Karooooo (KRO), formerly known as Cartrack, is a vehicle recovery, insurance, telematics, and fleet management company operating in 24 countries worldwide. The company boasts a 92% recovery rate, claiming it to be the best in the industry. Karooooo has demonstrated rapid organic growth, with a 21% compound annual growth rate in its subscriber base over the past six years. Approximately 96% of the company's turnover is annuity income, providing a stable and predictable revenue stream.
Zak Calisto, the founder, holds a significant ownership stake of 68.5% in the Singapore-based firm Karooooo. The company has almost no working capital requirements, and its annuity income ensures that overheads are covered before the month begins, making it an attractive investment option, especially for private investors seeking a rand-hedge.
Karooooo's listing on NASDAQ with an inward listing on the JSE enhances its ability to raise funds on the international market, attracting strong institutional interest. The company's financial performance continues to be robust. In its results for the year ending 29th February 2024, Cartrack subscribers increased by 15% to 1.97 million, and subscription revenue rose by 17%. Operating profit grew by 18% to a record ZAR1,043 million, and earnings per share increased by 24% to ZAR23.85.
On 12th February 2024, Karooooo announced a buyback program for up to 1 million of its own ordinary shares in the market. In the first quarter update, the company reported a 17% increase in subscribers and a 15% rise in subscription revenue. Operating profit for the quarter grew by 34% to ZAR300 million, and earnings per share increased by 41% to ZAR7.17.
Despite trading at a P/E ratio of 26.87, which is relatively high, Karooooo's impressive growth track record and strong financial performance justify its valuation. The company's stable annuity income, minimal working capital needs, and global presence make it a resilient investment. Given these factors, Karooooo remains a "must-have" investment for private investors, and accumulating shares on any weakness is recommended.
Zak Calisto, the founder, holds a significant ownership stake of 68.5% in the Singapore-based firm Karooooo. The company has almost no working capital requirements, and its annuity income ensures that overheads are covered before the month begins, making it an attractive investment option, especially for private investors seeking a rand-hedge.
Karooooo's listing on NASDAQ with an inward listing on the JSE enhances its ability to raise funds on the international market, attracting strong institutional interest. The company's financial performance continues to be robust. In its results for the year ending 29th February 2024, Cartrack subscribers increased by 15% to 1.97 million, and subscription revenue rose by 17%. Operating profit grew by 18% to a record ZAR1,043 million, and earnings per share increased by 24% to ZAR23.85.
On 12th February 2024, Karooooo announced a buyback program for up to 1 million of its own ordinary shares in the market. In the first quarter update, the company reported a 17% increase in subscribers and a 15% rise in subscription revenue. Operating profit for the quarter grew by 34% to ZAR300 million, and earnings per share increased by 41% to ZAR7.17.
Despite trading at a P/E ratio of 26.87, which is relatively high, Karooooo's impressive growth track record and strong financial performance justify its valuation. The company's stable annuity income, minimal working capital needs, and global presence make it a resilient investment. Given these factors, Karooooo remains a "must-have" investment for private investors, and accumulating shares on any weakness is recommended.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.