REG - Quartix Technologies - Trading Statement

Quartix TechnologiesAnnouncement

15/10/2024 07:00

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RNS Number : 1270I  Quartix Technologies PLC  15 October 2024

Quartix Technologies plc

("Quartix", "the Group" or "the Company")

Trading Statement

 

Quartix Technologies plc, a leading supplier of subscription-based vehicle
tracking systems, software and services, is pleased to provide the following
trading statement, covering the nine months to 30 September 2024 (the "9m
Period").

Recurring revenues, pricing and customer base

Renewed focus on the Company's core business continued to drive strong growth
in its Annualised Recurring Revenue ("ARR"). ARR is the key forward-looking
measure of growth and financial performance for the Company. The Company's ARR
increased by £3.1m (+11%) in the 12 months from 1 October 2023  to 30
September 2024. ARR growth is measured on a constant currency basis, using the
rates applicable at 30 September 2024.

During the 9m Period, the Company's ARR grew by £2.7m, an increase of more
than 60% on ARR growth achieved for the equivalent period in 2023. (£1.7m)

Average revenue per unit ("ARPU") during the 9m Period decreased by 0.1% on a
constant currency basis, representing a significant improvement in performance
when compared to the same period in 2023, during which we experienced a
decrease of 3.4%. The Company has now implemented an appropriate annual price
indexation policy and process for future price revisions and will continue to
focus on this key metric.

Attrition as at 30 September (on a trailing 12 months' basis) was 13.8%,
showing a slight improvement on performance at the end of H1 (14.0%).
Attrition in the  9m Period has reduced in most territories and it also
remains an important area of focus.

The key metrics shown below include growth expressed as a % since 1 October
2023, with the exception of the figures given for new subscriptions and new
customers, for which the growth shown is for the 9m Period (from 1 January
2024 to 30 September 2024) compared to the same period in 2023.

Renewed focus on customer acquisition drove a 29% increase in this measure in
the third quarter compared to Q3 2023, and this improvement is expected to
continue.

 Country  ARR (£m)   %     Subscription Base (units)  %     Customer Base  %     New Subscriptions (units)  %      New Customers  %
 UK/EI    17.49      +5%   154,448                    +7%   11,555         +2%   22,980                     +14%   1,174          +16%
 France   8.05       +18%  77,667                     +21%  8,907          +12%  17,341                     +4%    1,730          +2%
 USA      3.01       +2%   29,268                     -1%   3,798          -2%   4,853                      -1%    531            -8%
 Italy    1.21       +61%  13,412                     +59%  2,101          +49%  4,514                      +48%   703            +68%
 Spain    0.84       +41%  10,669                     +46%  1,958          +37%  3,484                      +37%   611            +30%
 Germany  0.59       +64%  5,972                      +58%  893            +45%  2,260                      +103%  320            +82%
 Other    0.05             590                              90                   100                               3
 Total    31.26      +11%  292,026                    +13%  29,302         +10%  55,532                     +14%   5,072          +16%

 

Market performance

UK

A continued emphasis on the Company's core business has driven a strong
increase in customer acquisition and new subscriptions, leading to a 7%
increase in the subscription base and 5% growth in ARR. Improvements were made
in the management of each of our channels to market.

France

The subscription and customer bases grew by 21% and 12% respectively on a
trailing 12-month basis. New subscriptions and customer acquisition were 4%
and 2% ahead of the same period last year, respectively, and good progress is
now being made through all channels.

USA

In the past few months we have started to rebuild our sales and support
capacity for the USA, effectively reversing the organisational and strategic
changes made during 2022 and 2023. Attrition also reduced and, in the past
three months, the customer and subscription bases returned to modest growth.
As a consequence, the Company achieved  growth in ARR in the first 9 months
of $0.1m versus a deficit of $0.2m last year. Enquiry levels are good and
customer acquisition rates in the third quarter were more than double the rate
for Q3 2023.

Italy, Spain and Germany

The company recorded strong growth on all key performance measures in each of
these countries. New customer acquisition rates in Italy were particularly
strong, as was growth in new installations in Germany. All three countries
offer substantial opportunities for business development and we will make
further investment in the remainder of the year and in 2025.

Financial results for the Period

The Board is confident of meeting market expectations for the year(1)  for
both profit and free cashflow. The Company's net cash balance at period-end
(30 September 2024) was £2.3m, following payment of an Interim Dividend of
1.5p per share and the final contracted purchase payment to shareholders of
Konetik Deutschland GmbH ("Konetik"); both of which were made during
September. Liquidation of Konetik is now largely complete, and anticipated
costs of closure were provided for in the Company's Interim Results. The
anticipated divergence between free cashflow and EBITDA in 2024 is a result of
the Company's committed programme of equipment upgrades in France and the
investment in growth in the subscription base.

More than 40% of the Company's revenue is derived from the EU and USA, and
continuing growth in the strength of the pound has therefore had a  marginal
impact on the Board's previous estimates of revenue for the year. This, as
noted above, is not expected to affect profit or cash generation.

Andy Walters, Executive Chairman of Quartix, commented:

"The rate of growth in the Company's recurring revenues, customer base and new
subscriptions over the period is very pleasing. I am immensely grateful to all
my colleagues and the management team at Quartix who have so successfully
refocused the company on its core business activity since my return to the
Board a year ago, and we look forward to the future with confidence."

(1)Note: the Company believes that, prior to this announcement, market
expectations for 2024 performance in terms of revenue, adjusted EBITDA and
unadjusted free cashflow were £32.9m, £5.8m and £2.1m respectively.

For further information contact:

Andy Walters, Executive Chairman.

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014 as retained as part of UK law by virtue of
the European Union (Withdrawal) Act 2018 as amended.

 

 

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