Exhibit 99.1
Karooooo Ltd.
Interim Report (unaudited) for the three months ended May 31, 2024
Contents
i
Management’s
Discussion and Analysis of Financial Condition
and Results of Operations
GENERAL INFORMATION AND FORWARD-LOOKING STATEMENTS
The following discussion of our financial condition and results of operations should be read in conjunction with our interim condensed consolidated financial statements and the notes thereto included as part of this report, as well as the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Risk Factors” sections in our Annual Report on Form 20-F for the financial year ended February 29, 2024 (“Annual Report”).
The discussion contains statements that constitute forward-looking statements within the meaning of Section 21E of the Exchange Act and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”). Forward-looking statements are based on our beliefs and assumptions and on information currently available to us, and include, without limitation, statements regarding our business, financial condition, strategy, results of operations, certain of our plans, objectives, assumptions, expectations, prospects and beliefs and statements regarding other future events or prospects. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “seek,” “anticipate,” “estimate,” “predict,” “potential,” “assume,” “continue,” “may,” “will,” “should,” “could,” “shall,” “risk” or the negative of these terms or similar expressions that are predictions of or indicate future events and future trends.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, the development of the industry in which we operate and the effect of acquisitions on us may differ materially from those made in or suggested by the forward-looking statements contained in this prospectus or the documents incorporated herein by reference. In addition, even if our results of operations, financial condition and liquidity, the development of the industry in which we operate and the effect of acquisitions on us are consistent with the forward-looking statements contained in this prospectus and the documents incorporated herein by reference, those results or developments may not be indicative of results or developments in subsequent periods.
Factors that may cause our actual results to differ materially from those expressed or implied by the forward-looking statements in this prospectus and the documents incorporated herein by reference include, but are not limited to, the risks described under the heading titled “Risk Factors” in our Annual Report, subsequent quarterly reports on Form 6-K and other filings with the SEC. For example, factors that could cause actual results to vary from projected results include, but are not limited to:
| ● | our ability to acquire new customers and retain existing customers; |
| ● | our ability to acquire new subscribers and retain existing subscribers; |
| ● | our expectations regarding the effects of a pandemic or widespread outbreak of an illness, the Russia-Ukraine conflict, geopolitical tensions, and similar macroeconomic events, including financial distress caused by recent or potential bank failures, global supply chain challenges, foreign currency fluctuations, elevated inflation and interest rates and monetary policy changes, upon our and our customers’ and partners’ respective businesses; |
| ● | our anticipated growth strategies, including our ability to increase sales to existing customers, the introduction of new solutions and international expansion; |
| ● | our ability to adapt to rapid technological change in our industry; |
| ● | our dependence on cellular networks; |
| ● | competition from industry consolidation; |
| ● | market adoption of software-as-a-service (“SaaS”) fleet management platform; |
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| ● | automotive market conditions and the evolving nature of the automotive industry towards autonomous vehicles; |
| ● | expected changes in our profitability and certain cost or expense items as a percentage of our revenue; |
| ● | our dependence on certain key component suppliers and vendors; |
| ● | our ability to maintain or enhance our brand recognition; |
| ● | our ability to maintain our key personnel or attract, train and retain other highly qualified personnel; |
| ● | the impact and evolving nature of laws and regulations relating to the internet, including cybersecurity and data privacy; |
| ● | our ability to protect our intellectual property and proprietary technologies and address any infringement claims; |
| ● | significant disruption in service on, or security breaches of, our websites or computer systems; |
| ● | dependence on third-party technology and licenses; |
| ● | fluctuations in the value of the South African rand and inflation rates in the countries in which we conduct business; |
| ● | our ability to access the capital markets in the future; and |
| ● | other risk factors discussed under the heading “Risk Factors” in our filings with the SEC. |
Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.
GENERAL
Karooooo Ltd. (“Karooooo”), headquartered in Singapore, is a leading provider of an on-the-ground operations Internet of Things (“IoT”) software-as-a-service (“SaaS”) cloud that maximizes the value of data by providing insightful real-time data analytics and business intelligence reports. Its offering extends beyond connected vehicles and equipment, assisting diverse enterprise customers in digitally transforming their on-the-ground operations, including systems integrations, fleet administration, field worker management, video-based safety, risk mitigation, delivery management and ESG compliance and reporting. Our business is vertically integrated, which affords us complete autonomy with regards to the development of the capabilities and features that differentiate our applications as well as the speed of our innovation. Since we own and control almost every aspect of our smart device design, platform innovation and software application development, client acquisition and onboarding, customer service and the management of our back-end support, we are able to move quickly without any significant third-party dependencies and inefficiencies.
Karooooo Limited (“Karooooo”), owns 100% of Cartrack, 74.8% of Karooooo Logistics.
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The following table sets forth the segment revenue, operating profit, operating profit margin, profit for the period, profit for the period margin, adjusted EBITDA and adjusted EBITDA margin for the periods presented.
