The experience over the past decade of Lo-Q, winner in the International Trade category, shows that time – or at least saving it – is indeed money.
Queueing has become so disliked by US consumers that some will pay up to $500 (£307) a day to rent one of Lo-Q’s devices and avoid standing in line with their families at a theme park.
It was the unfortunate experience of waiting around for hours on a hot summer day that led Leonard Sim, a Scottish engineer, to come up with a pocket-sized pager-like device that allows users to pre-book their rides.
“We had no idea of people’s propensity to spend money to avoid standing in queues,” says Tom Burnet, chief executive of the Berkshire-based company, adding that, once installed, Lo-Q has never lost a theme park.
Initially run from Mr Sim’s spare bedroom and garage, the company now works with 22 theme parks around the world, notching up an 18 per cent increase in pre-tax profits last year, to ₤£2.32m, on revenues up 16 per cent at ₤£20.3m. More than 90 per cent of revenues come from exports which, in turn, have grown 120 per cent in three years.
The company supplies, installs and operates the queue-busting devices and the networks that support them. Once start-up and other costs are deducted, it shares revenues with park owners. Take-up on a busy day is usually a little under 20 per cent of visitors.
“Those guests are no longer standing in queues and have more time to spend money,” says Mr Burnet. “There is a really good secondary effect for the park.”
The company initially financed itself with ₤£250,000 raised from family and friends before listing first on London’s Ofex market and then on Aim in 2002 after securing its first customer in 2000.
But it ran into difficulties because of a patent dispute and the withdrawal of a key leasing partner, and its share price collapsed to 3.5p, down from the Aim flotation price of 100p. It was rebuilt, however, to the point when last year the board, facing succession issues, set a new strategic direction.
Mr Sim, still by far the largest shareholder with nearly 19 per cent, says the choice was between selling the company, running it as a lifestyle business “plodding along” or adopting an ambitious growth plan. The board opted for the latter, bringing in Mr Burnet, a former senior executive at Serco, the FTSE 100 outsourcing company.
Among other things, he has revamped the sales and marketing functions. The company has added four parks so far this year and is about to launch a wristband version of its initial product for use in water parks.
The company sees many further uses for its technology and plans to maintain high levels of capital expenditure – last year’s figure was just over ₤£800,000.
“The potential stretches to lots of other environments – festivals, big events, cruise ships and so on. Smartphones have hugely increased the scope of who we can talk to,” says Mr Burnet. “We have spent 10 years studying queues and how to monetise them, and have some good patents. We don’t think there is anyone else with this level of know-how.”