Q4 2022 Karooooo Ltd Earnings Call
In this presentation, we will be making forward looking statements, including statements regarding our financial outlook for FY 'twenty three.
Please read the disclaimer before you make any decisions.
Reconciliations to non operation metrics are in our earnings announcement, the 6K published on our website.
Before we talk about.
The results of April 22, we wanted to demonstrate to you the way we think about our business.
Assuming charge, an epic changing and $50 a month per vehicle for luxury the launch impacted dental solution to ashland's businesses is often misunderstood.
Estimated.
Our platform helps our customers.
From the businesses, we allow them to be extremely efficient and competitive.
That's a digitalized pit underground operations.
And the main tier customers are able to do much more with less by using our platform.
We have been building a platform for over a decade and that would be both monitoring vehicles.
Specifically in the last years, we've allocated the large amount of capital into R&D and we will continue to be set.
We are booked up the platform for the future. So that we can be long term partners of our customers.
We understand that many of these developments will not divest a immediate results that viewpoint and we will get the benefits in the medium to long term.
As we all know mobility score to all the on the ground operations of any business.
We think beyond connected vehicles and equipment the operating environment in any business is dynamic and challenging.
Chuck and I need to know where they are and what they're going to keep them moving towards tier battery maintaining license of ensuring all on most importantly chavez.
Travis with permits licenses welcome Alex shaming driving behavior schedules information.
Jonathan when you see that as being fine you have to monitor driving productivity and ensure they're adding real value to your business.
You have your cargo you need to check up on pick up from Daniel grabbed onto your customers.
Nothing can Goldman.
The vehicle you drive it is allocated needs to fit all the cargo and need to arrive on time in good condition.
You also have machinery and asset such as claims tractors and containers you need to ensure your operational efficiencies.
Michelle and that teams are ready to load and also a good company.
Sure.
Many of vehicles many assets many employees many moving parts.
Victor Luis will scheduling and operational teams that know what's Glenn on working together.
On the ground operations are the foundation of any business, but the operations need a backbone to try and facilitate them is finance HR sales and marketing information needs to fill low cost departments, Kenny efficacy and quickly for businesses to keep innovating and remain competitive.
Finance once the actual time spent at customer side for billing our cost of operations and way of leakages are in order to improve the business capital allocation HR pushes to keep all your employees safe accurate overtime logs.
Marketing needs assurance Abacus service quality and time to service a customer with technology enhancing your business. They know theres no, beating our customer service and you have a competitive edge.
Finance notes that you need bucket this lumpy need to increase your sales, but operations no you're at maximum resource capacity already so HR needs to recruit more team members and procurement to me to buy more vehicles everything's together facilitating quick business decisions all departments in our business have operations and <unk>.
All need to be connected.
No way a business can scale and time for those increased sales going into another business and lithium. So most of the customers. So you don't have to say no to more revenue per customer will know the defense.
Businesses need an end to end platform that perhaps straight into the operations and empowered them to keep growing and intuitive platform seamlessly connecting vehicles equipment warehouses offsite ground people teams and systems.
Powerful platform, a contextualize of Iot data to deliver game changing actionable insights bringing forward. Thank you Rob.
<unk> doesn't just innovate for our customers operations are today, the planning and developing for winning need to be in a decade, we're building to create an agile operations ecosystem with businesses and economies can achieve more with less.
Hopefully, but thank you that's all.
Watched everybody picked understanding our prisoners.
<unk> mission is to catch the Lithia underground operations current.
Allow us.
Within our customers for the long term.
We know they're going to watch.
That will show what one of our customers' day to day operations Mark.
Okay.
Running the business.
Kevin.
You may begin.
Okay.
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Operations.
Thousands of reports.
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Helpful.
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Quick question.
Yes.
Yes.
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Driven by Bob.
So does it answer your question.
Thank you.
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Sure.
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They just got settled with guns warehouses.
The reliable driver.
Or do you think it will be gradually and.
John .
John has already received a notification that Harry.
Got it enables mitek.
J D from dispatch to deliver Youll fleet management back at the office can also see that everything is on track with something.
Something changed.
Unable to speed the delivery schedules would begin to change the delivery time and location.
Thanks for the delivery you've already notified Harry in real time.
