• Revenue: $31.9 million, up 20% from the prior year.
• Adjusted EBITDA: $9.5 million, a 26% increase.
• EBITDA Margin: Expanded by 139 basis points to 29.8%.
• Free Cash Flow: $6.4 million, up 60% from H1 FY24.
• EPS: $1.12 per share, a 70% increase.
• Cash on Hand: $8.5 million as of December 31.
• New Zealand Revenue: $3.4 million, up 61%.
• UK Revenue: $25.4 million, a 17% increase.
• Germany Revenue: Increased by 83% to $2 million.
• Acquisition Price for Peak Parking: $36 million.
• Equity Raising: $45 million at $0.88 per share.
• Debt Facility: $11.2 million undrawn, with a $10 million accordion facility.

• Warning! GuruFocus has detected 2 Warning Signs with BOM:519183.

Release Date: February 17, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Smart Parking Ltd (ASX:SPZ) announced the acquisition of Peak Parking, a fast-growing parking operator in the US, aligning with their growth strategy.
• The acquisition is expected to deliver over 25% EPS accretion on a pro forma basis in FY25, indicating strong financial benefits.
• Smart Parking Ltd reported a 26% growth in adjusted EBITDA and a 60% rise in free cash flow for the first half of FY25, showcasing robust financial performance.
• The company has a strong balance sheet with cash reserves of $13.4 million and undrawn debt facilities, positioning it well for future growth.
• Smart Parking Ltd has successfully expanded its operations in multiple international markets, with significant revenue growth in New Zealand and the UK.

Negative Points

• The acquisition of Peak Parking involves a significant cash outflow of $43.3 million, which includes acquisition-related costs.
• There is a risk associated with integrating Peak Parking into Smart Parking Ltd's operations, which may take time and resources.
• The US market presents regulatory challenges, with varying laws across states and cities that Smart Parking Ltd must navigate.
• The acquisition price of $36 million for Peak Parking is based on a multiple of eight times EBITDA, which is relatively high.
• Smart Parking Ltd's operations in Germany are still incurring losses, with an adjusted EBITDA loss of $0.5 million for the half year.

Q & A Highlights

Q: Can you discuss the drivers behind Peak Parking's recent site growth and the capital intensity of the business? A: Paul Gillespie, CEO: Peak Parking's growth has been driven by delivering excellent service and fulfilling commitments, which attracts more clients. Richard Ludbrook, CFO: The business is not capital intensive as landowners typically cover CapEx costs.

Q: Is there any working capital investment required for Peak Parking? A: Richard Ludbrook, CFO: No significant working capital investment is needed for Peak Parking.

Q: How quickly can you roll out your enforcement technology in the US, and are there regulatory hurdles? A: Paul Gillespie, CEO: We can start immediately, but there will be a period of integration and training. There are no regulatory hurdles to begin the rollout.

Q: Can you explain the earnout structure for Peak Parking and how it relates to site growth? A: Richard Ludbrook, CFO: The earnout is capped at $4 million, based on achieving $4.5 million EBITDA. It's a sliding scale, and the business should achieve this based on historical performance and planned expansions.

Q: How does the business model in the US differ regarding CapEx, and what are the unit economics for accessing keeper data? A: Paul Gillespie, CEO: In the US, customers often pay for CapEx, unlike other markets. Accessing keeper data costs about $1.25, and we plan to start with a lower ticket value to ensure acceptance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.