Quartix earnings set to be 'substantially ahead' of forecasts

Subscription-based vehicle tracking technology company Quartix Technologies said in a trading update on Monday that it expects revenue and free cash flow to be in line with consensus market forecasts for 2021, at £25.6m and £3.8m, respectively.

The AIM-traded firm said adjusted EBITDA was expected to be “substantially ahead” of those forecasts, at £5.7m.

It said it would therefore have recorded accelerated growth in fleet revenue of 8%, and as expected, reduced overall EBITDA due to increased marketing expenditure.

The improvement in adjusted EBITDA would be due to the timing delays in some of the planned incremental investments in the last quarter of the year, which were now expected to be made in 2022.

Markets for Quartix's services continued to be disrupted by the pandemic, particularly in the first three months of the year, and as anticipated, insurance revenues reduced again.

The company said its cash balance at year-end was £5.6m, with its estimates subject to possible revision following the finalisation of December's trading results and an audit review.

Quartix said it was intending to declare a final dividend for the year in line with its stated policies on ordinary and supplementary dividends, subject to economic conditions at the time of declaration.

“The business performed very well in the year, notwithstanding the various Covi-19-induced lockdowns in the first half, and we are pleased to be able to report strong growth in our fleet subscription base,” said chief executive officer Richard Lilwall.

“This has further demonstrated our capability to deal with the ongoing headwinds and uncertainty offered by the coronavirus pandemic, with our internal processes for remote working being well established and operating efficiently.

“The sales and marketing investments made in European markets are broadly proving successful with encouraging results delivered in France - where we have been active for many years; Spain, Italy and Germany - new target markets for Quartix in 2021 - in particular.”

Lilwall said the company’s revised United States strategy was nearing completion, and would be presented alongside further details of its growth strategy and medium-term growth ambitions in early March, with its 2021 results.

“Looking forward, with our full focus on expansion of our fleet business, we see significant opportunities for profitable sales growth in 2022 and beyond.”

At 1354 GMT, shares in Quartix Technologies were up 6.49% at 410p.