John .
Yes.
So just popped up on the screen.
Henry.
Sure. So good luck.
At this time.
Coverage was opened outside the us the relocation I would take the call.
Kevin I wonder.
Thank you.
David how are you from a contrast community. So you can pull to go before any color.
Yes.
Got it.
Carrington is driving this.
So it will be a busy period.
Advanced remind that allows them to make all the different rearrangement.
Indian diagnostics.
No one can match before pushing for maintenance services, while mineral company, John just with what you said Matt.
Okay.
The way.
Yes.
Okay.
Given the good.
Political.
You quickly check into <unk>.
As closely as we do have extra stock to cover trustworthy <unk> been Harry the dropout rate.
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We see that have you have delivered the goods and Mexico signed for it and just from a cost has just been informed that we will be seeing is gone and invoice. The next date chip the email so the fuel forward replacements.
Harris dual card was used at night, but the vehicle has talked at the office.
Chip heavy truck.
As part of the vehicle so it couldnt be after contracting but.
It turns out that the card has been copied and defensive reasons to the fund.
And just like that all from one customer.
What's happening when its happening.
It's all about their IP sites at the right.
Besides that our proactive.
Excellent.
I would obviously give you all the Reits.
So a bit up in Boston.
Everyone to power.
So all the dogs and making everything just.
After watching it.
<unk> can now be to contextualize that.
You bet.
Businesses.
The businesses that we see this from the small SMB customer Mr. Art, that's a very large enterprises.
Andy.
Let's move to enterprise and more complex each operation is all the more value we can bring to the table to assistant.
This can largely operations, allowing data to departments to be able to talk to China, allowing them to mitigate risks are now going to increase productivity to add greater visibility of the operations and.
And we found ourselves and continue developing our tech in order to continue to.
Our system customers indicate this demand from the operations.
We knew that you see transform a business that's grown FNF and nine.
So we partner with our customers to take them.
Pages of closing new business.
One of the themes that took patting ourselves on the online customer schemes.
I see that arent benefits chronic illnesses secondary at four importantly, east they see the real benefits at a time as they use our technology and which announced aimed to increase the businesses. If we can.
Day, one day at a time.
We have a fee type boost customer base ranging from consumers to small medium and large enterprises.
We understand it.
These businesses are very different keeping that they operate in different industries with different pump. So.
Vehicles.
And with the different operations.
We also understand that the three regions not any countries even countries these different months.
And now ability to another combined.
Important classic space.
And given that all the data that we can make Tuesday.
Industries.
Those are data points, we collect on a monthly basis.
Analysis to take knowledge to keep busy.
This intelligence reports that there are things that we've had from one country or one industry and to help assist other AD tech companies and it's being able to gather all the data to understand it.
If a customer is unchallenged and putting this all together is really what to do to be able to help our customers digitally transformed the operations.
With the <unk> data that we keep our customers it allows them to optimize their day to day operations.
We also announced in Pip.
The low to extract the GOP business the training of the staff.
The <unk> business.
It's that.
Many fix that.
Customers two RARA from using a platform that allows them to be competitive efficient and Rio and draw and drive real value.
The businesses and some of those decisions on not really.
Instant gratification silicon missing our pace should be improving the owned businesses that with aerotech knowledge. They don't even know what to increase.
Where are we at the much needed related services, given our large data pool.
We understand technically fit on that spectrum.
The sale of data on that current these forced in gray we commit.
Again, maybe both data points on a monthly basis.
We are at least <unk>, Tim credit opportunity.
Morbidity swiftly quarter, all took down the operations of all businesses throughout the world.
The best way to understand the opportunities to kick them out for vehicles that exist in each geography, we operate in.
We understand that some of these vehicles are consumed.
<unk>.
Mrs and they understand it and Susan.
Shifting geographies, we don't chief consumer business at this point in time.
If we look at South Africa, that's part of it.
<unk> million vehicles.
<unk> in the region of about 11 million vehicles. We currently have 10% of all vehicles on the road on our platform.
If we look at southeast Asia, which is quite well as a 100 million vehicles.
Got a small insignificant part and we believe that is really our biggest opportunity and at this point in time. It's overall at the end of February we had in our existing 40 Park tower from vehicles and we described it at 22% despite COVID-19 .
