Q1 2021 Karooooo Ltd Earnings Call
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[music].
Good day and thank you for standing by welcome take care of a limited contract fourth quarter and full year two tell from 'twenty, one reads out school well at this time all participants are in the listen only mode.
After the Speakers' presentation, there will be a question and answer session.
So you asked the question during the session you may need to press star one on your telephone. Please be advised for today's conference is being recorded and the like to hand, the conference over to Mr. Zach can Lister founder and CEO of Carew. Thank you. Please go ahead good day for everyone.
Oh, let's thank everybody for taking the interest.
Brian.
And that's worked out really speak of day shut in for 'twenty.
One.
And it sounds based on the same thing.
As good as the newly listed.
In the on NASDAQ and interest.
On the currency.
True.
And what we won't be provision besides E debt could eat them, but.
As of September.
It could be 2021.
So the public company.
For me it's definitely.
For the third 60, I want to thank them for checking for check with just the go to the journey.
Turning to the stock exchange.
Through debt.
April 2021 cause he listed on the.
Net debt to.
For the J C.
How do you perceive the culture.
The project once the calendar he tried to Africa.
You can argue all day in Singapore and did the heat.
Good day.
The list.
And I hope you all vehicles will be connected and base of the travel that's picked up like the lifting of the future and the PC.
He says to me our mission to bolt the leading liabilities catch plentiful.
The updated.
Yeah, the strong history of total system to organic growth and it's painful to the street that we.
Credit look at interest we have scaffolds were right and we've been profitable for many for many years now.
The carbon and we finish off the assets could be 'twenty, one at 1 billion.
Jonathan.
Revenue was at 616 million for COVID-19.
Yeah.
And on net income was one crazy eight.
Looking at Q4, you can seek airports for.
The right throughout the day.
Most recently for the fifth Street witness a day the low.
For several years contract was lifted on the chassis.
Stroke population of the split.
That's what's been right of us to growth and true corporate H be profitable at the effect of them.
Our track record of execution.
We have got ahead of the spark COVID-19, 60% of let's call. It base during the 2021.
The revenue we get from 18% during this foundation of good.
And 96% of our revenue and EBIT based on.
All of them.
Is it could range between streams one was 163.
The others.
Which equates to flow pool by day.
So the African range the.
The operating profit margin was consistent with it for 20 or 32%.
Is it the launch and a decrease from 48 39 per seat.
She created part of 19% for credit.
All of it but in politics, and especially it actually grew by 20% the.
There's different state of being Q2 costs, but it could totally liberal during the day.
I think the.
At this transaction cash but.
We also finished the year with over 70.
For the balance income.
<unk> customers.
Judy the financial good we swap the quarterly net subscriber additions fluctuate.
Predominantly due to COVID-19.
First quarter of such.
But if we compare to the loss from Asia yet.
And at the tip of the tower.
Since the Chicago, which was 76 per cent compared to last year.
The subdued the quantification of the feedlots already compared to Q1.
They were at 41 six total subscribers.
But by Q3 and Q4, we had the outpaced quoted it's true and in Q T. With the added 71000 net subscribers and in Q4, we added 60000 net subscribers.
We picked up particularly on maintaining the loss of yet of.
On the financial journey, and if you annualize that 80 price, we could be 22% year on year correct.
On it for 'twenty, one as I take the pool was $63 million.
And our operating profit continued to growth.
The coke tons on the COVID-19.
15% and it's P. J, just given them spoke to of your statement.
The equating to approximately 15 million U S dollars.
Adjusted EBITA was it.
Approximately 77 billion Euro of standard if you take the exchange rates debt.
The exchange rate the booking.
Sixth of June.
That means the growth of EBITDA of 21%. So overall, despite the COVID-19 the chips, we still believe we're the good year.
On cash flow.
Net cash cash flow from operating activities increased from 10% in this part of actually true.
The.
At the end of its fleet to non interest on 51 million range.
Cash flow from investing activities reaches the PPE increased by 44% growth and that's predominantly a U S. B it scaled up for the specific thing the last of all kept the business sort of guide the puts us at a free cash flow was down by 12% as expected with the growth that we could.
The most of two quarters.
We have the low cost of acquiring of subscriber.
But if we look at that at all.
Cost of the scrubber eats be pre the other three.
Okay.
If for a 21 day ticket thinking in terms of the amount of being capitalized debt.
