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Vehicle tracking specialist Quartix (LON:QTX) is heading in the right direction, judging by its half-year results.
Revenue in the first half of 2015 accelerated 24% to £9.2mln from £7.4mln in the same period of last year.
Fleet revenue grew by 17% on the back of a 12% increase in the fleet subscription base to 66,806 vehicles from 59.765 at the end of 2014.
The active customer base stood at 7,150 at the end of June, up 13% from 6,342 at the end of 2014.
As good as the fleet division’s performance was, it was put in the shade by the growth of the insurance division, where sales to insurance-based customers shot up 43% from a year earlier.
Insurance installations grew by 64% to 25,348 from 15,500 at the end of last year.
Adjusted profit before tax rose 9% to £2.7mln from £2.5mln the year before, while adjusted cash inflow improved by 8% to £3.0mln from £2.8mln.
The company ended June with net cash of £800,000, compared to net debt of £200,000 at the end of 2014.
“We have achieved a step change in new fleet installations and have continued to invest in our US business,” said Andy Walters, managing director of Quartix.
The group almost quadrupled its customer base in the USA, where it has 478 fleet clients and is tracking 1,858 vehicles.
“These costs, which were all expensed in the period, will generate recurring revenues in the future. Add to those our first full six months of plc costs and we are delighted to have achieved growth in pre-tax profits of 9% to £2.7 million," Walters said.
The company, which floated on AIM in November of last year, has declared an interim dividend of 2p a share.
Broker Northland Capital Partners said it was a good set of interim results, with growth across the UK, French and US markets.
“The latter is at an early stage but the initial signs are encouraging,” said Northland analyst David Johnson.
“The company’s subscription revenue model provides good levels of revenue visibility and Quartix’s attrition rate is comfortably below the industry average,” he added.
House broker finnCap said the interim sales figures were ahead of its expectations, due to particularly strong performance in the insurance sector.
However, insurance is lower-margin business and, together with the weakness of the euro and increasing numbers of new fleet customers, which will entail set-up costs, the blended gross margin has eased, prompting the broker to stick with its full-year forecast of £5.5mln for profit before tax, although the sales forecast is nudged up from £16.9mln to £17.8mln.
“The first interim dividend has been set at 2.0p, and we continue to anticipate 5.0p for the full year: a healthy 2.3% yield,” finnCap’s Lorne Daniel noted.
“The outlook remains very bright, with solid recurring business being built up across a range of geographic and vertical markets,” Daniel said, as he lifted its target price from 200p to 240p.
The shares, up 21% over the last month, had slipped back 11.625pp to 221.875p in afternoon trading.