<unk> is now starting to open up.
We have seen in the month of April we've seen a lot of the countries. We operate and we believe that will continue to ease specific teams to the next six months and that opportunity I think.
We had a quite firm.
Right.
Europe is also quite a bit.
100 million vehicles, we've got 120 students tell us in vehicles, and we will certainly allocate capital to Europe , and the crowd that well above historical growth rates.
It's about the same amount to vehicles as South Africa and at least talk about Africa, We talk about Africa, Excluding South Africa, and we have 68 elephant vehicles.
We are certainly also again, if it's growing.
Market.
Another important way.
At.
What is the contributing factor in terms of underground operations in terms of global GDP and it's been documented that its well over 40%.
We will be vaults.
Right.
I'll, let <unk>.
It certainly helps businesses grow.
It can be competitive and be efficient and we believe are key to improving operations.
Our or.
Was it 107 million U S products.
Is our trust 272 7 billion.
And so.
And that is in our best over the last years of compounded annual growth rate of 18%.
Why do we win.
We believe these are the key reasons why we win.
We are pretty integrated.
And into owning piece of art <unk> software platform.
<unk> continuously increasing.
And allocate to R&D too, we have a well established infrastructure.
Noticeably in several countries that we've been operating for lung other countries, we will certainly.
The establishment of a strong infrastructure over the coming years.
And we have an expanding distribution network, which talks to the wireless infrastructure.
Ability to execute and achieve has been proven over the last decade.
We continue to carve out business.
Operational technology partner.
Our customer centric culture customer alright.
We believe he's probably one of the most important aspects of why we win and.
We really chophouse talk to be innovative.
We Jonathan innovative culture, we have lateral asked off the great things that arent debate remedied quickly.
Our belief.
The reasons kind of NPL coal chase tend to maintain the overriding reason wildly.
We finished the year with a.
A powerful commercial customers.
<unk>.
We will continue to drive that growth into FY 'twenty two.
We are America through 2022.
Actual results of.
As you all know we start to the financial year, we are the sole shareholder of <unk>.
Which earned 68% of contract initiatives aimed at the on the transmit stock exchange in South Africa.
On the first on the 20 <unk> absolutely success can be delisted.
Car check from the <unk> stock exchange.
Ownership of 100% of Ashish.
We did in April and the NASDAQ.
NASDAQ commitment of at least into the chassis.
Core checklist talented in South Africa.
<unk> is now a company headquartered in Singapore.
With the.
The same type of contract.
We are delighted to have performance during this financial year, we have filed we estimate.
Cryptic act in the market for 2022.
We have made <unk> <unk> conference call.
Contract subscription revenue on a constant currency basis and contracts adjusted EBITDA margin as well.
That to us $1 million 526000 subscribers.
In terms of subscription revenue to six to.
Thank you, Eric Zol, and <unk> adjusted EBITDA margin of 47%.
Sure.
<unk>.
And what we're experiencing between the Q is in keeping with our long term financial goals.
So it can be what.
We had planned for the year the last two financial years have been quite difficult.
We are.
Consistency, rather now subscription revenue and customer acquisition, our subscribers grew by 17%.
Netflix competitions equity by 23% compared to last year or so.
Ascription, given your growth on a constant currency basis crude minority ashamed.
<unk> growth on a constant currency 22%.
<unk>.
Our subscription revenue is exchange of telco revenues, 97%.
We are also delighted that we now have 88 telephone commercial customers onto our platform.
<unk> continued to grow at <unk> count in total revenue.
In 'twenty <unk> $2 6 billion, so up between 2% compared to FY 'twenty, one and adjusted EBITA was 1212 brigades, so up 8% compared to FY 'twenty, one we have strong unit economics.
Robust operating margins, we consistently beating the approval of <unk>, we have a <unk>.
Strong balance sheet and re shifting of a strong cash position the strong growth supported by customer retention rate. We ended the year FY 'twenty two with the strong cash position.
Our net cash from an employee.
Employee from machine to shipping and just an $18 million great.
At the end of the $49 million range whats many at three raised net proceeds of the IPO in April .
We also spent 70 million grant R&D and acquisition pickup.
And that puts us in a very strong position.
