Good morning, everybody, and welcome to the Smart Parking FY 2024 results investor conference call. As usual, I have Paul Gillespie, CEO, and Richard Ludbrook, CFO, with me. Paul and Richard are going to present to the slides we've released to ASX this morning, and then we'd be very happy to take Q&A. Thank you for joining us, and on that note, I'll hand over to Paul.
Thank you, Michael, and good morning, and thank you for joining us for Smart Parking's full year results FY 2024 call. Today, as Michael just said a moment ago, I'm here with our CFO, Richard Ludbrook, and today we'll take you through the highlights of the presentation that we've released to the ASX this morning. So if we can kick off and go to slide two, please, and let's start with some key points. First, we're pleased to deliver another set of record results. We delivered 28% growth in Adjusted EBITDA and a 40% rise in free cash flow. We delivered strong growth in our UK, New Zealand, and German operations. We completed two acquisitions to build scale, and we expanded into a new attractive territory, which, of course, is Denmark.
As I said before now, SPZ is a fast-growing, profitable, and cash flow-positive company that can scale in large markets and self-fund its organic growth strategy. So if we compare with the PCP, revenue is up 21% to AUD 54.3 million. Adjusted EBITDA is up 28% to AUD 14.7 million, and margins have expanded by 150 basis points to 27%. We're managing our profitability. We're driving margin expansion and self-funding our growth investments. We generated AUD 12.2 million of free cash flow, including the acquisitions, CapEx, and technology investments. We spent about AUD 13.5 million and closed the year with cash on hand of AUD 7.2 million.
The growth investments included AUD 600,000 of setup costs in Denmark, where we started to generate revenue soon after set up due to some early contract wins through some great hires. We spent AUD 5.2 million on growth CapEx to support our organic expansion and a further AUD 7.7 million on two acquisitions in the UK and Germany to add its scale and earnings. It was a heavy investment year, which will set us up well for the FY25 and beyond. Put up now to slide three. It's easy to ask, or you might ask: What's driving these record results? Well, put simply, it's a continued disciplined execution of our growth strategy. We've said for many years that we know what we want to achieve at Smart Parking.
The team gets the job done, and everyone pushes the business forward in the same direction. Our strategy is to drive strong organic growth in existing territories, build scale in new regions, and complement this with selective acquisitions at accretive prices. We delivered revenue growth across the group, with the UK up 21%, New Zealand up 56%, and Germany up 519%. The increase in sites under management is a key revenue driver. We closed FY 2024 with 1,424 sites under management, 1,424 ANPR sites under management, which was growth of 28% compared to the PCP.
The estate of sites has grown at a CAGR of 31% since June 2018, and we have a clear line of sight on achieving our target to have over 1,500 sites under management by December of this year. This target seemed very ambitious when we set it, but there's now a very strong prospect of us delivering on this number well ahead of time. "So what's next?" you might ask. We certainly expect further growth across all of our operating territories, but we're also now able to look to optimize our portfolio in order to enhance our yield. PBNs increased by 22% on PCP. We averaged 214,000 PBNs per quarter this year, which is an average increase of 22% on last year.
UK accounts for 78% of our PBNs, with 15% in New Zealand and 8% in Germany. We expect the mix will continue to balance as new territories expand. During the year, we integrated the Local Parking Security acquisition in the UK and the ParkInnovation deal, which was completed in Germany in July of 2023. We will continue to make disciplined acquisitions to supplement our strong organic growth. Added to this, we are in advanced negotiations to establish a AUD 10 million debt facility to provide additional capital as and when these opportunities present themselves. We commenced operations in Denmark in February and have already started issuing PBNs and generating revenue. I will talk more of this case study later in the deck.
However, it's a great example of how we can leverage our market-leading technology, deep domains expertise, and execution capabilities to quickly and successfully enter new territories. It sets us up very well for entering potential new markets in the near future. And since we last reported our results in the half year, we've made good progress on researching and evaluating some of these new opportunities in Europe and the U.S. We've spent a lot of time on the States, and in particular, we've invested in understanding the regulatory frameworks, the site owners and their needs, and the incumbent providers. There is more work to do on this, but I will say we have significant interest, and we are firming up the business case for a carefully controlled market entry. Finally, on this slide, I'll call out that we've started FY25 strongly.