From 1020 of Eddie I grade two one of Tel Aviv published in 30 plus range.
Our low kept the last parts of a plenty of subscribed, which is how's the market actually increased two of it.
To the.
660 of the anniversary is probably 20 bad debt can be attributable to outgrowth installed specifically.
Specifically in Q4 and in late Q3, which which clearly a lot of the new stores not as productive as the bogey of pulp line of sales.
We have the robust operating cash.
Metrics are improving.
Any other <unk>.
Scripture they've been given the debt.
That's from from.
One for one to $2 2 million.
That means of subscription growth of 17% in FY 'twenty one.
On the previous year, we had growth of 24% the 17% is purely.
None of the other stroke is the biggest share, but that's the topic even to COVID-19 and specifically for the first off here a week growth.
The increase from 151 right the idea there.
Typically for us that most of the.
Due to currency fluctuations.
The Oh all of us being consistent for the last 15 years, we have losses.
We have not tried to push off the wheat.
The focus more on customer acquisition as the first of all three I should be the eastern markets largely underpenetrated across our gross margin for consistent if on 2017 per se there for 'twenty, 171%, we did with.
So on the case of the stay at substantial more.
The capital into R&D, and you can see R&D as a percentage of subscription revenue for us from 2% to park. The same tells the market because at the same set of subscription also the case from 10% to 11%.
The administration.
The subscription revenue of debt coming down from 24 percentage of 22 per se. We believe these changes will continue into the low to offer.
Breaking profit.
Consisting of 30 to 32 per se and as I said before our adjusted EBITDA margin increased from 48.
To put a note on the sales.
What we do we've got the opinion March customer base, what are the commercial pest and pose for you missed the different types of vehicles for a range of from Microsoft goes to eat the Judy trucks, the white, partly the tons way he mines, but the.
Different industries and given all of the state that what we do sort of contextualized against the types of folks that we collect and we focus on driving exceptional value for our customers tenancy. We can make the 50 billion data points per month and that is continuously increasing we collect the data price per mile for thought the Egypt from small coupon.
The answers both of them are in.
In inkjet called Smokey boxes.
We collected data was towards the that the passage of the fact that for that we all said eight the honest with third party systems that can you just to keep in perspective of dated June.
Given all the fact that debt we had we convict using.
Using artificial intelligence and data analytics allows us to contextualize all of the state that Detroit.
The intelligence reports predictive analytics and in terms of <unk> mission is to drive for pet.
The based on insurance sales.
Good for our customers.
With all the data, while it's able to 15th is baked into search in the business.
The financial institutions and other carpet paint it provides it.
EBIT drop out as a matter of us.
For us to do that and with all of those types of me, let's say in the very good position to note the.
Quality of the vehicles that does pencil the second drive pink and win the one itself. These vehicles, we will be able to give them. The best price as we know it moves toward the day that we don't see that drop of the idea of the vehicle weighted vehicles being driven a lot of its being driven in the state that can be.
To maximize the value of our customers vehicles.
It's true that we have for them.
Two vertical on the plentiful debt.
All the customer the St. Jude on the administration on our platform to keep older vehicles of maintenance finds Laurence It says and all other sort of administrative information that normally would have been done on an excel spreadsheet for the different subject package in packages.
I will just be done on the weighted towards that for them, which is the contract.
The communicator allows our customers to the edge the visibility.
The 10th of relocation would be a draw of us and the install from the appeal.
And that the ease of fish is the.
As strong as the model for that as we get into the more e-commerce environment and as a as a.
So all of those installs with moving nicely.
We are placing the large under penetrated market.
Specific to the boat shows us that the expected annualized growth of it between.
18 of 2026 due between two 6%.
The 2018 of our global Tam was 12 2 billion U S dollars in the net 12 to play the U S. Dollar fees on a lot of the entry level systems and is expected by 2026 debt our global turmoil at the 77 per day.
We are well positioned to grow in this market.
Organic customer growth can be smoothed dupont that into four segments consumer debt as held for profit small enterprises medium sized enterprises and large enterprises and one can see our year on year, we continued to grow in all of the different verticals of weird.
The low industry and customer concentration risk the call room for industry is the one 2% revenue and the largest customer but is low at eight to keep the safety of our revenue.
In terms of earnings it's the most significant portion.
The battery backed us with the fed specific customer.
The purpose really of a lifestyle sustained commercial customer retention rates.
Our success across the industry.
