The Smart Parking Ltd (ASX: SPZ) share price is going gangbusters today after the parking technology provider delivered its first-half results for FY21. At the time of writing, the Smart Parking share price is trading 13.79% higher to 17 cents per share.
A recovery in the works
Smart Parking sources its revenue from two main streams: parking management, and technology. Shareholders are likely rejoicing on the 51% uplift in parking management revenues for the company. The recovery placed the management segment's revenue at $8.674 million, up from $5.741 million in H2 FY20.
On the other hand, technology revenue experienced a drastic 30% fall to $2.316 million. Smart Parking put this down to a delay in revenue and capital projects due to the pandemic. Total revenue fell, despite the company expanding its presence to a total of 576 sites.
The company attempted to improve its operating margin through cost-saving initiatives undertaken last year. Such initiatives have included the reduction of staff, salaries, marketing reduction, and travel cuts. Despite the overhead cuts, adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) was $1.4 million, down from $1.6 million.
Shareholders may have thrown a party when they skipped to the bottom-line profit for the parking provider. Net profit after tax swung to a mighty fine $4.5 million, compared to a loss of $1.5 million in the prior corresponding period (pcp). However, don't celebrate too soon – Smart Parking received a one-off benefit of $6.9 million related to the VAT dispute.
Vaccines to the rescue
Smart Parking largely sees better operational conditions ahead with the rollout of vaccinations globally. Over the dampened period, the company has expanded its total sites and foresees this to be reflected in the results from March onwards.
The company also expects that parking breach notices (PBN) will bounce back in future periods.
An additional $3.4 million of work in progress and new orders are to be delivered moving forward. This consists of the delayed $1.3 million for Gatwick Airport and Queen Victoria Market in Melbourne.
Lastly, Smart Parking noted its Smart City product launch. This is Smart Parking's enforcements app and compliance management system. These are new products that could potentially provide Smart Parking with a new income stream.
The company has retained its growth target of 1,000 sites by June 2023.
Smart Parking share price snapshot
Over the last 12 months, the Smart Parking share price has fallen 10.8%. This would indicate an underperformance when compared with the S&P/ASX 200 Index's (ASX: XJO) return of 2% in the same period.
