Hello, and welcome to Karooooo's Financial Year 2025 Q1 Earnings Call. On behalf of Karooooo, we would like to thank you for joining us today. I'm Carmen, the Group's Chief Strategy and Marketing Officer, and together with Hoeshin, our Group Chief Financial Officer, we’ll be taking you through our key business updates and strong financial performance. All investors are advised to read through the disclaimer. We will be reviewing both Cartrack and Karooooo Logistics in today's webinar. After a milestone Q1 for net subscribers, we continue to profitably grow its scale, and now have over 124,000 businesses choosing to power their operations every single day with our cloud. Management believes we are on track to achieving our FY ‘25 outlook and remain excited to continue on our over 10 year track record of strong financial growth and performance. Physical operations bring us the food we eat and the infrastructure we rely on to call our families. They build our homes and they keep our communities healthy and clean, whilst often overlooked these physical operations power, everything we do, they're the reason our lives have become easy. They may not appear glamorous, but their work is admirable and complex and challenging, and still, as they continue on their missions to carry our economies, physical operations are experiencing big changes in their environments. Customers are more demanding. Costs are rapidly rising, and competition is heightening. In the day-to-day of running a physical operation, there are tons of moving parts between accidents, resource planning, timeline commitments, worker productivity, compliance, and customer expectations there's a lot that can go wrong, and then there's a extra layer of executing on everything beautifully whilst keeping your costs down and business efficient. This is no small feat. Now, the problem is that these physical operations are mostly…

Thank you, Carmen. I will now talk through Karooooo's financial performance for quarter one FY ‘25. Please note that all comparisons are against quarter one FY ‘24 unless otherwise stated. Our proven and profitable sales business model continue and delivered a solid start for the financial year. In this quarter, Karooooo's experienced strong customer acquisitions, total subscription revenue up 15% to ZAR964 million and as expected after substantial investment for future growth in all segments, operating profits up 34% to ZAR300 million and earnings per share up 41% to ZAR7.17. All segments continue to see strong traction with the benefits of our strategic investment beginning to show. As our earnings improve with high cash conversions free cash flow in this quarter stood at ZAR83 million, the free cash flow generated is keeping with our planned capital location for future growth. In this quarter, ZAR37 million are invested in the development of South Africa's central office and a total of ZAR304 million were invested to date. Capital expenditure incurred relates to telematic devices installed as a result of increase in new subscribers. Our strong track records of disciplined capital allocations, earnings and free cash flow will continue to bolster our balance sheet. Karooooo's earnings per share up by 41% to ZAR7.17 in this quarter. The increase is driven by higher subscription revenue and expanded margins. The negative impact from Carzuka’s on earnings are now resolved with Carzuka fully integrated to support Cartrack's operations. Cartrack's earnings per share up 29% to ZAR6.94 and Karooooo logistic earnings per share up 188% to ZAR0.23. Karooooo will continue to scale, grow and increase its earnings to meet our outlook. Our consistent results extend our track records of growth at scale, profitability and cash generation ability. Our net cash on hand plus cash in bank fixed…

Good morning, good afternoon to everyone, and good evening. Thanks everybody for making time for us today. I will go through the questions and explain and answer all the questions. I'll first start off with a question from Dylan Becker.

Talked about the improving environment in South Africa, most mature market, but still seeing nice growth. How should we think about the runaway year? How much larger can these customers be if they will adopt more of the platform?

We saw growth this year in South Africa of 16%. We believe we will continue this momentum and as Hoeshin said, we will be moving to our new office in Johannesburg in September, and that will definitely give us the opportunity to grow our headcount. At the moment, one of our bottlenecks is we haven't got space to house more people. In terms of the platform, we've got -- not all our customers use as much of the platform as they should be using, but we are embarking specifically from September on getting more customers to use parts of the platform that they could be using that they're not using.

Next question, Roy Campbell. Roy Campbell from Morgan Stanley, Roy; South Africa. What is your estimated market share in South Africa? What you estimate the penetration rate is? Can you describe the tech competitive environment?

So I first would like to say that, I think South Africa is extremely competitive environment. All our competitors have been in the markets for approximately 10 years, more than us. We came to the market in 2004. They've been around from '94 till about '96. They're all very strong, and I think it's one of the geographies that we certainly see strong competition. We estimate our market share in South Africa at this point in time to be approximately 40% of the installed base. That's based on some internal calculations that we've done, but it might not be fully accurate.

And what do you estimate the penetration is in South Africa at the moment?

We estimate the penetration to be between 3.5 to 4 million vehicles, and the total vehicle Park is 12 million. And we believe that, I've been saying this for years, eventually this will go up where the whole market will be penetrated.

Another question from Roy Campbell. Your 16% growth is that, traditional track and trace, or you're gaining more marketing fleet, in the fleets, in the core fleet, fleet telematics.

We grew our business in South Africa I think 40% of our growth came from consumer and 60% came from commercial customers.

A question from Alex, from Raymond James. Can you talk more about your improved macro you're referring to in South Africa? What did you see in June growth relative to prime months?

What we see in South Africa, we've, you know, South Africa's had elections and most, most South Africans are very confident that these election results will lead to a better South Africa. And what we are seeing as a business is in terms of customer defaults, that's starting to decrease. That's probably started to decrease about three, four months ago. And I think just generally speaking, also the whole economic environment is starting to look quite positive compared to what it was a year ago.

From Alex as well. Could you provide some more color on the launch of next gen vision? What percent your commercial customers take on the vision solution?

So the next-gen vision, we actually really only started launching it about two months ago. It's not fully launched and we find it to be a very positive uptake and we are very excited about that, Alex.

What are the ARPU uplifts and what features are in the next-gen product that might increase adoption relative to your prior version?

I think the, this version, it's really, it's got more AI than our previous version, firstly. And second of all, there is also improvement on the AI that we had on our previous versions. Also the way it integrates into our platform, it's the improvements there I think are quite big and we actually only rolling out all the improvements within the next two months. So I believe by the time we get to about October, we would've rolled out our new AI capabilities on the video, on the video cameras. Then Jackson, thanks for to, taking my question, I'm Jack from [Kerlingo] Research. I got question on contract geography, Asia Pacific, Midwest in USA got highest rate of subscribers and subscription revenue. We've got low base and compelling regional growth in the area. Could you give some color on growth rate for the region in financial FY ‘25? We certainly believe that we can keep the current growth rates and increase those growth rates and in actual fact, we had a relatively weak quarter in Asia, but we are really seeing a much better quarter now in Q2. Okay. A question from James. Has your investment in hardware related to AI capability is growing dramatically later or is it in line with previous trends? Our R&D is at about 6% of subscription revenue and we are seeing quite a big increase in R&D compared to last year. But I believe, we will by the end of Q4, that we will have that under control. And we are obviously getting much better talent in the R&D department. So overall, I think we're getting much more for our buck in R&D. But despite that, our R&D is going up. Is there any other questions? I think that's all the questions for today.

Thanks, everybody for joining us. Thank you. Bye, bye.