The strong growth in all our segments.
South Africa, each day, we have the strongest and we continue to grow the rest of Africa. We had the week you are the last foundation, yet specifically Q for the COVID-19 as a huge of kick the eating the for the rest of Africa Europe, because he will conclude with our pricing.
I see a lot of Lockdowns of Europe.
Of the lessors still got good growth.
We also true growth at.
Despite the difficult for us to operate as a lot of balance senior stores operating out of Singapore and day bucket of traveling to the job of keeping the region.
If we look at the level of subscribers in South Africa is true.
From 860 to.
One of the again the 14th Pellicle is typically the same okay subscription revenue.
Typically it's 17%.
Africa other we swapped subscribers' growth.
For the sake, but we swap of subscription revenue decline of about 12 percentage that's less of the primarily as we gauge kind of a lot of credit to and two out of striking of customers on the power of in the range of African and the speed of policyholders.
Policyholders to work with our customers.
In difficult times.
The call.
Subscribers keep on 12%.
<unk> revenue growth.
Two instead of a per stage.
But there's a lot of live with subscription revenue is largely the course of a week of range in the beginning of the financial year.
Asia Liberty's thinking outside the Cabos grew about 20% of subscription revenue grew by 22%.
The outlook.
We believe we're well geared for growth and just kind of out of business.
The strong financial discipline.
Our such cognizant of is of such Cabos, we expect.
By FY 'twenty two to grow to between one of the path of one 6 million subs Congress on.
Subscription revenue.
Are you expecting between two put for us in Q2 for it.
But you're getting rate and the adjusted EBITDA margin is expected to between 45 and 50% and that is because we all knew Kris King.
Kate increased sales staff count and we've got expansion costs, and we love the truth on the COVID-19 our bet on the pick vessel in terms of operating margins.
We have very culturally I shouldn't of but clearly the politic, our EBITDA and net income and the fifties for anyone to go to the leisure.
Thank you very much for wood list and the open.
The.
The questions I have with me more of my CFO to the piece that feel free to ask any questions.
I don't know if you want.
I think one of my.
The correction on slide nine our foods are cash flow terminal activities for the 42 per se.
From a 44 per cent actually put the fleet the soup.
And on slide 11.
You may begin.
Scripts from revenue, it's actually to keep credit.
And the offer of increased under the Pepsi for grant and not hundreds of in terms of the powertrain.
And it sounds of Mark opinions, the percentage of subscription bookings from nine to.
If you live in percentage as opposed to 11%.
Yeah.
Hum in the open up.
The audience for Chris.
Since I've got the pleasure Christian from vibrant overall.
Ricky keep some detail on your apex segment, what investments has been made over the last two.
The great talents and installers.
David.
The last 12 months between the difficult to try at the in Asia.
The COVID-19 kind of of our courage to grind the Asia was pretty much of a centralized approach, where we had the management and we use Singapore is the head office as you choose any big cities of the big country and from we operate the promising of pool into all of the neighboring countries and kind of.
Ken.
In the balance ability to cloud.
Specifically, because none of them went on the balance senior staff was able to flow into the directories. So we've had quite a lot of the senior staff trying to run the business true zoom calls and obviously debt Smart Kid of you picked us and given that we invest it's putting growth himself and installers, but no.
As much as we had before because each day.
We've done just critical staff, we are harvesting debt. This will change in the near future, but I must click the if you will know the Singapore.
Just changed the rules debt, if you travel out of Singapore, and you come back from.
Singapore is no longer quarantine for two weeks, it's not going to three weeks. So the kind of the best definitely take half of quipped us specific in the Asia Pacific region.
What does the growth of subscribers from expecting Q4.
I think I can't get in front of me I can certainly get it and when do you anticipate extra growth accelerates its growth I think for apex of getting to it seemed to accelerate the growth we need to get over COVID-19.
And we're not certain of them, that's what happened, but I'm sure it's going to lead to even the way we all run the epoch, we'd still get very good growth.
Just to give you on what's going to get you the.
The growth figures I can always email that to your day, but if you don't mind the growth I think in Q4.
And the type of downturn of anticipate monetize some of the data that you've accumulated.
In this type of new.
What we wouldn't do ease of use the data for the benefit of our own customers.
At this stage I don't think it's the right time to be selling any of the stated a lot about peers of doing that I was on the need that's where the real value I think we need to drive value for our subscribers for our customers and that sort of three focused on clearly we at the later stage, we would be able to explore the considering the amount of day to that we add.
