- Last updated 25th July 2018
Andy Walters, Managing Director
David Bridge, Finance Director
Andy Walters, Managing Director, Proactive Investors Interview
Paul Boughton has 30 years’ of executive experience in identifying, negotiating and completing acquisitions in the USA and Europe. Currently he is Business Development Director of Aventics GmbH, the German industrial pneumatics manufacturer. He spent thirteen years as Business Development Director for Spectris plc, and subsequently held similar positions at IMI plc, Consort Medical plc and Brammer plc. He was a Non Executive director of London Bridge Software plc and Raymarine plc earlier in his career. Paul has a BSc in Business and Managerial Economics from the University of Hull and is a Fellow of the Institute of Chartered Accountants.
Chief Executive Officer
Andy Walters founded Quartix in 2001 with three colleagues. Prior to that he was Managing Director of a subsidiary of Spectris plc for 6 years and had spent 15 years with Schlumberger in the UK and France, where he was marketing director of the payphones and smart cards division. Andy holds an MA in electrical sciences from the University of Cambridge.
Jim Warwick was until 31 December 2016 Chief Operating Officer at Abcam plc, a global leader in the supply of innovative protein research tools, having originally joined as Technical Director in 2001. Prior to that, he worked on IT, software and web development initiatives for telecommunications consultancy group Analysys Limited. Jim holds an MA in Computer Science from the University of Cambridge.
Chief Financial Officer
Dan Mendis joined Quartix in 2017. He was previously Head of Finance (Ruminant) at AB Agri Ltd, a subsidiary of Associated British Foods plc, before which he spent four years with Domino Printing Sciences plc in two different Group roles. Dan holds an MEng in Engineering Science from the University of Oxford, where he also represented the University at cricket, and is a member of the Institute of Chartered Accountants.
Ed Ralph PhD
Chief Operating Officer
Ed has extensive experience and a proven track record in technology management, digital marketing and eCommerce. From 2001 to 2015 he built and led the technology team at Abcam plc, having joined the company as the seventh employee and at a time when its revenues were just £200k. Before joining Quartix, Ed served in non-executive and consultancy roles related to technology and marketing at a range of Cambridge-based companies, including Red Gate Software, Axol Bioscience and Congenica. He joined Quartix full-time in February 2017 having worked with the company on several projects prior to that. Ed has a degree in biochemistry from Southampton University, a PhD in molecular biology and biotechnology from Sheffield University and was conducting post-doctoral research at the University of Cambridge prior to joining Abcam.
The following information is provided in compliance with Rule 26 of the AIM (Alternative Investment Market) Rules for listed Companies.
Name: Quartix Holdings PLC
Registered Office: Wellington House, East Road, Cambridge, CB1 1BH, United Kingdom
Registration: Incorporated and registered in England and Wales company registration number 06395159
Main Country of Operation: United Kingdom
Principal Other Countries Of Operation: France, United States of America
VAT Number: GB 918 4938 83
Quartix Holdings PLC is a holding company for;
- Quartix Ltd (UK Co No: 04159907),
- Quartix Inc (registered in the State of Illinois, no 6903-987-1)
Founded in 2001, Quartix is a leading supplier of subscription-based vehicle tracking systems, software and services in the UK. The Group provides an integrated tracking and telematics data analysis solution for fleets of commercial vehicles and “pay as you drive” motor insurance providers that is designed to improve productivity and lower costs by capturing, analysing and reporting vehicle and driver data.
Quartix’s vehicle tracking systems, which incorporate instrumentation to identify and transmit location, speed and acceleration data to the Group on a real-time basis, can be installed in a wide range of vehicles. The Group’s proprietary vehicle tracking software system provides business critical reporting and analysis of vehicle and driver data including timesheets and other customer KPIs to customers via any internet-enabled device. Vehicle tracking systems can either be purchased by the customer outright or rented on a monthly basis with no up-front cost and pricing is based on the level of functionality required.
As tracking technology and telematic data analysis have advanced, the functionality of vehicle tracking systems has increased making them more attractive and cost effective for end use customers. Consequently, the addressable markets in both the commercial fleet and telematics-based insurance sectors are anticipated to grow substantially over the medium term. The Berg Insight Report anticipates that the number of fleet management systems in active use will grow at an annual rate of 16 per cent. between 2012 and 2017 in Europe. The Group operates an effective, low cost remote sales model, based on direct telephone marketing and indirect sales including the use of price comparison websites and distribution networks, making it well positioned to grow both in the UK and internationally.