| Three Months Ended May 31, | ||||||||||||||||||||||||||||||||
| Cartrack | Carzuka | Karooooo Logistics(1) | Karooooo Consolidated | |||||||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||||
| Figures in Rand Thousands | ||||||||||||||||||||||||||||||||
| Subscription revenue | 959,603 | 834,232 | — | — | 4,165 | 2,165 | 963,768 | 836,397 | ||||||||||||||||||||||||
| Other revenue(2) | 19,372 | 19,197 | — | — | — | — | 19,372 | 19,197 | ||||||||||||||||||||||||
| Vehicle sales(3) | 2,099 | — | — | 81,563 | — | — | 2,099 | 81,563 | ||||||||||||||||||||||||
| Delivery service | — | — | — | — | 96,586 | 59,630 | 96,586 | 59,630 | ||||||||||||||||||||||||
| Revenue | 981,074 | 853,429 | — | 81,563 | 100,751 | 61,795 | 1,081,825 | 996,787 | ||||||||||||||||||||||||
| Cost of Sales | (268,060 | ) | (252,965 | ) | — | (74,445 | ) | (66,356 | ) | (42,838 | ) | (334,416 | ) | (370,248 | ) | |||||||||||||||||
| Gross Profit | 713,014 | 600,464 | — | 7,118 | 34,395 | 18,957 | 747,409 | 626,539 | ||||||||||||||||||||||||
| Gross Profit Margin | 73 | % | 70 | % | — | 9 | % | 34 | % | 31 | % | 69 | % | 63 | % | |||||||||||||||||
| Operating Profit/(loss) | 287,187 | 231,901 | — | (12,056 | ) | 12,560 | 4,529 | 299,747 | 224,374 | |||||||||||||||||||||||
| Operating Profit Margin | 29 | % | 27 | % | — | (15 | )% | 12 | % | 7 | % | 28 | % | 23 | % | |||||||||||||||||
| Profit/(loss) for the Period | 215,960 | 170,746 | — | (12,147 | ) | 9,323 | 3,348 | 225,283 | 161,947 | |||||||||||||||||||||||
| Profit/(loss) for the Period Margin | 22 | % | 20 | % | — | (15 | )% | 9 | % | 5 | % | 21 | % | 16 | % | |||||||||||||||||
| Adjusted EBITDA (a non-IFRS measure) | 453,333 | 392,090 | — | (10,958 | ) | 13,404 | 4,992 | 466,737 | 386,124 | |||||||||||||||||||||||
| Adjusted EBITDA Margin (a non-IFRS measure) | 46 | % | 46 | % | — | (13 | )% | 13 | % | 8 | % | 43 | % | 39 | % | |||||||||||||||||
| (1) | Karooooo acquired 70.1% of Picup in September 2021, subsequently re-named as Karooooo Logistics. Refer to “Other Events in the First Quarter of 2025” below for further commentary on the change in ownership to 74.8%. |
| (2) | Other revenue is non-subscription-based revenue and relates predominantly to the sale of telematics devices to large enterprise customers opting for a non-bundled contracts. Cartrack remains focused on bundled sales. |
| (3) | Effective from Q1 2025, Carzuka has been fully integrated to support Cartrack operations, with the final on-hand vehicles sold off in this quarter. |
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Key Business Metrics
Number of Subscribers and Subscription Revenue
We have demonstrated a history of growing our subscriber base through growth in customers as a result of our proprietary platform with next-generation functionality and software features, sales-centric culture and competitive pricing. We believe that our ability to attract a range of diversified new customers and grow our subscriber base is key to building a sustainable business model.
We define our number of subscribers at the end of any particular period as the total number of connected vehicles and equipment using our platform at the end of such period.
The number of subscribers on our platform directly drives our subscription revenue, which made up 89% of total group’s revenue for the three months ended May 31, 2024.
For the three months ended May 31, 2024 and the three months ended May 31, 2023, Karooooo’s subscription revenue was ZAR 963.8 million and ZAR 836.4 million, respectively, which represents a 15% increase compared to the prior period.
Geographical Overview of Cartrack Subscribers and Subscription Revenue
For the three months ended May 31, 2024, and the three months ended May 31, 2023, Cartrack had 2,047,442 and 1,757,452 subscribers, respectively, which represents net subscriber growth of 289,990 or a 17% increase from period to period.
South Africa: Cartrack’s number of subscribers in South Africa increased 16% to 1,549,951 at May 31, 2024 (May 31, 2023: 1,339,905) with subscription revenue growth of 15%.
Asia Pacific, Middle East and United States: Cartrack’s number of subscribers in Asia Pacific, Middle East and United States increased 23% to 238,174 at May 31, 2024 (May 31, 2023: 193,557). This translates to 19% growth in subscription revenue (21% on a constant currency basis, a non-IFRS measure).
Europe: Cartrack’s number of subscribers in Europe increased 17% to 173,588 at May 31, 2024 (May 31, 2023: 148,927). This translates to 19% growth in subscription revenue (15% on a constant currency basis, a non-IFRS measure).
Africa (excluding South Africa): Cartrack’s number of subscribers in Africa (excluding South Africa) increased 14% to 85,729 at May 31, 2024 (May 31, 2023: 75,063).
The constant currency presented above has been determined by adjusting the current financial reporting period results to the results reported for the three months ended May 31, 2023, using the average of the monthly exchange rates applicable to that period. The measurement has been performed for each of the group’s operating currencies.
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Adjusted Earnings Before Interest Depreciation Taxation and Amortization (“Adjusted EBITDA”) (a non-IFRS measure)
In addition to our results determined in accordance with IFRS, we believe Adjusted EBITDA, a non-IFRS measure, is useful in evaluating our operating performance.
We use Adjusted EBITDA in our operational and financial decision-making and believe Adjusted EBITDA is useful to investors because similar measures are frequently used by securities analysts, investors, ratings agencies and other interested parties to evaluate our competitors and to measure profitability.
We define Adjusted EBITDA, a non-IFRS measure, as profit less finance income, plus finance costs, taxation, depreciation and amortization, plus impact of non-recurring operational expenses, if any.
However, non-IFRS financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with IFRS. Investors are encouraged to review the related IFRS financial measure and the reconciliation of Adjusted EBITDA to profit, its most directly comparable IFRS financial measure, and not to rely on any single financial measure to evaluate our business.
| Three Months Ended May 31, | ||||||||
| 2024 | 2023 | |||||||
| (Rand Thousands) | ||||||||
| Profit for the period | 225,283 | 161,947 | ||||||
| Taxation | 80,043 | 71,131 | ||||||
| Finance income | (11,213 | ) | (10,878 | ) | ||||
| Finance costs | 5,634 | 2,174 | ||||||
| Depreciation of property, plant and equipment and amortization of intangible assets | 166,990 | 161,750 | ||||||
| Adjusted EBITDA (a non-IFRS measure) | 466,737 | 386,124 | ||||||
| Profit for the period margin | 21 | % | 16 | % | ||||
| Adjusted EBITDA margin (a non-IFRS measure) | 43 | % | 39 | % | ||||
Free Cash Flow (a non-IFRS measure)
In addition to our results determined in accordance with IFRS, we believe free cash flow and free cash flow margin, which are non-IFRS measures, are useful in evaluating our operating performance. Free cash flow is a non-IFRS financial measure that we calculate as net cash generated from operating activities less purchases of property, plant and equipment. Free cash flow margin, also a non-IFRS measure, is calculated as free cash flow divided by revenue.
We believe that free cash flow and free cash flow margin are useful indicators of liquidity and the ability of the Group to turn revenues into free cash flow, respectively, that provide information to management and investors about the amount of cash generated from our operations that, after the investments in property and equipment, can be used for strategic initiatives, including investing in our business, and strengthening our financial position.
However, non-IFRS financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with IFRS. In particular, free cash flow does not reflect any restrictions on the transfer of cash and cash equivalents within the Group or any requirement to repay the Group’s borrowings and does not take into account cash flows that are available from disposals or the issue of shares.
