As the name suggests, SPZ sells ‘smart parking’ systems, which give drivers real-time availability information that makes it easier to find a parking space.
ASX-listed companies can be world leaders in some surprising business fields. In the case of Smart Parking Limited (SPZ), it is in that bane of the city dweller, car parking.
Car-parking is not just an urban annoyance – it is a major global problem, with many cities suffering from congestion and desperate to manage parking better. Smart Parking is in the sweet spot to help solve this problem: as the name suggests, it sells “smart parking” systems, which give drivers real-time availability information that makes it easier to find a parking space.
Reducing urban traffic congestion is one of the most important drivers for the smart parking system market: according to a recent report from Navigant Research, global revenue for smart parking systems is expected to total US$1.5 billion from 2015 to 2024, although the market for smart parking is only in its early stages.
Despite its small size – it is capitalised at $41 million – Smart Parking is in the thick of this growing market, having rolled-out its systems successfully in Australia, New Zealand, the Middle East, South Africa and Europe.
The company was established in 2003 in Cambridge, New Zealand, by husband-and-wife team Paul and Jo Collins, as MeterEye, and then Car Parking Technologies Limited. The company built an international business managing car parking, having developed a suite of ‘smart’ technologies –including ground sensors, guidance and infringement systems – for car park managers in New Zealand, Australia and Britain.
Its move toward the stock market came in October 2010 when Paul Collins met Chris Morris, founder of global investor services provider Computershare, which had begun as a small Australian company in 1978. Morris convinced the urged the Collinses to list the company, which they did, in February 2011. As part of its listing, through the shell of the delisted Empire Beer Company, Car Parking Technologies raised $1 million: Morris was on board as chairman.
Car Parking Technologies’ big break came when it entered the UK market in 2011 by buying Town & City Parking, the UK’s largest retail parking company, manager of more than 1,000 car parks for some of the country’s major retailers. This took it from being a software provider to supplying parking management solutions, adding another potentially lucrative string to its bow.
However, the acquisition did not go smoothly. Car Parking Technologies discovered a year later that Town & City Parking was a financial black hole, complete with phantom employees, no controls on spending and procurement and what it described as a "total lack of any accountability."
Only 30 per cent of automatic number plate recognition sites in car parks were operational and earning revenue. Morris had to fly over to run the UK operation, slash headcount, pay off bank debt and install a new system that finally let the company see which car parks are profitable. With the accounting cleaned up and the business streamlined, Town & City Parking was able to start building its business.
Co-founder Paul Collins retired as chief executive in 2012, replaced by current CEO Paul Gillespie. The company changed its name to Smart Parking in July 2013.
The company is now organised in two divisions:
- Technology: the sale of car parking technology hardware, software and associated products and services; and
- Parking Management: provision of parking management solutions, mainly servicing the retail sector in the United Kingdom, but also property developers, the transport sector, local government, and the healthcare and leisure sectors.
About 90% of revenue comes from the parking management division.
The company’s intellectual property suite includes:
SmartEye – Radio Frequency Identification Device (RFID)-equipped infrared vehicle detection sensors.
SmartApp – Easy-to-use app for both iPhone and Android devices that enables drivers to easily locate vacant parking spaces in real time.
SmartRep – A management information package that provides real-time visibility of parking behaviour per space, whether on-street or off-street. Reports are sent by email direct to clients enabling them to review the effectiveness of their parking enforcement function, monitor the success of new parking initiatives; and compile and interpret data to assist with their transport modelling and development plans.
SmartRFID – An ‘intelligent’ RFID that identifies and links a specific vehicle/driver to a specific parking location. This can be used for both on-street and off-street spaces, allowing any parking bay to be managed in real time. SmartRFID also enables cashless payments so that permit bay renewals can be easily processed electronically.
SmartGuide – SmartEye sensors are fixed in each bay on the ground and coupled with a ceiling-mounted indicator that indicates with a different colour the status of each bay – available, occupied or disabled-only. Sends over-stay alerts to system operator. RFID tag identification technology means employee exemption lists, customer loyalty programs and receipt-based refund schemes can all be delivered.
SmartCounter – real-time parking space counting and guidance solutions, with wireless data transfer. Provides easy-to-maintain counting solutions, from simple entry and exit counts to individual bay monitoring of multi-storey car parks.
SmartPlate – an Automated Number Plate Recognition (ANPR) vehicle monitoring and enforcement solution that uses optical character recognition to read vehicle registration numbers. SmartPlate can also be integrated with a wide range of payment machines.
Pay and Walk – can integrate with any payment machine provider that can be used as part of a ‘Pay & Walk’ parking solution without the need to display a parking ticket.
SmartPark – can be fully integrated into a client’s existing parking management software and parking/permit payment systems via simple web services and API integration. It’s a solution that can be at the heart of maximising returns on your investment in on-street enforcement, enabling you to make significant long-term savings in personnel deployment and enabling your bays to operate as you intended them to do.
A good example of the system in action is the company’s contract with Westminster City Council in London, which has gone live with SmartPark to give drivers real-time information on unoccupied on-street car parking spaces in the city. The contract has 3,000 sensors installed at all paid-for and disabled parking bays across the West End in the heart of London (at full roll-out there is expected to be 10,000 sensors in place.) The SmartPark solution allows efficient and precise management of parking spaces within a defined area through the interaction between an RFID tag located on the relevant vehicle and the company’s in-ground parking sensor. This job represents the world’s largest deployment of this kind of real-time parking technology to date.
Trials have also been conducted with Milton Keynes Council and the London Borough of Barnet, and the City of Athens in Greece. Smart Parking has also entered into an extended services contract with existing client Matalan, a fashion and homeware retailer with more than 200 stores across the UK. This adds to successful roll-outs of SmartPark in Australia, New Zealand, the Middle East, South Africa and Europe. The system has the potential for global roll-out, especially in high-density population cities such as New York and Tokyo.
The company says the smart parking systems market is still at an early development stage, but it has begun to see large-scale adoption in numerous cities throughout North America and Europe: it says it is seeing this transition in its previous wins and upcoming tenders.
Shareholders would be happy to see this, because they currently have a loss-making company. For the year ended June 30 2015, Smart Parking lifted revenue by 8%, to $23.8 million, but showed a bottom-line loss of $5.36 million, an improvement on the $7 million loss posted in FY14. There was $2.2 million of non-recurring items that contributed to the net loss.
At 14 cents, Smart Parking is capitalised at $41 million. It is in the red over the last 12 months, and three years, down 6.7% and 17.9% a year respectively, but has delivered investors 7.5% a year if they have held the stock for five years. But the bottom line with Smart Parking is that this is a stock that could be at the ground floor of a major worldwide trend, with a market-leading product and service offering.