Quartix makes solid progress in core fleet business

Vehicle telematics services supplier Quartix Holdings announced its audited results for the year ended 31 December on Monday, with group revenue increasing 5% to £24.5m.

The AIM-traded firm said fleet revenue was up 14% to £17.0m, while insurance revenue declined 12% to £7.5m.

Its operating profit improved 1% to £6.6m, while earnings before interest, tax, depreciation, amortisation and share-based payment expense rose 6% to £7.2m.

The company’s profit before tax increased 1% to £6.6m.

Quartix said diluted earnings per share fell 4% to 12.21p.

Looking at cash, the company’s free cash flow increased 5% to £6.3m, while cash inflow before tax rose 3% to £7.0m.

Net cash was up at £7.3m, compared to £6.2m a year earlier.

The board proposed a final dividend payment of 11.1p per share - up from 9p in the prior year - including 6.8p for supplementary dividend, giving a total dividend for the year of 13.5p per share

On the operational front, the board reported strong progress in the main fleet business during the year, with a 20% increase in its subscription base to 105,314 units and a 20% increase in its customer base to 10,961.

Unit attrition was consistent at 10.1%, up very slightly from 10.0% in the prior year, which the board said compared “favourably” with its estimate of the industry average of around 14.5%.

The firm saw 23% growth in new fleet installations, and reported strong growth in France, which ended the year with 1,776 customers and 13,131 vehicles under subscription - an increase of 24% and 32% respectively.

During its third full year of trading, the US division grew its customer base to 1,460 - up from 1,075 - with 8,973 vehicles under subscription - rising from 6,191.

The company said it saw the anticipated decline in the lower-margin insurance telematics business, with a 17% drop in insurance installations to 57,826.

“We are delighted with the progress made in 2017,” commented chief executive Andy Walters.

“New fleet installations increased by 23% to 27,250 and the client base grew by 20% to just under 11,000.

“As announced a year ago, investment has been made in the development of the Group's fleet business in the United States.”

To date, that included further local recruitment, product development and a new sales and marketing automation platform, Walters explained, with the group now able to build on those foundations.

“We achieved satisfactory margins in our insurance business, in keeping with the group's stated strategy of focusing on only those insurance opportunities which are closely aligned to the group's fleet business.”

Walters said Quartix made a good start to the year, in line with the board’s expectations.

“The high levels of recurring revenues and opportunities to grow our fleet business in the UK, France and the US combined with continued progress in our insurance business underpin our confidence for the rest of the current financial period and beyond.”