3/2/2017Redflex Reports $26.2 Million Loss
Australian red light camera provider continues its downward financial spiral.
The red ink has not slowed at Redflex Traffic Systems, the troubled photo enforcement firm. In documents filed with the Australian Securities Exchange on Tuesday, the Melbourne-based company admitted its losses for the first half of the fiscal year swelled to $32,961,000 before tax, or $26,262,000 after taking into account tax writeoffs.
Overall revenue dropped five percent to $4 million from the previous year's results as more and more cities decided to stop using red light and speed cameras entirely. Declines were sharpest in the United States, where revenue dropped 8.9 percent.
"The decrease in revenue was primarily attributable to a number of contract terminations in the USA," Redflex chairman Adam Gray wrote. "Our contract renewal rates remain strong and the terminations are generally the result of the cessation of the photo enforcement program in a particular locality, not losses to our competitors."
The company also recovered some money by firing employees, but layoffs were not enough to cover the $25.3 million cost of settling the legal case against the company in Chicago, Illinois. The company faced potential damages as high as $383 million after being caught distributing bribes to Windy City officials to guarantee that it would win Chicago's lucrative photo ticketing contract.
After having been burned in its US operations, Redflex is looking elsewhere for expansion.
"The Americas business has commenced developing new revenue streams in new markets (Mexico and Latin America) and new products (hand-held speed cameras)," Gray wrote. "The Americas business has commenced developing new revenue streams in new markets (Mexico and Latin America) and new products (hand-held speed cameras). Additionally, opportunities to further expand in the Canadian photo enforcement market continue to be pursued and delivered."
Even so, the company's operations outside North America grew at a mere 0.6 percent. In the event that new options do arise, Redflex secured a $10 million loan to cover working capital needs. The company insisted it would remain a viable part of a photo enforcement industry set to generate $4 billion in revenue by 2021.