- Quartix Holdings Plc, Interim Report 30 June 2018
- Quartix Holdings Plc, Financial Statements 2017
- Quartix Holdings Plc, Interim Report 30 June 2017
- Quartix Holdings Plc, Financial Statements 2016
- Quartix Holdings Plc, Interim Report 30 June 2016
- Quartix Holdings Plc, Financial Statements 2015
- Quartix Holdings Plc, Interim Report 30 June 2015
- Quartix Holdings Plc, Financial Statements 2014
- Quartix Holdings Plc, Interim Report 30 June 2014
- Quartix Holdings Ltd, Financial Statements 2013
- 13 August 2018 Exercise of Options
- 25th July 2018 Quartix Holdings Plc Interim Results
- 2 July 2018 Quartix Holdings Plc Trading Statement
- 26 April 2018 14:58 Director Share Transfer
- 23 April 2018 07:00 Queen’s Award for Enterprise
- 27 March 2018 14:46 Exercise of Options
- 27 March 2018 14:42 Result of AGM
- 27 March 2018 07:00 Trading Statement
- 12 March 2018 18:10 Director/PDMR Shareholding
- 26 February 2018 07:00 Quartix Holdings plc Full Year Results 2017
- 16 January 2018 17:33 Director/PDMR Shareholding
- 12 January 2018 07:00 Trading Statement
- 01 December 2017 13:29 Issue of Equity & Directorate Changes
- 10 November 2017 07:00 Holding(s) in Company
- 08 November 2017 15:26 Holding(s) in Company
- 27 September 2017 07:04 Directorate Change
- 01 August 2017 07:00 Director/PDMR Shareholding
- 26 July 2017 07:00 Directorate Changes
- 26 July 2017 07:00 Interim Results
- 03 July 2017 07:00 Trading Update
- 21 June 2017 07:00 Exercise of Options
- 18 April 2017 12:20 Director/PDMR Shareholding
- 13 April 2017 17:00 Holding(s) in Company
- 30 March 2017 12:20 Holding(s) in Company
- 30 March 2017 08:01 Holding(s) in Company
- 28 March 2017 13:20 Exercise of Options
- 28 March 2017 11:40 Result of AGM
- 28 March 2017 07:00 AGM Statement
- 09 March 2017 10:10 Exercise of Options and Total Voting Rights
- 02 March 2017 11:13 Director/PDMR Shareholding
- 27 February 2017 07:00 Quartix Holdings plc Full Year Results 2016
- 18 January 2017 07:00 Trading Statement
- 22 December 2016 13:41 Holding(s) in Company
- 15 September 2016 07:00 Holding(s) in Company
- 09 August 2016 09:13 Exercise of Options
- 05 August 2016 16:12 Holding(s) in Company
- 01 August 2016 09:43 PDMR Shareholding
- 27 July 2016 07:00 Interim Results
- 01 July 2016 07:00 Trading Update
- 19 April 2016 13:55 Director Share Transfer
- 04 April 2016 07:03 Holding(s) in Company
- 29 March 2016 12:16 Result of AGM
- 29 March 2016 07:00 AGM Statement
- 29 February 2016 13:42 Exercise of Options
- 29 February 2016 07:00 Quartix Holdings plc Full Year Results 2015
- 15 January 2016 07:00 Trading Statement
Company, market and background
What are the origins of the company, and where did the name Quartix come from?
Four founders started the company in 2001 to focus on the market for vehicle tracking systems, software and services used by the commercial fleet sector. Our target market was then, as it is now, small to medium-sized fleets of light commercial vehicles. The name “Quartix” was the suggestion of one of the founders, for which the URL www.quartix.net and www.quartix.co.uk were available. We purchased both www.quartix.com and www.quartix.fr and other Quartix domains more recently.
What do you estimate your market share to be?
We believe that of the 3.6 million+ commercial vehicles in the UK, roughly 3 million of these are light commercial vehicles (i.e. vans) and that approximately half of these are operated by fleets which would be a potential target for our technology. Of these 1.5 million vehicles, we estimate that around one third are already equipped with some form of fleet management or vehicle tracking system, and that therefore (with a subscription base of around 100,000 units in the UK) we have around 20% of the current market.
Who are your biggest competitors in the UK, France and USA? How do you compare with them?
Other companies which compete in this market include, inter alia: TomTom, Masternaut, Fleetmatics and Teletrac. We do not comment on their, or our, relative competitive strengths and weaknesses.
In July 2016 Quartix announced an intention to focus more on its fleet operation. How does this impact on insurance operations?
The Group will concentrate its business development activities in insurance on those opportunities which make best use of the significant technological and service advantages that the Group has. The insurance capabilities of the system can be seen at www.quartix.net/insurance.
The company appears to command higher margins than many of its competitors. Why is this?
