PARKD Limited (ASX:PKD) Managing Director & COO, Peter McUtchen, discusses the company's modular car parking systems' advantages over conventional car parks, contract wins and 2H19 outlook.
Katrina Bullock: Hello, I'm Katrina Bullock for the Finance News Network, and joining me today at FNN's investor event is PARKD’s Managing Director and Chief Operating Officer Peter McUtchen. Peter, welcome to the network.
Peter McUtchen: It's a pleasure to be here.
Katrina Bullock: Peter, could we start by getting you to give us just a little bit of an introduction to the company and what you do?
Peter McUtchen: PARKD (ASX:PKD) is a really unique company. It offers the market a full turnkey parking solution for multilevel car parks. It's modular, it's relocatable, and it's eco-friendly, so to speak.
So we offer something unique to the market in that we were in construction, design construction, and in property development. So we offer what would be the perfect storm for developing car parks and constructing them.
Katrina Bullock: And where do you see car parking solutions going, over say the next decade?
Peter McUtchen: It's a very disruptive time in the parking world as it is with vehicles. We see electric vehicles changing things in car parks, we see autonomous cars coming in and creating new opportunities for developing car parks in new places. The relocatable nature of the car park means that we can react very quickly to where this need is. Previously, car parks have been very static and they are where they are, but with our solution they can be where they need to be.
Katrina Bullock: And when you say quick, how did the timeline of your projects compare to, say, a traditional car park?
Peter McUtchen: So we've recently, as a bit of an example, we've recently put together a tender for a public car park in Perth. It's for 1,200 cars, about 30,000 square meters, and they needed this built in 70 days, which is 14 weeks. If you look at traditional construction, that would be something like 14 months. So if you look at that as a way of demonstrating the benefits of the system, it is phenomenal, and it changes the way that we develop car parks as well. The economy's completely changed when you can capture the revenue of car parks, like a year's worth of revenue, that would've been taken up in construction. That's a lot of money.
Katrina Bullock: And zooming in on PARKD's unique solution for car parking, what are the advantages compared to a traditional car park?
Peter McUtchen: Well I've already mentioned speed. It's cost-effective because we use half the amount of material in our car parks in concrete. So that's half the weight of a traditional concrete car park. So, phenomenal advantages there. It's all prefabricated. The project that we just completed in Perth only required four people on site to build it. Compared to a traditional project, you would be flooded with guys doing form work and fixing steel.
So there's speed, cost. You know in terms of the lightweight nature of it, that means a lot less embedded carbon.
Katrina Bullock: And can you tell us a little bit more about the precontract design, the sales, and the leasing?
Peter McUtchen: So we have in-house engineers who develop the concepts and develop the solutions for our clients, and it takes some time. We have to work with them to get the right solution, and then go through the council process of approval. But we are getting very, on quite a few projects we're getting to the point where we can see the starting point of construction, and it's extremely exciting. But having that full control over the process is great for our clients, because it's turnkey, and it's great for us.
Our clients at the moment come from the auto retail sector, so we've got Subaru, Mazda (TYO:7261), Audi, Toyota (NYSE:TM), all these companies are looking at our solution as being a bit of a saviour for them. They haven't had this solution before and it completely changes their business model in that sales. These guys look at it as a way of saying, for the customers, when they come in and they go, "Yeah, but I wanted a red one," and usually that sale goes out the door if the red one isn't there. But having the red one there, in the car park, means they make the sale.
For them, it's very basic, and looking at our other clients around, the major airports in Australia. We've spoken to pretty much everybody and we've done, we've completed works for one of the biggest airports in Australia, for a car park that's enormous. Talking 16.5 thousand car bays. The need for parking is increasing all the time.
Katrina Bullock: And now turning to financials, can you tell us a little bit about your funding position and how the share price’s performed over the last 12 months?
Peter McUtchen: We're in a really strong cash position. We've got a good, low burn rate, and a lot of support from our directors. It's been a tough time for a lot of people out there in our space and we've appreciated that, there's, patience has been needed by our investors. But we see that the hard work we've been doing over the last 12 months is going to bear a lot of fruit for us over the next 12 to 24 months.
Katrina Bullock: Thanks Peter McUtchen. Now, before I let you go Peter, one final question. Did you have any other words for investors?
Peter McUtchen: The next 12 to 24 months is an exciting time for me, the business, and for investors because we're in front of strong revenue, and we're in front of also the company evolving into the property development side of things. And that's really where we see investors are really going to be attracted to the business. Annuity, having that founding base of income for the business, that is where PARKD has got an extremely attractive future.
Katrina Bullock: Peter McUtchen, thanks for the update.