@Byrnesty, great pick up mate, I hadn't come across this. SPZ is of my largest and highest conviction holdings, so this one hurts.
This article provides more clarity, and even mentions SPZ.
'Transport and Main Roads Minister Mark Bailey said that from next Monday the companies, including ASX-listed Smart Parking, will no longer be able to access the Transport and Main Roads Department database to obtain details including home addresses of vehicle owners and other personal information.'
A separate article by Brisbane Times indicates the halt will commence next Monday (20/02) and will effectively end the sector’s ability to enforce minor fees for their ungated car parks until to-be-decided changes arrive later in the year.
First and foremost, this is a significant risk for SPZ. It will be interesting how management handle this, with Queensland being SPZ's largest (and only?) market in Australia. In the APAC region in FY22, SPZ issued 35,000 parking breach notices -- around 15,000 of these were in Australia (Queensland). So it is a big part of its APAC division. As a reminder, SPZ earns an overwhelming majority of its revenue (over 75%) through parking breach notices, so this has a massive impact on its Queensland-based business until changes occur later in the year. That said, there is nothing to suggest the changes will be positive for SPZ so this remains one to watch until further information comes to light. It also brings into question how their Brisbane office (and staff) handle this and what the company's action will be. Will they get rid of their staff temporarily?
While this one hurts, it is not catastrophic, in fact far from. While there were around 15,000 breach notices issued in Queensland in FY22, in the UK alone -- SPZ's largest market -- they issued more than 500,000. SPZ also has presence in NZ and Germany, although the latter is much less developed than Australia/Qld. I would estimate total breach notices in Australia account for around 2-3% of SPZ's total breach notices. What it does do is demonstrate legislative risk for SPZ -- without the ability to access registration details (only possible with favourable legislation) SPZ and their business model can't function.
Interested in the thoughts of others here.
Interesting post from SPZ on LinkedIn:
Good to see the German team winning sites, but perhaps more important is the logo for customer in the background...
@Noddy74, thanks mate, I missed the comments about the NE Parking acquisition. I agree completely re: the acquisition, I consider it more or less a strategic investment -- one that has given them a platform to bring across suitable sites. If half of those sites are found suitable and eventually converted to ANPR -- whether this be in the next six months or over the next two years -- it will only further solidify this investment as a success (in my opinion). The acquisition was opportunistic and dirt cheap; I'd like to see more of these over the short to medium term.
As it stands, Q1 looks like it will be impressive -- 86 sites added since FY22. That's good progress, with at least 75% of these being organic growth (being safe and removing the 20 sites brought across from NE). The FY22 investor update suggested APAC sites stood at 62 (38 in Aus, the remainder in NZ), so they've since added another 27 sites to this region in two months. Again, great progress, and importantly this growth continues to be funded by the company's profitable UK segment.
On another note, you might be interested in this if you haven't already seen -- you also @Wini -- a bit of info re: traffic/vehicle stats in the UK, link here. I try and keep tabs on this environment as best I can, particularly in this region. Most of the data I see continues to suggest the pandemic hasn't resulted in any structural change re: vehicle ownership and traffic in the UK. Q30 touches on this briefly -- in 2021 general traffic was still 12% lower than 2019 pre-pandemic levels, but vehicle ownership is higher than its ever been. As Q1 states, the total number of licensed vehicles has increased in all but two years (1991 & 2020) since the end of the Second World War. This makes sense -- the population in the UK continues to grow, which can only be positive for SPZ, given vehicle ownership remains the primary transport method. Use of public transport remains 20-30% lower than pre-pandemic levels, but this probably speaks more to flexible work arrangements than anything else. Car traffic and congestion in the UK are both forecasted to grow over the coming years.
Anyway, I'll stop ranting -- and disregard if you are both across this. But the current operating environment, to me at least, suggests continued tailwinds for parking operators like SPZ.
@Noddy74 Bear in mind SPZ holds some restricted cash on behalf of customers. The audited reports include that in the cash balance, but SPZ management remove it in their marketing materials when they report cash.
At 30 June total cash was $11.4m but unrestricted was only $10.8m. I am sure the $9.3m wouldn't include the restricted cash. That said, you are right there is still a shortfall even after adjusting for capex and share buybacks but likely just some working capital movements. Worth watching.