Pretoria – DigiCore Holdings, the listed fleet management and vehicle tracking firm, is to move part of its manufacturing to China.

Nick Vlok, DigiCore’s chief executive, said yesterday that a new affordable stolen vehicle recovery product would be made in China, largely because of cost issues.

DigiCore has a factory in Pinetown in KwaZulu-Natal that employs about 125 people.

But Vlok said the group did not have plans to shift all its manufacturing to China. It would be difficult to move its fleet management products because they were bigger units, required maintenance and had to be reprogrammed.

He said DigiCore was still in negotiations with a Chinese firm on the production of its new product but manufacture was likely to start in three to four months.

It was hoped that production in China would add to the bottom line this financial year by making the units more competitive. It would be “smaller, smarter and more effective” than current models. The aim was to make it affordable to the average car owner.

In the past three to four months, Vlok said, DigiCore’s stolen vehicle recovery products had made big inroads into new sales channels that were very difficult to break into.

He said the group had established firm relationships with about six insurance firms and brokerages and with some vehicle dealership groups.

DigiCore was in discussions with original equipment manufacturers, particularly in the UK, about the factory installation of its fleet management products in light commercial vehicles.

“This is part of our strategy and we’re confident we’ll make a breakthrough into this market down the line,” he said.

DigiCore yesterday posted a 47 percent year-on-year increase in headline earnings a share to 64.7c in the year to June.

Earnings were boosted by an R8.5 million profit from the expropriation of its previous head office in Centurion for the Gautrain project and R7 million in foreign exchange profit after the devaluation of the rand.

Revenue rose by 55 percent to R684.8 million. Operating profit improved by 52 percent to R204.1 million.

A final dividend of 13c a share lifted the dividend for the year to 19c, a 46 percent rise.

Vlok said this profit achievement had come on the back of seven consecutive years of excellent growth.

Francois Schindehütte, the financial director, said DigiCore’s international operations had grown revenue by 78 percent and its local operations by 37 percent in the year.

DigiCore has grown profit at a compound rate of 53.8 percent over the past seven years.

Bruce Richards, DigiCore’s international director, said the number of units exported grew by 60 percent during the year to 52 617, representing half of its production. The group now operated in 36 countries.

DigiCore’s stock fell 5.8 percent to R6.50 yesterday. The electronic and electrical equipment sector fell 1.75 percent.