Good day. Thank you for joining us today. I'm Zak Calisto, the founder and CEO of Karooooo. During this presentation, we will be making forward-looking statements, including statements regarding our financial outlook for FY 2023. Please read the disclaimer before you make any decisions. All reconciliations to non-IFRS metrics are in our earnings announcement, the 6-K, published on our website. Before we talk about our results of FY 2022, we want to demonstrate to you the way we think about our business. As we only charge on average ZAR 150 per month per vehicle for what we do, the large impact that our solution has on businesses is often misunderstood or underestimated. Our platform helps our customers digitally transform their businesses. We allow them to be extremely efficient and competitive as they digitalize their on-the-ground operations.
Fundamentally, our customers are able to do much more with less by using our platform. We have been building our platform for over a decade and have evolved far beyond monitoring vehicles. Specifically in the last years, we have allocated a large amount of capital into R&D, and we will continue to do so. We have built our platform for the future, so we can be long-term partners of our customers. We understand that many of these developments will not give us the immediate results that we want, and we will get the benefits in the medium to long term. As we all know, mobility is core to all the on-the-ground operations of any business. We think beyond connected vehicles and equipment.
The operating environment of any business is dynamic and challenging. You have trucks, and you need to know where they are and what they're doing. To keep them moving, they need fuel, tolls, tires, a battery, maintenance, licenses, insurance. Oh, and most importantly, drivers. Drivers need permits, licenses, working hours, training, driving behavior, schedules, and permissions. Who was driving when you received that speeding fine? You have to monitor drivers' productivity and ensure they're adding real value to your business. You have your cargo. You need to track it from pickup within your grounds and to your customer. Nothing can go missing. The vehicle your driver is allocated needs to fit all the cargo and needs to arrive on time in good condition. You also have machinery and assets such as cranes, tractors, and containers.
You need to ensure your operational grounds are being used efficiently and that teams are ready to load and offload goods promptly. Many vehicles, many assets, many employees, many moving parts. You need effective resource scheduling and operational teams that know what's going on, working together. On-the-ground operations are the foundation of any business, but the operations need a backbone to drive and facilitate them. There's finance, HR, sales, and marketing. Information needs to flow across departments clearly, effortlessly, and quickly for businesses to keep innovating and remain competitive. Finance wants the actual time spent at a customer site for billing, the cost of operations, and where your leakages are in order to improve business capital allocation. HR pushes to keep all your employees safe and needs accurate overtime logs. Marketing needs assurance about your service quality and time to service a customer.
With technology enhancing your business, they know there's no beating your customer service, and you have a competitive edge. Finance knows that to meet budget this month, you need to increase your sales, but operations know you're at maximum resource capacity already. HR needs to recruit more team members, and procurement need to buy more vehicles. Everything moves together, facilitating quick business decisions. All departments in a business have operations, and they all need to be connected. No way your business can scale in time for those increased sales? Connect to another business and let them service the customer, so you don't have to say no to more revenue. Your customer won't know the difference. Businesses need an end-to-end platform that plugs straight into their operations and empowers them to keep growing. An intuitive platform seamlessly connecting vehicles, equipment, warehouses, offsite grounds, people, teams, and systems.
A powerful platform that contextualizes IoT data to deliver game-changing, actionable insights for a new forward-thinking world. Karooooo doesn't just innovate for where our customers' operations are today. We're planning and developing for where they need to be in a decade. We're building to create an agile operations ecosystem where businesses and economies can achieve more with less.
Hopefully, the video that we've all watched has helped everybody better understand our business. Fundamentally, our mission is to establish the leading on-the-ground operations cloud that will allow us to partner with our customers for the long term. We're now gonna watch another video that will show what one of our customers' day-to-day operations looks like.
Let's keep it real. Running a business isn't child's play. It's challenging, but we make it easy. We know all about the moving parts and ones that should be moving but aren't. We know this because we are operational too. We've got thousands of important moving parts, and we figured out how to keep them moving. We control every part of our own business, and we help businesses do the same for theirs. Everything should work like clockwork, and it can. Right now, your forklift, driven by Marvin, just picked up your stock. He's loading it onto one of your trucks that Harry is just idling at the delivery bay. Your system just lets you know that your stock headed for John's warehouse has just left the premises.
