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Thursday, February 1, 2024

Our opinion on the current state of MIX

Our opinion on the current state of MIX

Mix Telematics (MIX) specializes in vehicle tracking technology and operates across several countries, including South Africa, Australia, the UK, the US, Brazil, Thailand, and Romania. As a service-oriented company, Mix Telematics enjoys the advantages of low working capital requirements and a significant portion of its income coming from annuity or debit-order income. This business model is highly favorable for private investors, as it allows for global expansion without substantial workforce or capital-intensive assets.

In its financial results for the six months ending on September 30, 2023, Mix Telematics reported a 13% increase in revenue and a notable addition of 87,900 subscribers, bringing the total to 1,089 million. The company also announced a profit for the period of R38 million, with adjusted EBITDA up by 58% year-over-year to R343 million, maintaining an adjusted EBITDA margin of 24.8%.

In a subsequent update on the third quarter of their 2024 financial year, Mix Telematics reported the acquisition of 52,400 new subscribers and a 6% increase in revenue. The adjusted EBITDA also saw a 13% year-over-year increase to $9.5 million, with an adjusted EBITDA margin of 24.4%, marking a 220 basis points improvement from the previous year.

Notably, the trading volumes for Mix Telematics have shown an increase, averaging around R232,000 worth of shares changing hands daily. This suggests growing interest from institutional investors in the company's stock. Despite these positive developments, the share remains attractively priced. It was added to the Winning Shares List on December 28, 2023, at a price of 590c and has since appreciated by 27.8% to 754c per share.

On October 10, 2023, Mix Telematics announced its intention to merge with a US company, Powerfleet, and subsequently delist from the JSE. Simultaneously, Powerfleet will list on the main board of the JSE through a secondary inward listing, ensuring continuity of trade for investors.


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