Our typical service charges are shown on our website, and these charges reflect the value of the software and services that we provide for our customers. Ongoing marginal costs for these are accounted for by the SIM card and mapping costs. The fleet tracking business, once the equipment and installation costs are absorbed, is therefore inherently high margin, reflecting the investment that we make in our software systems. We write all equipment and installation costs down immediately following installation.
The company is especially associated with the building, maintenance and construction industries so would you call it a cyclical company?
To some degree, yes, but this did not affect us unduly in the last recession, and we now have a broader spread of customers, including many from the public sector.
Is the fact that you are spread over four locations not a problem for you? Do you have any future plans to consolidate them all in one place?
We operate common VPNs, database systems and CRM and other business applications across each of our 4 UK sites and our Chicago office. We have recently introduced a common VOIP phone system across our operations. Communication and collaboration across functions and locations is extremely good. In addition to this, each of our R&D locations has a specific area of responsibility, as follows:
Telematics hardware, firmware and communications servers are developed in Cambridge.
All our web-based user applications and reporting are developed in Leatherhead
Systems, networking and database design are all conducted in Bishop’s Waltham.
Our sales, logistics, customer support, administration and insurance telematics teams are based at our main office centre in Newtown, Mid-Wales.
Each of these teams works effectively with the others and we have no plans to consolidate these operations.
How do you plan to prepare for the introduction of General Data Protection Regulation (GDPR) in May 2018?
Quartix is working with suppliers and partners to ensure that we continue to be compliant with all regulations including GDPR.
Product and technology
How big is the risk to your business of emerging disruptive technologies (i.e. using mobile phones for tracking)?
We constantly monitor the potential risks posed by both OEM –fitted technology and by the use of smart phones in vehicle tracking. Our current opinion on these matters are as follows:
- OEM-fitted technology: our customers typically choose a single software solution and reporting tool to cover their whole fleet, regardless of vehicle manufacturer, type or age. Although it is quite common for vehicle manufacturers to offer some form of telematics solution for its own products, these devices and software do not generally interface with those provided by other vehicle manufacturers.
- Mobile phone applications: whilst these undoubtedly have a place in segments of the market, most of our customers use the tracking system to regulate overtime and manage their mobile workforces. They expect the system to be tamper-proof, and for it to record every movement and journey that the vehicle makes. This is simply impractical with a mobile phone, as it could easily be left at home or switched off, or become discharged (the use of GPS increases battery drain).
Investors must, however, form their own opinions and conduct their own research in order to satisfy themselves regarding the level of risk associated with investing in Quartix.
Why can I not simply buy a tracker device from Amazon, or use another company’s software with your tracking system?
The link between our tracking systems and our communications servers is encoded using our own, proprietary, protocol. We registered a patent for this protocol soon after the foundation of the company. For security reasons it would not be possible for other applications to interpret and use this data without detailed technical information from us. Similarly it is not possible to purchase and use a GPS tracking system without an appropriate fleet management software application which is compatible with the tracking system.
Is there anything unique in the company’s database systems and other intellectual property. How important are these to the success of the company?
We use enterprise level database systems and whilst there is no single aspect of the design of our databases which is unique, we derive substantial competitive advantage from the use of our proprietary database systems integrated with best-in-class CRM and marketing automation systems.
All intellectual property in the company’s telematics hardware, firmware, server software, database systems and application software is proprietary to Quartix, and is of great importance to the success and profitability of the company.
Can you monetise the Safe Speed Database ?
The Company’s “Powered by Quartix” initiative for the insurance sector, which it launched at the middle of last year, offers insurance brokers an off-the-shelf telematics product allowing them to compete effectively in the young driver market. The SafeSpeed database is unique in comparing the behaviour of young drivers on particularly dangerous roads (such as single-carriageway rural roads) with that of more experienced fleet drivers on exactly the same road, helping to identify and coach those who are at risk of accident. Loss ratios on the first programme to use it have been very good so far.
Executive salaries and benefits appear to be low in relation to other quoted companies. Why is this so and is it likely to change?
Executives on both the plc and operations board have traditionally received the same annual pay review as all other employees. Each executive has either an equity stake in the business (through their own investment) or share options.
What is your option granting policy going forward in terms of the annual % of number of shares? Is there a maximum cap on total outstanding options?
Current options outstanding amount to less than 5% of the share capital. The company will continue to grant options to employees and managers in order to retain, motivate and incentivise them, but it is not envisaged that this would result in any significant dilution for existing shareholders.
What does the goodwill shown on the balance sheet relate to?
Please see the following link for more details: http://www.logisticsit.com/articles/2008/02/01/3355-quartix-takes-the-next-step-forward-with-bank-of
Can you provide historical numbers for sales, profits etc?
* Note: adjusted to exclude exceptional gain of £0.25m in 2014
What is your expected mid-term (five to ten years) growth rate?
