TPL Trakker Limited is the premier satellite-based vehicle tracking company of the country in terms of market share. It is also the domestic pioneer of the use of such technology in the country. TPL Trakker Ltd was listed at the Karachi Stock Exchange in June 2012.
TPL Holdings (Pvt) Limited launched the vehicle security and fleet management concept in Pakistan in the year 2000 as a joint venture with the South African multinational DigiCore Holdings Limited which has 30 percent shareholding in the Company.
Pakistan's first and the region's largest vehicle tracking and fleet management service provider has established its notable presence in the market and remains the emphatic market leader today despite the presence of many competitors.
TPL Trakker Ltd is providing car tracking services in over 320 cities of the country. Its business is to supply superior GPS, GSM and Satellite Mobile Asset Tracking, Management and Information Solutions.
PERFORMANCE SNAPSHOT FY12 was not the best year for TPL Trakker. In that year, the Company's bottom line was eroded by 11 percent, compared to the previous fiscal as it tallied Rs 82.5 million for the year. The Company's top line had expanded by about 13 percent during the same period, however a higher cost of doing business and an increase in other expenses incurred by the business kept the beefed up revenues from inflating the firm's profit during FY12.
Sales revenues for FY12 tallied Rs 942.93 million. The cost of sales for the same period was recorded at Rs 443.6 million. As a result, TPL Trakker's gross profit rose by about eight percent over the previous fiscal. Distribution expenses and administrative costs faced by the Company increased by about 13 percent each, to Rs 82.46 million and Rs 216.02 million, respectively.
The higher outflow of funds under both heads was largely in line with inflation during that fiscal, hence there appears no significant impact of either expanding business or a drive to lower expenses on these fronts. However the real dowser on profitability came from a whopping increase in other expenses, taxes and also, some slowdown in the growth of earnings from other business activities. According to the Company's published statements, the higher cost from other operating expenses is attributable to losses due to exchange rate fluctuations.
The Company's financing cost was also up by about 18 percent, reaching Rs 127.67 million. Despite recording a lower profit before taxation, than the previous fiscal, TPL had to pay out Rs 40.69 million in taxes in FY12, compared to Rs 33.2 million in the preceding fiscal. The steeper tax tally took a toll on the bottom line as the Company's net profit fell by about 11 percent compared to FY11, even though its profit before taxation had dropped by a relatively lower two percent.
The Company's business portfolio is divided into three broad segments of assets tracking solutions, container tracking solutions and navigation solutions. The assets tracking solutions business includes tracking services for vehicles and power generators. The business line continued its strong growth during the outgoing fiscal as the sales of its equipment grew by 74 percent in the period. The growth is especially encouraging for the future prospects of the Company because it brings with it a stream of future earnings from the services rendered to the owners of the assets that are tracked using this equipment.
Although business prospects for other business lines are also bright, some occurrences in the last fiscal had an adverse impact on their performance during FY12. The Company provides container tracking services to goods transporters and this business had shown impressive growth over the previous 24 months. However during FY12, the attack by US forces on Pakistan Army's Salala Check Post brought the Afghan Transit Trade to a screeching halt.
As that stalemate persisted for many months, the flow of goods via containers along that route remained suspended. As a consequence, the use of TPL Trakker's container tracking services was also severely impacted. The business segment that had seen its revenues double during FY11, compared to the preceding fiscal, saw its sales drop by a whopping 56 percent during FY12. The contribution of this business line to the Company's cumulative earnings was also dragged down to a less-than-impressive 11 percent.
TPL Trakker has an exclusive agreement with Indus Motor Company, the manufacturers of Toyota Corolla and other brands. Car sales for that Company have also been lackluster of late, mostly due to the high influx of used cars from abroad. These depressed sales have also taken a toll on the growth story for TPL in the outgoing fiscal as navigation solutions contributed just 2.4 percent to the Company's top line.
Outlook The outgoing fiscal served up little for TPL Trakker to write home, or investors about. However, the Company's prospects in FY13 and beyond appear more promising. The sales of domestically assembled cars are expected to rebound as previously lax regime for the import of used cars has been tightened.
2013 is also the year the Company is expected to complete a significant portion of its intended satellite mapping of the country. That initiative is likely to increase the utility of its navigation services among users and hence boost appeal among motorists. The receding interest rate scenario is also expected to ease the outflow of funds in the form of finance cost.
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TPL TRAKKER LIMITED
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2012 2011 2010
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PROFITABILITY
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Gross profit margin % 53 56 51
Net profit margin % 9 11 7
ROE % 4 4 3
ROCE % 3 4 3
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LIQUIDITY
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D/E ratio times 0.03 0.01 0.01
Current ratio times 1.02 0.74 0.67
Quick acid ratio times 0.96 0.71 0.66
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LEVERAGE
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Interest cover ratio times 1.96 2.16 1.96
Financial leverage times 0.36 0.41 0.33
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ACTIVITY
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Inventory turnover times 9 14 20
Debtor turnover times 2 2 2
Fixed asset turnover % 56 48 48
Total asset turnover % 26 23 24
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