo Logistics, today gave an account of its performance for the period ended in August.
Listed on the Johannesburg Stock Exchange and Nasdaq, Karooooo reported robust performance, which it says gave management confidence to leave the outlook for the 2023 financial year unchanged.
In the current reporting period, Karooooo’s revenue increased 30% and its subscription revenue went up 17% in the second quarter of 2023. Profit for the period rose by 26% to R155 million, and earnings per share surged by 28% to R4.93.
Karooooo’s adjusted EBITDA increased 27% to R377 million, compared to R298 million during the same period in fiscal 2022.
Cash generated from operating activities also increased 42% to R240 million, compared to R169 million in the previous comparable period.
Cartrack’s revenue and subscription revenue accounted for 88% and 99.8%, respectively, of Karooooo’s revenue and subscription revenue in the second quarter 2023.
Cartrack generated R753 million revenue in the quarter, of which R733 million was subscription revenue.
Cartrack’s total net subscriber additions for the quarter under review exceeded 57 000, which is well above that recorded for any prior second quarter, says Karooooo.
Boisterous stance
“The solid and expected growth in both revenue and earnings in a challenging environment confirms our value proposition and cements our decade-plus track record of strategically investing for the future, while scaling, growing and generating healthy profits,” says Zak Calisto, Karooooo CEO and founder.
“We believe our focus on product improvement, innovation and a vertically-integrated business model continues to differentiate us from our peers by delivering high profitability, consistent growth and record levels of cash from operations.
“The hard work in establishing the brand in Southeast Asia continues to gather momentum, where we are acquiring enterprise customers of various sizes and industries. In spite of trading conditions in South Africa remaining sluggish, we experienced strong demand in the quarter.
“We remain with a portfolio of customers with no concentration risk and with no significant exposure to any industry.”
Addressing the performance of Carzuka and Karooooo Logistics, Calisto says, as planned, the two continue to scale and bolster Karooooo’s revenue growth.
Carzuka generated R65 million in the second quarter of 2023, with Calisto saying: “Its steady expansion supports our belief in the sustainability of Carzuka’s agile, data-enhanced and highly-scalable business model.
“Carzuka is another example of how our ethos of customer-centricity and innovation in solving unique mobility needs translates into value in practice.
“For Carzuka, our vast and growing cloud-based data assets, data contextualisation and machine learning capabilities facilitate vehicles being bought and sold at a fair price on an efficient platform.”
Looking ahead, Calisto says by leveraging Cartrack’s technology, subscriber base, distribution network, digital marketing capabilities and ability to execute, Carzuka is expected to achieve strong growth at scale.
Turning to Karooooo Logistics (trading as Picup in SA), the unit generated R41 million in revenue, delivering strong growth of 49% quarter-on-quarter and for the first time reported an operating profit for the quarter.
Calisto explains the value proposition of the unit: “Karooooo Logistics focuses on delivery-as-a-service with its own selection of third-party crowd-source drivers and logistics companies, with a financial model of primarily charging per delivery.
“We are in the process of integrating the Karooooo Logistics software into the Cartrack platform, to empower Cartrack customers to manage and enhance their own logistics capacity with ease.
“With the integration, Cartrack customers can augment their own fleet capacity with third-party crowd-sourced drivers and logistics companies of their choice using Cartrack’s API architecture.
“Cartrack will charge customers for using the Karooooo Logistics stack on a subscription-based model.
“We believe Karooooo is well-positioned for growth, operating in a growing and largely underpenetrated market, with strong demand from customers across diverse industries seeking software solutions to successfully digitalise their businesses and improve their operational performance.
“Our mission is to be a leading on-the-ground operations cloud. Our proven, robust and consistently profitable business model, underpinned by a strong balance sheet and healthy cash position, gives us multiple levers for expansion.”
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