MONEYWEB, Alec Hogg, 05 September 2006
DigiCore develops on-board computers that go into vehicles.
MONEYWEB: Nick Vlok, the chief executive of DigiCore is with us in the studio. Is Arthur on the money there? One to watch out for in the future? You’ve had a good run, Nick.
NICK VLOK: Thank you. Yes, very much so, Alec. I think we were very fortunate if we look back over even the last four to five years. We’ve just been chipping away, just doing the same thing, quicker, better, faster and just building organically.
MONEYWEB: “Quicker, better, faster” – sounds like a bank!
NICK VLOK: Sorry, that’s not what I meant.
MONEYWEB: What is the business of DigiCore?
NICK VLOK: Alec, we really design, develop on-board computers that will go into vehicles; we then build them in our factory in Durban, sell them through to the end user and put people in a position where they can actually monitor their vehicles and know exactly what drivers are doing. We’ve also diversified into the start-up vehicle-recovery market in the last 12 months, so that is really where we see the growth coming from in the next couple of years.
MONEYWEB: Unit sales are up 52% – is that because petrol prices have gone so high that people now have a bigger incentive to follow what happens to their vehicles?
NICK VLOK: That would definitely have been one of the factors that did play a part in our growth, Alec. You’ve got to manage your fleet much better than in the past, just purely from a cost point of view. Vehicle sales have also been dramatically up over the last two years, in actual fact, which also helped and made some contribution to the growth in the business, yes.
MONEYWEB: You’ve mentioned that you’re in the vehicle-tracking industry now as well. Can you give us your perspective on what’s happening with crime or the theft of vehicles in South Africa?
NICK VLOK: We were involved recently with an organisation called Business Against Crime, which I think everybody is fully aware of, and some of the figures that were disclosed to us at that stage really indicated to us that it might have come down slightly, but it is still extremely high. And when I say slightly, I really mean slightly – 1 or 2%.
MONEYWEB: So. It’s a problem and we need this war against crime to be maybe accelerated a little.
NICK VLOK: I think so, and this is why we’re there.
MONEYWEB: Having a look to the future, Arthur seems to think that even though your share price has gone strongly, it’s worth holding or maybe even, Arthur, buying stock still?
ARTHUR BUCHNER: Well, it starts to move into a couple of asset managers’ vision. When it’s a 70c stock, it’s relatively illiquid and it’s a small cap and guys don’t want to touch it until it actually shows that it could actually produce a couple of earning coming through. Now that it’s into the R3 stock, the market capitalisation is starting to be more enticing to asset managers, and not just to the small-cap funds
MONEYWEB: So you have to do more of a roadshow now and talk to more of the professionals, Nick?
NICK VLOK: Yes, it seems like it, Alec.
MONEYWEB: And what would you say to your investors, those guys who got in a 70c and have had a fantastic run? Do they stick with it?
NICK VLOK: No, I think they should hang in there, Alec, most definitely. I think, again, you know, if you look at the vehicle population out there and I think you know as well by now we’re currently in 21 countries abroad, the market scope and opportunities are still extremely big, huge.
MONEYWEB: So, the opportunity’s not only in South Africa, where I guess market share growth is possible, but places like Pakistan, Europe and so on.
NICK VLOK: Your memory is quite good, yes. Pakistan has been one of our star performers for the last three or four years. Also, obviously crime-related. If you look at Europe, cost-driven, expensive labour on that side, so they need to manage their people relatively well.