Management therefore takes such factors into account, in addition to free cash flow when determining the resources available for acquisitions and for distribution to shareholders. Investors are encouraged to review the related IFRS financial measure and the reconciliation of this non-IFRS financial measure to its most directly comparable IFRS financial measure, and not to rely on any single financial measure to evaluate our business.
| Three Months Ended May 31, | ||||||||
| 2024 | 2023 | |||||||
| (Rand Thousands) | ||||||||
| Net cash generated from operating activities | 836,233 | 340,211 | ||||||
| Less: purchase of property, plant and equipment | (267,271 | ) | (182,479 | ) | ||||
| Free Cash Flow (a non-IFRS measure) | 568,962 | 157,732 | ||||||
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Results of Operations
The following table sets forth our results of operations for the periods presented.
| For the Three Months Ended May 31, | ||||||||
| 2024 | 2023 | |||||||
| Figures in Rand thousands | ||||||||
| Revenue | 1,081,825 | 996,787 | ||||||
| Cost of sales | (334,416 | ) | (370,248 | ) | ||||
| Gross profit | 747,409 | 626,539 | ||||||
| Other income | 1,682 | 2,328 | ||||||
| Operating expenses | (449,344 | ) | (404,493 | ) | ||||
| Sales and marketing | (140,248 | ) | (124,705 | ) | ||||
| General and administration | (221,494 | ) | (198,263 | ) | ||||
| Research and development | (57,609 | ) | (49,651 | ) | ||||
| Expected credit losses on financial assets | (29,993 | ) | (31,874 | ) | ||||
| Operating profit | 299,747 | 224,374 | ||||||
| Finance income | 11,213 | 10,878 | ||||||
| Finance costs | (5,634 | ) | (2,174 | ) | ||||
| Profit before taxation | 305,326 | 233,078 | ||||||
| Taxation | (80,043 | ) | (71,131 | ) | ||||
| Profit for the quarter | 225,283 | 161,947 | ||||||
| Profit attributable to: | ||||||||
| Owners of the parent | 221,584 | 157,481 | ||||||
| Non-controlling interest | 3,699 | 4,466 | ||||||
| 225,283 | 161,947 | |||||||
| Earnings per share | ||||||||
| Basic and diluted earnings per share (ZAR) | 7.17 | 5.09 | ||||||
Comparison of Results for the Three Months Ended May 31, 2024 and May 31, 2023
Revenue
Karooooo’s revenue increased by ZAR 85.0 million, or 9%, to ZAR 1,081.8 million for the three months ended May 31, 2024 from ZAR 996.8 million for the three months ended May 31, 2023.
Cartrack’s revenue increased by ZAR 127.6 million, or 15%, to ZAR 981.1 million for the three months ended May 31, 2024 from ZAR 853.4 million for the three months ended May 31, 2023. Cartrack’s subscription revenue increased by ZAR 125.4 million, or 15%, to ZAR 959.6 million for the three months ended May 31, 2024 from ZAR 834.2 million for the three months ended May 31, 2023. Cartrack achieved strong customer acquisition in the quarter, resulting in net subscriber growth of 17%. See, further, “Key Business Metrics—Number of Subscribers and Subscription Revenue—Geographical Overview of Cartrack Subscribers and Subscription Revenue” above.
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Karooooo Logistics delivered significant revenue growth to ZAR 100.8 million for the three months ended May 31, 2024 (May 31, 2023: ZAR 61.8 million), up 63%. Karooooo Logistics focuses on delivery-as-a-service (“Daas”) through selected third-party sourced drivers and logistics companies, and charges per delivery.
Cost of Sales
Karooooo’s cost of sales decreased ZAR 35.8 million, or 10%, for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. This was primarily due to Carzuka ceasing to buy secondhand vehicles during the three months ended November 30, 2023 and being integrated into Cartrack’s broader operations, resulting in decreased combined cost of sales.
Cost of sales of ZAR 66.4 million relating to Karooooo Logistics for the three months ended May 31, 2024 compared to ZAR 42.8 million for the three months ended May 31, 2023 is in line with the increase in revenue.
Other Income
Other income decreased ZAR 0.6 million, or 28%, for the three months ended May 31, 2024, compared to the three months ended May 31, 2023. This was due to decrease in sales of fixed assets.
Operating Expenses
Operating expenses increased ZAR 44.9 million, or 11%, for the three months ended May 31, 2024 compared to the three months ended May 31, 2023.
Cartrack’s operating expenses were ZAR 427.5 million for the three months ended May 31, 2024 compared to ZAR 370.9 million for the three months ended May 31, 2023, an increase of ZAR 56.6 million, or 15%.
Karooooo Logistics operating expenses were ZAR 21.8 million for the three months ended May 31, 2024 compared to ZAR 14.4 million for the three months ended May 31, 2023, an increase of ZAR 7.4 million, or 51%.
The increase in operating expenses is set forth in more detail below:
Sales and Marketing
| For the Three Months Ended May 31, | ||||||||
| 2024 | 2023 | |||||||
| (in R thousands) | ||||||||
| Sales and marketing | (140,248 | ) | (124,705 | ) | ||||
Karooooo’s sales and marketing operating expenses increased by ZAR 15.5 million or 12% for the three months ended May 31, 2024 compared to the three months ended May 31, 2023.
Cartrack’s sales and marketing operating expenses were ZAR 139.9 million for the three months ended May 31, 2024 compared to ZAR 115.3 million for the three months ended May 31, 2023, an increase of ZAR 24.5 million, or 21%. This reflected our investment in customer acquisition positions, demonstrating our continued commitment to territorial expansion and growth.
Karooooo Logistics’ sales and marketing operating expenses were ZAR 0.4 million for the three months ended May 31, 2024 compared to ZAR 0.2 million for the three months ended May 31, 2023, an increase of ZAR 0.2 million, or 101%. This reflected our continued investment to scale Karooooo Logistics.
We believe that the continued and strategic investment in enhancing our vertically integrated sales and marketing capabilities to leverage our go-to-market strategy drives customer acquisition and places us well for long term growth and margin expansion.
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General and Administration
| For the Three Months Ended May 31, | ||||||||
| 2024 | 2023 | |||||||
| (in R thousands) | ||||||||
| General and administration | (221,494 | ) | (198,263 | ) | ||||
Karooooo’s general and administration operating expenses increased by 12% to ZAR 221.5 million for the three months ended May 31, 2024 from ZAR 198.3 million for the three months ended May 31, 2023. This planned increase reflects management’s commitment to build a strong infrastructure that supports growth, while also demonstrating our ability to contain costs.