Your reliable driver, Harry, accepted the job on your delivery app before leaving and knows exactly where he is headed and what needs to be done. John has already received a notification that Harry is on his way with his goods. John is able to live track Harry's entire journey from dispatch to delivery. Your fleet management team back at the office can also see that everything is on track with Harry. Something changed. John is not able to accept the delivery as scheduled, forcing him to change the delivery time and location. Thanks to the delivery app, you've already notified Harry in real time, saving him the unnecessary trip to John's warehouse. An AI alert has just popped up on your screen letting you know that Harry yawned. You know it's fresh on his shift, so you're not too worried.
Another alert just came through, this time to let you know that one of Harry's cargo doors has opened outside the delivery location. You double-check your cargo cameras from your app. It seems that one of the doors has accidentally opened. You safely call Harry from the Cartrack Communicator, so he can close the door before any cargo flies out. Sia, from your admin department, just got alerted that the truck Harry is driving is due for a service at the end of this month. It's going to be a busy period. Thankfully, this advanced reminder allows you to make all the necessary arrangements. Sia checks the engine diagnostics and confirms that there are no urgent warning lights before booking the maintenance services.
While that was happening, John just informed you that Max, his stock manager at his other warehouse, can actually assist in receiving the goods he previously put on hold. You quickly check in to see where Harry is and see he is close to your warehouse where you have extra stock to cover John's order. You instantly send Harry the job update. You've just received proof that Harry has delivered the goods, and Max has signed for it. Alice from accounts has just been informed and will be sending John an invoice. The next day, Alice checks her emails for the fuel fraud report. Harry's fuel card was used that night, but his vehicle was parked at the office. She checks Harry's truck and sees he left his card in the vehicle, so it couldn't be him.
After contacting the bank, it turns out that the card has been copied, and the bank agrees to refund the amount. Just like that, all from one platform, you know exactly what's happening, when it's happening, and how it's happening. It's all about the right insights at the right time. Insights that are proactive, simple, and actionable. Our job is to give you all the right tools, so you can do your job better and faster. Empowering everyone to empower everyone, connecting all the dots, and making everything just click.
After watching that video, I believe you can now better contextualize all the value that we bring to businesses. The businesses that we service are from very small SME customers right up to very large enterprises. Clearly, the larger the enterprise, the more complex its operations are, and the more value we can bring to the table to assist them in digitize their operations. Allowing their different departments to be able to talk to each other, allowing them to mitigate risk, allowing them to increase productivity, to have greater visibility of their operations. You know, we pride ourselves in continuing to develop our platform in order to continue to assist our customers in better digitizing their operations. We know that to digitally transform a business does not happen overnight.
We partner with our customers to take them through the different stages of building their business. One of the things that we pride ourselves on is the ROI that our customers get. They see the ROI benefits right from the first, second month. More importantly is they see the real benefits over time as they use our technology, which allows them to improve their businesses every day, one day at a time. We have a very diverse customer base, ranging from consumers to small, medium, large enterprises. We understand that all these businesses are very different given that they operate in different industries with different types of vehicles, and with very different operations. We also understand that in different regions, not only countries, but even within a country, there's different mindsets, and our ability to localize is very important for our success.
Given that all the data that we collect through our different industries and the billions of data points we collect on a monthly basis, this allows us to take knowledge to give business intelligence reports that learnings that we've had from one country or one industry can help assist other companies. It's being able to gather all this data and to understand that every customer has its own challenges. Putting this all together is really what we do to be able to help our customers digitally transform their operations. With the contextualized data that we give our customers, it allows them to optimize their day-to-day operations. Not only that, it also allows them to improve their long-term strategy of their business, the training of their staff, the way they organize their business.
It's the many effects that our customers derive from using our platform that allows them to be competitive, efficient, and drive real value for their businesses. Some of those decisions are not really offer instant gratification, because some of them is how they should be improving their own businesses. Without that knowledge, they don't even know what to improve. We are aware of the much-needed related services given our large data pool. We understand the untapped network effect of our platform. The scale of data on our cloud is vast and growing. We collect over 90 billion valuable data points on a monthly basis. We are at the earliest stage of a large and long-term growth opportunity. Mobility certainly caught all the ground operations of all businesses throughout the world.