And we didn't get the convicted on monthly basis.
Yeah.
That's the anyone else have any further questions.
Operating shooting the allow anyone to ask questions.
Alright. Thank you just a reminder, ladies and gentlemen, if you wish you asked the question from the telephone line. Please press star one on your telephone keypad.
Our first question comes from the lineup from Matt from William Blair. Please go ahead.
Hey, Thanks for taking my questions and congrats on the nice.
Traction in the subscriber additions zac. So wanted to start off asking about that obviously, we're two months into your first quarter did.
Did you see the momentum that you saw in the fourth quarter continue into the first two months of the of the first quarter that right now.
I'm, sorry, I didn't get your night I'm speaking.
I'm getting used to the system.
Yes exactly.
It's Matt portfolio for May.
On the timing. So we have now surpassed 1 million tangible in terms of quantum of subscribers. So we continue to see the growth that we saw in the last two quarters.
Traditionally our worst quarters of Q4 for Q1.
Now this quarters of traditionally the west given all of the holidays and all of the other nice and we see.
Q1 in the push through the months were quite happy with the credit pink in Q on Q1.
Okay got it.
And then with the subscription revenue guidance that you gave for fiscal 'twenty two.
How should we think about the cadence of that from a growth perspective, do you expect growth to an end.
True throughout the year or it should be relatively the same quarter to quarter.
Hum.
To be honest I'm not sure to myself and that's why we keep them quite a wide range of it.
Slope on every month, a one day windows cause of the Dallas that kind of impact us new zillions of coming at it.
Everybody goes once the Lockdown then the out of Lockdown vaccination is different news of it.
If we if the morning I get up and it's.
Some of them different on the news in the.
Countries of being vaccinated quarantines continue so debt tranche, we keep on quite a broad range, but some of the move the over the years the.
Based on way to look at it on to predict on a subscription, but then you see on subscriber growth of this kind of in true and added to the subscriber growth of the P. Just share the Basel, but huge and that should be quite to our subscription revenue growth. So lost your subscriber growth to a six 2% the opinion on that.
We got out of lots of paccar, because the sheer used to add the two day pause about June and that's what gives you a pretty good indication.
We take all kind of growth in the last two months and if we take the current growth in the last two quarters of it for 'twenty, One day annualized debt, we grant counting the region of about 23% year on year. So it really depends on all of it.
If it plays the opt in the rest of the yet, but we certainly have been employee and being optimistic that the weekend.
From our business and we certainly and taken the the.
The risk the loop point people because I think if you don't take the risk you also could like beyond so we have taken debt risk that will definitely waiting on on Opex and hopefully we will get the benefits of kind of the opening up.
The senior management being able to get into the regions that we looked at stroke and patent the with the restrictions and Kathleen will focus more on our key markets.
Got it and then in terms of the investment priorities for fiscal 'twenty two it seems like adding head count in the Asia region is one any other areas to call out for your investment priorities for for FY 'twenty two.
So we think based on the lot in R&D, but we didnt basically of logging on platform.
We certainly believe that's the big importantly, the smoke and will continue disposing of both seem to Uber you've seen on investment.
We will continue that income from this financial year as well.
But we are at the.
Counting all of the segments.
Asia Pacific South Africa based of Africa, and most of Europe, We certainly want to growth and getting for Nick feels right to the credit environment in all of the regions and that's what we're attempting to do.
Got it and last one for me just on the subscription revenue growth versus the total revenue growth for the quarter. There was a bigger disconnect there than the typical maybe you can just.
Discuss the dynamics that drove that.
So for Q4, we've got one very big the mining house and that type of the feet on client bundled channels. So I actually want to back the cash they want to divorce the subscription revenue from the cash and debt you know the.
Mining of ounces actually of Anglo American the peers and it doesn't take big or the continued in Q4.
And that's obviously read the disparity tenzing in non subscription revenue.
Total revenue.
It's you know, it's but I think if we take the first.
Three quarters, that's a bit of a reflection of what is percentage of out of revenue is subscription revenue.
Operating I think I appreciate it.
Thank you very much messed up the other change that.
Joey Campbell.
Thank you very much Matt can you break the law school growth.
For the region with shipment that you got out of ink and consumable of small BJ given that credit for any element of the.
