2/6/2015Red Light Camera Profits Continue To Tumble
Turn of US public opinion against photo ticketing brings financial woe to Redflex Traffic Systems.
Red light camera vendor Redflex Trafic Systems saw its stock plummet more than 16 percent overnight as news of its dismal financial performance hit investors. The company on Thursday formally announced a $10 million trading loss for the financial year, even though the company had previously said it would break even.
The promised "recovery" never happened, largely because of increasing dissatisfaction throughout the United States with photo enforcement. As the company admitted in January, New Jersey's statewide rejection of red light cameras and Ohio's new law "significantly reducing the viability of red light systems" will cost the Australian firm $4.4 million. Redflex realizes that it will have to move to other markets because of the shift in public opinion across America.
"Given the impact of negative legislation and limited new growth opportunities in the US, we have increased our focus on entering and profitably expanding in new geographies, including in the UK and Canada where we have recently secured new contracts and both are markets that have significant demand for our core products," the company told Australian investors Thursday. "Our international business is performing in line with expectations and we expect this business to continue to grow."
Redflex troubles do not end with New Jersey and Ohio. A serious effort is underway to outlaw red light cameras and speed cameras in the Arizona legislature, and insiders suggest that the votes are there for passage. Likewise, the Texas House has long sought to ban red light cameras, only to be blocked in the state Senate. State Senator Don Huffines (R-Dallas) has been working behind the scenes to clear away the hurdles to that have kept the ban from making its way to the governor's desk.
"Red light cameras are unpopular, unsafe, and unjust," Huffines said in a statement. "Texans not only reserve the right to face their accuser in court, but they also deserve the respect, discretion and judgment of a peace officer instead of the cold and uncaring camera that generate images and revenue."
Redflex has several highly lucrative contracts in Arizona and Texas. Losing those states would add to the $2.3 million loss brought on by the failed effort to turn school buses into automated ticketing machines. The company is desperate to find a way to position the buses so that they will maximize the number of tickets issued.
"The balance of the Student Guardian installed base has generated lower incident volumes than anticipated, and we have slowed further contract implementations until we understand how the performance of these bus routes can be optimised," Redflex explained to investors.