The best way to understand the full opportunity is to look at the amount of vehicles that exist in each geography we operate in. We understand that some of these vehicles are consumer, others are businesses, and we understand that in certain geographies, we don't do consumer business at this point in time. If we look at South Africa, that's got over 10 million vehicles, or in the region of about 11 million vehicles. We currently have 10% of all vehicles on the road are on our platform. If we look at Southeast Asia, which has got well over 100 million vehicles, we've got a small, insignificant part, and we believe that is really our biggest opportunity.
At this point in time, or rather at the end of February, we had 145,000 vehicles, and we did grow at 22% despite COVID, and Asia is now starting to open up. We've seen in the month of April, there's been a lot of easing in the countries we operate, and we believe that will continue to ease specifically into the next six months. That opportunity, I think by Q3, we would have got momentum into growth. Europe has also got over 100 million vehicles. We've got 127,000 vehicles, and we will certainly allocate capital to Europe and hopefully grow that at well above historical growth rates. Africa has about the same amount of vehicles as South Africa. When we talk about Africa, we talk about Africa excluding South Africa, and we have 68,000 vehicles.
We are certainly also going to put efforts into growing that market. Another very important way of looking at what is the contributing factor in terms of on-the-ground operations, in terms of global GDP? It's been documented that it's well over 40%. As the world evolves and as data technology evolves, it certainly helps businesses grow. It helps them be competitive, it helps them be efficient, and we believe IoT data is key to improving operations. Our ARR was at February, $177 million. In ZAR, it was ZAR 2.727 billion. That has allowed us over the last years a compounded annual growth rate of 18%. Why do we win? Yeah, we believe these are the key reasons why we win. We are vertically integrated.
We an end-to-end all-inclusive IoT cloud software platform that we're clearly continuously improving and allocating R&D to. We have a well-established infrastructure, noticeably in some of the countries that we've been operating for longer. Other countries we will certainly be establishing a very strong infrastructure over the coming years. We have an expanding distribution network which talks to the well-established infrastructure. Our ability to execute and achieve has been proven over the last decade, and we continue to scale our business. Our operational technology partner, a customer-centric culture, high customer ROI, we believe is probably one of the most important aspects of why we win. We really drive our staff to be innovative. We drive an innovative culture. We allow our staff to break things, provided they remedy quickly. I believe these are the reasons.
Fundamentally, our culture is fundamentally the overriding reason why we win. We finished the year with over 88,000 commercial customers, and we will continue to drive that growth into FY 2023. We will now go through the 2022 financial results of Karooooo. As you all know, we started the financial year where I was the sole shareholder of Karooooo, which owned 68% of Cartrack, a listed entity on the Johannesburg Stock Exchange in South Africa. On the twenty-first of April, we successfully delisted Cartrack from the Johannesburg Stock Exchange. Karooooo took ownership of 100% of the shares, and we did in April a listing on Nasdaq, an inward listing to the JSE. Cartrack was founded in South Africa. Karooooo is now a company headquartered in Singapore with owning 100% of Cartrack.
We are delighted with our performance during this financial year, whereby we have met our outlook that we gave to the market for 2022. We have met the number of subscribers, the Cartrack subscription revenue on a constant currency basis, and Cartrack's adjusted EBITDA margin as well. That was 1,526,000 subscribers. In terms of subscription revenue, ZAR 2.625 billion and Cartrack's adjusted EBITDA margin of 47%. Further, the change in what we experienced in 2022 is in keeping with our long-term financial goals and certainly what we had planned for the year. The last two financial years have been quite difficult, but despite that, we have still consistently grown our subscription revenue and our customer acquisition. Our subscribers grew by 17%.
Our net subscriber additions grew by 23% compared to last year. Our subscription revenue growth on a constant currency basis grew by 19%. Revenue growth on a constant currency by 23%. Our subscription revenue as a percentage of total revenue is 97%. We're also delighted that we now have over 88,000 commercial customers on our platform. Karooooo continued to grow at scale in 2022. Total revenue in 2022 was ZAR 2.746 billion, up 20% compared to FY 2021. Adjusted EBITDA was ZAR 1.212 billion, up 8% compared to FY 2021. We have strong unit economics. We've got robust operating margins. We're consistently beating the rule of forty. We have a strong balance sheet, and we sit in a very strong cash position.
