Smart Parking’s Rapid Expansion Faces Regulatory Hurdles in Australia

Strong Financial Growth Amid Global Expansion

Smart Parking Limited has delivered a compelling half-year financial report for the period ending 31 December 2024, showcasing significant growth across key financial metrics. The company’s revenue climbed 20% year-on-year to $31.9 million, reflecting the successful expansion of its parking management operations internationally. Net profit after tax jumped 70% to $3.9 million, underscoring improved operational efficiency and favourable foreign exchange movements.

The company’s Adjusted EBITDA, a key measure of underlying profitability excluding non-recurring items, increased by 12% to $8.4 million. When factoring in costs associated with the newly launched Danish operations and exploratory activities in new territories, adjusted EBITDA growth accelerates to 26%, reaching $9.5 million. This suggests that Smart Parking is effectively balancing growth investments with profitability.

Expanding Footprint Across Multiple Markets

Smart Parking’s international footprint continues to broaden, with established parking management businesses now operating in New Zealand, Australia (Queensland), Germany, Denmark, and the United Kingdom. The company added a net 137 new Automatic Number Plate Recognition (ANPR) sites during the half-year, bringing the total sites under management to 1,561 globally. Notably, New Zealand’s business grew revenue by 61% to $3.4 million, supported by a 34% increase in Parking Breach Notices issued, and achieved a strong EBITDA margin of 41%.

In Europe, the UK remains the largest contributor, generating $25.4 million in revenue, up 17%. The recent implementation of a unified Code of Practice for private parking in the UK has legitimised Parking Breach Notices, encouraging earlier payments at discounted rates. Meanwhile, the Danish operation, launched in January 2024, has gained traction with 21 live sites and $0.3 million in revenue, positioning Smart Parking to disrupt a traditionally manual parking management market with its technology-driven solutions.

Germany also showed promising growth, with revenue up 83% to $2 million and a 49% improvement in EBITDA losses, signaling operational optimisation. However, the Queensland business faces regulatory headwinds due to a government-imposed pause on private operators’ access to the Motor Vehicle Register, impacting 71 ANPR sites. The company is redeploying assets and awaiting regulatory clarity.

Financial Position and Strategic Outlook

Smart Parking’s balance sheet remains solid, with $8.5 million in cash and undrawn debt facilities totaling $20 million secured from HSBC Australia. These facilities, comprising a $10 million revolving credit and a $10 million accordion facility, provide the company with financial flexibility to pursue acquisitions and further geographic expansion. The company has complied with all financial covenants since entering the facility.

Capital expenditure of $3.1 million during the half-year was directed primarily towards property, plant, and equipment to support future revenue growth, including new site installations. The company’s strategic focus remains on growing its ANPR site portfolio to 3,000 by the end of 2028, which is expected to drive sustained revenue and earnings growth.

While the Technology division saw a 47% decline in external revenue as the company shifts focus towards higher-margin parking management services, investment in research and development continues, with $0.3 million spent on enhancing ANPR software and hardware capabilities.

Navigating Challenges and Opportunities Ahead

Smart Parking’s performance highlights its ability to scale internationally while maintaining profitability, but challenges remain. The regulatory uncertainty in Queensland poses a risk to Australian operations, and the company’s continued investment in new territories will require careful management of costs. However, the company’s technology-led approach and strong balance sheet position it well to capitalise on growth opportunities in underpenetrated markets.