The increasing demand for pay-as-you-drive insurance services proved to be a bit of a bonus for Quartix (QTX) in the first half. The vehicle tracking device company managed to bring in turnover and profit comfortably ahead of expectations, largely thanks to the 47 per cent increase in UK insurance sales to £4.4m.
That's not to say the core fleet vehicle tracking sector did not pull its weight in the period. Here revenues were up 16 per cent to £7.2m with growth seen across all geographies. This comes in spite of the fact that the US business is yet to take off as hoped. Although vehicles under subscription stateside more than doubled to 4,067 in the period, recent new legislation concerning the monitoring of fleet drivers hours, stunted demand. Quartix is on the case though; a new service which complies with the new legislation is due to be launched imminently. When the law comes into effect in December 2017 it is expected to hugely increase product demand - an estimated 3.1m vehicles are expected to be affected by the legislation.
Cash conversion was as strong as ever, with free cash flows up 29 per cent to £3.1m. This left net cash at the period end at £4.1m, comfortably up on the prior year-end despite the higher dividend pay-out.
Broker finnCap expects full year adjusted pre-tax profits of £6.7m for the year to December 2016 leading to EPS of 11.6p, up from £6.1m and 10.7p in FY2015.
QUARTIX (QTX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 373p | MARKET VALUE: | £ 176m | |
| TOUCH: | 360-385p | 12-MONTH HIGH: | 393p | LOW: 199p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 33.9p* | NET CASH: | £4.1m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 9.2 | 2.7 | 4.7 | 2.0 |
| 2016 | 11.6 | 3.3 | 5.9 | 2.2 |
| % change | +26 | +23 | +24 | +10 |
Ex-div: 18 Aug Payment: 15 Sep *Includes intangible assets of £14m, or 30p a share | ||||