July revenue is up, is AUD 5.5 million, which is up 34% on the prior year. We have many more sites generating revenues and a higher quality of revenues, given the broader geographic mix across the estate. We expect FY25 to be another year of profitable growth and positive cash flow, so it's encouraging. We started the year with a record month. On page four, we highlight our progress in building scale in our selected markets. Our focus is on building our business in existing territories, and then from this strong base, leverage our core technology and capability into new territories. We provide market-leading solutions and the industry's best practice compliance standards, to drive improved outcomes for parking site owners and landlords. We deliver increased compliance, revenue growth, and an improved customer experience for our clients. We have growing businesses in all territories outside of Australia.
Revenue in the UK increased by 21% to AUD 44 million. We issued 14% more PBNs, and closed the year with 1,124 sites under management, an increase of 21% on the PCP. More sites under management will create increased PBNs, and in turn, generate higher revenues. Our financial model is simple. UK is clearly our largest market. It accounts for 80% of our sites under management and 81% of the group's revenue total. However, our New Zealand business is performing very strongly. Revenue was AUD 4.6 million for the year, a lift of 53%. Our compelling offer is resonating in the market, and I've said before, we are displacing and disrupting the industry there.
We have 162 sites under management, which is up 93% on the PCP, and we delivered 70% growth in PBNs. We've captured less than 1% of our addressable market, so there's enormous upside for the future. As some of you will remember, we suspended our Australian operations last year. There have been constructive developments on the regulatory front, which I'll talk to you later in this deck. In Germany, we're making good progress. The largest market in which we operate today. Revenues for the year increased by 519% to AUD 2.8 million. PBNs increased by 477%, and the number of ANPR sites under management was up to 67. The team over there is operating well. We have a brand that stands for quality and compliance.
Our priority is to drive scale and operational leverage. Finally, as mentioned a moment ago, in February, we started operations in Denmark. This is another constructive market for our ANPR technology and operational processes. We have the sales team and structure in place. We have five sites under management and have signed 11 contracts to date. Revenue generation has commenced, and with the market potential of 10,000 sites, it's over three times the addressable market in New Zealand, so we expect growth for many years to come. I'll now hand over to Richard, who can talk you through some of the financial detail.
Thanks, Paul. I'll start with slide 7, where you will see the group achieve record adjusted EBITDA of AUD 14.7 million, up 28% on FY 2023. This was the result of an increase in revenue from organic site growth and revenue contributions from acquisitions during the year. Revenue of AUD 54.3 million, excluding revenue in the new Denmark territory and interest income, is up 21% on the prior year. This was the result of a 22% increase in parking breach notices, driven by organic growth in sites under management across all territories, with the exception of Australia, where the Queensland operations are currently paused, and the contribution from acquired businesses. Further detail on the revenue increase is included later in the deck. Overheads are up 16% compared to PCP.
This is a result of increased activity, ongoing expansion into the newer territories, and the acquisition of ParkInnovation and Local Parking Security. The adjusted EBITDA margin increased one hundred and fifty basis points to 27%, which is pleasing given the newer territories are margin dilutive. You can see on the slide there are AUD 1.7 million of adjustments to EBITDA, and these are detailed in the supplementary information on page 25. The amounts excluded from adjusted EBITDA include, firstly, foreign exchange losses of AUD 0.2 million, and this is a gain of AUD 1.2 million in FY23. Secondly, AUD 0.7 million of expenses, comprising AUD 0.4 million of professional fees related to evaluation of three acquisition opportunities in the UK and Germany, and two of these ended up proceeding.
AUD 300,000 of professional fees related to regulatory matters in both the U.K. and Queensland. Paul will provide a regulatory update later in the presentation. Thirdly, an AUD 0.6 million EBITDA loss related to the new Denmark business, which was launched in early 2024. While early days, Denmark is performing in line with our expectations. There was also AUD 0.2 million of spend related to evaluating new territories, including the USA, Scandinavia, and other European countries. On the back of this research, we launched in Denmark. We will continue to look at new territories that are suitable for the SPZ commercial model and have the right regulatory framework. Depreciation and amortization increased following the installation of an additional 302 organic sites and D&A related to acquired businesses.