For growth into the future will be we don't believe we need the shipment and as an $18 million range for the next 18 months and we certainly have got also something which is largely untouched.
Our database for project was at 34 days down one day compared to FY 'twenty one after.
After significant investment into R&D in Kashmir acquisition during the financial year, we ended up with.
$379 million range and free cash flow.
Operating activities cash raised two operating activities, let's rather flat at $952 million range at <unk>.
<unk>.
10% more than the prior year into your customer acquisition predominantly customer acquisition, which is PPE in the PPE is also now in Q.
<unk> seen in Vinci.
Due to the shortage of components, we find that we have to increase the amount of inventory that you know in the K to be able to meet demand.
We didn't want to experience in the.
Would you just stuck and we are able to fulfill demand.
Similarly, we believe FY 'twenty.
We should not be placed with stock shortages EBIT.
We pride ourselves on our discipline capital allocation over the years.
Can you just check record.
Our earnings per share. This year was 15 <unk> 24.
Our EBITA margin growth.
<unk>.
Free cash flow of 379 million and this year, we started to do.
Create dividend of 60, you exchange reasonably pay out dividends and you have seen is the core securities filings in Singapore is in U S dollars estimate that's an equivalent to us.
<unk> million dollars to your payouts and difficult.
We have sufficient cash we generated sufficient cash Judy FY 'twenty two we believe with the ongoing generation of cash G&A FY 'twenty P&L.
Greg if I can <unk>, where that sufficient cash receipts and they don't want to be keeping cash that we don't believe we can even faced in this next year. We've also got the bank facility.
Our disposal, so we feel very comfortable if our 2003.
Our business model, if you will.
<unk>.
Strong generator of cash.
If we do reach is in April of accelerated growth.
Dan we can what are they stepping out.
Our bank facility.
<unk> has a long history of consistent execution, we've been crying out business for 16 years now.
Carl.
$1 5 million subscribers subscription revenue at the end of the year was close to two 6 billion.
Great.
And operating profit at $750 million grant.
After at 15 million going forward.
In February we've taken all the steps necessary to make sure that this does not happen again.
It is to our steps that we've put in place and feel comfortable this will not occur again.
Third that we'll see in Q4 was our customers that we are keeping the benefit but down from <unk> financial.
Is it all being gripped intervals.
And we arent satisfied with the operating profit results that could do that for 2022, given the circumstances of two years.
We will continue with our strong financial discipline, and you'll certainly get forward to it.
2023.
We had a record year in net subscriber additions.
Two interesting 'twenty talents and compete to Boston aligned and connected TV networks, 23%.
Sure.
Mitch.
In our opinion quite a good achievement given the challenges that we've had that for the last two years.
Fortunately our commercial customers, we now have.
<unk>, Johnson and that to us and T cells.
17% on the Pvs financial yet.
We are well positioned to materially increase our investment for growth on the back of our objective unit economics.
Al.
Lost.
Last time value.
All of our customers to cost of our client customers as a non tons.
That is driven by internal systems.
Market strategy, and the quality of our stock and the quality of our product and the ability to retain customers and that is for us key to be able to win in the market.
Our average cost of any such contract count decreased from two <unk> to two <unk> 70 range.
Having said that and.
These two components.
The cost of our clients that Scott.
The ocean that Youre capitalizing a portion that you expense the portion that you're extinction increased in FY 'twenty two from 660, <unk> shipments 19, grant and that Delta tons that Bob the numbers of new channels that we that impacted at all.
All income statement negatively in terms of what <unk>, we kept and launched.
Difference of $1 430 T J.
<unk> 2021 compared to 1000.
<unk> 2002.
Our all.
In FY 'twenty two.
51, Greg on paid to 154 ranked what <unk> been impacted Easter timing effect and also the exchange rates.
Our subscription revenue guidance gross margin dropped from 73% to 70% and that to us most because of the broad spectrum of custom.
Customers that had been impacted EBIT predominantly about COVID-19 <unk> financial through it and Thats an impact specifically in Q4, and we believe that margin expansion will be to any gross profit expansion in <unk>.
As it all our contracts are desperate EBITA March and remains at 42%, which is certainly within our expectations for FY 'twenty. Two we grew our subscriber bases in all the different segments of this park Covid <unk> grew by 17% Asia grew by <unk>.
