Dividends on the back burner as Cartrack guns for growth
Provider of fleet management and stolen-vehicle recovery services reckons global market is wide open
If you are a dividend-hunting investor, vehicle telematics company Cartrack is no longer for you. The provider of fleet management and stolen-vehicle recovery services this week said it would pay lower dividends in future. The move is in line with the company’s focus on using earnings instead to invest in technology and other opportunities.
The company regards itself as a growth stock and says its priority is to clear the debt on its balance sheet (about R190m). Paying big dividends will not serve that purpose.
As a growth stock, Cartrack makes a compelling investment case. It has a track record of strong cash flow generation and low financial leverage (debt used to buy assets). Until this week’s announcement, the company was also a strong dividend payer.The company’s headline earnings per share have grown from 64c a share in 2015 to 116c in 2019. In 2012, the group’s revenue was R448m. This has soared to R1.7bn...