Unfortunately we are unable to comment on or offer a prediction of our future growth rates.
We can say that we are seeking sustainably superior financial performance, in terms of:
- Organic fleet revenue growth
- Return on sales
- Gross margin
- Free cash flow conversion
- Recurring revenues /sales
- Revenue per head
The following information is correct as of 27 July 2018.
The Company’s issued share capital comprises 47,709,604 ordinary shares, each with a nominal value of £0.01. Each share has equal voting rights.
The number of the Company’s securities not in public hands is: 20,918,781 ordinary shares representing 43.85% of the issued share capital.
The Company has been notified of the following significant shareholders. Significant shareholders are those holding 3% or more of the shares in issue.
|Name||Number of shares||Percentage (%)|
|Andrew John Walters*||17,855,986||37.43%|
|Andrew Martin Kirk||4,009,853||8.40%|
|Liontrust Investment Partners LLP||3,756,043||7.87%|
|Cat Rock Capital Master Fund LP||3,650,485||7.65%|
|William Arthur Hibbert||2,663,000||5.58%|
|Kenneth Vincent Giles||1,871,800||3.92%|
*Includes shares held as family interests or by virtue of position as beneficiary or potential beneficiary of certain trusts.
Nominated Advisor and Broker
Address: 60 New Broad St, London, EC2M 1JJ
Grant Thornton LLP
Address: 101, Cambridge Science Park, Milton Rd, Cambridge CB4 0FY
Address: Shakespeare House, 42 Newmarket Rd, Cambridge CB5 8EP.
The Board of Directors is responsible for determining, implementing and reviewing the strategy, budgeting and corporate actions of the Company. The Directors recognise the importance of sound corporate governance and whilst the FRC Combined Code on Corporate Governance formally applies only to companies listed on the London Stock Exchange, the Company has developed procedures to ensure that, as far as is practicable, it complies with most of the main principles of the Combined Code in line with its size and stage of corporate development.
The Company is subject to the UK City Code on Takeovers & Mergers
The Board is chaired by Paul Boughton as non-executive chairman, with Paul Boughton and Jim Warwick as an independent non-executive directors. The Board currently consists of the non-executive chairman, one non-executive directors and two executive directors. The Board meets at least ten times each year.
Division of Responsibilities
The Chairman is responsible for leadership of the Board, setting its agenda and monitoring its effectiveness. He ensures effective communication with shareholders and that the Board is aware of the views of major shareholders. He ensures that the executive directors develop a strategy which is supported by the Board as a whole. The executive directors through the managing director are responsible for executing the strategy once agreed by the Board.
A memorandum on matters reserved for the Board can be downloaded here.
Independence of non-executive directors
The non-executive chairman and independent non-executive directors bring wide and varied commercial experience to the Board and Committee deliberations. They are appointed for an initial three-year term, subject to election by shareholders at the first AGM after their appointment, after which their appointment may be extended subject to mutual agreement and shareholder approval. The Company remains committed to a Board which has a balanced representation of executives and non-executives.
The Board has established the following committees with formally delegated rules and responsibilities.
The function of this committee is to review and recommend compensation strategies in order to recruit and or retain executive board members of a sufficient calibre to deliver the Company business plan. It meets at least once each year.
Chair – Jim Warwick
The function of this committee is as follows:
- To receive the audited accounts and report of the Company appointed auditors.
- To scrutinize and clarify any qualifications, recommendations and/or observations within the audited accounts and report.
- To present the above to the Company Board and subsequently review the effectiveness of resultant corrective and/or preventative measures.
The Audit Committee meets at least twice each year.
Chair – Paul Boughton
The function of this committee is to meet as necessary to consider appointments to the Board of Directors and to coordinate succession planning. The Company operates a share dealing code for Directors as required by the AIM rules.
The Nomination Committee meets as required to fill vacancies or appoint additional persons to the Board.
Chair – Paul Boughton
Communications with Shareholders and Investor Relations
The Company is committed to maintaining good communications with investors. Normal shareholder contact is the responsibility of the non-executive chairman together with the managing director and the finance director.
There is regular dialogue with institutional investors who, along with analysts, are invited to presentations immediately after the announcement of the Company’s interim and full year results. Shareholders have the opportunity to meet and question the Board at the AGM. The Independent non-executive directors and chairmen of the Audit, Remuneration and Nomination Committees will be available to answer questions. A detailed explanation of each item of special business to be considered at the AGM is included with the Notice of Meeting which is usually sent to shareholders at least 20 working days before the meeting.
Call 01686 806 663
Chief Executive Officer
Chief Financial Officer & Company Secretary
Investor information is set out in accordance with AIM rule 26