TTI (ASX) Ann: Earnings Guidance

Originally posted by Padova: ↑

This is my understanding of the area and TTI, I don't work with TTI, so there may be variations from what TTI would tell.

Traffic control and smart cities is growing at an exponential rate and will continue to grow for the next 10 years. This is because of the trend towards urban congestion and city living which leads to large revenue losses and CO2 emissions caused by heavy traffic and traffic jams.

Working in the smart cities space and traffic control is what TTI has evolved into over the last 10 years, aiming to provide a complete traffic control infrastructure solution. They were initially a traffic control group, i.e. men on the ground in traffic management, where they racked up alot of debt and have been successfully paying it down from 50mill to the ~8mill it is today, while managing to evolve into a traffic solutions company. This makes it hard to nail down future revenue as alot of TTI's services are still in the growth phase.

In terms of the trends, for the LED street lighting, it's part of an Australian national initiative to convert all halogen lights to LED lights and smart lights, at current its something like only 20% converted. There are competitors in this space, but TTI is one of the few national companies, and it's smart LED street light has won awards, and they have been consistent in winning contracts. Australia needs to catch up to the rest of the world in LED conversion. More about that here, http://www.slsc.org.au/slsc/slsc-publications/slsc-roadmap

Recently they were awarded the $15 mill contract in Tasmania, and from what I saw that may have involved establishing an office in Tasmania.

They also one of 4 licensees of scats software, and now manufacture IOT traffic controllers with a large global footprint. SCATS is owned by NSW transit authority and is a major global traffic control system. This area is growing largely due to the relationship between the the controllers and SCATS software. Not sure if the TSI software plugs into SCATS if it does that would be significant as it would allow traffic authorities a one stop solution.

TTI have recently established a maintenance section so also gain recurring revenue from traffic maintenance.
TTI are the major providers of road signage and traffic lights in Australia and revenue is fairly consistent from these sectors. They have also moved in to the smart led sign space aswell as preparing for the vehicle to infrastructure space where cars receive information from smart traffic lights, signs, controllers etc about road conditions and traffic flow. As far aTTI are involved in every facet of the smart traffic space.

The smart city software is still nascent and is part of a government smart city initiative, current funding was around ~50mill, you can read a little about it here to get an idea of some of the uses of the software,

https://pacetoday.com.au/rmit-research-using-sensor-technology-trial-smart-city-management/

They are also trialing the smart city software in the UK and Hong Kong, will need to wait on TTI to provide a revenue breakdown and roll out. As they've indicated that it's happening across the eastern seaboard, which is significant.

A breakdown of revenue in 2018 from the annual report is as follows.

There is plenty of room for growth in TTI's model and if successful will be a essential part of Australian traffic into the future.

All IMO DYOR.

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You seem to know TTI pretty well Padova, obviously done your research.... maybe next step is contacting TTI investor relations and question why the lack of announcements to the market?

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