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MiX Telematics back on growth track

Johannesburg - MiX Telematics [JSE:MIX] on Monday reported diluted headline earnings per share of 11.3 cents for the year ended March 2011, from 10.1 cents previously. Adjusted diluted headline earnings per share rose to 14.1 cents from 12.8 cents in 2010.

Revenue advanced to R886.6m from R840.48m, with profit for the year of R71.50m from R66.088m earlier.

Cash generated from operations increased to R190m, while the dividend declared increased by 20% to six cents per share.

MiX Telematics is a group which focuses on all levels of vehicle telematics, combining vehicle tracking and recovery, fleet management, driver and passenger safety and compliance services.

CEO Stefan Joselowitz said: "Firstly I am delighted to report that our group is back on the growth track. This was by no means an easy year but the signs of easing that we had observed towards the end of the last financial year, improved even further as this latest period progressed.

"As our investors are aware, we are a global group operating from six international offices and serving dealers and customers in 135 countries. 41.5% of our total revenue is earned in foreign currency but naturally, we report in South African rands."

He said that the group achieved fair growth despite the fact that the rand strengthened further against the global currencies in which MiX invoiced its offshore customers.

Joselowitz pointed out that MiX grew annuity revenue to R503m from R477m in 2010.

Foreign revenue reduced somewhat to R368m, from R379m in 2010.

"Ignoring the obvious factor of the currency exchange rate, revenue in our European business was lower off the back of weaker trading in the region and specifically the UK," he said.

Joselowitz said that trading conditions during the year under review were a mixed bag.

"As I reported in November, last year's (Soccer) World Cup event in South Africa was certainly entertaining but as per expectations, local sales for the period of the event were disappointing. Despite this, I am happy with the performance of our African operations during the year. Our local fleet business gave a strong showing in the second half, with a number of new deals as well as implementation of some large tender projects, most notably our fledgling contract with Eskom."

He noted that some other regions in which the group operated also traded "quite strongly".

"Our Middle East operation had a good year, although political upheaval in the region did give us some headaches and still remain a cause for concern.

Looking ahead, MiX highlighted that many of the world economies were still fragile with the UK particularly hard hit resulting in disappointing results from its operation in Birmingham.

"This business unit services both the UK and Europe and is a key hub for us. We are in the process of refocusing this unit with the aim of returning it to profitability as soon as possible.

"Our stated strategy is to leverage our strong cash flows to grow our high margin annuity revenue base. We have executed well against this strategy during the past year, growing our corporate subscriber base by over 40%. Additionally, we launched a number of new products during the year, with another major release scheduled for rollout early in the 2012 financial year. These initiatives augur well for the future growth of the group."

He added that the group is confident that it is on track to achieve its medium-term objectives and remains vigilant for opportunities or transactions that will enhance shareholder value.
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