Fundamental Management Policy
This section introduces the basic management policy, medium- to long-term management strategies, and each of our challenges.
Basic Management Policy
PARK24 Group’s philosophy is “We create new forms of comfort and convenience by responding to the needs of today and anticipating the needs of tomorrow.” PARK24 Group provides comfort and convenience in forms both familiar and entirely new. The Group helps to make urban environments and the lives of people living and working in them richer and pleasanter. The Group listens carefully to our customers to create services that meet the needs of the times. At the same time, we will contribute to the sustainable development of society by promoting business development and initiatives that contribute to solving environmental and social issues.
In order for the Group to realize the "comfort" demanded by the times and contribute to the sustainable development of society, we recognize the importance of expanding the scale of our Parking Business and Mobility Businesses, as well as expanding and evolving our services, and therefore we recognize that ensuring high growth and profitability is a management issue. Therefore, we have set the growth rate of recurring profit as the most important management indicator and strive to maintain double-digit growth sustainable growth.
The Group recorded a net loss for two consecutive fiscal years beginning in the fiscal year ended October 31, 2020 due to the significant impact of COVID-19, and the shareholders' equity ratio was largely decreased. In response, we issued new shares through an overseas offering on April 12, 2022, and achieved profitability for the first time in three fiscal years in the fiscal year ended October 31, 2022, and have steadily accumulated profits in the fiscal year ended October 31, 2023, thereby recovering the shareholders' equity ratio to a certain level. We continue to recognize that achieving financial soundness is an important management issue, and we target a stockholders' equity ratio of 30% at the end of the fiscal year ending October 31, 2025 as a financial indicator.
Medium term business strategies
Regarding the short-term business environment, while the impact of COVIT-19 is slowing and economic activities are picking up, the outlook is still expected to remain uncertain due to soaring resource and energy prices, rising global prices, and sharp exchange rate fluctuations caused by monetary policies of various countries.
Regarding the medium- to long-term business environment, we believe that climate change due to global warming, changes in behavioral patterns due to global population growth and changes in the demographic structure of each country, the ongoing digital revolution, and rapid advances in technology will progress at an accelerated pace. Based on this recognition of the macro environment, we have identified five materialities (key issues) that we will prioritize by organizing risks and opportunities for the Group. The Group believes that its sustainability efforts will contribute to the enhancement of corporate value for society as a whole and for the Company. We will continue to promote initiatives that contribute to the five materialities in order to realize a sustainable society through our core business in accordance with international standards.
- (i)Contribution to sustainable global environment
- (ii)Provision of safe mobility and transportation infrastructure services
- (iii)Innovation for comfortable society
- (iv)Promotion of active participation of diverse human resources essential for corporate growth
- (v)Establishment of strong management foundation
The core of our medium term business strategy is to promote the expansion and seamlessness of our four networks: people (members), cars (mobility), communities (destinations), and parking facilities.
With regard to the first (parking) of the "four networks," we intend to expand our network by developing a stable supply of parking facilities both domestically and internationally. We recognize that the environment is conducive to the development of parking facilities, especially in Japan, where there is a chronic shortage of parking spaces and a large supply-demand gap. In addition, to improve customer convenience, we are working to develop next-generation parking services where entry/exit and payments can be done smoothly and stress-free. Overseas, we are developing our parking business in the United Kingdom, Australia, New Zealand, Singapore, Malaysia, and Taiwan, and in each region, similar to Japan, we are working to expand our parking network and develop parking facilities. In the U.K. and Australia, the core of our international operations, we are promoting the development of short-term contract parking facilities suited to the parking demand environment in each region based on our Parking Business Japan strategy of "small, diversified, and dominant" in order to optimize our business portfolio, which is biased toward large, long-term contract parking facilities, to reduce business risk and improve profitability.
Regarding the second (mobility), we will expand the number of vehicles and rental locations for Times CAR, a new mobility service that combines car sharing and car rental services. Times CAR is a convenient service that allows customers to rent the type of car they want, whenever they want, wherever they want, for as long as they want. As a result, both the number of members and the operation of Times CAR have been growing steadily, and we recognize that this service is capable of continuing significant growth in the future.
In the third, communities, which is the destination for our customers, we will increase the number of member stores for Times PAY, a cashless payment service to provide comfort for both member stores and customers, and to thereby expand the communities (destinations) network.
In the fourth category of members, the expansion of services for cars (mobility), communities (destinations), and parking, respectively, will improve convenience and provide easy-to-use services, thereby increasing the size of both corporate and individual members.
In the "Seamless" segment, to improve the convenience of Group services through digital investment, we will enhance customer convenience by upgrading smartphone application functions for various services and strengthen linkages; improve profitability of parking facilities by optimizing spaces such as hourly, reserved, monthly and Times CAR allocation; and reform business infrastructure such as business processes to promote cost reduction and efficiency.
Through these efforts, we are targeting 1 million parking spaces in the Parking Business Japan, 100,000 Times CAR vehicles, and 10 million Times CLUB members(Achieved in January 2023) by the fiscal year ending October 31, 2026.
As a company that provides mobility services, including parking, throughout the world, the Group will strive to achieve sustainable growth to become the world's No. 1 company in terms of services as well as profitability, and to enhance corporate value by fulfilling its corporate social responsibility, thereby earning the trust and meeting the expectations of all stakeholders.