Research and Development
| For the Three Months Ended May 31, | ||||||||
| 2024 | 2023 | |||||||
| (in R thousands) | ||||||||
| Research and Development | (57,609 | ) | (49,651 | ) | ||||
Karooooo’s research and development operating expenses increased by ZAR 8.0 million or 16% for the three months ended May 31, 2024 compared to the three months ended May 31, 2023 primarily due to an increase in Cartrack’s research and development operating expenses by ZAR 9.1 million, or 20%, for the three months ended May 31, 2024 compared to the three months ended May 31, 2023 as the group continued its investment for improvement, enrichment and expansion of its connected cloud during the three months ended May 31, 2024.
Expected Credit Losses on Financial Assets
Expected credit losses on financial assets decreased ZAR 1.9 million, or 6%, for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. The method in providing for expected credit losses is consistent with prior years.
Finance Income
Finance income increased ZAR 0.3 million, or 3%, for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. This was primarily due to an increase in interest earned on positive bank balances during the course of the year.
Finance Costs
Finance costs increased ZAR 3.5 million, or 159%, for the three months ended May 31, 2024 compared to the three months ended May 31, 2023. This was primarily due to interest expense incurred for bank overdraft and the lease assets.
Taxation
Our total effective tax rate for the three months ended May 31, 2024 was 26%, which decreased from 31% for the three months ended May 31, 2023. This was primarily due to a decrease in taxes incurred in the three months ended May 31, 2024, partly attributable to reduction in corporate income tax rate in South Africa.
There is no dividends tax in Singapore.
Non-Controlling Interest
Profit attributable to non-controlling interest, relates to a portion of Karooooo’s subsidiaries not owned by the parent and decreased by ZAR 0.8 million, or 17%, for the three months ended May 31, 2024 compared to the three months ended May 31, 2023.
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LIQUIDITY AND CAPITAL RESOURCES
General
For a discussion on liquidity and capital resources generally, please refer to the “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources” section in our Annual Report.
Liquidity and Cash Flows
Our principal sources of liquidity are our cash generated from operations, cash and cash equivalents on hand and borrowings available under our revolving credit facility. Cash and cash equivalents consist primarily of cash on deposit with banks. Cash and cash equivalents totaled ZAR 949.6 million as of May 31, 2024.
| For the Three Months Ended May 31, | ||||||||
| 2024 | 2023 | |||||||
| (in R thousands) | ||||||||
| Net cash generated from operating activities | 836,233 | 340,211 | ||||||
| Net cash utilized by investing activities | (279,359 | ) | (197,314 | ) | ||||
| Net cash utilized by financing activities | (38,098 | ) | (18,329 | ) | ||||
Operating Activities
Net cash generated from operating activities increased ZAR 496.0 million, or 146%, for the three months ended May 31, 2024 compared to the three months ended May 31, 2023, primarily due to an increase in cash generated from operations before working capital changes of ZAR 86.7 million and a net decrease in working capital of ZAR 417.8 million due to a decrease in trade receivables and other receivables, decrease in inventories, increase in trade and other payables, deferred revenue and capitalized commission assets.
Investing Activities
Net cash utilized by investing activities increased ZAR 82.0 million, or 42%, for the three months ended May 31, 2024 compared to the prior period, primarily due to an increase of ZAR 84.8 million in investment in property, plant and equipment compared to the prior period.
Financing Activities
Net cash utilized by financing activities increased by ZAR 19.8 million for the three months ended May 31, 2024 compared to the prior period primarily due to ZAR 15.2 million from repurchase and cancellation of ordinary shares of a subsidiary and ZAR 3.5 million from purchase of treasury shares. Net cash utilized by financing activities was also impacted by an increase in cash outflow of ZAR 2.4 million for the three months ended May 31, 2024 relating to lease liabilities repayment.
Certain other Balance Sheet Matters
At May 31, 2024, Karooooo’s property, plant and equipment had increased by ZAR 94.5 million to ZAR 2,127.3 million (February 29, 2024: ZAR 2,032.8 million). This was primarily due to an increase of ZAR 48.1 million in in-vehicle capitalized telematic devices, an increase of ZAR 5.0 million in telematic devices available for future sales and an investment of ZAR 37.2 million in building the South African central office.
In line with business growth and currency fluctuations, trade and other payables increased to ZAR 465.7 million (February 29, 2024: ZAR 446.3 million). Trade and other receivables and prepayments decreased to ZAR 595.8 million (February 29, 2024: ZAR 985.4 million). At February 29, 2024 fixed deposits placed with banks amounting to ZAR 485.7 million, which matured in June and July 2024, were included in other receivables.
Debtor’s collection days remain within our historical norms at 30 days (February 29, 2024: 29 days).
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OFF-BALANCE SHEET ARRANGEMENTS
We do not engage in any off-balance sheet activities or have any arrangements or relationships with unconsolidated entities, such as variable interest, special purpose, and structured finance entities.
CONTRACTUAL OBLIGATIONS
The following table summarizes our contractual obligations as of May 31, 2024.
The table below analyses the group’s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows and include contractual interest payments.
| Less than 1 year | 2 years | 3 years | 4 years | >5 years | Total | |||||||||||||||||||
| (in R thousands) | ||||||||||||||||||||||||
| At May 31, 2024 | ||||||||||||||||||||||||
| Term loans | 7,253 | 44,029 | — | — | — | 51,282 | ||||||||||||||||||
| Lease obligations | 76,033 | 58,011 | 39,771 | 30,534 | 4,174 | 208,523 | ||||||||||||||||||
| Trade and other payables | 421,642 | — | — | — | — | 421,642 | ||||||||||||||||||
| Loans from related parties | 668 | — | — | — | — | 668 | ||||||||||||||||||
| Bank overdraft | 46,496 | — | — | — | — | 46,496 | ||||||||||||||||||
other matters
Share Capital and Reserves
At the Annual General Meeting (“AGM”) held on July 12, 2023, 97.35% of Karooooo’s shareholders passed a resolution authorizing the repurchase of up to 10% of the company’s shares. Purchases of ordinary shares by the company may be made by way of market purchases on the Nasdaq and/or the Johannesburg Stock Exchange (the “JSE”). At our next AGM, we expect to seek approval for the renewal of our share repurchase program on the same terms.
Karooooo repurchased 57,806 shares of its common stock in February 2024 and May 2024, at an average purchase price of USD 24.84 per share. We subsequently cancelled 51,106 shares on May 25, 2024. The remaining 6,700 shares were cancelled on June 18, 2024.