The company incurred a tax expense of AUD 1.9 million, compared to a tax benefit of AUD 0.2 million in FY 2023. FY 2023 included the benefit of tax losses to the UK companies and New Zealand, and the UK business is now in a tax-paying position. The company has a further unrecognized deferred tax assets of AUD 2 million related to losses in New Zealand, which it will recognize in the future. The net profit after tax and the basic earnings per share were impacted by the adjustments to EBITDA, as detailed earlier, the higher D&A and the AUD 2.1 million increase in the tax expense. Slide 8 shows the breakdown of the 21% increase in revenue, driven by the 22% increase in parking breach notices issued. The UK parking management revenue increased by AUD 6.4 million, or 21%.
The UK company restructured the sales team in early FY24, with the benefit of this showing in H2. The UK business added 75 sites in H1 and 109 sites in H2, bringing the total UK sites to 1,124 at 30 June 2024. The strategy of growing the number of customers with multiple sites has proven beneficial. The site portfolio will continue to be optimized to increase yields. The company continues with its strategy of expanding into countries where there is a suitable regulatory framework. The company established operations in Denmark in early 2024, and in the last three and a half years, the company's established parking management operations in New Zealand and Germany. Both of these businesses are growing strongly.
Revenue in New Zealand at AUD 4.6 million, increased 56% on PCP, with Germany excluding the acquisition, contributing revenue of AUD 1.4 million at 215% on PCP. The rate of site growth in these territories is accelerating, with New Zealand and Germany adding 118 sites in FY 2024, compared to 89 in FY 2023. Historically, the majority of New Zealand's parking management contracts are three years. In November, the company increased the term for new contracts from three years to five years, and approximately 30% of the New Zealand estate is now on five-year contracts.
The New Zealand business has increased its PBN charges for new sites from AUD 65 per PBN to AUD 85, and we've also been transitioning the existing estate from AUD 65 to AUD 85, and approximately 70% of the New Zealand estate is now at the higher breach value. Australia, up until the pause in February 2023, was growing strongly. While the company continues to enforce manually on Queensland sites, revenue reduced from AUD 1.4 million in the PCP to AUD 70,000 in FY24. The two acquisitions contributed revenue of AUD 2.6 million in FY24. Just a reminder that we acquired ParkInnovation in July 2023, which is a manually operated German parking management business, and Local Parking Security, a U.K. parking management business that includes 68 ANPR sites and a portfolio of manually operated sites.
July 2024 revenue is a record of AUD 5.5 million, up 35% on July 2023, and obviously this doesn't include the benefit of new sites to be installed in FY25. Paul will talk more about the substantial runway we have in all markets, which will drive future growth. Slide nine shows the group has cash on hand of AUD 7.2 million. The group generated record adjusted free cash flow of AUD 12.2 million, up 40% on FY25. The strong cash generation and cash reserves have enabled the business to invest, which will lead to future revenue and earnings growth. The company made a substantial investment in future growth, with AUD 12.9 million spent on CapEx and intangible assets, and the two acquisitions I referred to.
Just to remind, that CapEx isn't included in the free cash flow as it relates to future growth rather than maintenance CapEx. The company's strong cash flow enables it to continue to explore new growth opportunities. Slide 10 shows the movement in the group's operating expenses. Overheads of AUD 22.8 million include AUD 1.3 million related to businesses acquired during the year. Staff previously engaged in the technology business were redeployed during the year into the fast-growing New Zealand parking management business. Excluding the two acquisitions and the Denmark startup, the headcount grew by 5% in FY24, and total headcount is now 231, and that includes headcount from acquisitions and in Denmark. Slide 11 shows the group maintains a strong balance sheet and is well-placed to fund organic growth, expansion into new territories, and further acquisitions.
As of August, the company is debt-free. Annual repayments, including interest, were AUD 1.1 million. SPZ is in advanced negotiations to establish debt facilities to fund international expansion and complementary M&A. We remain optimistic about the outlook for the business, given the potential in the core markets and continued expansion into new markets. I'll now hand back to Paul to discuss the business update.
... Thank you, Richard. Okay, so we now look to slide 13, please. Excuse me. At Smart Parking, we're planning for long-term growth. We have a great opportunity, significant competitive strengths, a highly capable team, and the ambition to succeed. As we show on this slide, we have multiple growth drivers. We feel we're at the forefront of driving industry change, raising standards, and delivering better solutions for site owners. Our opportunity is to scale quickly and entrench ourselves the leading technology provider of parking management solutions across major markets. We can scale through these three growth vectors. We can build share in our existing territories by displacing legacy providers with archaic systems. We're demonstrating that capability in the U.K. and New Zealand. We can leverage this expertise into new territories such as Denmark.
