Smart Parking Transcript.pdf

This interview with Paul & Richard did a lot to assuage concerns over some of the regulatory risks, which is one of the bigger things (understandably) on many people's radar. Of course they are going to downplay them and we should never take management at face value, but the reasoning they offered made sense. Specifically:

The £50 cap is unlikely to happen: Paul argued that the risk of the standard parking charge being reduced to £50 is "very, very, very low". He noted that while earlier government consultations suggested aligning private charges with local government rates, these proposals were consistently withdrawn following industry pushback and legal challenges. Furthermore, the current rhetoric in government consultations has shifted from suggesting lower prices to asking if charges should be capped at the current £100 level.

Government acknowledgement of the need for deterrence: The government increasingly understands that private landowners require a mechanism to protect their land. Paul pointed out that data shows reducing the charge to £70 actually doubles the rate of non-compliance, proving that a higher charge is necessary to function as an effective deterrent.

The market trend is actually moving toward higher fines: Local councils in areas like Scotland, London, and Bournemouth are actually increasing their own parking fines to £100 because the lower £50 fines proved to be an insufficient deterrent against "carnage" on the streets (plus, if i'm being cynical, which politician doesnt like the potential for extra revenue)

Debt recovery bans are unlikely: While there is a potential risk that the statute of limitations for chasing debts could be reduced from six years to three , they do not believe debt recovery fees will be banned entirely because doing so removes the incentive for violators to pay. Additionally, Richard noted that the company already accounts for estimated write-offs monthly, meaning their financial modeling is robust.

Geographic diversification reduces the impact: The company has actively reduced its reliance on the UK market by expanding into New Zealand, Germany, Denmark, and the US. Paul projects that the US market will eventually overtake the UK in revenue generation, making UK-specific regulatory changes less existential to the wider business.

Outside of the regulatory stuff, it seems to be the same (and rather attractive) story. You have a very easy to understand business with a clear and compelling value proposition, one that aligns the company's interests with their customers, and where there is clear evidence of successful execution. Absolutely they have had challenges, but nothing that has short-circuited the general trajectory, and for which they seem to have drawn valuable lessons. Moreover, this is a business with a largely complete product and for which the focus is just on continued execution. There's minimal development requirements, a very scalable cost base, a successful go-to market strategy and an ever growing set of super sticky customers that generate a long tail of reliable, high margin revenues. What's more, organic expansion is relatively capital light and there is a VERY large addressable market -- even if you only count the geographies in which they operate.

They are very much on the hunt for more acquisitions, but they have mostly good form on that front (Germany the exception, although that seems to have turned around) and appear to be rather selective. Importantly, they have the cash flows and balance sheet that provides a good bot of optionality.

The PE is up there at 55x, but given the incremental margins and long growth runway, I dont think it's silly. Not a bargain, certainly, but not terrible if they can, as they suggest, achieve the growth they are talking about. Paul is aiming for sustained growth of over 20% year-on-year for both revenue and profit, noting they are actually currently growing at a clip of 40%. The long-term vision he painted (getting to 10 territories with 1,000 sites each generating $42k in annual revenue) would theoretically result in a business doing over $400 million in revenue with ~30%operating margins, based on their average site metrics. He also said they could reach a billion-dollar market cap within the next three years, but as we all know the market may not be so compliant!.

When you consider he estimates the US market opportunity is ten times the size of the UK , and that they've currently only captured fewer than 2,000 sites out of a potential 300,000 in their existing jurisdictions, that "long runway" argument feels like it has some serious weight behind it rather than just being corporate fluff.

For me, i'll be looking to see strong growth in the US and a recovery in Germany to help validate some of these comments at the next set of results.

Smart Parking is a lean, tech-driven operator with a proven model, solid fundamentals, and a genuinely scalable path to growth.

The business itself is nice and simple: it helps owners of parking assets (think shopping centres, hospitals, transport hubs etc) better manage and monetise their space. The pitch is straightforward: SPZ handles enforcement, ensures compliance, and increases space availability for actual customers, all while sharing in the revenue upside. In most cases, the client doesn't even foot the capex bill. It's win-win.

The engine behind this is Smart Parking's integrated tech platform: ANPR cameras, SmartCloud software, and automated enforcement via Parking Breach Notices (PBNs). The system tracks vehicles, detects overstays or breaches, and initiates enforcement. Critical to this model is access to vehicle registration data, which SPZ secures through legal agreements with government agencies. This end-to-end control allows for efficient scaling with minimal human intervention.

Importantly, it's working. Over the past four years, revenue has grown at a 21% CAGR, adjusted EBITDA margins have expanded to 27%, and free cash flow conversion remains high. FY24 delivered $54.3m in revenue and $14.7m in adjusted EBITDA, with $12.2m in free cash flow—an 83% conversion. The business model is capital-light post-installation, and new sites tend to pay back in under a year.

The strategic footprint is expanding. With 1,561 sites under management as of H1 FY25, Smart Parking has barely scratched the surface of a global opportunity: the company estimates over 240,000 addressable sites. It has already established operations in the UK, NZ, Germany, and Denmark, and entered the U.S. in 2025 via the acquisition of Peak Parking. The U.S. market is especially enticing—not only the largest in value terms but also deeply fragmented and inefficient.

The Peak Parking deal added more than 1,000 managed sites in markets like Texas, Florida, and Georgia, offering immediate scale and distribution for Smart Parking's tech. The AUD $38m acquisition was funded through a $30m equity raise at $0.88/share, demonstrating investor confidence and providing ample runway. With $7.2m in cash and $20m in undrawn debt capacity, the balance sheet remains conservative.

Operationally, the business is in rollout mode. Growth is both organic via direct wins of new sites and inorganic, through tuck-in acquisitions. The model is modular and replicable, and the company has demonstrated the ability to enter new geographies effectively, as evidenced by its rapid progress in Germany and Denmark. Management execution has been disciplined, with site growth averaging 31% per year since 2018.

While regulatory risk (especially access to vehicle data) exists, Smart Parking has a track record of navigating these hurdles. Queensland remains paused for now due to local policy, but other jurisdictions have proven workable, and the company continues to diversify.

This is not a winner-takes-all market. Despite some capable competition, the majority of the world’s car parks are still managed manually or with outdated systems. With a first-mover advantage in many regions, strong tech IP, and recurring revenue from long-term contracts, Smart Parking is positioned to capture share steadily over time.

At the current share price of $0.85, the company is valued at around $350 million. The trailing P/E ratio is high (~80x), but that reflects one-off impacts and a business in scaling mode. On a pro-forma basis including Peak, earnings per share are estimated to nearly double, suggesting a forward P/E under 40x. While still elevated, it's a more reasonable multiple given the company's capital efficiency, cash generation, and average profit growth of ~30% per annum. So it’s not cheap, but nor is it expensive if current trends continue.

This is a very easy to understand business, with excellent economics and a lovely track-record of disciplined execution. And there’s a lot of scope to grow. Happy to hold.

(First posted May 2018)

Holy Cow!

Looks like something dodgy was going on in the UK.

See here

Shares down 50% on release of this announcement. 

Wouldnt go near it until more is known. Maybe a one-off involving two rogue (yet very senior) employees doing something less than ideal, or a sign of a deeper rot and more serious problems. Potentially legal ramifications. At the very least, some reputational damage.\

Buyer beware!