Smart Parking Posts 20% Revenue Growth, 70% EPS Jump Amid US Acquisition
Smart Parking Limited has reported robust H1 FY25 results, underpinned by a strategic acquisition of Peak Parking LP and a fully underwritten $45 million equity raise to fund its US expansion.
- 20% revenue growth and 70% EPS increase in H1 FY25
- Acquisition of Peak Parking LP for up to USD 36 million
- Equity raise of A$45 million fully underwritten by Canaccord Genuity
- Entry into the US market with 134 parking locations across six states
- Expected >25% EPS accretion in FY25 on a pro forma basis
Strong Half-Year Performance
Smart Parking Limited (ASX: SPZ) has delivered a solid first half for fiscal year 2025, reporting a 20% increase in revenue to $31.9 million and a 70% jump in earnings per share to 1.12 cents. Adjusted EBITDA rose 26% to $9.5 million, reflecting margin expansion and operational leverage across its global parking management portfolio.
The company’s growth was driven by a 28% increase in sites under management, with notable contributions from the UK, New Zealand, Germany, and Denmark. Smart Parking’s proprietary AI-driven technology continues to underpin its competitive advantage, enabling enhanced vehicle recognition and operational efficiencies.
Strategic Acquisition to Enter US Market
In a landmark move, Smart Parking has entered into a binding agreement to acquire 100% of Peak Parking LP, a fast-growing boutique parking operator based in Austin, Texas. Peak Parking manages 134 locations across six US states, including Texas, Florida, Georgia, Washington, and Tennessee, representing a significant geographic expansion for Smart Parking.
The acquisition consideration is up to USD 36 million, comprising an upfront payment of USD 32 million (USD 26 million in cash and USD 6 million in SPZ shares) and an earnout of up to USD 4 million in shares contingent on achieving CY25 EBITDA of USD 4.5 million. This deal is expected to deliver immediate earnings accretion of more than 25% in FY25 on a pro forma basis, leveraging Peak Parking’s strong financial profile and growth trajectory.
Capital Raise to Support Growth
To fund the acquisition and support ongoing growth initiatives, Smart Parking has launched a fully underwritten equity raise of A$45 million. The raise consists of an institutional placement of approximately A$32.2 million and an accelerated non-renounceable entitlement offer to existing shareholders for around A$12.8 million, priced at $0.88 per new share, a discount of roughly 9% to the last traded price.
Canaccord Genuity is acting as lead manager and underwriter for the offer. The capital raise, combined with a new debt facility from HSBC, strengthens Smart Parking’s balance sheet, providing liquidity to pursue further organic growth and strategic acquisitions.
Market Opportunity and Growth Outlook
The US parking management market represents a vast opportunity, with over 2 billion parking spaces and 285 million registered vehicles nationwide. Smart Parking’s entry via Peak Parking positions the company to deploy its proprietary technology in the world’s largest parking operations market, differentiating itself through AI-powered solutions and deep domain expertise.
Smart Parking has set an ambitious target of managing 3,000 ANPR sites globally by December 2028, up from 1,561 sites at the end of 2024. The company continues to expand in existing territories while evaluating new markets in Scandinavia, mainland Europe, and the US.
Risks and Integration Challenges
While the acquisition offers significant upside, integration risks remain. Peak Parking operates on rolling 30-day contracts, which could lead to client churn post-acquisition. Additionally, regulatory and litigation risks inherent in the US market, a heavily litigious environment, require careful management. Smart Parking’s ability to successfully integrate Peak Parking’s operations and realize synergies will be critical to delivering the forecasted earnings accretion.
What's more, the company faces typical industry risks including cybersecurity threats, foreign exchange volatility, and competitive pressures across its territories. Regulatory reviews in key markets such as the UK and Australia also pose potential uncertainties.
Conclusion
Smart Parking’s H1 FY25 results and strategic acquisition mark a pivotal step in its evolution from a regional player to a global parking technology leader. The combination of strong organic growth, disciplined M&A, and technological innovation positions the company well for sustained expansion. Investors will be watching closely as Smart Parking integrates Peak Parking and executes on its US market entry strategy.
Bottom Line?
Smart Parking’s bold US acquisition and capital raise set the stage for accelerated growth—but integration execution will be key.
Questions in the middle?
- How smoothly will Peak Parking integrate into Smart Parking’s global operations?
- What impact will US regulatory and litigation environments have on the new acquisition?
- Will the equity raise and debt facility provide sufficient runway for further expansion?