At May 31, 2024, Karooooo had 30,900,000 ordinary shares in issue, with 30,893,300 shares outstanding, and paid-up share capital of USD 504,520,625 plus SGD 1,000.
The negative common control reserve of ZAR 2.7 billion on the balance sheet relates to a common control transaction on November 18, 2020, in which the loan of USD 194.0 million from Isaias Jose Calisto was converted into Karooooo share capital. Consequently, Karooooo acquired control of Cartrack. On that date, 20,331,894 shares were issued to Isaias Jose Calisto and Karooooo registered ZAR 2.7 billion in paid-up capital, resulting in the common control reserve.
The ZAR 3.6 billion other reserve on the balance sheet relates to the buyout of 95,350,657 Cartrack shares at ZAR 42.00 per share from minorities when Cartrack delisted from the JSE, totaling ZAR 4.0 billion. This was offset by the ZAR 0.4 billion previously reported in the non-controlling interest. The ZAR 0.4 billion relates to the net asset value of 95,350,657 Cartrack minority shares acquired by Karooooo.
ZAR 12.0 million of other capital reserve on the balance sheet relates to the cancellation of Karooooo’s treasury shares and ZAR 11.4 million of other capital reserve relates to the repurchase and cancellation of Karooooo Logistics’s ordinary shares.
Other Events in the First Quarter of 2025
In April 2024, the Board approved a resolution for Karooooo Logistics (Pty) Ltd to repurchase its ordinary shares at a purchase price of ZAR 15.2 million in accordance with the Companies Act of South Africa and to cancel the repurchased shares. As a result, the Group’s effective shareholding in Karooooo Logistics (Pty) Ltd is now 74.8%.
10
Events after the First Quarter of 2025
In June 2024, The Standard Bank of South Africa Limited extended a loan of ZAR 250 million to Purple Rain Properties No. 444 Proprietary Limited (the owner of the regional South Africa head office under construction) at South Africa Prime Rate less 1.5%. The loan will mature on December 21, 2025 and the funds were used to settle an intercompany loan from Cartrack Pty Ltd.
Dividend Policy
The Board recognizes the importance to the group of investment in achieving growth at scale, and endeavors to avoid swings in dividend profile.
However, the payment and timing of dividends in cash or other distributions (such as a return of capital to shareholders through share buy-backs, for example) are determined by the Board after considering factors that include: earnings and free cash flow; current and anticipated capital requirements; economic conditions; contractual, legal, tax and regulatory restrictions (including covenants contained in any financing agreements); the ability of group subsidiaries to distribute funds to Karooooo; and such other factors the Board may deem relevant.
Karooooo aims to reinvest retained earnings to the extent that it aligns with the group’s required return on incrementally reinvested capital, return on equity, and short- to medium-term growth strategy.
Subject to Karooooo’s constitution and in accordance with the Singapore Companies Act, the Board may, without the approval of shareholders, declare and pay interim dividends. Any final dividends must be approved by an ordinary resolution at a general meeting of shareholders.
The Board may review and amend the dividend policy from time to time.
Dividend Declaration
In accordance with the dividend policy set out above, an interim dividend of USD 1.08 per ordinary share, pertaining to the first quarter of Karooooo’s 2025 financial year, will be paid on August 12, 2024, to JSE shareholders on record as at the close of business on Thursday, August 8, 2024 and on August 14, 2024 to Nasdaq shareholders on record as at the close of business on August 8, 2024. Although Karooooo’s reporting currency is ZAR, its statutory filings in Singapore are reported in USD, as a result of which dividends are declared in USD. The details with respect to the dividends declared for holders of our ordinary shares are as follows:
| NASDAQ | JSE | ||
| Declaration date | Thursday, July 18, 2024 | Friday, July 19, 2024 | |
| Finalization announcement, date of currency conversion and confirmation of record date | Monday, July 29, 2024 | Monday, July 29, 2024 | |
| Last date to trade cum dividend | Tuesday, August 6, 2024 | Monday, August 5, 2024 | |
| Shares commence trading Ex-dividend | Thursday, August 8, 2024 | Tuesday, August 6, 2024 | |
| Record date | Thursday, August 8, 2024 | Thursday, August 8, 2024 | |
| Dividend payment date | Wednesday, August 14, 2024 | Monday, August 12, 2024 |
11
INDEX TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
F-1
UNAUDITED INTERIM CONDENSED Consolidated StatementS of Financial Position
| Figures in Rand thousands |
Notes | As of May 31, 2024 | As of February 29, 2024 | |||||||
| ASSETS | ||||||||||
| Non-current assets | ||||||||||
| Property, plant and equipment | 5 | |||||||||
| Capitalized commission assets | ||||||||||
| Intangible assets | ||||||||||
| Goodwill | 6 | |||||||||
| Loans to related parties | ||||||||||
| Long-term other receivables and prepayments | 7 | |||||||||
| Deferred tax assets | ||||||||||
| Total non-current assets | ||||||||||
| Current assets | ||||||||||
| Inventories | ||||||||||
| Trade and other receivables and prepayments | 7 | |||||||||
| Income tax receivables | ||||||||||
| Cash and cash equivalents | 8 | |||||||||
| Total current assets | ||||||||||
| Total assets | ||||||||||
| EQUITY AND LIABILITIES | ||||||||||
| Equity | ||||||||||
| Share capital | 9 | |||||||||
| Treasury shares | 9 | ( | ) | ( | ) | |||||
| Other capital reserve | 9 | ( | ) | ( | ) | |||||
| Common control reserve | ( | ) | ( | ) | ||||||
| Foreign currency translation reserve | ||||||||||
| Retained earnings | ||||||||||
| Equity attributable to equity holders of parent | ||||||||||
| Non-controlling interest | ||||||||||
| Total equity | ||||||||||
| Liabilities | ||||||||||
| Non-current liabilities | ||||||||||
| Term loans | ||||||||||
| Lease liabilities | ||||||||||
| Deferred revenue | ||||||||||
| Deferred tax liabilities | ||||||||||
| Total non-current liabilities | ||||||||||
| Current liabilities | ||||||||||
| Term loans | ||||||||||
| Trade and other payables | ||||||||||
| Loans from related parties | ||||||||||
| Lease liabilities | ||||||||||
| Deferred revenue | ||||||||||
| Bank overdraft | 8 | |||||||||
| Income tax payables | ||||||||||
| Provision for warranties | ||||||||||
| Total current liabilities | ||||||||||
| Total liabilities | ||||||||||
| Total equity and liabilities | ||||||||||
The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.
