Quartix Technologies – H1 Trading Update shows leader in real-time vehicle tracking looks undervalued, 95%+ ARR, shares 249p, brokers TP 340p

04.07.2025

Ahead of declaring its first-half results on Thursday 24^th July, the integrated telematics cloud-based platform Quartix Technologies (LON:QTX) yesterday updated the market.

The group is a leading supplier of subscription-based vehicle tracking systems, software and services.

A massive pointer to the group’s business is provided by its very high net revenue retention, which on a trailing twelve-month period is running at an increased 97.3% (95.7%).

The Business

The group was set up in 2001 by four industry professionals in the UK, who have a combined experience in systems design, telemetry, embedded computing, communications and database design and implementation.

Globally the group now has more than 31,588 fleet customers.

In fact, across some 8 countries, it has installed more than 800,000 units since its establishment.

Each month it signs up about 400 new businesses to its services.

The Quartix vehicle tracking lets fleet managers view the live location of their fleet vehicles, at any time, from any device.

Fleet managers from many sectors benefit from the tracking services provided.

And this is the bit that I really like – some 95% of the group’s revenue is derived from recurring subscription services.

As an example, a range of Quartix unit customers operate in various sectors, tracking vehicles, and thus operatives, in:

Building and construction:  like excavation, painting and decorating, plumbing, electrical services, bricklaying, flooring, drywall, roofing, siding, and air conditioning.

Trades and field services:  such as sign installation/ maintenance, shopfitting, pest control, merchandising, machine tools, replacement windows, cleaning, and environmental services.

Transportation:  covering the full range of transportation services, including trucking, courier and dispatch work, taxis and specialised services such as the transportation of fine art and valuables.

Security:  including CCTV installation, patrol car monitoring, staff transportation, monitoring of expensive plant and machinery, and locksmiths.

Distribution:  such as for raw materials, food, poultry, packaging, hardware, electrical goods, jewellery, and component distribution.

The group remains as a leader in telematics technology, by continuing to offer cutting-edge solutions that meet evolving market demands, such as the recently launched Quartix Check walkaround app and the company’s connected dashcam solutions, both of which were well-received by customers and contributed to overall growth in 2024.

Outlook And Management Comment

The company stated that accelerated growth in ARR and emphasis on overhead efficiency provide the opportunity for increased investment in ARR growth in 2026 as well as continued improvement in profitability.

Its Management is looking forward to the rest of this year and next year with confidence.

Chairman Andy Walters stated that:

"We have made strong progress in the first half of 2025.

Over the past 12 months our annualised subscription revenues have risen by a record £4.1m, or 13%, to £35.0m; we finished the first half with a substantial order backlog for installation in July and August."

The Equity

There are some 48.39m shares in issue.

Founder Andrew Walters is the largest equity holder (22.44%), while other private investors include Andrew Kirk (8.29%), William Hibbert (5.50%) and Kenneth Giles (3.87%).

The larger professional holders include Liontrust Investment Partners (11.61%), Charles Stanley Investment Management (8.99%), Sanford DeLand Asset Management (7.85%), Schroder Investment Management (5.50%), JP Morgan Asset Management (1.25%), and abrdn Investment Management (0.71%).

Brokers Views

Analysts Michael Hill and Kimberley Carstens, at Cavendish Capital Markets, have maintained a Target Price for the group’s shares at 340p.

They consider that recent upgrades and the record H1 highlights that Quartix is excellently positioned to continue to outperform, and the brokers are looking forward to more detail at the H1 results on 24^th July.

The analysts suggest that Quartix has the potential for upside from further sales investment, further enhancements to gross margin, and further optimisation of overheads.

Their estimates for the current year to end-December 2025 are for revenues of £36.0m (£32.4m), with adjusted pre-tax profits of £6.9m (£6.2m), generating earnings of 10.8p (9.5p) with an increased dividend of 7.0p (4.5p) per share.

For the year to end December 2026, they see £39.9m in revenues, £8.4m profits, 13.3p earnings, and a 7.5p dividend per share.

At Zeus Capital, analysts Carl Smith and Bob Liao, retained their 280p a share valuation on Quartix.

They estimate current-year sales of £35.9m, with £6.9m profits, 10.3p earnings and a 5.6p dividend.

For the 2026 year, the analysts go for £39.0m revenues, £8.4m profits, 12.5p earnings and a 9.5p dividend.

In 2027 the brokers look for £40.4m revenues, £8.8m profits, 13.0p earnings and a 13.0p per share dividend.

My View

Yet another positive update from Quartix, highlighting its excellent 95% ARR giving strong visibility of its potential earning power.

The shares, which were up to 270p two months ago, are currently trading at around 249p, valuing the whole group at just £120m.

I believe that they are undervalued and remain a very Firm Hold.

(Profile 17.10.2024 @ 150p set a Target Price of 185p*)

Asterisk * denotes that Target Price has been achieved since Profile publication.