The 2%, we still believe that Asia is our biggest opportunity.
About 15% and efficacy.
In 2022, we increased our spend on R&D significantly.
About 41% from and maybe in terms of the $41 million.
Sales and marketing moved up by 34% from $238 million <unk> 'twenty two we've got niche subscription additions of 23% is always a lag between the money just being ourselves in marketing and the actual benefits and.
And G&A was up by 10% from $4 77 for <unk> and that is obviously, excluding the 15 million going forward between counted in December 2021.
We remain very strategic in the way, we allocate that capital and we believe this is pretty much in keeping with our long term goals.
Because we have.
Our long term targets.
Operating metric targets, I guess switching to development to be between four and 6% to 6% in April 'twenty, two challenging marketing as a percentage of subscription revenue to be between 70 Menard from fishing.
Zinc in April 22, we would like to increase our Spanish market environment additional 50%.
Our general and administration as a percentage of subscription revenue.
20% in the system and the drastic decrease debt between travel at 16%.
<unk> adjusted EBITDA.
Margin as a percentage of subscriptions.
Was 48% and our long term targets, 50% to 55%.
<unk> four.
For FY 'twenty three.
We are well get to scale the business.
And we would like to see the number of such accomplished between one seven and one but clearly if we can shift that.
Got it.
Cortex subscription driven you're looking between $2.
Again saw 51 potential and we do CAD cortex, adjusted EBITDA margin between 45 and 50%.
And our IRR ascertain that <unk> was amended in mainland China lenses, and 11 million U S dollars and <unk> 77.
We again saw.
I'd like to thank everybody that's joined us.
That's helpful.
Comes from Paul <unk> from thoughtful.
As we look to accelerate sounds and marketing business, maybe FY 'twenty.
What should we expect the typical ramp up once you use counts Greg should look like and do you expect sounds efficiencies to remain stable throughout the year.
Please proceed.
But slower than one in Brazil.
<unk> already started to recruit in Q4.
Clearly this does take time to get the right mix of people and the right people well trained.
Clearly also when you.
Can you frame up your sounds stocks specifics if you really wanted to have a strong.
You too.
Good luck.
With.
Okay.
Efficiencies if that makes any sense and that takes quite a bit of time to get drunk. So we switching on <unk> as we ramp up.
Unit economics.
Dean.
The next question in the case of recent commercial customer wins on the Magellan there'd be situations greenfield opportunities or are you, replacing a variety of competitive conditions.
Normally.
We target and the earliest time asked off the market.
La Quinta, we should can believe it and clearly we most of our customers to get a greenfield when we start talking to medium size and large enterprise customers, we come with more.
Sophisticated offering to help them not only with looking at the vehicles with the online operations. We are now clearly asked Tony.
It would be.
Keeping with.
With competitors that are actually servicing those customers.
We envisage over the next three years that we will start taking.
Customers away from compared to this specific deep the competitors not quite a comprehensive solution and Anthony balk at that time.
Okay.
Two questions from Matthew.
Okay.
From William Blair.
Which markets are you in in Southeast Asia does the cough push on the $100 million reflect those countries on the whole region.
And we are predominantly out biggest markets would be Indonesia, Philippines, Thailand.
We in Malaysia, the only country in southeast Asia, we would not.
Vietnam and to be honest with you I'm not sure if banded million vehicles include skip them or not.
Once we take them in a bit more to get into Vietnam and Thats why its been included potentially been included but I'm not sure our different to get back to you on that next year.
Our next question why is the difference in EBITDA module began contracting the <unk>.
<unk>. Please go ahead.
And we've got the question.
Loss, making entities at the site should it be much thought that.
<unk> joined <unk>, EBITDA and negative EBITDA of $19 million range.
<unk>.
$15 million, so mackie right $50 million 15 million 51 booked in the P&L.
Each booked on the Opex expenses and the G&A.
Okay.
I'm not sure if that Fitbit is Matthew from William Blair, but I'm not sure if it was from William Blair.
I would now go to a question from Matthew from William Blair.
I apologize I'm not sure.
First Matt you.
You mentioned you would like to increase at the same show revenue that these gains on sales and marketing with <unk>.
<unk> been advocating this additional investment.