F-2
UNAUDITED INTERIM CONDENSED Consolidated StatementS of Profit and Loss
| For the Three Months Ended May 31, | ||||||||||
| Figures in Rand thousands | Notes | 2024 | 2023 | |||||||
| Revenue | 10 | |||||||||
| Cost of sales | ( | ) | ( | ) | ||||||
| Gross profit | ||||||||||
| Other income | ||||||||||
| Operating expenses | ( | ) | ( | ) | ||||||
| Sales and marketing | ( | ) | ( | ) | ||||||
| General and Administration | ( | ) | ( | ) | ||||||
| Research and development | ( | ) | ( | ) | ||||||
| Expected credit losses on financial assets | ( | ) | ( | ) | ||||||
| Operating profit | ||||||||||
| Finance income | ||||||||||
| Finance costs | ( | ) | ( | ) | ||||||
| Profit before taxation | ||||||||||
| Taxation | 11 | ( | ) | ( | ) | |||||
| Profit for the quarter | ||||||||||
| Profit attributable to: | ||||||||||
| Owners of the parent | ||||||||||
| Non-controlling interest | ||||||||||
| Earnings per share | ||||||||||
The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.
F-3
UNAUDITED INTERIM CONDENSED Consolidated StatementS of Comprehensive Income
| For the Three Months Ended May 31, | ||||||||
| Figures in Rand thousands | 2024 | 2023 | ||||||
| Profit for the period | ||||||||
| OTHER COMPREHENSIVE INCOME | ||||||||
| Items that may be reclassified to profit or loss in future periods: | ||||||||
| Exchange differences on translating foreign operations | ( | ) | ||||||
| Other comprehensive income for the period | ( | ) | ||||||
| Total comprehensive income for the period net of income tax | ||||||||
| Total comprehensive income attributable to: | ||||||||
| Owners of the parent | ||||||||
| Non-controlling interest | ||||||||
The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.
F-4
UNAUDITED INTERIM CONDENSED Consolidated StatementS of Changes in Equity
| Figures in Rand thousands | Notes | Share capital | Capital reserve | Common control reserve | Foreign currency translation | Retained earnings | Total attributable to owner of the parent | Non- controlling interest | Total equity | |||||||||||||||||||||||||
| Balance at March 1, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Profit for the period | – | |||||||||||||||||||||||||||||||||
| Other comprehensive income | – | |||||||||||||||||||||||||||||||||
| Total comprehensive income for the period | – | |||||||||||||||||||||||||||||||||
| Transactions with owner, recognized directly in equity Contributions by and distributions to owner | ||||||||||||||||||||||||||||||||||
| Dividends | 12 | – | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Total transactions with owner | – | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Changes in ownership interest in subsidiaries | ||||||||||||||||||||||||||||||||||
| Acquiring interest in subsidiaries without change in control | ||||||||||||||||||||||||||||||||||
| Total changes in ownership interest in subsidiaries | – | |||||||||||||||||||||||||||||||||
| Balance at May 31, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
F-5
| Figures in Rand thousands | Notes | Share capital | Treasury shares | Other capital reserve | Common control reserve | Foreign currency translation | Retained earnings | Total attributable to owner of the parent | Non- controlling interest | Total Equity | ||||||||||||||||||||||||||||
| Balance at March 1, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Profit for the period | – | – | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income | – | – | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Total comprehensive income for the period | – | – | ( | ) | ||||||||||||||||||||||||||||||||||
| Transactions with owner, recognized directly in equity Contributions by and distributions to owner | ||||||||||||||||||||||||||||||||||||||
| Cancellation of treasury shares | 9 | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Purchase of treasury shares | 9 | – | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Total transactions with owner | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Changes in ownership interest in subsidiaries | ||||||||||||||||||||||||||||||||||||||
| Repurchase and cancellation of ordinary shares of a subsidiary | – | – | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Total changes in ownership interest in subsidiaries | – | – | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance at May 31, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
The accompanying notes form an integral part of these unaudited interim condensed consolidated financial statements.
F-6
UNAUDITED INTERIM CONDENSED Consolidated StatementS of Cash Flows
| For the Three Months Ended May 31, | ||||||||
| Figures in Rand thousands | 2024 | 2023 | ||||||
| Cash flows from operating activities | ||||||||
| Profit before taxation | ||||||||
| Adjustments | ||||||||
| Depreciation on property, plant and equipment | ||||||||
| Amortization of capitalized commission assets | ||||||||
| Amortization of intangible assets | ||||||||
| Gain on disposal of property, plant and equipment | ( | ) | ( | ) | ||||
| Finance income | ( | ) | ( | ) | ||||
| Finance costs | ||||||||
| Provision for warranties charge | ||||||||
| Working capital adjustments | ||||||||
| Inventories | ( | ) | ||||||
| Trade and other receivables and prepayments | ( | ) | ||||||
| Trade and other payables | ||||||||
| Deferred revenue | ( | ) | ||||||
| Capitalized commission assets | ( | ) | ( | ) | ||||
| Cash generated from operating activities | ||||||||
| Interest received | ||||||||
| Interest paid | ( | ) | ( | ) | ||||
| Income tax paid | ( | ) | ( | ) | ||||
| Net cash generated from operating activities | ||||||||
| Cash flows from investing activities | ||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
| Purchase of property, plant and equipment – Telematics devices and equipment on hand | ( | ) | ( | ) | ||||
| Purchase of property, plant and equipment – Other | ( | ) | ( | ) | ||||
| Proceeds on disposal of property, plant and equipment | ||||||||
| Investment in intangible assets | ( | ) | ( | ) | ||||
| Acquisition of subsidiary, net of cash acquired | ( | ) | ||||||
| Net cash utilized by investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Repayment of related parties loans | ( | ) | ||||||
| Purchase of treasury shares | ( | ) | ||||||
| Repurchase and cancellation of ordinary shares of a subsidiary | ( | ) | ||||||
| Repayment of term loans | ( | ) | ( | ) | ||||
| Payments of lease liabilities | ( | ) | ( | ) | ||||
| Proceeds from related parties loans | ||||||||
| Net cash utilized by financing activities | ( | ) | ( | ) | ||||
| Net increase in cash and cash equivalents | ||||||||
| Cash and cash equivalents at the beginning of the quarter | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at the end of the quarter | ||||||||
The accompanying notes form an integral part of these interim condensed consolidated financial statements.