Demand. So I think if we it place the pool, we grew in all of our enterprise customers consumers medium small and growing and all of those segments and the baseball to do the boy you could take out Q3 presentation. We show you the amount of customers that we had the in each of.
Sounds great of course, and you can compare that to the Q4 with ease of public numbers on.
Yeah, and the one can see how growth, whereas the other.
The tell us the commercial customers. We've now got the other 70 plants balance of commercial customers.
I haven't got the exact number between the one and the other but eat it appears that if we he took the instead of all we are the best of gold Richenthal exactly what that there's numbers of all I haven't got the move front of me at the spoken come on boy Susan can give you those numbers.
I've got another question from Daniel boats.
And how should we think about the awkward accounting for this.
He says the Asia as I RP.
Daniel we've always the last 15 years, we will be consistent with our boots on the other.
Lot of L. P is a case of RFP, we have not changed in our booth. We believed the are pleased the V healthy all through the weekend, we our customers can get.
A lot of debt you would pull that are 500 instead of average your plans of doing 50 range per month.
We certainly.
Yeah, all of our philosophy has been to add more debt and keep the RP the same and.
The reason why we've had this mindset in the business approach is because the market is very underpenetrated and if we try to increase all rfps at this point I think it's premature when the market is more mature at that point in time, we will as we add services as we added strategy, we'll certainly try and increase the <unk>.
And then she and we've also got the price each brought that to the right things of that I'd be out and we certainly will the United the the men.
It's opportunity the opportunity to do it we will and it's just the question of Nam and we will take the T. Deploy those funds it's not the leave by the second of off of this year one to the expect it to be on a little bit the subject to kind of it and then the state again I'm a little bit surprised in the what's that.
And the and the lost maybe month in terms of COVID-19, Susan you've been in for you.
You'd be going backwards on an international level a the in terms of the restrictions being posted on kind of a <unk> of the vaccinations that'll actually Anthony.
Any further questions.
We got it for.
Yeah.
Alright that could you of late my from Kenacort ask the question. Please.
Certainly please ask a question Mike.
Alright, the get get of talk to everybody hope everybody's doing well is that just wanted to ask one question. Just just on the industry of some of your competitors are are struggling to source of components for the connectivity piece to drive their businesses any comments on your ability to the source.
The components to to get your new customers up and running are you seeing any any impact on the global.
The supply shortages.
There's definitely a supply of shortish coming through of my Queen Shih-tzu I've seen that if you look at the other than being killed, which we know is on reported Konwinski really bought the day C E and you'll see a substantial increase the Indian Vinci and we already started planning for those of all the time the lost.
Six months of science or even maybe rather non months. So we I've seen in the case, we are talking to Susan of a supply of that.
Or a shot of it's telling us that I'll leave bombs on not gonna be golf Nice then out of the camp eight moved to community for months and he comes but Fortunately, we've got sufficient stock for the next nine to 12 months and hopefully in in the year's time, we will be in a bit of situations. So for if one of 20.
Cute, we believe we have reason to believe that we'd not gonna have stock shortages.
Okay, great out with that that type of stock you should be able to maybe take some share from the the competitors the switching gears on the competitive dynamics.
If you look at the South Africa markets, you haven't Sega selling their subtract business and.
Maybe a mixed telematics, who lowered some head count while you're still investing for growth maybe you could talk about the competitive dynamics in that market and if you think of your points to maybe gain some market share.
How much we can do at any given the time and we certainly striving to grow as quickly as we can and even on the code of adopting the effective <unk>. The Saint it's of Sparkled. These restrictions on both just the the outcome of searching will be the for you to have done the better at that but being the test and all on.
We <unk>, we kind of cable said that the quite a lot to covet our biggest restriction now isn't on trees, even COVID-19, it's free the ability to get the senior executive senior management on to the ground to to <unk> to train it to guide and that's really important and.
You know you you can't do it through as soon for the Knights. Okay did kicked us so I think all markets Ache cycling, that's the ink and obviously, we'll continue to focus on the key markets under COVID-19 because that's the easiest because it's got the already strong management on the ground.
Thank you for <unk>.
Certainly.
It seems like you grew much faster than your peers from the from our working during the physical 21 challenging yourself. Congrats on the execution of best anxious for continued success of past the line.
Thank you very much alright day, if you sit with Daniel from Bank of America.
The <unk> please.
Oh, please ask the question.
Great is the.