The strong growth is supported by customer retention rate. We ended the year of FY 2022 with a very strong cash position. Our net cash on hand was up 845% to ZAR 780 million. Three hundred and forty-nine million rand was money that we raised the net proceeds of the IPO in April. We also spent ZAR 70 million on doing an acquisition of Picup, and that puts us in a very strong position for growth into the future. Albeit, we don't believe we need the ZAR 780 million for the next 18 months, and we certainly have got also funding, which is largely untouched. Our debtors days for Cartrack was at 34 days, down one day compared to FY 2021.
After significant investment into R&D and customer acquisition during the financial year, we ended up with ZAR 379 million in free cash flow. Our operating activities, the cash raised through operating activities was rather flat at ZAR 932 million. We invested 16% more than the prior year into customer acquisition, predominantly customer acquisition, which is PPE. In the PPE is also now included an increase in inventory. Due to the shortage of components, we find that we have to increase the amount of inventory that we normally carry to be able to meet demand. In FY 2022, we did not experience any shortages of stock, and we're able to fulfill demand. Similarly, we believe FY 2023 we should not be faced with stock shortages either. We pride ourselves on our discipline with capital allocation over the years.
You know, we've got 16 years track record. Our earnings per share this year was ZAR 15.24. Our EBITDA margin growth was up 8%. Free cash flow, ZAR 379 million. This year we decided to declare a dividend of $0.60. The reason we declare dividends in US cents is because Karooooo's filings in Singapore is in US dollars. That's an equivalent of $19 million that we'll pay out in dividends. We have sufficient cash. We've generated sufficient cash during FY 2022. We believe with the ongoing generation of cash during FY 2023 and our projected growth for FY 2023, we are allowed for sufficient cash. You know, we certainly don't wanna be keeping cash that we don't believe we can invest in this next year. We've also got the bank facility that's at our disposal.
We feel very comfortable with FY 2023. Our business model, as everyone knows, is a very strong generator of cash. If we do reach a high level of accelerated growth, then we can always dip into our bank facility. Cartrack has a long history of consistent execution. We've been growing our business for 16 years now. Our subscribers are now over 1.5 million subscribers. Subscription revenue at the end of the year was close to ZAR 2.6 billion and operating profit at ZAR 750 million. After a ZAR 50 million fraud that we uncovered in February, we've taken all the steps necessary to make sure this does not happen again. We've back-tested our steps that we've put in place and feel comfortable this will not occur again.
Further, also in Q4, all the customers that we have given the benefit of the doubt in terms of financial ruin, those have all been written off. We're quite satisfied with the operating profit results that we did there for 2022, given the circumstances of two years. We will continue with our strong financial discipline, and we'll certainly look forward to a strong 2023. We had a record year in net subscriber additions. That was 220,000 compared to last year of 180,000. That was 23% up on last year. That's in our opinion, quite a good achievement given the COVID and the challenges that we've had over the last two years.
Importantly, our commercial customers, we now have over 88,000, and that was an increase of 17% on the previous financial year. We are well positioned to materially increase our investment for growth on the back of our attractive unit economics. Our lifetime value of our customers to our cost of acquiring customers over nine times. That is driven by our internal systems, our go-to-market strategy, and the quality of our staff and the quality of our product and the ability to retain customers. That is for us key to be able to win out in the market. Our average cost of adding a subscriber to our cloud decreased from ZAR 2,092 to ZAR 2,070.
Having said that, these two components were to the cost of acquiring a subscriber, the portion that you capitalize and the portion that you expense. The portion that you expense increased in FY 2022 from ZAR 660 to ZAR 718. That delta times the number of new sales that we did impacted our income statement negatively. In terms of what we capitalized, we capitalized a difference of ZAR 1,432 of 2021 compared to ZAR 1,352 in FY 2022. Our ARPU in FY 2022 was ZAR 151 compared to ZAR 154. What could have an impact there is the timing effect and also the exchange rates.