F-7
Notes to unaudited INTERIM CONDENSED consolidated financial statementS
1. BASIS OF PREPARATION
The unaudited interim condensed consolidated financial statements for the three months ended May 31, 2024 have been prepared in accordance with International Accounting Standards (“IAS”) 34 Interim Financial Reporting and should be read in conjunction with the Group’s last annual consolidated financial statements as at and for the year ended February 29, 2024 (‘last annual financial statements’). They do not include all of the information required for a complete set of financial statements prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IASB”). However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the last annual financial statements.
The Group has prepared the unaudited interim condensed consolidated financial statements on the basis that it will continue to operate as a going concern.
The unaudited interim condensed consolidated financial statements were approved for issue by the Directors on July 23, 2024.
2. USE OF ESTIMATES AND JUDGEMENTS
The preparation of the Group’s interim condensed consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the reporting period. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in the future periods.
The significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual financial statements.
3. NEW STANDARDS AND AMENDMENTS ADOPTED BY THE GROUP
The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended February 29, 2024, except for the adoption of new standards effective as of March 1, 2024. The adoption of new standards does not have an impact on the interim condensed financial statements to the Group. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
F-8
4. SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (“CODM”). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Group Chief Executive Officer (“CEO”), who makes strategic decisions.
The Group organized its business units based on its products and services into the following reportable segments:
| - | Cartrack is a provider of an on-the-ground operational Internet of Things (“IoT”) Software-as-a-service (“SaaS”) cloud that maximizes the value of transportation, operations and workflow data by providing insightful real-time data analytics to connected vehicles and equipment. |
| - |
Carzuka is a physical and e-commerce vehicle buying and selling marketplace which allows customers to source, buy and sell vehicles efficiently and cost effectively. During the third quarter of the financial year of 2024, despite the growth experienced by Carzuka in South Africa, a decision was made to cease buying second hand vehicles in South Africa. This follows considerable interaction with motor dealerships across South Africa during these periods, who perceived Carzuka’s business interests to conflict with their business interests and Cartrack do not want to risk the long-standing strategic relationships that Cartrack has forged with motor dealerships across South Africa.
There are many components within the Carzuka’s platform that had been built and developed and will continue to provide substantial value to the existing Cartrack fleet platform. As at February 29, 2024, Carzuka has been integrated into Cartrack’s broader operations. |
| - | Karooooo Logistics provides a software application enabling the management of last mile delivery and general operational logistics. This technology addresses the challenges of on-the-ground distribution for large enterprises requiring systems integrations, payment gateways, third-party long-haul services and crowd-sourced drivers in order to scale and meet their operational needs. |
| Figures in Rand thousands | Cartrack | Karooooo | Total | |||||||||
| May 31, 2024 | ||||||||||||
| Subscription revenue | ||||||||||||
| Other revenue | ||||||||||||
| Vehicle sales | ||||||||||||
| Delivery service | ||||||||||||
| Segment revenue | ||||||||||||
| Segment operating profit | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Capital expenditure | ||||||||||||
F-9
| Figures in Rand thousands | Cartrack | Carzuka | Karooooo | Total | ||||||||||||
| May 31, 2023 | ||||||||||||||||
| Subscription revenue | ||||||||||||||||
| Other revenue | ||||||||||||||||
| Vehicle sales | ||||||||||||||||
| Delivery service | ||||||||||||||||
| Segment revenue | ||||||||||||||||
| Segment operating profit/(loss) | ( | ) | ||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Capital expenditure | ||||||||||||||||
| For the Three Months Ended May 31, | ||||||||
| Figures in Rand thousands | 2024 | 2023 | ||||||
| Total segment operating profits | ||||||||
| Finance income | ||||||||
| Finance cost | ( | ) | ( | ) | ||||
| Consolidated profit before taxation | ||||||||
| Non-current operating assets1 | As
of | As
of | ||||||
| South Africa | ||||||||
| Africa-Other | ||||||||
| Europe | ||||||||
| Asia-Pacific2, Middle East & USA | ||||||||
| 1 |
| 2 |
Information about revenue from geographical areas are disclosed in Note 10.
There are no customers which contribute in excess
of
F-10
5. PROPERTY, PLANT AND EQUIPMENT
Acquisitions and disposals
During the three months ended May 31, 2024, the
Group acquired assets with a cost of ZAR
The carrying amount of the property under construction
at May 31, 2024 was million (May 31, 2023: ZAR
Assets with net book value of ZAR
Capital commitments
As at May 31, 2024, the Group has commitments
for capital expenditure of ZAR
F-11
6. GOODWILL
| Cartrack | Karooooo | |||||||||||||||||||||||
| Figures in Rand thousands | Mozambique | Portugal | Spain | Other | Logistics | Total | ||||||||||||||||||
| At March 1, 2023 | ||||||||||||||||||||||||
| Acquisition of subsidiary | ||||||||||||||||||||||||
| Translation adjustments | ||||||||||||||||||||||||
| At May 31, 2023 | ||||||||||||||||||||||||
| At March 1, 2024 | ||||||||||||||||||||||||
| Translation adjustments | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| At May 31, 2024 | ||||||||||||||||||||||||
Impairment testing
The Group performs its annual impairment test at the end of each financial year, or more frequently if there are indications that goodwill may be impaired. The recoverable amount of each cash-generating unit (CGU) with the exception of the Other CGUs and Cartrack Mozambique is determined using a discounted cash flow valuation technique. The Other CGUs and Cartrack Mozambique are valued on an earnings multiple basis. The key assumptions used to determine the recoverable amount for the different cash generating units were disclosed in the annual consolidated financial statements for the year ended February 29, 2024.
Management has considered the carrying amount of goodwill as of May 31, 2024 and since there is no indicators for impairment of any of the CGUs, management has not updated any of the impairment calculations. Having assessed the future anticipated cash flows, management believes that any reasonably possible changes in key assumptions would not result in an impairment of goodwill.
