My school years were particularly unexceptional, as surfing was my prime focus and an education that included compulsory weekend team sport came a distant second.
Surprisingly, I was introduced (begrudgingly) to the classics by Captain Alastair Courtenay, a very conservative former English soldier turned teacher. I was captivated by the myths and legends. The books that drew me in were The Iliad covering the Trojan War, then The Odyssey by Homer, detailing the adventures of Odysseus from the Trojan wars through the perilous journey back to Ithaca where he uses his wits to escape from Calypso, disfigures the Cyclops and finally leaves the clutches of Circe before returning home to wreak revenge on his wife’s unsavoury suitors.
This brings me to a modern myth and legend: Operating carparks is an easy business; a recipe to print money.
Whilst there are no fantastical creatures in the business, the list of companies that have either failed and disappeared forever or been taken over is as long as Odysseus’s conquests:
- Pacific Parking
- Kings Parking VIC
- Wilson Parking Australia Ltd
- Hooker Parking (no joke!)
- Lend Lease Parking
- Mirvac Parking
- KC ParkSafe
- Premier Parking
- Prestige Parking
- Park Fast
- Choice Parking
- Ezi Park
- Grimes
But such tragedies have not prevented new entrants to the market – either from a startup perspective (such as Point, Nationwide and First Parking) or from large international operators such as Park24 acquiring Secure Parking.
A number of these gallant operators are private companies, exempt from filing detailed financial reports. However, when we look at both Secure and Care, we get a clearer picture of the low returns relative to the risks of leasing carparks – and the very low fees earned from managing them. The following table summarises the position for Secure Parking over the past 3 years and highlights the impact that COVID had on the industry as a whole.
Even if the full year plan for 2023 is realised (including 91 new sites), the margin is only 7.2% – which is exceedingly thin as the economy enters a slowdown that will impact non-essential consumer spending, such as parking.
As of 30 September 2021, the companies total current liabilities exceeded total current assets by $150,693,000.
The company has $70m in loans and borrowings and is fortunate to have a substantial owner in Park24 unconditionally standing behind it, having outlaid approximately $177m for the business in 2016.
