Cartrack reports higher profit and more subscribers while awaiting for report into employee’s death
· Citizen
Cartrack’s parent company, Karooooo, has announced a successful first quarter of 2027, with the vehicle tracking company adding more subscribers and achieving higher operating profit.
The announcement of Cartrack’s performance for the first three months of its financial year comes while it is awaiting a report into the death of 29-year-old Gcina Dhladhla, who passed away at its head office in Rosebank, Gauteng.
Visit afrikasportnews.co.za for more information.
Karooooo, headquartered in Singapore, owns 100% of Cartrack and 81% of Karooooo Logistics.
Cartrack cashing in
According to the results, Cartrack’s customer base continued to grow, reaching more than 2.8 million subscribers. It also added a record 142 472 new subscribers during the quarter, after accounting for cancellations, representing a 70% increase from a year earlier.
Coming to the money, the vehicle tracking company reported a 16% increase in operating profit to R395 million, although its operating profit margin narrowed from 30% to 28%, indicating that operating costs grew faster than revenue during the quarter.
Cartrack’s annualised recurring revenue, which estimates the subscription income the company expects to generate over the next 12 months, increased 19% to R5.4 billion.
Cartrack remains optimistic
Cartrack has, for the past few weeks, received bad publicity over accusations of an unhealthy working environment, starting with allegations that employees are not allowed to use the stairs or make any noise at its Rosebank offices.
Following Dhladhla’s death, allegations were made that the company’s tracking devices do not work, including the cameras and trackers. Despite these allegations, Karooooo Group CEO and founder Zak Calisto said the company remains optimistic about attracting more subscribers during the current financial year.
“FY 2027 is off to a strong start with record net subscriber additions and healthy retention driving 21% Cartrack constant currency subscription revenue growth. We believe we are on track to accelerate total subscription revenue growth in FY 2027 as we realise the benefits of our recent investments in sales capacity.
“We aim to drive our growth by balancing subscriber growth with the increased adoption of Video and Cartrack-Tag.”
Vehicle company makes money for Karooooo
Calisto acknowledged that Cartrack is making the majority of money for the Karooooo group.
“With Cartrack’s revenue making up the majority of group revenue,” he said.
“Our guidance for FY 2027 remains unchanged: Cartrack’s subscription revenue between R5.7 million and R6 million, which implies subscription revenue growth between 18% and 24%;
“Gross profit margin between 70% and 72%; and operating profit margin between 27% and 30%.”
Report into employee’s death
It is reported that the vehicle tracking company is awaiting external reports for it to finalise its internal investigation into the death of Dhladhla.
Employment and Labour Minister Nomakhosazana Meth visited the offices on Wednesday as part of the department’s investigation into the employee’s death.
Meth said a multidisciplinary team, including an expert from the International Labour Organisation, had been appointed to assist with the investigation.
“We want to leave no stone unturned. That is why we have assembled a multidisciplinary team with the necessary expertise, including support from the International Labour Organisation,” Meth said.
CEO remains positive
Cartrack CEO Joshua Victor said they are positive the reports will reveal no wrongdoing from the company’s side.
“We are confident the findings will show that the allegations circulated in the media and on social media are not true. We are comfortable that, on the day of the incident, the correct protocols were followed and that there were no shortcomings in terms of employment practices or emergency response,” he said.
Victor added that they are committed to improving their working conditions.
“Together with the Department of Labour, we are reviewing our practices to ensure we continue to follow best practice and provide the best possible care for our employees.
“We are waiting for a small number of external reports, after which we will engage with the family. We will release the report in due course, together with the Department of Labour,” he said.