By Ian Porter Manufacturing Reporter November 26, 2005 AdvertisementAdvertisement
THE road ahead will be a little bumpy for red light camera company Redflex but shareholders can expect their first dividend in about 18 months, the annual meeting has been told.
Chairman Chris Cooper said yesterday a slowing of orders in the June half-year would be reflected in a drop in installations this half, reducing earnings.
The company also has trouble with its biggest communications contract, with US partner Lockheed Martin cancelling the $48 million project less than a third of the way through.
Mr Cooper said the company signed only 10 red light camera contracts in 2004-05, but had signed 15 since the start of this financial year. It would install about 120 of the 200 cameras to be delivered this year, lifting the total to more than 650.
While Redflex would have to use some loan funds to meet the expected $20 million capital expenditure, Mr Cooper said cash flows were rising rapidly and would soon cover that spending.
"Within the next 12 to 18 months, we simultaneously expect to improve our cash flow position and also to … pay substantial Australian tax, which will lead to franking credits being generated," Mr Cooper said.
Assuming predictions were right, it was likely dividends would be paid in 18 months, he said. Redflex closed 14¢ down at $3.21.