We look for a constructive regulatory environment, legacy-style competitors, and the ability to deploy our technology advantage. There is scope for many years of growth in Germany and Denmark alone. We can then take these capabilities, learnings, and expertise into new markets. I have to say, the more time we spend researching new opportunities, the more I see markets that are open and viable for us. For example, there are around 40 states in the U.S. that are potential growth options for us. If we just look at 2 of those states, Texas and Florida, for example, each one is a significant market with huge opportunity. Our task is to be careful, considered, and selective, and to manage execution risk well. We have a track record of doing that, so we will stay true to our playbook that has worked so well for us in the past.
We can supplement this growth with accretive acquisitions. It's a question of capital deployment, speed to market, and risk-adjusted returns. We have a capital-light model, a good balance sheet, and we'll continue to ensure expansion is low cost and risk averse. Ideally, we'd enter the U.S. market with a small acquisition to provide a base that we can grow from. We will be patient and careful. We'll continue to evaluate the opportunity and how best to add value for shareholders. Let's look now at slides 15, 16, and 17, that show the operating metrics that we update shareholders regularly with. As highlighted earlier in the presentation, we're seeing growth across all metrics. To me, these slides highlight the importance of an effective sales strategy and execution-focused operational teams.
As mentioned earlier in the presentation, the business model is simple: we win the sites, we operate them effectively to create the PBNs, generate the revenue, and manage costs carefully to drive operating leverage. We can then reinvest the cash flows at a high rate of return in order to maintain our market position and our technology advantage. Slide 16 shows that we can generate consistent growth and succeed in multiple markets. We have the ability to open a new territory and generate revenue relatively quickly. We're conscious of not overextending ourselves and risking execution. We have built operating systems, infrastructure, and bench strength to manage this risk. We are well placed to scale. Page 17 shows the scalability coming through and the increasing geographic diversification of our revenue mix. This reduces the risk to any one regulatory environment and improves the quality of our revenues.
If we look to slide 18, this shows more detail on Denmark and provides somewhat of a case study. It's fair to say we're pleased with the start we've made in this territory, and we're looking forward to discussing the progress in more detail later in the year. However, as mentioned many times, Denmark has a good regulatory and commercial environment for SPZ, and we're confident this will be a successful market for us for a long period of time. Slide 19 provides an update on the regulatory situation in both the U.K. and Queensland. If we take Queensland first, after a roundtable discussion with the minister and the Department of Transport and Main Roads, or TMR, there is a commitment to draft a Code of Practice based on the U.K. Code of Practice, which will be reviewed by the minister in September.
As we've said many times, we're committed to work with the Queensland Government and TMR to support the implementation of the code of practice that will raise standards as soon as possible. In the UK, we're having positive, ongoing dialogue with the new ministers and the department responsible for parking. From the first of July, the British Parking Association, or the BPA, and the International Parking Community, the IPC, have come together to provide a single code of practice. We strongly support this code. It is designed to raise standards and bring both industry associations into line. The new code has been well received by the department and has also attracted some significant positive media interest. We will, of course, keep shareholders informed of developments as they evolve, but it's fair to say the regulatory outlook is positive and constructive.
We move now to the final slide, slide 20. I'll wrap up with some comments on our FY25 priorities. As I said, we expect another year of profitable and positive growth, profitable growth and positive cash flows. We started FY25 strongly, with 34% revenue growth in July versus the PCP. As of today, we have 1,465 ANPR sites under management. So you can see we've continued our growth momentum since the end of the financial year. Our short-term focus is to deliver the 1,500 sites by the end of the year. We want to demonstrate again that we do what we say we will do. We have good forecasting clarity in the business, and we execute well.
Reflecting on the bigger picture, we are at something of an inflection point in the business, and the board and management team recognize we are entering a new and larger growth chapter. As well as continuing to grow in our existing territories, we are well-placed to selectively expand into new, larger markets. Building scale in multiple markets will significantly broaden our base, strengthen our business, and increase our earnings power. With less than 1% capture of our total addressable market today, and the timely opportunity to expand the TAM elsewhere, we have years of growth ahead of us, and finally, we will continue to complement our organic growth with disciplined and selective acquisitions. We can consolidate the industry, raise compliance standards, improve outcomes for site owners, and generate good returns for shareholders.