Issues to be Addressed
We recognize the following as issues to be addressed based on our medium- to long-term management strategy in order to accelerate our growth toward our group philosophy: "We create new forms of comfort and convenience by responding to the needs of today and anticipating the needs of tomorrow”.
(i) Addressing environmental issues
In the midst of a business environment in which global demands are being made to address climate change, the parking facilities and mobility businesses operated by the Group are attracting attention as one of the main providers of Electronic Vehicles (EV) and EV chargers. In the parking facilities business, we will promote the installation of EV chargers in our parking facilities, while being aware of the spread of EVs. In the mobility business, we will promote the introduction of EVs into our mobility services, while also being aware of the spread of EVs.
In addition, in December 2021, we expressed our support for the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), and are working to enhance the quality and quantity of our disclosure of information on climate change issues. We will continue to contribute to the reduction of environmental impacts by promoting specific initiatives while keeping an eye on the drastically changing business and social environment.
(ii) Providing stable services
The Group recognizes that parking services and mobility services are social infrastructure. To ensure that each service can be provided in a stable manner, we will build an operating structure that allows Group services to be centrally managed and will also enact strict rules in order to maintain quality.
The Group also provides services to its customers through IT systems. Accordingly, we will work to ensure stable operation by making sufficient investment in IT systems and developing and recruiting human resources with IT skills.
(iii) Expanding the four networks
The Group will provide customers with an environment in which they can use the Group services more comfortably by expanding the scale of its four networks: people (members), cars(mobility), towns (destinations) and parking facilities. To this end, besides strengthening development capabilities and service proposal capabilities within each network, the Group will also promote utilization of ICT in areas such as business data analysis and data marketing.
(iv) Expanding business globally
The Group expanded its parking business to Asia in 2006 and to Oceania and Europe through M&A in 2017. At SECURE PARKING and NATIONAL CAR PARKS, which joined the Group in 2017, we will instill the Group philosophy and seek to develop a shared awareness for the achievement of sustainable growth.
The Group also recognizes that developing and strengthening its business foundation and improving and enhancing profitability though expansion are issues that need to be urgently addressed. We will address these issues by making significant improvements to the parking facility management and operation structure, entering new markets through the rollout of new services and pursuing other initiatives. In addition, by promoting the development of short-term contract parking facilities suited to the parking demand environment in each region based on our domestic parking business strategy of "small, diversified, and dominant", we will strive to optimize our business portfolio, which is biased toward large, long-term contract parking facilities to reduce business risks and improve profitability.
By organically linking its business assets, the Group will create new value while also providing a comfortable environment for customers to use the Group's services more easily and conveniently. To this end, in the area of seamless operations, the Group will enhance digital investment to improve customer convenience by upgrading smartphone application functions for various services and strengthening linkages, improve profitability of parking facilities by optimizing spaces such as hourly rental, reserved rental, monthly parking, and Times CAR deployment, as well as reduce costs and improve efficiency by reforming business processes and other business infrastructure. We will also promote cost reduction and efficiency improvement through renewal of business infrastructure such as business processes.
(vi) Developing diverse human resources and creating an environment in which employees have job satisfaction
The Group believes that employees create much of the value in the services it provides to customers, and that the development and hiring of human resources and the creation of a rewarding work environment are essential for its sustainable development. In an era in which products and services are strictly selected, employees are an important management capital that determines a company's competitive advantage. We are striving to develop and recruit human resources with respect for diversity, and that “maximizes their individuality, fulfills their expected roles, and continually improves their abilities.”
(vii) Promoting health management
The group has declared the "Health Management Declaration" in order to build a workplace environment in which employees of all ages can play an active role in good physical and mental health. We believe that the maintenance and promotion of the health of our employees and their families is an important issue in the management strategy of our group, and by incorporating the perspective of health management, we aim to provide an environment in which employees can proactively and positively work to improve their physical and mental health, and to create a high-performing, energized organization.
(viii) Strengthening financial soundness
The Group has posted a net loss for two consecutive fiscal years since the fiscal year ended October 31, 2020, due to the significant impact of COVID-19. In response, on December 30, 2020, the Group raised funds through a syndicated loan with a subordinated clause in order to maintain and improve its financial soundness while securing long-lived funds for investment in growth in anticipation of the end of the pandemic. In addition, we issued new shares through an overseas offering on April 12, 2022, and achieved profitability for the first time in three fiscal years in the fiscal year ended October 31, 2022, and have steadily accumulated profits in the fiscal year ended October 31, 2023, thereby recovering the shareholders' equity ratio to a certain level. We continue to recognize that achieving financial soundness is an important management issue, and we target a stockholders' equity ratio of 30% at the end of the fiscal year ending October 31, 2025 as a financial indicator.
(ix) Strengthening corporate governance
We believe that strengthening corporate governance as part of moves to strengthen the management basis is important in order to realize improvement in the Group’s corporate value through sustainable growth. We are, therefore, seeking to build a structure for accurate and speedy decision-making and business execution and an appropriate supervision and monitoring structure. Meanwhile, to further strengthen the effectiveness of corporate governance from the viewpoint of soundness and fairness, we will also endeavor to improve our self-purification ability by thoroughly implementing risk management, internal controls, and compliance initiatives across the Group, which will, in turn, help us to gain more trust from stakeholders.