Ann: Q4 FY19 Sales Activity Update, page-20

Part of a report from The Australian yesterday...
https://www.theaustralian.com.au/bu...e/news-story/3bace416873d0aad55c97206de3f9475
“Stocks that drive motorists spare

• TIM BOREHAM
• 12:00AM JULY 27, 2019......

......Redflex (RDF) 41c

While Australian motorists grumble about copping a speeding or red-light camera fine, they generally pay up without further remonstration. But not so in the US, where camera citations are viewed as un-American and increasingly are being banned by governments or subject to adverse court judgments.

The backlash has been an increasing headache for traffic camera maker and operator Redflex, which derives close to half of its revenue from the US.

In May, the Texan government in effect banned traffic cameras. Redflex said the Lone Star state accounted for 13 per cent of its total half-year revenue in the first (December) half — which implies $7.4m — adding the ban would “materially” affect financial performance.

In July Arizona’s El Mirage city council turned off its speed cameras, in favour of having extra cops to dish out the fines personally.

Given the solid evidence that traffic cameras save lives, the authorities’ actions seem retrograde. But a big difference between here and the US is that police chiefs are elected and thus are behove to popular opinion.

While further camera program windbacks seem inevitable, Redflex has had its wins as well. Two days after the Texan ban, the company said Pennsylvanian traffic authorities awarded an $US30m ($42m) multi-year contract to enforce automated speed enforcement on highway work zones.

Canada is also proving more receptive to the “cameras save lives” message. This month the company won a deal from Toronto Council to install and operate automated speed enforcement technology. The five-year deal is worth up to $25m.

Locally, the Victorian government this week renewed a contract for Redflex to service 150 cameras, in a three-year deal with two one-year extension options (the initial three-year period is worth $15m of revenue).

Given the US backlash, Redflex’s mantra is more about tools to monitor traffic and detect incidents. It is also in Smart Parking’s game of deploying number plate recognition for parking management, such as at Melbourne’s Chadstone shopping complex.

In a business update, Redflex reported new business orders of $41.5m in the year to June 2019, up 42 per cent, with a rolling total contract value of $300m.

In the December half Redflex reported revenue of $57m (up 7 per cent) and underlying earnings before interest tax and depreciation of $9.1m (up 63 per cent).

But a steep depreciation charge on the cameras resulted in a $945,000 loss, an improvement on the previous $10.8m deficit.

Investors slashed the value of Redflex shares by 25 per cent after the Texan revolt, but the flow of new orders suggests the company isn’t doing everything wrong. If it can avoid further US potholes and hone its focus on broader traffic management, performance finally might switch to the fast lane.”


Cheers