The Group considers the relationship between its
market capitalization and its equity attributable to equity holders of the parent, among other factors, when performing the annual test
of impairment. At May 31, 2024, the market capitalization of the Group exceeded the value of equity by ZAR
F-12
7. TRADE AND OTHER RECEIVABLES AND PREPAYMENTS
| Figures in Rand thousands | As
of | As
of | ||||||
| Trade receivables | ||||||||
| Expected credit loss provision | ( | ) | ( | ) | ||||
| Other receivables | ||||||||
| Deposits | ||||||||
| Sundry debtors | ||||||||
| Finance lease receivables | ||||||||
| Subtotal | ||||||||
| Prepayments | ||||||||
| Other taxes | ||||||||
| Total trade and other receivables and prepayments | ||||||||
| Non-current | ||||||||
| Current | ||||||||
As of February 29, 2024, short term deposits include deposits amounted
to ZAR
8. CASH AND CASH EQUIVALENTS AND BANK OVERDRAFT
| Figures in Rand thousands | As
of | As
of | ||||||
| Cash on hand | ||||||||
| Bank balances | ||||||||
| Short-term deposits | ||||||||
| Cash and cash equivalents in the consolidated statement of financial position | ||||||||
| Bank overdrafts | ( | ) | ( | ) | ||||
| Cash and cash equivalents in the consolidated statement of cash flows | ||||||||
| Current assets | ||||||||
| Current liabilities | ( | ) | ( | ) | ||||
F-13
9. SHARE CAPITAL, TREASURY SHARES AND RESERVES
| Figures in Rand thousands | As
of | As
of | ||||||
| Share Capital | ||||||||
| Issued and fully paid | ||||||||
| Figures in Rand thousands | Treasury shares | |||
| At March 1, 2023 | ||||
| Treasury shares purchased | ||||
| At February 29, 2024 | ||||
| Cancellation of treasury shares | ( | ) | ||
| Treasury shares purchased | ||||
| At May 31, 2024 | ||||
During the financial year ended February 29, 2024,
the Company acquired
During the quarter ended May 31, 2024, the Company
acquired
| Figures in Rand thousands | Capital reserve | Other reserve | Total | |||||||||
| At March 1, 2023 and February 29, 2024 | ||||||||||||
| Cancellation of treasury shares | ||||||||||||
| Repurchase and cancellation of ordinary shares of a subsidiary | ||||||||||||
| At May 31, 2024 | ||||||||||||
F-14
10. REVENUE
The Group generates revenue by offering a full-stack smart mobility technology SaaS platform for connected vehicles and other assets, vehicles sales and delivery services.
| For the Three Months Ended May 31, | ||||||||
| Figures in Rand thousands | 2024 | 2023 | ||||||
| Revenue from contracts with customers | ||||||||
| Subscription revenue - Cartrack | ||||||||
| Subscription revenue - Karooooo Logistics | ||||||||
| Other revenue - Cartrack | ||||||||
| Hardware sales | ||||||||
| Installation revenue | ||||||||
| Miscellaneous contract fees | ||||||||
| Vehicle sales | ||||||||
| Delivery service fees | ||||||||
| Total revenue | ||||||||
| Primary geographical markets | ||||||||
| South Africa | ||||||||
| Africa-Other | ||||||||
| Europe | ||||||||
| Asia-Pacific*, Middle East and USA | ||||||||
| Timing of revenue recognition | ||||||||
| Products and services transferred at a point in time | ||||||||
| Services transferred over time | ||||||||
| Total revenue | ||||||||
| * |
F-15
11. TAXATION
The income tax expense for the three months ended
May 31, 2024 was ZAR
12. DIVIDEND
Dividend per share
Dividend paid by the Company to owner of the Company
On May 8, 2023, the Board of Directors declared an interim dividend
of 85 U.S. cents per ordinary share, pertaining to the first quarter of Karooooo’s 2024 financial year. The dividends, amounting
to ZAR
13. RELATED PARTIES
In addition to the information disclosed in Note 7 in the interim condensed financial statements, the following transactions took place between the Group and related parties at the terms agreed between parties:
| For the Three Months Ended May 31, | ||||||||
| Figures in Rand thousands | 2024 | 2023 | ||||||
| Sales to related parties | ||||||||
| Purchases from related parties | ||||||||
| Rent paid to related parties | ||||||||
Included in the “Purchases from related parties” are transaction with Found (Pty) Ltd. Zak Calisto, the CEO of the Group, is a trustee of the Kubu Trust, a discretionary trust that is the ultimate beneficial owner of Found (Pty) Ltd. Zak Calisto undertook to be a trustee until the end of February 2024 and is not a beneficiary of the trust. As at June 2024, the regulatory process of registering Zak Calisto’s resignation as a trustee was still underway with the deed’s office. Upon completion, Found (Pty) Ltd will cease becoming a related party of the Group.
F-16
14. ANALYSIS OF ASSETS AND LIABILITIES BY FINANCIAL INSTRUMENT CLASSIFICATION
| Figures in Rand thousands | As
of | As
of | ||||||
| Financial assets (at amortized cost) | ||||||||
| Loans to related party | ||||||||
| Trade and other receivables (excludes prepayments and other taxes) | ||||||||
| Cash and cash equivalents | ||||||||
| Financial liabilities (at amortized cost) | ||||||||
| Loans from related parties | ||||||||
| Trade and other payables (excludes other taxes) | ||||||||
| Term loans | ||||||||
| Bank overdraft | ||||||||
F-17
15. FAIR VALUE OF ASSETS AND LIABILITIES
Fair value hierarchy
The Group categorizes fair value measurement using a fair value hierarchy that is dependent on the valuation inputs used as follows:
| ● | Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date. |
| ● | Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). |
| ● | Level 3: Unobservable inputs for the asset or liability |
Fair value measurements that use inputs of different hierarchy levels are categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
Assets and liabilities measured at fair value
No assets and liabilities were measured at fair value as of May 31, 2024 and February 29, 2024.
Assets and liabilities not measured at fair value, for which fair value is disclosed
| As of May 31, 2024 | ||||||||
| Figures in Rand thousands | Carrying amount | Aggregate fair value | ||||||
| Loan to related party | ||||||||
Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value
Cash and cash equivalents, trade and other receivables, trade and other payables, term loans, loans from related parties, and lease liabilities. The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values as they are short term in nature, market interest rate instruments.
Fair value of financial instrument classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value
There are no financial instruments that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value.
16. SUBSEQUENT EVENTS
In June 2024, The Standard Bank of South Africa
Limited extended a loan of ZAR
On July 18, 2024, the Board of Directors declared an interim dividend of 108 U.S. cents per ordinary share, pertaining to the first quarter of Karooooo’s 2025 financial year. The dividend is therefore not recognized as a liability as of May 31, 2024. The dividend will be payable on August 12, 2024 to Johannesburg Stock Exchange (“JSE”) shareholders and August 14, 2024 to Nasdaq shareholders.
F-18