Congrats on the I P O and thanks for taking my call here just have a couple of questions for you. The first of all of the bit of of clarification, perhaps you know you're you're seeing the good strength and for Q. It sounds like it's extending into one queue. So far can you just go back and kind of dissect for us what's what's driving this how much.
Of it is the COVID-19 situation improving vs. How much of it is maybe the recent investments that you're making I already bearing fruit or maybe or maybe it's just something else, but if you can kind of walk through the components driving the growth that'd be helpful.
So Ah Daniel.
We've got the at the moment of of 3000 employees at the day and we had to tell us of non under the 19 on so we've we've not of the town is a little price too bold the clue.
You said three broke the vertically integrated with everything else House.
Taken us many years to get the way we ought to that.
And.
Keven and get a in the end of it and if you can just the street kept the the fundamental part of your question sorry, I lost because I was taught the door Coupe. If you can just give it to me. Please the king <unk> sorry, Daniel Yeah.
Yeah I'm just curious you know of a recently it looks like you know on the net subscriber trends improving on your.
You guys received picking up you know is it more of COVID-19 situation for getting better or is it more you get the need some recent investment and you're starting to you know actually better around those.
Okay. So you know we've got on it to to.
<unk> tells US talk so that's quite a lot of investment before it for 21 in other words in December 2028, 2019. When you did the help I just for it for of 21, we and we were at the base to get close.
<unk>, it's between probably in the region of about 750 people and didn't COVID-19 came from the beginning of of sort of February and stopped at the edge.
Move back down on us all about the middle in the of February the last four of and last year.
That's obviously, we can <unk> people in the price kept on the allocation into growth and and we so that was the right decision specific day for the first two quarters. We deemed is thought that the start investing the money that you anticipate the it's starting to invest in the round March.
We started doing it all the pet in the round <unk> kind of that.
So we start the scene that but the the captain of the cash in itself wouldn't just get your day to the Assaf death more open market the in the mall.
You know of a list of restrictions around COVID-19. So we believe that in April of 21 rid of shoot can make that much better without the carpet and it also tend to believe that or being based on what we do is although it is the 11th of recipes ZIP code of it doesn't interest Cynthia locked down on the socket that the 12 months ago that would be it.
It could be it instead of the account al bottom line cause the we'd be getting a break and expenses, but I'll say for belief at the got the carpet.
Read the east Alexander Cook, and all of the asking able to grow out distribution.
Business increase on the electric boat and we continuously P D on.
On the on distribution on the operations on our platform. It's you know it's really the lots of bothered me continuously busy on a business I think of just a product of us in premium.
Allocate the capital and that's for US the most important thing and for that you need there on staff and the staff need to be trained as relative to be able to grow fast.
Makes sense.
Yeah, Yeah that sounds good and just last one for me you know the.
The car Zucker opportunity is pretty interesting I know, it's super early but you know.
It sounds like you guys have an interesting hybrid strategy, where you may look into buying some of the used cars and also help kind of aggregate connect the sellers for the buyers as well of more of a platform approach. So.
Just hypothetically if car Zika does really well coming out of beta you know how.
How much more <unk>.
<unk> is required to support cars yoga.
And what would that be pretty capital intensive as well.
So we're quite excited about because it gives the opportunity you know, we always tuning out of beta phase and equals we earn fees on it that they will say is my team and there's little ways of the capital that you require banks are very much willing to finance, let's say, if we wanted to take bank debt.
The available Oh, we could go to the to the markets and erase capsule. The whenever we can go either way.
The reality is I believe with $200 million, we can do really a lot and for us to raise tens of million dollars relates to the finals through a bank or where they used to raising capital. We can certainly do that but we will only do it and if the prudent why we will get a good return on capital. So initially it might be.
On the expense for us well all of the rig count for the motto.
But once we've got the model and we've got the right people in place on the system I believe it's gonna be a weighted business and to take his coming on really well I'm very proud of the R&D team. What they are what they are delivering and each day of just little treatments and the.
We also going on and starting to go operational stalking the games of the.
On the face are experimenting on people and very good about the business, but our system of believes the CS at 12 to 24 months before we see a real business coming out of it.
Gotcha really interesting and good to hear the thanks for all of that that I. Appreciate it. Thank you. Thank you Daniel upright the if you could lift Parker from non.
For.
And ask questions. Please.
Certainly Parker. Please go ahead.
Yeah, Thank you and Jack and team great quarter of.
