PARKD finishes up contract with WA’s John Hughes dealership on-time despite sector chaos

Perth-based readers will likely know exactly who John Hughes is, but for those on the east coast, some explanation might be needed around today’s news from modular carpark maker PARKD (ASX:PKD). 

John Hughes, based in Victoria Park just outside the CBD, is the largest WA-owned car dealership in the state; its owner, of the same name, is one of the richest men in Australia. 

Its mammoth Victoria Park landholding (as far as urban city design goes) is where PARKD has built its most recent modular carpark, installing a two-level carpark for the dealership inside an existing one-storey warehouse. 

Modular carparks are what they sound like: quick to build and modifiable depending on customer needs and specifications. 

Floor area doubled 

The introduction of a mezzanine level into the warehouse is a testament to the company’s ability, though, one which the market has overlooked today as macro trends continue to deflate sentiment across the board. 

In short, PARKD has seen John Hughes effectively double the gross floor area of its existing Vic Park warehouse. 

Using a mix of high-weight-bearing steel beams and prefab slats, the company was able to rapidly build a permanent second storey, all while kept indoors and without needing to modify the exterior dimensions of the existing warehouse.

The big thing to note: construction took only six weeks. 

Traditional construction unable to compete: Management 

“We are delighted to see the benefits of our system of building fully realised on this project, clearly demonstrating our technology creates opportunities where traditional construction cannot compete,” PARKD MD Peter McUtchen said. 

“The delivery of the project further strengthens our ability to pursue [contracts] in a challenging market with greater control over project outcomes.” 

PARKD has not revealed the commercial value of its contract. 

How is PARKD going? 

PARKD is firmly a microcap, with a capitalisation of $2.7m; its share price is 2.7c.

The company is ranked 2,369 of 2,418 players in the Industrials sector and is fairly illiquid. 

A summary of stock price performance reveals the following: 

• One month returns down -6.9% 

• Year to date returns down -50.9% 

• One year returns down -28.9% 

Macro trends depressing sentiment are amplified by construction-specific concerns with major supply chains across the country disrupted and a growing number of building firms liquidating. 

However, one feather to put in PARKD’s cap is the fact it was able to complete its recent contract with John Hughes on-time and on-budget, even as supply chains remain mangled. 

The company finished the June quarter with $0.88m in cash. 

PARKD's three month charts