Our subscription revenue gross profit margin dropped from 73% to 70%, and that was mostly because of the write-offs that we did of customers that had been impacted either by, predominantly by COVID or other financial ruin. That's had an impact specifically in our quarter Q4, and we believe that margin expansion will return in gross profit expansion in 2023. Overall, our Cartrack adjusted EBITDA margin remains at 47%, which is certainly within our expectations for FY 2022. We grew all our subscriber bases in all the different segments despite COVID. South Africa grew by 17%. Asia grew by 22%. We still believe that Asia is our biggest opportunity. Europe grew by 15%, and Africa grew by 9%. In 2022, we increased our spend on R&D significantly.
It went up by 41% from ZAR 100 million to ZAR 141 million. Sales and marketing went up by 35% from ZAR 238 million to ZAR 322 million. We got net subscription additions of 23%. There's always a lag between the money spent on sales and marketing and the actual benefits. G&A was up by 10% from ZAR 477 million to ZAR 523 million. That is obviously excluding the ZAR 15 million fraud that we encountered in December 2021. We remain very strategic in the way we allocate our capital, and we believe this is very much in keeping with our long-term goals. We have our long-term targets, operating metric targets. Our research and development to be between 4%-6%. It was 6% in FY 2022.
Sales and marketing as a percentage of subscription revenue to be between 17%-19%. It was 13% in FY 2022. We would like to increase our spend in sales and marketing by an additional 50%. Our general and administration as a percentage of subscription revenue was 20%. We certainly would like to decrease that to between 12%-16%. Our adjusted EBITDA margin as a percentage of subscription revenue was 48%, and our long-term target is 50%-55%. Cartrack outlook for FY 2023. We are well geared to scale the business. We would like to see the number of subscribers between 1.7 and 1.5. Clearly, if we can surpass that would be better.
Our Cartrack subscription revenue, we're looking between ZAR 2.95 billion to ZAR 3.1 billion. We're looking at Cartrack adjusted EBITDA margin between 45% and 50%. Our SaaS ARR as at the end of February was $711 million and ZAR 2.727 billion. I would like to thank everybody that's joined us for the presentation, and I would like to open up for questions. Thank you very much. Question comes from Parker Lane from Stifel. As we look to accelerate sales and marketing investment in FY 2023, what should we expect the typical ramp-up of your new sales reps to look like? And do you expect sales efficiencies to remain stable throughout the year? The recruitment process is always a bit slower than one envisages.
We've already started recruiting in Q4. Clearly this does take time to get the right mix of people and the right people well trained. Clearly also when you do ramp up your sales staff specifically, if you really wanna do a strong ramp up, you do have to live with a lack of efficiencies, if that makes any sense, and that takes quite a bit of time to get right. We certainly are expecting, as we ramp up, a weakening of our unit economics. The next question. In the case of recent commercial customer wins, are the majority of these situations greenfield opportunities, or are you replacing a variety of competitive solutions?
Normally, we target and we always tell our staff the market is, you know, it's quite large, it's quite untapped. We certainly believe that. Clearly we, most of our customers that we get are greenfield. When we start tapping into medium-sized and large enterprise customers, where we come with a more sophisticated offering to help them, not only with looking at their vehicles but their whole operations, we now clearly are starting to be competing with competitors that are actually servicing those customers. We envisage over the next three years that we will start taking customers away from competitors, specifically if the competitors have not got a very comprehensive solution, and they haven't evolved over time. I have three questions from Matthew from William Blair: Which markets are you in Southeast Asia?
Does the car pool shown 100 million reflect those countries or the whole region? We are predominantly our biggest markets are Indonesia, Philippines, Thailand. We're in Malaysia. The only country in Southeast Asia we're not in is Vietnam. To be absolutely honest with you, I'm not sure if the 100 million vehicles includes Vietnam or not. We do have, once we settle in a bit more, to get into Vietnam, and that's why it's been included, potentially been included, but I'm not certain. I will definitely get back to you on that, Matthew. The next question. Why is the difference in EBITDA margin between Cartrack and Karooooo? The reason is that we've got Pick Up and we've got Carzuka. They're both loss-making entities at this stage. They're very much startups. Jointly, they have an EBITDA, negative EBITDA of ZAR 19 million.
