Lo-Q has been making the news recently. Two significant new contracts have been signed: the first with Compagnie des Alpes and the second with an as yet unnamed major US theme park operator.
It’s just two years since Tom Burnet (left) took over as CEO of the virtual queuing specialists with a mandate from the Board to “go for growth”. In that time Lo-Q has seen strong revenue and profit performance reflected in a healthy increase in share price.
Blooloop caught up with Burnet to find out how it’s going and what he thinks the future holds for queuing technology.
A Three Phase Plan
Since his appointment as CEO, Burnet has been keen to transform Lo-Q from a successful start-up to a mature business with strong foundations and prepared for growth. In a previous interview with Blooloop, Burnet had laid out his three stage plan for the company.
The first two elements of his plan were to tighten up corporate governance, including a review of advisors and management structures, and sharpening up operations, in particular the sales pipeline. He says that he is “delighted with the progress that we’ve made on loads of fronts.”
So having “changed a huge amount of what’s supporting the business day to day”, Burnet is pleased to be moving forward with the growth phase of the plan. “What’s interesting for us is that we’re now onto Phase 3 which I hope will be the most fun bit.”
Under Burnet’s leadership, Lo-Q’s revenue growth has had a kick start. The potential for future growth is something that Burnet is particularly excited about. In terms of organic growth, Lo-Q’s business model, in which Lo-Q shares profit with the operator, means that there is growth locked into the existing contracted business.
Burnet says, “We create a growth business story each time we start work in a new park. We know that in the first year of operation that piece of business will do well. However, experience tells us that the business will continue to grow for 3, 4, 5, 6, 7, 8, 9, 10 years if you operate it well, as guests get familiar with the system and understand the benefits. It’s a really unusual but fantastic model – for our customers and the park guests!”
Lo-Q has recently announced that another major US theme park operator has signed up, taking Lo-Q’s tally to six of the world’s top ten theme park companies as customers. On announcing the win, Burnet said, “We’re absolutely delighted! We’re installing right now and hope very much that it provides a route to further growth in the US over time.”
With queuing solutions now becoming an accepted part of the theme park model, and a partnership with Sanderson signed to cover the Far East, Burnet is confident that others will come on board. “In terms of the top 10, we have built strong and mutually profitable relationships with more than half of them to date. That’s great progress – but there are clearly an enormous number of other significant operators and independents that we’re very confident we can add value to as well.”
Having developed a successful business model with inbuilt growth in the near term it would have been easy for Lo-Q to be complacent. But after securing the company’s IP, (the company has a patent portfolio of some 25 patents relevant to this space) Burnet is looking to the future with new technologies rather than an upgrade of the Q-bot. “When we first started the Q-bot had to be built from scratch. That was down to us and it was a lot of hard work. These days Apple, Samsung and the other handset manufacturers are doing that job for us. Q-smart is a smartphone based solution that allows theme park guests to access Lo-Q’s queuing services as well as ticketing and payments, location based services and the operator’s existing apps. For customers willing to spend more there is also the option of waiting for less time. The advantages of a cloud-hosted mobile solution are that no stocks of Q-bots, sales offices or additional servers are needed at the theme park.”
Compagnie des Alpes
Compagnie des Alpes (CDA) has recently announced that Walibi Holland will be the first theme park to use Q-smart. With a customer demographic weighted towards local teens, Q-smart is a good solution for the park.
Burnet says, “We would obviously be delighted if Compagnie des Alpes were sufficiently impressed with the product that they chose to install it elsewhere. They have demonstrated that they’re a company that’s open to new ideas and let’s hope that we have the opportunity to work with them in a number of ways, but clearly only if it’s going to be sensible for them and deliver what they and their guests want.”
In terms of the potential to engage with customers outside the theme park industry, Burnet believes that for “the state fair market or single line attractions, museums, events, festivals, one off shows, all of these markets, we can now address the whole customer base in a different way.”
In the short term, where smart phone ownership is still growing and roaming charges and data costs can be high, Burnet acknowledges that Q-smart may not be the right solution for everyone. However, he foresees that in the next three to five years that will change as the world follows the Far East to 4G, parks will consider offering Wi-Fi for guests and consumers will come to expect ubiquitous, fast data on their mobiles as a “free” resource.
At the end of 2011, Lo-Q had a healthy £7.5 million in cash on the balance sheet. Burnet has expressed his interest in making acquisitions, in particular in the supply chain which he believes is unusually fragmented in the Attractions Industry.
However, he is not feeling under pressure to spend saying, “It’s about finding the right one isn’t it? I like having cash on the balance sheet. It helps me sleep at night to know that we can pay the bills and make some investment choices.”
The strategy is now to “continue to do more of the same in terms of growing our business organically and developing products around our core business, but, at the same time, looking for these adjacent products which will add value to our core.”
“The technology world is going to consolidate onto the smartphone and we need to be ready for that. So when I think about potential acquisitions I’m thinking about that for sure. We’re are always looking at where we think we might be able to make sensible additions to our technology portfolio and asking, ‘What else is there that we could offer our customers to improve the guest experience?”
Tom and the Lo-Q team will be at the IAAPA Attractions Expo, 12-16th Nov, on booth number 3654