Just wondering if you could discuss the low video solution for a second you know how mature that is from a product standpoint, and maybe give us a sense of how many of your customers have adopted that solution and where do you expect that the trend maybe throughout the rest of the 2020 one.
So.
On that solution and.
The the actual hard range, each day parting Audrey and on top of that towards the very weak too.
Thirdly the.
So we've got the two different providers of Audrey we asked part of the video Kinematics, a department and we believe our debt to EBITDA.
On the Magic Sparkman will become the thing potent part of the business and it will be something that we will see growth over the coming years.
At this point in time, we've got it with strategic customers.
But we actually run out of stock.
And to eat the way I forgot inventory at this point bolt on.
But as we got back all this for.
The video of telematics.
The flip of the video of Telematics and we certainly believe that's also kind of the important part of the business, but it will never be as big as the traditional telematics.
Got it it makes a lot of sense and then of core assets of really been driving a lot of the growth on the story for a long time here, but as we think about emerging opportunities.
Areas like bikes, and scooters and micro mobility, how well suited as the platform for those sort of assets today and and how substantial I guess do you think that opportunity could be as we look out you know over the three to five year horizon.
So our platform allows we brings even do prison the Grafton so the slope.
Political prisons.
Debt are able to stay at home, we've got that contract in Singapore. So our platform allows us to check it.
Any any checking the box and then we take the data we contextualize it and we can do quite a lot of the data with its night the cycles, whether it's by the sweep its a big losses.
No it doesn't really matter for a class.
So I think the opportunities unique and the way we are we developing on our platform, it's really to deal with mobility as a whole irrespective of whether it's a large tract.
The living a mining equipment or whether it's an enviable sort of whether it's the passenger vehicle and the outlook.
Dragging on the platform to be a solution for irrespective of whether it's for passengers of waits for call. It aims for.
For us for multiple use and they've gotta be comprehensive platform that we believe is very easy to use.
Good day to enterprise customers or consumers.
And then maybe a last one for me.
You know you mentioned a lot of different COVID-19 lockdowns and restrictions in some of the key markets, particularly the APAC is that something that could potentially delay installation of the subscribers that you're bringing onto the platform or do you think that you're largely insulated from any potential risks there.
No.
We've got for instance, just to give you a bit of kind of we've got one message on the now that's signed up three engineering 50 vehicles.
Just to go and install these vehicles will move out of the igloo since they have to do kind of a case, they've got a dish swaps in a day.
It's the logistics of around COVID-19, specifically in the place now I'm talking about a single point of the company. It's just to get your technicians to work and to be able to do it and to do all of the COVID-19 tests.
<unk> is already a clutch of quite successfully and from an operations perspective, so because of the that will impact on us.
On a day to day operations in different geographies in different ways.
It makes a lot of sense alright, thanks for that for all of the color.
Thanks, very much Banca.
On a per I think to cause the amount Anthony coming based thinking Pete.
Certainly Anthony please ask the question.
Yeah, Hi, Zach congratulations on a good quarter and congratulations on on your listing I just wanted to ask philosophically I mean, clearly 'cause it's still around in the headwinds that you navigating on unfortunate and very restrictive, but it kind of feels like the business was operating in in food gear on.
You've been knocked back a little bit, but you say 12 to 24 months to hope to be running at full throttle kind of.
Can you give us the sense without necessarily attaching numbers to it you know just around your ambitions.
To go from kind of third get to put the <unk>.
Six seven sketch of how much foster care of the business expand and then what does that mean in terms of marketing R&D expense you know, what's the capacity of the business too.
In order to drive the top line.
Okay.
And.
And the high na.
Thanks for making the complex and some of them.
Good day.
The way, we've gone out of business and you'd be familiar with the us and our story for quite a long time report has gone out of business.
<unk> debt eat it.
The focus about the margins because nice to visitors.
<unk> South Africa, the really looked at the doubt on margins profitability and a bad out dividends.
And if you recall three years ago, all sorts of the accelerated growth and we got subscriber growth of nearly 30% and most of the investors would be on that'd be that we all started growing the business. So for us because it was at this alignment between topline growth and bottom line growth and it's one of you know.
The all toward was starting to be of great resolve plastic accelerate.
Actually the at the edge our shield the base wasn't that didn't really appreciate it so for us the high.
The 20% we've done that already before COVID-19 and if you look at on average in growth. It's been printed at the St. Pete kind of it in terms of.
