Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 103

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 4A
Chunk 103
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 (1))                              (in R thousands)                                                     
  Sales and marketing                                     (33,050                            (614,765                (500,903               

  (1)      For convenience purposes only, amounts in South African rand as at February 28,                                                                

Karooooo’s sales and marketing
operating expenses increased by ZAR 113.9 million or 23% for the financial year ended February 28, 2025 compared to financial year ended
February 29, 2024, primarily driven by Cartrack. The increase is offset by the cessation of Carzuka’s business of buying and selling
vehicles and the integration of its platform into Cartrack’s broader operations. For the financial year ended February 29, 2024,
Carzuka’s sales and marketing operating expenses were ZAR 26.1 million.

Cartrack’s sales and marketing operating
expenses increased 30% to ZAR 613.1 million for the financial year ended February 28, 2025 compared to financial year ended February 29,
2024 with a significant recruitment drive focused mainly on sales and customer experience. We expect our investment in sales and marketing
to support ongoing and future customer acquisition. Sales and marketing basic salaries are a major component of the cost of acquiring
new customers and are not expensed over the expected life span of a customer, but rather when incurred. This component increased ZAR 77.9
million, or 24%, for the financial year ended February 28, 2025.

Investment in sales and marketing
expenditure which will generally take approximately 6 months to translate into customer acquisition. We believe that the continued and
strategic investment in enhancing our vertically integrated sales and marketing capabilities to leverage our go-to-market strategy drives
customer acquisition and places us well for long term growth and margin expansion. Our customer lifetime value (LTV) to customer acquisition
costs (“ CAC”) ratio, a non-IFRS measure, continues to exceed 9 times and underpins our disciplined approach to growth and
customer acquisition.

Karooooo Logistics’s sales
and marketing operating expenses were ZAR 1.6 million for the financial year ended February 28, 2025, compared to ZAR 1.5 million for
the financial year ended February 29, 2024.

Lifetime value (LTV of a Customer) of customer relationships
to customer acquisition costs (CAC) (a non-IFRS measure)

We calculate the L