Quartix Technologies PLC Konetik update (2500W)
11 Dicembre 2023 - 8:00AM
UK Regulatory
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RNS Number : 2500W
Quartix Technologies PLC
11 December 2023
Quartix Technologies plc
("Quartix", "the Group" or "the Company")
Konetik update.
The Company announced the acquisition of Konetik on 15 September
2023. As noted in the trading update of 6 October 2023, a detailed
review of the acquisition of Konetik Deutschland GmbH ("Konetik")
and the potential for the Company's Evolve product line, a tool
that assists fleet managers with planning their migration to
electric vehicles, has now been completed. Following his return to
the Company and appointment to the Board as Chairman on 26
September 2023, Andy Walters, major shareholder and founder of the
Company, led this review.
Launched in 2022, the Evolve product has been sold as an upgrade
to a small number of existing customers, principally in the UK
public sector, and revenue generated to date has been very limited.
Whilst users are pleased with reports provided by Evolve, repeat
usage by most has been very low and renewal rates for early
adopters has been disappointing. Following the review, the board
considers that the ability to increase the customer base and scale
the business in the next two years will be substantially more
challenging than had been envisaged at the time of making the
acquisition. This is due to:
1. demand for Evolve, particularly in the private sector, has
been adversely impacted by delays to EV transition deadlines with
the UK government's decision to postpone the ban on the sale of
petrol and diesel vehicles to 2035.
2. the ability to generate substantial increases in the volume
of license sales is now expected to require much higher investment
in the software infrastructure due to limitations in the
scalability of the current product
3. the customer acquisition cost and implementation support are
now expected to be much higher than previously anticipated
4. the customer lifetime is now expected to be significantly shorter than previously anticipated
In addition, the Board considers that the Evolve product is not
an effective tool for the acquisition of new vehicle tracking
customers. Finally, the anticipated resource requirements for the
development, sale, support and maintenance of Evolve means that
such investment is not anticipated to achieve an appropriate
return.
Following this review the Board is committed to reducing the
impact of this acquisition on the operating performance of the
Company as soon as possible. However, a further consequence of the
conclusion of the review is, regrettably, that a substantial, one
time, non-cash impairment in the goodwill arising from the Konetik
acquisition (GBP2.5 million) will need to be made in the Company's
2023 financial statements.
Quartix generates strong recurring revenues and operational
cashflows from its subscription base and the Company will refocus
its efforts on its primary strategic objective of delivering
profitable growth in this core business.
Andy Walters, Executive Chairman, commented:
"Quartix provides subscription-based telematics services to more
than 26,000 customers, for more than a quarter of a million
commercial vehicles. Over the past 5 years Quartix has added new
territories and developed additional channels to market which offer
exciting growth potential for the future.
Since my return to the Company at the end of September I have
been very grateful for the support of the executive management team
in conducting this review and am delighted that I have their full
commitment to returning the Company's focus to its core
business."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 as retained as part of UK
law by virtue of the European Union (Withdrawal) Act 2018 as
amended.
For further information, please contact:
Quartix (www.quartix.net)
Andy Walters, Executive Chairman
Emily Rees, Chief Financial Officer 01686 806 663
Cavendish Capital Markets Limited (Nominated
Adviser and Broker)
Matt Goode / Seamus Fricker (Corporate
Finance)
Tim Redfern / Sunila de Silva (Corporate
Broking) 020 7220 0500
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END
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December 11, 2023 02:00 ET (07:00 GMT)
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