Story audio is generated using AI
Karooooo says it started its 2027 financial year with record customer growth as its vehicle tracking business added subscribers at its fastest pace yet, helping lift revenue and profit while keeping the group on track to meet its full-year targets.The Singapore-based group, which owns Cartrack and a majority stake in Karooooo Logistics, said Cartrack’s subscriber base grew 18% to more than 2.8-million by the end of May. During the quarter, it added a record 142,472 net subscribers, up 70% from the same period a year earlier.The strong customer growth helped push Karooooo’s subscription revenue up 19% to R1.35bn. Cartrack’s subscription revenue also rose 19% to R1.35bn, while its annualised recurring revenue reached R5.43bn.Group operating profit increased 16% while adjusted earnings per share rose 11%. Cartrack’s operating profit climbed 16%. though its operating profit margin narrowed to 28% from 30% a year earlier.Karooooo Logistics also continued to grow, with its business-to-business delivery service revenue jumping 46%, while operating profit at the logistics business increased by 50%.CEO and founder Zak Calisto said the company had entered the new financial year with strong momentum, adding the company would continue focusing on expanding its customer base while making better use of the investments it made in its sales teams during the previous financial year.We believe we are on track to accelerate total subscription revenue growth in FY 2027 as we realise the benefits of our recent investments in sales capacity— Karooooo“Our product innovation continues to deliver the intended outcomes. This year, our focus remains to accelerate growth by growing sales and marketing at a moderate pace while optimising the strong investment we made in sales capacity during FY2026.”The group said demand for its products remained strong as more businesses looked for technology to improve efficiency, reduce costs and make their operations safer.Karooooo said it remains on track to achieve its guidance for the year. It expects Cartrack’s subscription revenue to grow by between 18% and 24%, with operating profit margins expected to grow by up to 30%. The group also maintained its earnings per share guidance of between R38.50 and R40 for the financial year.The company ended the quarter with cash and cash equivalents of R755m. Cash generated from operations before working capital changes rose 21%. However, free cash flow dropped to R60m from R338m a year earlier as the group invested more in in-vehicle IoT devices and equipment to support faster subscriber growth.Karooooo said it remained confident its continued investment in artificial intelligence, product innovation and customer experience would support long-term growth.“We believe we are on track to accelerate total subscription revenue growth in FY 2027 as we realise the benefits of our recent investments in sales capacity,” it said. “We aim to drive our growth by balancing subscriber growth with the increased adoption of Video and Cartrack-Tag. We also believe increased sales efficiency, coupled with realising other efficiencies in the business due to scale and leveraging AI, will support strong EPS growth.”Business Day
