Telematics firm Quartix all the boxes Cambridge-based fleet telematics firm Quartix is profitable, growing, has a net cash balance and pays a dividend. This puts the company among just 5% of all AIM-quoted firms. Quartix joined AIM via IPO in November 2014. Its subsequent performance and future prospects make the company one of the best to have joined AIM in the last decade. Quartix is led by its co-Founder and Managing Director, Andy Walters. Mr Walters remains a major shareholder in the company, controlling 37.7% of the equity. InfoPlus, Quartix’ main product is a combined hardware/software technology solution for motor fleet managers. The in-vehicle product weighs 90g. It is essentially a GPS tracking device, powered by the vehicle battery. Along with position reporting, the unit includes an accelerometer that can record impact data. Done properly, this amounts to a serious amount of computing and data processing. The full unit contains three ARM processors, one for the mobile network modem, one in the GPS receiver and another to serve the Quartix firmware. Quartix still has plenty of work to do once the vehicle unit has sent the data. Analysis of the information gathered enables Quartix to assess a myriad of aspects of a driver’s performance. Vehicle speed information at a specific location www.aimprospector.co.uk
can be combined with road data to measure if a driver is speeding. Time and location information are processed into timesheet entries. This can be combined across an entire fleet to aggregate business performance.
combined across an entire fleet to aggregate business performance Quartix’ solution is sold either to the companies running fleets themselves or to insurance companies, who may demand the installation of a Quartix (or similar) device as part of terms. Quartix’ subscriber base has increased more than sevenfold in the last ten years. In the last five years, the compound annual growth rate in sales has averaged 24%. Operating cash flows in this time have shown an average annual increase of 39% per annum. According to stock data site Stockopedia, only 23 AIM-quoted companies can demonstrate a similar level of growth and many have only done so via acquisition. Interim results, announced at the end of July, showed a 16% increase in sales to the fleet sector and a 47% increase in demand from insurers. It is the growth in the USA
growth in the USA that is perhaps most encouraging that is perhaps most encouraging. Here (albeit from a low base), the subscriber base doubled and revenues increased fourfold in 12 months. Legislation in the US had dampened demand for Quartix’ product somewhat but a compliant solution is expected to begin shipping in H2. An estimated 3.1m vehicles in the US will require monitoring by law. Given that Quartix’ current installed base is around 80,000 vehicles, the opportunity is huge. Quartix is a successful business controlled and managed by the smart people that started it. Provided that the technological position can be maintained, Quartix looks set to keep its status among AIM’s most successful firms. Quartix Holdings (LON:QTX) FOR Excellent growth Strong balance sheet AGAINST Competitive area Punchy valuation Market cap Bid:offer P/E (forecast) Yield (forecast) 52week low:high
£156m 325p:345p 27.7 3.2% 233p:475p
Published on Nov 15, 2016
Published on Nov 15, 2016
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