new redflex cameras, page-7

Hi again,

All very interesting and a side of the business I wasn't exposed to in the presentations made to me in Qatar.

I have to say that Gatso gave by far the worst presentation, partly due to the local agent not being up to much.

Gatso have tried to marry newer technologies onto legacy systems that they had, rather than biting the bullet and going wholeheartedly into the new. Their camers had a bizare electromechanical, kind of home-made, focussing suystem that needed regular maintenance. Any Japanese camera manufacturer (Sony for instance, who supply Redflex their cameras I seem to recall) can provide an established and competant, maintenance free, sealed, focussing sytem.

Gatso have tried to do everything themselves rather than concentrate on the things they specailise in and farm everything else out. It is a policy that is costing them dearly now.

My project did not consider wet film and so we really didn't get any flavour of how the digital compares to the wet in conversion rates. Anyway, as somebody who has bought in on 3 occasions I am pleased to hear that they have the lead for more reasons than I already knew about.

Another poster on Hotcopper gave a $5 share pice by the new year prediction. I think this is possible & likely.

Working the mathematics behind the investor briefing into a spreadsheet gave a figure of around US$15 EPS when they had ramped up to the couple of thousand sytems. However pessimistic one might be, anything aproaching $20 Australian dollars per share earnings will be reflected in the share price as it becomes a mature, rather than speculative share.

The dififculty I forsee is them maintaining the installation momentum. Getting orders will become easier with every confirmed order but their ability to manufacture and install systems wil be increasingly stretched and this a a danger point when quality can drop. We will see how the management deal with bursting order books. The servicing back office end of things is no problem as this can be scaled up at virtually no cost or farmed out to India if needs be. That's one of the beauties of the systems being internet nodes - the processing can be centralised for efficency - non of the other vendors offered anything similar that I recall.

I'm tipping this for $60 by end of financial year 06/07 or 1764% from todays price of around $3.25. Bold words and I won't be dissapointed if it only makes a 1000%. I tried to do a 'stock picker' but couldn't get it to work so my brave words are for the readers of this posting only. - You are honoured!

I am accumultaing as my protfolio grows - as I have margin loans I can't have too high a % of non dividend paying stock so Redflex is abut 17% at the moment.

Keep the faith and retire on this one stock alone.