Quartix Technologies plc

1

Financial statements for the year ended 31 December 2021

Contents

Page

Company Information

2

Highlights

3

Chairman's Statement

6

Strategic Report: Operational Review

9

Strategic Report: Financial Review

14

Strategic Report: Section 172 (1) Statement

18

Corporate Governance Report

22

Directors' Remuneration Report

35

Directors' Report

38

Independent Auditor's Report to the Members of Quartix Technologies

42

plc

Consolidated Statement of Comprehensive Income

49

Consolidated Statement of Financial Position

50

Consolidated Statement of Changes in Equity

51

Consolidated Statement of Cash Flows

52

Notes to the Consolidated Financial Statements

53

Parent Company Statement of Financial Position

82

Parent Company Statement of Changes in Equity

83

Notes to the Parent Company Financial Statements

84

Notice of Annual General Meeting

91

Notes to the Notice of Annual General Meeting

93

Quartix Technologies plc

2

Financial statements for the year ended 31 December 2021

Company Information

Company registration number:

06395159

Registered office:

Sheraton House

Castle Park

Cambridge

CB3 0AX

Directors:

Paul Boughton

Andrew Walters

Richard Lilwall

(appointed 11 October 2021)

Emily Rees

(appointed 20 May 2021)

Daniel Mendis

(resigned 20 May 2021)

David Warwick

Laura Seffino

Company secretary:

Emily Rees

(appointed 12 April 2021)

Bankers:

Barclays Bank PLC

Mortlock house,

Station Road,

Histon,

Cambridgeshire

CB24 9DE

Solicitors:

HCR Hewitsons

Shakespeare House

42 Newmarket Road

Cambridge

CB5 8EP

Auditor:

PKF Littlejohn LLP

15 Westferry Circus

London

EH14 4HD

Nominated advisor and broker:

finnCap

One Bartholomew Close,

London,

EC1A 7BL

Quartix Technologies plc

3

Financial statements for the year ended 31 December 2021

Highlights

Quartix is one of Europe's leading suppliers of vehicle telematics services and driver analytics.

Financial highlights

  • Group revenue decreased by 1.2% to £25.5m (2020: £25.8m) o Fleet revenue grew1 by 7.7% to £23.8m (2020: £22.0m)
    o Fleet revenue represented 93.1% of total revenue (2020: 85.4%)
    o Insurance revenue2 decreased by 53.4% to £1.8m (2020: £3.8m)
  • Adjusted EBITDA3 decreased by 27.3% to £5.7m driven by planned investment for growth (2020:
    £7.9m)
    o Fleet telematics services profits4 increased by 1.0% to £19.8m (2020: £19.6m)
    o Fleet customer acquisition investment5 increased by 21.6% to £8.4m (2020: £6.9m)
  • Operating profit decreased by 6.5% to £5.3m (2020: £5.7m)
  • Profit before tax decreased by 6.6% to £5.3m (2020: £5.7m)
  • Adjusted diluted earnings per share6 of 9.18p (2020: 13.16p), diluted earnings per share of 10.07p
    (2020: 9.82p)
  • Free cash flow7 decreased by 41.0% to £3.3m (2020: £5.5m), partly due to increased inventory holding as Quartix manages component levels due to global microchip supply issues.
  • Final dividend payment of 7.00p per share proposed (2020: 17.70p) including 5.10p for
    supplementary dividend (2020: 15.30p) giving a total dividend for the year of 8.50p per share
    Outlook
  • Strong start to 2022, with fleet new unit subscriptions growth of 25% for the first two months, leading to a £0.4m increase in annualised recurring revenue.
  • Acceleration of growth planned, targeting annualised recurring revenue of at least £30.0m by the end of 2023.
  • Total Fleet segmental revenue (see Strategic Report: Financial Review, Financial Overview)
    2 Insurance segmental revenue (see Strategic Report: Financial Review, Financial Overview)
    3 Earnings before interest, tax, depreciation, amortisation, share based payment expense and the 3G swap out provision (see note 5)
    4 Profit for the Fleet segment before customer acquisition costs and central costs (see note 4)
    5 Revenue, marketing, net equipment, net installation and carriage cost for new fleet customers (see note 4) 6 Diluted earnings per share before the 3G replacement provision (see Strategic Report: Financial Review) 7 Cash flow from operations after tax and investing activities

Quartix Technologies plc

4

Financial statements for the year ended 31 December 2021

Principal activities and performance measures

The Group's main strategic objective is to grow its fleet subscription base and develop the associated annualised recurring revenue.

Annualised recurring revenue (see definition in KPI table below), when measured in constant currency year on year, is a forward-looking key performance measure and it is pleasing that it grew by £2.0m to £23.9m at 31 December 2021.

The Key Performance Indicators and the Segmental Analysis used by the Board to assess the performance of the business are listed below and discussed in the Chairman's Statement and Strategic Report.

Key Performance Indicators ("KPIs")

Year ended 31 December

2021

2020

% change

Fleet subscriptions1 (new units)

50,765

42,898

18.3

Fleet subscription base2 (units)

202,734

173,793

16.7

Fleet customer base3

22,668

19,039

19.1

Fleet attrition (annualised)4 (%)

11.6

12.2

Annualised recurring revenue5 (£'000)

23,942

21,943

9.1

Fleet invoiced recurring revenue6 (£'000)

22,506

20,801

8.2

Fleet revenue7 (£'000)

23,752

22,059

7.7

Price erosion8 (%)

6.0

6.7

  • New vehicle tracking unit subscriptions added to the subscription base before any attrition
  • The number of vehicle tracking units subscribed to the Group's fleet tracking services, including units waiting to be installed for which subscription payments have started or are committed
    3 The number of customers associated with the fleet subscription base
    4 The number of new vehicle tracking unit subscriptions, less the increase in subscription base, expressed as a percentage of the mean subscription base
    5 Annualised data services revenue for the subscription base at the year end, before deferred revenue, including revenue for units waiting to be installed for which subscription payments have started or are committed, all measured in constant currency.
    6 Invoiced subscription charges before provision for deferred revenue
    7 Total Fleet revenue (see Strategic Report: Financial Review, Financial Overview)
    8 The annual decrease in average subscription price of the base expressed as a percentage of the average subscription price at the start of the year, all measured in constant currency

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Disclaimer

Quartix Technologies plc published this content on 25 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 February 2022 08:21:10 UTC.