With our balance sheet and positive cash flow, we're well-capitalized to take advantage of organic and inorganic opportunities as they arise. So that concludes our presentation today. Thank you for joining. We'll now open the lines for some questions. You can ask questions via the Zoom chat, or you can unmute yourself and ask a question, but I think we have yeah. So yeah, I'll
Okay, so the first question on board. Will SPZ direct focus from potential UK acquisitions to other markets, in the interest of avoiding further concentration of earnings towards the UK?
I think ultimately, we evaluate every deal on its merits, okay? And I've said this many times, but we look at acquisitions to see, you know, what is it actually gonna do for us? Is it gonna make our business better, or can we make that particular business better? If the answers to those questions are yes, then we have a closer look and try and go ahead, regardless of where it is. Clearly, you know, a big part of what we're trying to do is build a portfolio of territories in which we operate. Obviously, we have five today. You know, we have a focus of where we wanna get to, but the more we spread that portfolio, then of course, the lower the risk.
You know, some time ago, I would've said, yeah, yes, we need to probably diversify away... to diversify ourselves away from the UK because of regulatory, some regulatory challenges, but they seem to be under control, and we have very positive, ongoing dialogue, as I mentioned a moment ago, around the regulatory environment. So it really doesn't matter where these are. Clearly, we want to grow into new territories, but if there's a opportunity in the UK that is, a good one for us, it's positive, it's going to make our business better, and we're gonna make their, that particular business better, then we'll clearly look at it. But like I say, it's each deal, each opportunity on its merits.
Yeah. So the next question is from Stella Wang. So since the launch of the UK new private parking code of practice, has the company seen much positive or negative impact operationally? For example, the new grace period may be easily exploited by offenders. Is it a fair observation that the UK pre-sightings are slightly down than expected?
I think the new Code, I think is incredibly positive. Let's start there. Having both the trade associations working together to deliver a single Code of Practice is really what the government's been talking about for some years, and the industry's delivered it, so from that perspective, it's positive. In terms of the 10-minute grace period, I mean, look, we've had a 10-minute grace period on our sites for many years, and most of our competitors do the same thing. I think it's very few competitors who would run at a lower grace period for certain, for different reasons, so I think that's somewhat of a misnomer, that it's sort of gone out into the media.
But yeah, most, you know, larger operators, people like ourselves, will operate at that ten-minute period, and we've been doing that for many years. So no, we haven't seen anything change from an operational perspective, Stella. In terms of the EBITDA question, do you want to cover that?
Yeah, any change would be pretty marginal, and potentially it's skewed slightly by, obviously, the acquisition of LPS-
Mm-hmm. Yeah
… and back in March.
But also seasonality. The second half, the-
Yeah
... the third quarter, Stella, in the U.K., is always the most challenging. In fact, Stacy, if we can go to slide 15, I think it is, or 16, maybe? You'll see the way the PBNs fall. That one there. Yeah, perfect. You can see by quarter, clearly Q3 is the lowest quarter. And that's heavily, excuse me, heavily weighted towards the U.K., 'cause January, February, March, in England, you know, for those who don't know, is pretty dark, pretty wet, and pretty cold, so you don't get as many car journeys or car movements in that three-month period, as you do, say, for example, in Q4, which you can see here, which is significantly higher coming into the summer months.
No, I think what you're seeing is probably more of a seasonal adjustment, as opposed to any change from the code, which I see as only positive, and we've had really good positive feedback from MPs, from the ministry, as well as some good positive media coverage, which makes a change, which is good.
Okay, so another question from Stella: Thanks for the comments on the careful control of U.S. entry. Regarding the plan for the U.S. entry, how much of that can be covered by the AUD 10 million dollar debt facility that's planned?
It really depends. I mean, look, I guess, Stella, you know, we're telling people we're keen to do this. We want to do it, and we're gonna be careful about it. Right now, we don't know. You know, it's still quite early days. We don't have an opportunity on our desk, so to speak, that's gonna open up for us there. We're keen to look at, you know, entering that market through a potential acquisition, because we believe we want to sort of retain some good local knowledge. Entering that environment organically is gonna be challenging, but we're still evaluating and tossing up between the two, what's the best way forward. But yes, I mean, look, the reason for trying to have a debt facility on hand is to give us optionality.
