New broker report out from Shaw and Partners today highlighting ongoing potential growth opportunities for SPZ that I found informative.

The detail on the new UK follow-up notices before an upcoming review into the private parking code due in March/April 2026 was a very interesting tidbit.

I was also under the belief that Peak Parking in the US had a different business model and wouldn't be able to bring the current SPZ PBN system in as easily to that market, but sounds like it is possible and they're testing it now.

We’ve been thinking about where further potential upside is in Smart Parking. The company is indeed growing very strongly already with projected EBITDA growth of ~60% in FY26 and ~30% FY27. Nevertheless, we explore a few avenues that can augment or extend the growth. No changes to earnings or target price with this research note.

• UK Incremental Yield Improvement: UK is SPZ’s largest earnings contributor today. SPZ has improved revenue/PBN (parking breach notice) over the last 12 months with the SepQ reporting a very strong, 19% increase vs pcp. Revenue/PBN, averages about £40, by our estimates. SPZ has indicated there is more upside potential. We understand SPZ has established a new procedure in its late payment/debt recovery process. From 1 October, SPZ will issue an additional request for payment at full breach value plus penalties (£155) prior to converting the breach into a “debt” and turning over to the debt recovery agents.

This is a well-considered management initiative that is also in the interest of motorists. As 30% of all breaches go unpaid there is the possibility of meaningful yield improvement because SPZ’s debt recovery procedure captures £142 out of a maximum £170 collectible. If 1/3 of breaches that were intended for debt recovery are collected internally by SPZ, we calculate SPZ’s yield can increase a further 10%. UK yield is the most impactful driver of SPZ EBITDA. An extra £3/PBN of gross profit in the UK can add nearly A$5mn of EBITDA (+17% on FY27E) according to our modelling.

The UK Government is undertaking a review of the private parking code of practice with a focus upon whether debt recovery charges are too high. It may be that SPZ preemptively addressing an issue by giving motorists a lower cost option to pay prior to turning over an unpaid parking breach to the debt recovery process. Further, we note that if the UK Gov’t recommends lowering the maximum recoverable parking debt (£170), this could potentially offset some of SPZ’s yield enhancers. An update from the UK Government may be forthcoming around March-April.

• USA: The blue sky in small surface lots. SPZ is entering the US market as a leader in providing cost-effective automated parking lot monitoring and enforcement technology. Its Smart Cloud system which identifies licence plates, interacts with motor vehicle data providers, and populates a customer dashboard is industry leading technology developed in Europe and NZ. This technology can transform small lots, adjacent to a retailer, hospitality venue, small office or medical centre into revenue generating assets in short payback times. The US opportunity for small lots is vast. Historically, the focus of parking management firms has been on higher value paid parking locations, such as garages.

SPZ is testing its technology across 10 automated sites it acquired as part of the Peak Parking USA acquisition. SPZ is encouraged by its system progress as it is now issuing breach notices and collecting payments. SPZ has been building its sales force and its operational systems/team. A key milestone for investors will be when SPZ begins contracting new sites: that would be evidence that the company’s offer is competitive.

• NZ very low churn/satisfied customers: In 2022 SPZ managed 20 parking sites. In FY26, we think SPZ will surpass 350. Naturally, investors should wonder about churn. If churn was high, then perhaps SPZ’s customer base would be susceptible to competition when it catches up. It turns out, SPZ management indicates that churn is very low, like 1%. Moreover, SPZ is winning awards as a trusted and valued supplier. There are at least 3,000 available parking sites to be managed in NZ. It is plausible that SPZ could capture 1/3 of the market, now that we understand churn is so low. Our SPZ financial model has NZ sites capping at 690 in 2032. If we remove our growth taper and extend the business to 1,000 sites by Dec 2032 (15% CAGR), our SPZ valuation would rise by 10% or 15c/shr