Perfect.
19 piece the percentage of revenue stream.
And we sit in the <unk>.
I'm not certain that a pretty understood the question Matt.
We sit maintained one nice we're spending the money on obviously product adoption.
Actually our salespeople doing face to face on a wholesale and I think overall, just improving customer experience.
Some adoption.
Attracting new customers say to overall front through the spectrum of business.
The first debate.
PBT guidance lines, the <unk> much wider than the subscription revenue growth range.
The reason is this in the financial modeling a lot about customers, putting Scott on Q4.
It has been from the Permian a lot of them came on in February and that does it.
The debt.
Growth in subscribers and the growth in subscription that's it doesn't quite match also the best way to model the subscription revenue growth is to take that.
Net subscriber growth one year plus.
<unk> you get the average of those two and that should give you more or less what do you expect subscription to be so it's.
It's more based on net debt the two done necessarily match.
Got it.
Further question from.
From Alex from Alex.
I wanted to ask about context gross profit margins in Q4, only 60 pump the same despite the higher mix of subscription here. This quarter you touch on from write offs can you quantify that impact in any pain also impacted the gross profit margin.
That makes.
I missed that.
Write offs in Q4 was substantially higher.
And in Q1 and Q2 in Q T. We already told the market that we would begin dry docks in Q4.
And Tim.
Obviously impacted our gross operating profit.
Clearly in Q4, but we certainly expect margin expansion on gross profit margin expansion in FY 'twenty three.
Mchugh from William Blair, what are your key business days.
2020, I would say sales and marketing expansion.
<unk> also building.
Some G&A and certainly continuing to develop and improve our product. So I think overall, we're going to be continued team based right to all the different whether it's G&A with it.
Sales and marketing and R&D.
Our main focus is going to be some I'll say marketing and with R&D.
Okay.
And visiting your FY 'twenty three outlook.
Mike will clean.
What are your assumptions for <unk>.
GM chain hoist operating expenses and basically.
<unk>.
Okay.
I'm not quite sure what <unk> is.
But.
I'm not sure what the big action is in.
And what are your assumptions changed so I'm going to skip that question and Mike Forgive me for Mike and its nothing with <unk> on that.
I'm trying to get back to you.
Given the shift upwards in sales and marketing spend.
In the guidance would you be increasing our long term revenue growth guidance.
We certainly what we trying to do suite trying to be.
Right.
Conservatively in Hawaii, and we also do not want to be promising jmp's, the community things and not delivering on them, but we'd certainly like to me.
Our guidance now that kind of a <unk> out of the way, we certainly would love to do that and hopefully we can come in on the upfront.
<unk> that we are putting out for FY 'twenty three.
Yeah.
We got a question from his truck.
The question is do you see any significant impact of inflation in your business.
Clearly, we can peel it.
The ground space can be now with the unease in Europe , we've seen the pure Francesco.
<unk> seen prices going up.
Clearly, it's a concern.
What will this impact whether it's on our business in terms of inflation.
But given our economies of scale.
We are thinking <unk> with reprocessing ourselves in the market.
We just benefit from the economies of scale and not need to change our pricing.
Clearly we are expecting.
The inflation to be a real thing in the next Joe.
So we will have to play it by year and work with it.
Okay.
<unk>.
Uh huh.
Dan we have a question from a saving.
The information is the USA ultra yielding does management see difficulty in the market or opportunity to expand.
I don't think we see difficult in the USA market I just think we have.
We have got.
Sufficient people to go tackle the USA, we've got so much to do.
Segments were in.
I think it's we've learned rather focus on what we do we've got a large untapped opportunity and pay.
Great that sounds good Matt.
We certainly believe that <unk>.
<unk>.
Good at developing software and it's always good to see one what are the changes in America.
Our competitor is doing.
What is the market in which way is the market.
Leaving what is happening in logistics, so theres a lot of insights that we get from both from what businesses are doing.
And certainly with what's happening in the software space and when we talk about spot pricing basis.
Only in the industry, but a tough created the next piece relates to any software as it relates to helping customers on the ground on the operations and because we can move just from fleet management, and we take either software and see how can we bundle everything into one platform to make our customers lots of <unk>.
Yeah.
Yeah.
