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Quartix makes further progress with fleet expansion

The vehicle tracking systems company has continued to focus on expanding its fleet business, with less focus on its insurance division
Quartix makes further progress with fleet expansion

Quartix (QTX) made further progress in its focus on its fleet market, with revenue in this division up 11 per cent to £10.1m during the first half of its financial year. This came on the back of a 12 per cent improvement in the subscription base to 138,081 vehicles, with a 13 per cent larger customer base at 14,851. The supplier of vehicle tracking systems saw installations increase by nearly 50 per cent to 22,505, while recurring revenue improved by 12 per cent to £9.4m. This subscription growth was thanks to a significant increase in spending on marketing and distribution.

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This expansion in the fleet market was partially offset by a weaker performance in the lower-margin insurance business, where revenue dropped by 35 per cent to £2.5m and insurance installations fell by nearly a third to 17,069. This decline is as expected, and insurance now makes up around 20 per cent of revenue. Management commented that insurance rivals were generating low margins, and therefore pricing pressures may ease in the future.

Analysts at FinnCap expect adjusted pre-tax profits of £6.5m during the year to December 2019, giving EPS of 11.5p, down from £8.2m and 14.5p in FY2018.

QUARTIX (QTX)   
ORD PRICE:275pMARKET VALUE:£131m
TOUCH:270-280p12-MONTH HIGH:361pLOW: 215p
DIVIDEND YIELD:1.7%PE RATIO:29
NET ASSET VALUE:32p*NET CASH:£5.1m
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201812.93.866.892.4
201912.63.195.672.4
% change-3-17-18-
Ex-div:15 Aug   
Payment:13 Sep   
*Includes intangible assets of £14m, or 29p a share