After seeing a major uptick in its share price over the past year, parking tech company Smart Parking (ASX: SPZ) attributed its growth to the strategic expansion of its managed sites, pointing to a promising trajectory for the Company.
For the Half Year ended 31 December 2023, Smart Parking revealed a 20% increase in revenue to $26.6 million, accompanied by a notable 28.4% EBITDA margin and a 20% rise in NPAT (Net Profit After Tax), with $4 million in positive adjusted free cash flow.
Revenue growth was primarily driven by a 24% expansion in the number of sites under management, demonstrating revenue growth across all territories outside of Australia. The UK emerged as the highest revenue-generating region, with $21.7 million across 45,000 sites, followed by New Zealand with $2.1 million across 3,000 sites, and Germany with over $1 million across 90,000 sites. Australia contributed $44,000 across 2,000 sites.
The performance in existing territories has been solid. In New Zealand, Smart Parking witnessed a remarkable 202% increase in the number of sites, totalling 124, while in Germany, the Company saw a 330% surge in sites compared to the previous corresponding period (PCP), reaching a total of 43.
It is also gearing up for the launch of operations in Denmark as of February 2024. Corporate activity and private equity investments underscore a positive outlook for the UK industry.
131 new sites were added in H1 FY24, bringing the total to 1,219 sites as of December 31, 2023.
Smart Parking’s suite of services includes automated number plate recognition (ANPR) and parking violation payment solutions. The Company’s share price has doubled over the past year, reflecting its expansions and operations.
Smart Parking completed the integration of ParkInnovation, a German parking management business acquired for $2 million in July 2023. The Company also expanded its presence in Europe with the establishment of Smart Parking Denmark, leveraging the country’s favourable regulatory structure and commercial environment. Denmark’s market is early in the adoption of ANPR technology and has a positive commercial operating environment that fits the Smart Parking business model.
In the UK, the Company saw significant recent interest and investment from Private Equity in the UK private parking management market. Two transactions in H1 demonstrate the attractive growth opportunity in the UK.
Despite operating expenses exceeding $11 million, Smart Parking remains financially strong with $9.7 million in cash reserves, allowing self-funding for growth initiatives, technology investments, and potential acquisitions. The Company is on track to exceed 1,500 sites under management by December 31, 2024, and continues to explore new territories with suitable legislative frameworks.
Furthermore, Smart Parking is actively engaged with the Queensland and UK governments to find mutually beneficial solutions. The Company sees significant opportunities for further growth, driven by private equity interest in the UK private parking management market, with recent transactions indicating deal values surpassing $230 million.
Smart Parking anticipates becoming debt-free by September 2024.
Alinda is a Business Reporter for The Sentiment
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