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South African billionaire Zak Calisto's Karooooo Ltd. reported record quarterly operating profit as growth in subscriptions to its Cartrack vehicle-tracking service picked up, despite a stronger rand that cut the value of its foreign earnings.
Operating profit rose 19% to R422 million ($26.2 million) in the three months to Aug. 31, the second quarter of the company's 2027 financial year, the Singapore-based company said on Monday. Revenue climbed 22% to R1.64 billion ($102 million), and earnings per share rose 18% to R9.28.
Cartrack, which sells software and in-vehicle devices that let companies and individuals track and manage their vehicles, added about 400,000 subscribers in a year to reach 2.9 million. Its subscription revenue rose 20% to R1.42 billion ($88 million), and by 23% when currency moves are stripped out, up from 21% in the previous quarter.
"We are pleased to report another quarter of acceleration," Calisto, the group's chief executive, said in the statement. He said growth in constant currency picked up in every region where Cartrack operates.
A strong rand weighs on results
Karooooo reports in rand but earns a large part of its income in Asia, Europe and elsewhere in Africa, so a firmer South African currency shrinks those earnings when they are converted. Annual recurring revenue, a measure of the subscription business's yearly run rate, rose 19% to R5.71 billion. In dollar terms it grew 30% to $354 million.
Profit for the quarter rose to R291 million ($18 million) from R249 million a year earlier. Free cash flow was R41 million, held back by spending on tracking devices and a build-up of stock to guard against sharp increases in the price of memory chips.
The company kept its outlook for the year to February 2027. It expects Cartrack subscription revenue of R5.7 billion to R6 billion, growth of 18% to 24%, and earnings per share of R38.50 to R40. Karooooo Logistics, its delivery business, grew revenue 36% to R189 million in the quarter.
"As we enter the second half of FY 2027, we remain focused on building on the strong momentum established in the first half of the year and on driving the adoption of AI throughout the organization," Calisto said.
His $1.1 billion stake
Calisto owns about 17.79 million Karooooo shares, or roughly 58% of the company, after selling shares worth about $11.5 million over three weeks in July and August. At Monday's price of about $61.60 on the Nasdaq, his stake is worth about $1.1 billion. Karooooo has 30.89 million shares in issue, giving it a market value of about $1.9 billion.
The company paid shareholders R752 million ($46.7 million) in dividends in July, most of it to Calisto.
Calisto founded Cartrack in South Africa more than two decades ago and still runs it. He moved the group's headquarters to Singapore and listed Karooooo on the Nasdaq in April 2021, with a secondary listing on the Johannesburg Stock Exchange.
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