You know, for us, and when these opportunities arise, that we're looking to use debt to fund our growth, rather than just equity. So from that perspective, I think at this stage, it's still very early days, Stella. Like I say, we're being careful, we're being considered, and we're just looking at this in a measured way to find the best possible opportunity. But of that money, let's wait and see. So see what comes up.
Okay, so the next question is from Nick Maxwell. While the number of sites and PBEs issued continues to grow, PBE per site are declining or be at a slow pace. Is there a particular reason behind this? Smaller sites, timing of acquisitions, or a cautious impact with the parliamentary review? So I can answer that. So in terms of the UK, we're not really seeing any change in terms of the PBE industry per site. You've got to remember that we did take on 68 sites as part of the LPS acquisition, so that might skew the data slightly. We have seen a reduction in the average circuits per site in New Zealand, and that's more a reflection that in FY 2023, we had a relatively small portfolio of sites, and then had a couple of very big earning sites.
Obviously, we've added a lot more sites in the last twelve months, and so the average has come down. Okay. Yes. Okay. Okay, James Tracy has a question. Do you wanna unmute yourself, James?
Yes. Thanks, Richard. Thanks, Paul. It's James from Blue Ocean. I just wanted to get a bit of color around the acceleration in revenues that you've seen. You talked about 34% growth in July. That's the 21% over the full year. Could you just contextualize that around the rate of site openings?
Yep. I mean, I think, we talked a lot at the half year about how, you know, we restructured the UK sales team, you know, early in FY 2024. We brought in a new sales director in June of 2023. So obviously, come July or start of the financial year, he's making some changes. And so we've definitely restructured that team, and that had an impact on us, I would say, in Q2 of our site acquisition. However, since then, we've seen a real uptick in growth in sales and sites, and so much so, we had a record installation months in both May and June. Both doing twenty-nine new sites installed and gone live in the months in both May and June.
So that that has sort of validated the changes we've made, so to speak, and was the right thing to do. And I think Richard pointed out, with his 75 sites in the first half in the UK and 109 in the second half. So again, the changes we've made have really sort of come to the fore. So I guess what you're seeing there, James, is again, the sales strategy working, right? The sales team, you know, doing what we said we're gonna do and us, yeah, executing on that plan. So yeah, really, it's that and that's really what's seen us go into July, you know, with a good revenue, a record month, AUD 5.5 million of revenue, as like you say, up 34% on the PCP.
So, you know, it's that continued disciplined execution of the sales strategy that's gonna see us continue to grow. That's the biggest part of our strategy, of course, in the new territories and the acquisitions off the back of that. But it really is, you know, what we expect to see over the next 12 months across all territories is another further expansion of that organic growth.
Is that... You mentioned 29 sites, I think, per month over the past two months in the UK. If you multiply that by 12, it's close to 350 sites. I think you did 184 organic sites last year. You know, what's the sort of annualized run rate of UK sites you think you could do?
Again, these things obviously can fluctuate, right? Because your sales have a good month and some not so good months. But what I would say to you is, you know, the team are focused on exceeding that 200 site number, right? That's the key focus for that sales team in the UK. In New Zealand, we're looking at somewhere between 80 and 100 sites, yeah. In Germany, I expect to see more. We've seen some significant change in Germany that we believe will see a higher level of sales performance. And already Denmark is opened up really quite well since February, right? We've signed 11 deals or 11 contracts. We're generating revenue, only 5 of them are live so far.
So, you know, again, as that operational execution gets up to speed, you'll see, I think the sales will go a bit quicker. So from that perspective, you know, you're probably looking somewhere between 350-400 sites across the group, you know, with the new territories really starting to come into their own and get that sales momentum going. And let's not forget, yeah, we're going to places where we're building a brand, right? So whilst we're. If you talk to German customers and Danish customers, they don't really care too much about what you've done in the UK. They wanna know what you've done in country and location. They wanna look for some sort of track record. So proving that out is challenging, but we're doing it.
The teams are doing it very well. We're starting to see that really start to come through. It's a pleasing result to see the sales strategy come to pass, so to speak, and actually, we'll see some real fruit from our labors.
... And, just a final question from me: How close are you to breakeven in Germany?
Very close. Not far off at all, James. We expect to be breakeven quite soon. Yeah, Germany is a challenging market, like I say, but it's absolutely where we want to be, because of the size of the opportunity and the size of the market there. You know, like I say, we've made some personnel change there recently, which I think is very positive, or will be very positive for the business. I think we're gonna see an uptick in our sales performance in that part of the world because of the changes we've made.
