Forum Topics SPZ SPZ SPZ - general chat
Strawman
a month ago

Just a quick heads up that our meeting with Smart Parking starts in half an hour. If you can't attend live, please add any questions here and i'll be sure to put them to Paul.

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McLovin
5 months ago

For those who have attended / watched the meeting with Paul Gillespie earlier today what were your thoughts?

Seems most things are heading in the right direction with SPZ tracking ahead of their 1500 site target by 6 months and seeing terrific growth in NZ and Germany.

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There was a great question asked about the decisions to look into new markets, and why they don't just focus on doubling down into their growth markets such as Germany and NZ given they have only just touched the surface here. Was I the only one who felt the question was side stepped a little (I'll need to watch the replay to see if I missed something).

Maybe I'm being a little to cynical here, but I did ask a question on sales team retention and how the sales team are incentivized. Having worked as a Corporate Sales Executive in many small startup companies both locally and internationally one of the biggest challenges typically is internal culture, as well as whether the sales team and management are aligned. Paul alluded to the fact that there is high turnover in the sales team but also covered this by stating the turnover is typically based on who can perform and who can't. This concerns me a little, because Glassdoor doesn't tell a pretty picture from an internal culture perspective (appears most of the challenges are in the UK). When this sales growth continues, and an increasing disconnect occurs between management and people on the street who are selling, the house of cards can come falling down fast.

Does anyone here share similar concerns, or am I just being overly cynical? I worry that a revolving sales door means customers are constantly being re-assigned new Account Managers, and in the long term this can really diminish customer satisfaction. Perhaps I'm jaded from past experience.

Keen to hear if this is a concern to anyone else?

Yours faithfully,

McLovin

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Strawman
5 months ago

Some good points there @McLovin.

Culture is the hardest thing for an outsider to divine. Given the sales team, as a whole, seem to be winning, and management seem to be focused on retaining and promoting the best talent, I didn't have any alarm bells ring, but turnover in sales workforce could be something to watch.

To a large degree, I imagine it's a numbers game for the sales folk. 150,000 potential sites will require a lot of door knocking and following up, and management seem to have volume focused KPIs -- so maybe it's a bit of a slog to get the numbers. I guess it's a question whether the turnover is high relative to other direct-sales teams.

In terms of customer satisfaction, as sales and account management are different departments, and given the apparent low churn, I'm not worried about anything there either.

To me the biggest risk is the regulatory one. Losing access to number plate data, or having charges increase, could be a serious problem if the impact is widespread enough. Aside from that, it's a simple value proposition, with a proven tech that is demonstrably better then traditional approaches, and a large addressable market. And, the business is self funded with attractive economics -- a trailing PE of 17 seems very low given the growth runway.

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Wini
5 months ago

@McLovin I think you are right to be concerned, the Glassdoor reviews are poor and the negative comments share common criticisms. Culture is such a tricky thing to assess from the outside and I agree with you that when it goes bad things can still look rosy for a while before collapsing quick.

One thing I would note on your last point, I think what helps SPZ avoid a revolving door of Account Managers is the product would be very low touch once a customer is won and installed correctly. I'm sure the odd thing goes wrong that requires a quick email or call to sort out, but it is not a product/solution that needs constant integration, training or change management. It is the main feature that attracts me to the business model, the very low requirements for re-investment of capital (human or dollars) into existing sites.

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UlladullaDave
5 months ago

I picked up on those comments too, @McLovin and went straight to Glassdoor. The reviews were, I guess, what I more or less expect from a company like this. To my mind, the culture reflects the short sales cycle and, probably, very low post sale contact between the customer and company. In that regard, you don't need to hire the sort of people who want to build relationships with customers you just need mercenaries who can sell product come hell or high water.

Something like this...


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McLovin
5 months ago

@Strawman @Wini @UlladullaDave Thanks for the insights and giving me perspective. I think you’ve all made me realise perhaps i was overthinking it and being a little pessimistic.

It seems i overlooked the fact that there is probably little account management required once the systems have been set up.

I do like the customer facing system which allows them to collect data on their customer so they know their busiest periods etc enabling them to drive promotions during their busiest periods etc.

Exciting company most certainly. Cheers all.

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Wini
5 months ago

@Strawman Great chat on SPZ in the latest Motley Fool podcast this morning. Made for good listening after finishing my 10km run this morning!

I think you made a great point about selling to customers and even with a great product the sale can be difficult if the customer has other priorities, no room in the budget etc. I think SPZ does a fantastic job getting around that problem with their go to market of not charging their clients directly. SPZ bear the up front cost of camera and signage installation and in return collect the on-going parking fines.

In this environment I think the ability to go to a retail/hospitality customer and say we can improve your foot traffic by X% and the best bit is there is no upfront cost or capex required. Hard for customers to say no really.

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Strawman
5 months ago

Thanks @Wini!

Looking forward to speaking with the CEO again next week.

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Rocket6
one year ago

@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.

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Noddy74
one year ago

Great pickup @Byrnesty and a really good summary by @Rocket6

I agree that in terms of materiality it isn't that big ideal to the broader business. What it does do is cut off a growth market for Smart Parking and - worst case - permanently waste substantial time and investment in setting up the operations. Ideally it will lead to a Code of Conduct being developed in QLD but what that means and the time it will take is unknown. Presumably it will also limit the chances of other Australian states allowing access to license databases. There had been some talk of Victoria allowing limited access.

I don't imagine the parking cop will get a lot of public sympathy, but hopefully Smart Parking's customers will advocate on their behalf as they do provide a service to retailers and genuine customers, and they will be impacted by this announcement.

Government action was one of the risks to their business case. They are probably most at risk at the earliest point when they enter a new market for two reasons. The first being consumer backlash from having to adapt to change. The other relates to foregone government revenue being less in a relative sense - companies like Smart Parking pay a per use fee to access registration details. Once mature - like in the UK - the disincentive for governments to change the status quo is much higher.

No doubt there is much scrambling being done by Smart Parking management at the moment but I think they need to come out pretty soon with a statement of some sort.

[Held]


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Hackofalltrades
one year ago

Just copying the straw here for the conversation.


An announcement made in relation to the Queensland Government's change.

https://hotcopper.com.au/threads/ann-response-to-press-articles-in-queensland.7228318/

Points of note.

  • They don't seem happy.
  • QLD is less than 5% of revenue, which suggests to me it's around 4.
  • It's not yet profitable.
  • They operate nearly 1000 centres.


The way the Government and press treat SPZ is interesting. In the UK it seemed like there was an initial negative response, but then the Government after thinking about it realises that not being able to enforce parking fines is a bad idea because then people can just park in ungated business carparks wherever. I'll be interested to see how QLD develops.

I do wonder if privacy concerns are politically starting to become a bigger issue given the big tech stuff.


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