15-05-2025
Karooooo's CEO outlines ambitious plans for expansion and profitability
KAROOOOO CEO and founder Zak Calisto says the group is building momentum for growth after four years of challenging market conditions
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Karooooo, which owns the vehicle tracking and fleet management solutions company Cartrack, has four difficult years behind it and is looking to the new financial year to build growth momentum, said the founder and CEO Zak Calisto.
Interviewed on Thursday at the release of the fourth quarter results to February 28, Calisto, who has expanded the group into Asia, Europe and South Africa, said they scaled up in the last two quarters by nearly 1 000 additional staff, and the company had moved into a new head office in Johannesburg, this after a period where operations were impacted by the Covid pandemic for two years, and by the work-from-home trend.
Karooooo's operating profit increased by 30% to R385 million in the fourth quarter and earnings per share increased 19% to R8.11. The number of Cartrack subscribers increased 17% to 2.3 million from 1.97 million. The group is ungeared with some R900m in cash.
Calisto said their biggest business remains in South Africa, and he believes the market still has 'huge opportunities for growth.' The group is aiming to double the size of its South African business in the next four years, he added.
He said there were similar opportunities in their European and Asia markets, and over time, it was likely that Asia would become the group's biggest market.
'We operate in an expanding and largely underpenetrated market globally, fueled by robust and sustained customer demand. This demand is driven by a heightened focus on digitalization, the need to improve operational efficiency and reduce costs, and increasing attention to safety in physical operations,' he said.
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A significant goodwill impairment of R43.9m was realised, whch related to the political uncertainty in Mozambique. Calisto said some of their clients had their entire fleets and properties burned through the political riots. He estimated hundreds of vehicles were burned in total, and there was no certainty at this stage how long the political situation would remain resolved.
He said despite the challenges in the fourth quarter, their Mozambique operation continued to support their South African customers who have cross-border operations and has remained profitable with healthy cash generation.
'In the 2026 financial year, we aim to accelerate Cartrack subscription revenue growth by expanding our distribution footprint in existing markets, driving broader platform adoption and capitalising on growing demand for video solutions,' he said.
He said while their targets might be hard to meet, they had a strong and proven track record of execution, sustained growth at scale, and a highly profitable business model supported by a solid balance sheet and a healthy cash position.
'As we expand our distribution footprint in existing markets, we expect lower earnings per share growth in the 2026 year, given our planned upfront investment in sales and marketing for the year,' the group said.
Cartrack's subscription revenue was forecasted to grow between 16% and 21% compared to the 2025 financial year, while Karooooo's earnings per share was expected to be between R32.50 and R35.50.
Karooooo's adjusted earnings per share increased 39% to R9.48. Operating expenses increased 15% to R485m. Of the total, Cartrack accounted for R459m (Q4 2024: R399m) in operating expenses including investments in infrastructure and headcount to support territorial expansion and distribution growth.
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