Then we've got a question from David <unk> from <unk> capital.
Congrats on the results what gets you excited about Costa Rica, what's the opportunity and you've seen that you feel that you have a different offering two larger competitors. It's a water are you intend investments in Costa Rica.
Great.
David.
To give you some color in South Africa, we've got $1 1 million vehicles.
Now average customer changed it changes the vehicle every 60 months.
So we've got a lot of insight to all the customers that are selling maybe it goes in buying new vehicles.
We have lots of data, we've got lots of visibility to that.
And we believe that if we can help our customers with selling the vehicles, we want and we can give them a better price and we also know the conditions of those vehicles and similarly, we can answer onset and the second vehicle. It allows us to attract a new contract customers.
Julie fit for us.
We've developed down software.
And we certainly believe that we see.
We've now gone to market with our first version of the software and we will start lifting discount that business.
I think it's complementary and it's just really ease.
And on to the business and add value to our customers we've got physical.
<unk> taken that 600 parking by E. Eastgate shopping center, we've got another one in San Francisco.
We kind of got stuck up about 350 vehicles, we see that going up to about a telephonic vehicles and if we doing your telephone vehicles. The month itself. It keeps us at good profit.
For the shareholders, but more than that but also allows us to onboard new customers on lower LNG customers.
Got it.
From a freudian from LNG investments.
With retail fuel process that all time on the focus on saving benefitting a solution on a contract.
As commercial activity boosted as oil prices increase what is the impact of oil price changes on contract customer ROI.
Basically if you look at it deploying into what we and what we gave as a value proposition that customer that is far beyond just savings on the fuel that was very much I would say 10 to 15 years ago.
Saving a broad whats the big thing today, most of our customers.
But those benefits already.
This will clearly drawn.
More customers to us.
Quantifying how much more.
Because our value proposition is much more than just fuel.
But I certainly do believe it will have an impact to what extent I'm not sure and the auto customers on fuel that's the only thing that what I'll call.
The second month auto we they get they need yet.
Benefits, which is least hi Blaine.
Laser haunting picking up any pure fruit.
Picking up a.
That comes from that.
The drop is aren't necessarily using that Greg.
So that has benefits come in the first two months and obviously with the increase in oil processing pieces the Ara.
Florian another question.
The long term June 10th to expand cost.
Two other geographies I think first of all we need to get the <unk>, South Africa, which I believe we have a good path to getting a dry and when that is.
Do we get that front, then we'll look at other geographies and I think we must take baby steps and we missed it.
All these businesses do take time to build that and given that we've only gone to <unk>.
I'll speak to the markets ethylene April we certainly believe that we can build a good business out of it.
Then we have a question from Tim Daly.
Sorry, Im getting used to using the screen just bear with me. Please.
I think we missed this year.
Okay.
Sandy any symphony dividends, not repeatable sustainable keeping on game basement into growth can you. Please kindly provide guidance on dividend policy into the medium term.
So.
Anybody investing in SMS marketing based.
As for dividends, but certainly we haven't grown as we've not yet, earning the last two years and in that process. We've obviously accumulated.
A lot of funds in our bank accounts.
700 odd million dollars range at the end of February we need to know that was at a lower dollar exchange rate a lot of the money that we keep these extra kept in U S dollars in Singapore.
<unk> statutory filings on U S dollars and all.
All money that youre not using operationally, we tried to keeping your installers.
We pay out this dividend because we just believe with the cash generation that you are going to be able to generate in FY 'twenty two plus.
Cash at <unk> mining, so I'll, just add some cash as a dividend.
Second question is a substantial reduction in loans to be like a line item in the balance sheet.
Is the line item not to be material gain in the foreseeable future.
And delete that related party transactions at <unk>. Since we are listed on the chassis and tweak certainly on now with the biggest line item being the building.
<unk> occupied <unk> bank that belong to myself in June and with that now belonging to contract or two can draw that equal.
<unk> certainly you stop becoming a related party transaction and that will add at.
That will probably reduce the.
Related party transactions close to no.
And that's mainly the main reason why we did that transaction.
Yeah.
This is quite a few quarters.
And we.
We thank you all for all the questions and thank you very much once again, putting being present.
Presentation. Thank you bye.
Bye bye.
Okay.