Where is the $15 million, sir? Matthew, you wrote $50 million. It's actually $15 million. $50 million were booked in the P&L. It's booked under OpEx expenses under G&A. That was Matthew. I'm not sure if I said that was Matthew from William Blair, but I'm not sure if it was from William Blair. It was just Matthew. I've now got a question for Matthew from William Blair. My apologies. I'm not sure where the first Matthew is from. You mentioned you would like to increase the percentage of revenue that is spent on sales and marketing. Where do you plan allocating this additional investment, geo or product? Like to increase the percentage of revenue that is spent on sales and marketing. Well, we certainly, it's, we're gonna.
I'm not certain that I fully understood the question, Matt. We certainly intend one is we're spending the money on, obviously on product adoption, on actually our salespeople doing face-to-face on our call centers. I think overall just improving customer experience and customer adoption and attracting new customers. It's overall right through the spectrum of growing our business. It refers to that. For FY 2023 guidance, why is the subscriber growth range much wider than the subscription revenue growth range? The reason is there's in the financial modeling a lot of our customers that we've for instance got on in Q4, it depends on the timing. A lot of them came on in February, and that could affect the growth in subscribers and the growth in subscription.
That's why it doesn't quite match. The best way to model the subscription revenue growth is to take the subscriber growth of one year plus the previous year, get the average of those two, and that should give you more or less what to expect subscription growth to be. It's more based on that the two don't necessarily match. A further question from Alex. I wanted to ask about Cartrack's gross profit margins in Q4. Only 65% despite higher mix of subscription revenue this quarter. You touched on some write-offs. Can you quantify that impact and anything else impacted in the gross profit margin? Alex, I don't have the exact numbers, but our write-offs in Q4 was substantially higher than certainly Q1 and Q2.
In Q3, we already told the market that we would be doing write-offs in Q4. That's obviously impacted our gross operating profit clearly in Q4. We certainly expect a margin expansion on gross profit margin expansion in FY 2023. Matthew from William Blair: What are your key investment areas for fiscal year 2023? I would say sales and marketing, expansion, training, also building up some G&A, and certainly continuing to develop and improve our product. I think overall we're gonna be continuing to invest right through all the different, whether it's G&A, whether it's sales and marketing and R&D.
Clearly, our main focus is going to be sales and marketing and with R&D. Embedded in your FY 2023 outlook, this is by Mike Walkley, what are your assumptions for GM trends, base operating expenses investment? I'm not quite sure what GM is. I'm not sure what the abbreviation is and what are your assumptions for the trends. I'm gonna skip that question. Mike, forgive me for my ignorance, not knowing what GM is. I'll look it up, and I'll try and get back to you. Given the shift upwards in sales and marketing spend in the guidance, will you be increasing your long-term revenue growth guidance?
We certainly, what we're trying to do is to be conservative in a way, and we also do not wanna be promising the investor community things and not delivering on them. We'd certainly like to beat our guidance now that COVID is out of the way. We certainly would like to do that, and hopefully we can come in on the upper side of the guidance that we are putting out for FY 2023. We got a question from Histra. The question is: Do you see any significant impact of inflation in your business? Clearly we can feel it on the ground, especially now with the unease in Europe. We've seen the fuel prices go up, and we've also seen food prices going up.
Clearly it's a concern, what impact this will have on our business in terms of inflation. Given our economies of scale, we are thinking, is it worth it as repricing ourselves in the market, or will we just benefit from the economies of scale and not need to change our pricing? Clearly, we are expecting inflation to be a real thing in the next year or so. We'll have to play it by ear and work with it. We have a question from Lesedi. What information is the USA office yielding? Does management see difficulty in the market or opportunity to expand? I don't think we see difficulty in the USA market. I just think, you know, we haven't got sufficient people to go tackle the USA.
We've got so much to do in the current segments we're in. I think we've learned to rather focus on what we do. We've got a large untapped opportunity, and let's not spread ourselves thinner. We certainly believe that the Americans are really good at developing software, and it's always good to see, one, what are the trends in America, what are our competitors doing, what is the market, in which way is the market moving, what's happening in logistics. There's a lot of insights that we get from, both from what businesses are doing, and certainly what's happening in the software space. When we talk about software space, it's not necessarily only in our industry, but it's software that actually relates to any software that relates to helping customers on the ground, on the operations.
