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11/18/2011
Photo Ticketing Investors Content with Declining US Performance
Investors accept that as more cities reject red light cameras, Redflex revenue decreases.

Redflex AGM coverInvestors in Redflex Traffic Systems were resigned toward the photo enforcement vendor's declining US performance at Wednesday's annual shareholder meeting in Melbourne, Australia. The company has lost significant US market share and profit as more cities reject automated ticketing machines. Nonetheless, large executive compensation packages were approved without the dissent found in past meetings.

Shareholders signed off on a $324,926 salary for chief executive Graham Davie, plus $194,956 in stock for a total of $519,882 -- a raise of 3.6 percent. Board member Karen Finley's salary increased 3 percent to $318,270 plus $196,060 in stock for a total of $514,330. Finley is in charge of US operations which saw a drop in profit from the first and second half of the year of 7.4 percent.

Redflex has also lost its position as the dominant player in the automated ticketing market to American Traffic Solutions which has used funds invested by Goldman Sachs to buy out smaller competitors and take on their municipal contracts. ATS now boasts the greatest number of cameras deployed.

Those numbers are at risk to voter revolt, however. On November 8, two-thirds of voters in Monroe, Washington moved to send Redflex packing and 55 percent did so in South Euclid, Ohio. So far, twenty-one cities have held ballot initiatives to force the elimination of red light cameras and speed cameras. Other city councils have seen the results and canceled expected programs.

In her annual meeting presentation, Finley promised her company would "avoid ballot initiatives" by blocking voter access to the ballot and "create positive environment for renewals and expansion" by increasing the use of front groups to support automated ticketing machines.

The company is also looking to expand operations by turning school buses into photo ticketing vehicles and bringing more red light cameras to Alabama, Florida and Canada. It has also followed the lead of ATS and filed a lawsuit against its customer, Farragut, Tennessee, because a state law prohibiting photo tickets for right hand turns on red is costing the company significant revenue.

Redflex stock currently trades at $1.70 on the Australian Securities Exchange, down 34 percent since May.




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