We will cover the of 16 the peak of it for five years, it was 22% with clearly some gears.
Just before COVID-19 over the year before COVID-19, where you saw growth of close to 30 per cent. So ideally what we'd like to do is to grow grow and double our business every day, yes, that's what we'd like to do as management.
But I think at the cause of these add up the way that some of that can really Uh huh.
On the tech kept on for that type of growth at the.
Obviously, the even desktop of God doesn't come out of the ninth.
It's me and well see who pays for the Lotte specifically in the last Q4 in a chart of in terms of recruiters somehow even counting the AQR. The part that's one of the part of the partners. That's increased the most I think on team has tip of the sauce now in the HR to deal with the you know the recoup.
For the big of grid.
Well the oil based food, but can we predict flow baseball and at this point in time, given some of the negativity coming out of COVID-19, we've exited the cider to perhaps please.
Hiring for another.
The 123 months to see if.
It really kind of left in the index of nations are really going out when we normalize based economies, but even without that I'm still the content in our teams very contained two of downtown correct.
Great that's very clear and I wish you all the best in hitting those targets.
Thank you very much Anthony.
Operating it doesn't appear that the any other calls.
I've got a call coming through from current slogan.
Your cost of the quad.
Since the Sky of state will start then.
For the North sea over the last two out of it.
Yes.
Any of that kept the non sports yet and we expect the strength to continue as you just kind of a piece of it technology costs.
Paul.
Hey, Chris.
Yes.
Is that are we will be moving out of technology getting the Dow R&D team of fee basically without price P technology.
And it's all really the things as well what will be between 18 months from 12 months from in terms of course, we are developing or the new technology around the path G. So that could sit on the web and in fact, but it's an investment that we need to do it but fundamentally.
Well, it's on the bank the Ethernet.
The increase.
The other off the value of out of it who initially the Mod services.
I wouldn't vote in terms of modeling I wouldn't worry too much for the increase.
The cost of acquiring a M a C.
Scott.
The increase.
I think the ease to taunt one can we expect a further decrease but it actually increased because of the new technology that we now working on for the future.
Then I've got a question from more of the low.
Okay.
Yeah.
And is the concerns regarding a growth of he liked it too big of impact as far as the workforce of moving towards the working from home.
Sure.
We certainly believe to working from home and this is me personally you can only do so many people working from home and the efficiencies of people waiting for a lot of them.
I believe the shortlist.
The people at the end of the day still need to see people you called the bulk of the business everybody weighted from them. So you can do it for one to answer and I believe of mobility and transportation will normalize.
I do believe where it came from them could be something bigger than it was on the path, but I don't think it's going to be the solution for the future.
And another question from Paul who is the any plans for <unk>.
Large acquisitions of mergers in the near future.
And we would certainly look at an acquisition or merger if it makes sense Ah, but kind of at this point and from a you know we cannot announce any acquisition or any new agents.
Yeah.
And do you feel the need less for Australia.
We expect the market correction.
For the.
You know I believe the way they just pay the price on switching and believed for a face to the nurse.
The 42 range investment at Silicon the I believe that glut of the deal for themselves, but it's fun for me to the sides of the day trustee of not to say I can only say that 66% for the company and I feel very comfortable with mop the original investment but.
All of the day to say that you know and start making catchment of on somebody else's investment and the better off you'll be comfortable of being alone in the baseball Concord.
And I've got another question from grip on what.
The most critical factor that differentiates you from your competition keeps you outgrowing the peers.
I'm.
Sometimes of a difficult question to answer that.
Got quite a lot of reasons why we believe we win.
We are vertically integrated.
From the Saint Kate and we have found the meat business, we've got a great.
That for me, we've got great technology.
And I think the way we operate internally internal systems allows us to be quite the lehman, meaning the way, we are able to service and the liver.
The service to our customers.
I think what's the importance of nitrogen viewpoint is that we've made the focus on the Blue piece, you know off the sound of customers appeal that we'd be of partners technology partners in the course of that you're continuously getting referrals from our customers.
Think of that always helps instrument.
Yeah.
Yeah.
Okay.
And that's where the questions is the any other questions.
There are currently no questions. Please continue sir.
And with the on a lot of questions I, thank everybody for.
Joining us today wherever you are and the thank you for your much for supporting US. Thank you I'm.
I'm on.
Thank you that does conclude our conference for today. Thank you for participating you may all of this.
Connect.
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