But yes, I'm excited by what we can achieve there, and like I said, it's the right place to be because of the size and the opportunity that's presented to us that will allow us to grow for many, many years. So that's the reason why we're there.
Thanks, Paul.
Okay, question from Annabelle: You talk historically about franchise opportunities. How much of the organic UK site growth is from existing customer expansion versus new customers?
Yeah, good question. I mean, the majority is new customers, and we really focus on new business. Having said that, I think I talked a lot at the half year about acquiring a customer by the name of Evri. Evri are a parcel delivery business, kind of like DHL or another sort of large delivery company. They have over 500 locations around the country and 140 of those have parking facilities they want managed. Now, we've already got, I think, 15 sites installed with them. Obviously won the contract, you know, late last year. But that's a customer that will be growing for a very long period of time.
By the same token, we've managed to access successfully McDonald's in a couple of locations, in particular the UK, in Germany, and also in New Zealand. So I do see a number of sites coming from that particular customer, you know, that fast food area. We've obviously done well with KFC in the past. With Burger King doing well in Germany, we've got seven sites, Burger King now. So from that side of things, you know, I do think we'll see a bit more expansion from those sorts of customers, which is pleasing. So but, but again, the focus, you know, that's our account management team, where they grow. You know, they work on growing that customer, those individual customers.
But the majority of the sales team, the direct sales team, they're out there winning new business. And that's the focus, to get those new customers, longer contracts, and signed up for a long period of time. Do we have any more questions?
Just one more from me, Paul, as well. Could you talk about Queensland? You've got the comment in there that they're talking about a draft code of practice modeled on the UK. The government has indicated that's what they want to do. Does that mean that you'll be able to resume ANPR, and if so, what's the timing on it?
That's the objective, yes, James. So I guess the positive thing as I highlighted in the presentation, you know, the government and the TMR, Transport and Main Roads department, invited us to a roundtable meeting. So there was the TMR, the minister in charge, as well as representatives from the industry, so ourselves, one or two of our competitors were there, as well as some of our customers, in fact, came along, which was incredibly positive and productive. And off the back of that, they committed, saying, you know, "We understand the code of practice that you have in the UK." You know, and they basically wanted to implement something similar into Queensland, right?
In order to raise the standards, to ensure there's essentially rules of engagement for how parking operators will run car parks or run these private parking areas. Now, of course, ANPR is a big part of that, you know? And of course, for us, you know, we're obviously really pushing that, because that's our core business is the ANPR technology, and the ability to provide lots of different products off the back of that to our customers and the benefits that come with it. Timeline, I mean, they, they've committed to, well, getting that Code of Practice to the minister in September for review. So I suspect, you know, them to do what they said they were gonna do, which is provide that to the minister. Will we get something before the election, which happens in October? I don't know.
Probably not. But I think certainly before Christmas, we'll have a much better idea of, of, whether we're gonna be open up there or, or operating again, accessing that database, in the... whether it's gonna happen before Christmas or just after. But I feel it's an incredibly positive step forward. You know, the information put forward, it's incredibly positive that they want to adopt a Code of Practice or, you know, essentially something similar to the U.K., because that's a mature market. It works, it keeps, you know, operators honest about how they, they operate, how they're gonna manage car parks. So I, I'm positive about, about a good outcome for us. Timing is unsure at this stage, James, but I think we'll know a lot more before, just before Christmas.
Thank you.
I just got-
Sorry. Just on Denmark as well, I understand you're issuing digital tickets instead of, you know, in the mail. Is that having any impact as well?
Absolutely. You know, we've worked hard on our technology, and whenever we enter a new market, there's gonna be some changes we have to make to the technology, and we've been able to move and do that quickly, because as how it's our IP, we have our own R&D team that can make these changes, and we can adapt to the markets as required. So as you may remember, we, as part of the environment over there, you can issue the tickets via a digital portal called an e-Boks system, which is a government system. So therefore, you don't have the printing and postage. So of course, that's you're saving money on the cost of sale.
But really, the key thing there is, you know, if the information is coming to you via a government portal, then of course, the payment ratio is higher. And what we're seeing now from what's been issued, we do get higher payment ratios, but also quicker payments. So in particular, the quickest payment we've seen to date from time of issuance is something like 46 minutes, right? From the moment the ticket is issued. So if something's coming through that sort of digital portal and we see, you know, tickets being paid faster, then that's gonna improve our cash.