Because we've moved just from fleet management and we take other software and see how can we bundle everything into one platform to make our customers' lives easier. We've got a question from David from SaltLight Capital Management. Congrats on the results. What gets you excited by Carzuka? What opportunity are you seeing that you feel that you have a different offering to larger competitors? Why are your intended investments in Carzuka for FY 2023? David, you know, just to give you some color, in South Africa, we've got 1.1 million vehicles. Our average customer changes their vehicle every 60 months. So we've got a lot of insight to all the customers that are selling their vehicles and buying new vehicles. We have lots of data. We've got lots of visibility into that.
We believe that if we can help our customers with selling their vehicles, one, we can get them a better price, and we also know the conditions of those vehicles. Similarly, we can, on selling their second vehicle, it allows us easy to attract a new Cartrack customer. It's got a dual effect for us. We've developed our software, and we certainly believe that we've now gone to market with our first version of the software, and we'll start looking to scale that business. I think it's complementary, and it's just really an add-on to the business and add-on value to our customers. We've taken up a 600 parking bay in Eastgate Shopping Center. We've got another one in Sandton City.
We currently only have got stock of about 350 vehicles. We see that going up to about 1,000 vehicles. If we're doing 1,000 vehicles a month in sales, it gives us a good profit, for the shareholders. More than that, it also allows us to onboard new customers, our lower LSM customers. I've got a question from Florian, from LGM Investments. With retail fuel prices at the all-time high, the focus on saving, benefiting a solution on Cartrack. Is commercial activity boosted as oil prices increase? What is the impact of oil price changes on Cartrack customer ROI? The best way to look at it, Florian, what we give as a value proposition to our customers is far beyond just savings on the fuel.
That was very much, I would say 10-15 years ago. The fuel saving that we brought was a big thing. Today, most of our customers have got those benefits already. This will clearly drive more customers to us. I can't quantify how much more, because our value proposition is much more than just fuel. But I certainly do believe it will have an impact. To what extent, I'm not sure. The ROI on customers on fuel, that's normally seen in the, what I call the first, second month ROI, where they have the immediate benefits, which is less idling, picking up any fuel fraud, picking up that the drivers aren't necessarily using the correct routes.
Those benefits come in the first two months, and obviously with the increase in oil price, that increases the ROI. Florian, another question. In the long term, do you intend to expand Carzuka to other geographies? I think, Florian, first of all, we need to get it right in South Africa, which I believe we're on a good path to getting it right. When we get that right, then we'll look at other geographies. I think we must take baby steps, and we must get, you know, all these businesses do take time to build up. Given that we've only gone to market with the software actually in April, we certainly believe that we can build a good business out of it. We have a question from Sandile.
Sorry, I'm getting used to using the screen. Just bear with me, please. I think we missed a few. Sandile, certainly dividend's not repeatable, sustainable given ongoing investment into growth. Can you please kindly provide guidance on dividend policy into the medium term? Anybody investing in us must not invest in Karooooo for dividends. Certainly we haven't grown as we'd like to have grown in the last two years. In that process, we've obviously accumulated quite a lot of funds in our bank account. It was ZAR 700-odd million at the end of February. You need to know that was at a lower dollar exchange rate. A lot of the money that we keep is actually kept in US dollars in Singapore.
Karooooo's statutory filings are in US dollars and all money that we're not using operationally, we try to keep in US dollars. We are paying out this dividend because we just believe with the cash generation that we're gonna be able to generate in FY 2023, plus the cash that we have on hand, we might as well just pay out some cash as a dividend. The second question: there is a substantial reduction in loans to related parties line item in balance sheet. Is the line item likely to be material again in the foreseeable future? Sandile, the related party transactions have been there since we are listed on the JSE, and we certainly are now with the biggest line item being the building which Cartrack occupied in Rosebank.
That belonged to myself and Juan. With that now belonging to Cartrack, or to Karooooo rather, it will certainly stop becoming a related party transaction, and that will probably reduce the related party transactions to close to null. That's the main reason why we did that transaction. Missed quite a few questions. We thank you all for all the questions, and thank you very much once again for attending our presentation. Thank you. Bye-bye.