And that's why you're seeing a big, big change in our cash flow, because we've made a number of changes in our back office process for how we issue the tickets and the speed at which we issue them from contravention. And then, of course, you know, getting that to the motorist. The quicker you do that, the more likely you're going to get paid, and the more likely you get paid quickly, which is why you're seeing the 40% uplift in cash, or in free cash flow. So, you know, the environment in Denmark, yes, is positive. It's made us change a few things around our technology, which has had a big impact across the group.
and we expect that to have better, even further positive impacts as we grow in that territory. Thanks, Paul.
Okay, so this question is from Mo: Any plan to repurchase shares? So I'll ask the first part of that question. So in FY 2024, we didn't do a share buyback. In the previous financial year, we did, at an average price of AUD 0.23 per share. Did you want to answer a bit about the future?
Well, at this stage, we're keen to-- Obviously, the buyback we've done has been very successful. As we look at where the price is today versus where we bought the shares, so that's positive. At this stage, we're focused on, you know, investment for growth. So we're probably gonna put the money into, obviously, you know, further organic expansion, new territory expansion, and probably some additional accretive acquisitions. So I suspect that's where the investment's gonna go, Mo.
Yeah. Next question from Will Lawrence: In your market review or research of the U.S., are the majority of operators still manual or, the existing operators with some technology elements?
There is a technology element, and most of it's manual, but there are technology elements there that we've seen on recent research trips. Again, it depends where you go, state by state; it's quite different. There are. I mean, still lots of kind of what I would say traditional operations with you know boom gates or barriers in place, and some of these are operated by ANPRs. We have some interesting back office operations. Very few kind of barrier-less, gateless environments, so that's obviously a big opportunity for us, and also you tend to see a lot of these kind of what you call at-grade lots or you know outside lots. You don't tend to see a lot of those managed in the same way that we do, right?
You often see, you know, a person wandering around, or it might be a car, an ANPR car that goes around taking pictures. Again, you know, none of this is as effective or as efficient as a static ANPR camera on entry and exit, watching everybody in and everybody out. So, U.S. is a really interesting market to us, and I see a huge amount of opportunity there. You know, for the right opportunity, if that makes sense. We just have to get that entry right. We're gonna take our time, be careful and considered, to make sure we get the right one. But, once we're there, I see a big opportunity. Do we have any other questions to come? Well, this week we're obviously on the road.
We're seeing shareholders and giving a number of presentations in both Sydney and Melbourne this week. So I suspect I'll see many people on this call throughout the next few days, as we, we've a number of meetings that are lined up. But I guess if, if there are no further questions, I'll, I'll just, I'll just finally recap on the, our, I guess, our priorities for the year, which, you know, for us, clearly, you know, we've, if I just finalize with, we've started the year well, okay? As I mentioned a moment ago, we expect another year of profitable growth and positive cash flows, and as I say, we've started FY 2025 with a 34% growth in revenue on last year. As of today, this, we are at 1,465 ANPR sites under management.
You can see we've continued our growth momentum as into the new financial year, and we're very close to our 1,500 sites target, which we set some time ago. Again, if we talk about the bigger picture, we are at an inflection point. We've talked a lot in the questioning around new territories, talked a lot in the questioning about the U.S. in particular. You know, we see these, these new territories and other, and the U.S. in particular, as a much larger, larger growth chapter for us. As well as continuing to grow in our existing territories, we're well-placed to selectively expand into these markets. We want to build scale in multiple markets and significantly broaden our base, strengthen our business, and increase our earnings power.
Let's not forget, we've only captured what, less than 1% of the total addressable market we're in, and it's obviously a timely opportunity to expand the town elsewhere, so we have years of growth ahead of us. As we keep saying, you know, we will continue to complement our organic growth with disciplined and selective acquisitions. We can consolidate the industry, raise compliance standards, improve outcomes for site owners, and generate good returns for our shareholders. We have a strong balance sheet, and with positive cash flow, we're well-capitalized to take advantage of organic and inorganic opportunities as they arise. I think that concludes, unless there's no further questions. Like I say, we're gonna be on the road for the next, well, until Thursday, so we're keen to see as many people as we can.
Any other questions you have in the meantime, please do not hesitate to reach out. But, thank you very much for joining. That concludes today's call.
Thank you.
Thank you.
Goodbye.