8/30/2019Redflex Ends Another Year Without Profit
Redflex Traffic Systems continued its six-year losing streak in fiscal 2019.
Redflex Traffic Systems on Monday announced it had ended the fiscal year without turning a profit. The Australian red light camera and speed camera operator has racked up losses for six consecutive years following the revelation of the firm's involvement in a widespread corruption scandal. For 2019, the firm posted an $8.6 million loss -- a five percent improvement from the prior year thanks to a $5 million reduction in the outstanding balance for the penalties owed to Chicago, Illinois. Despite some positive trends, major challenges remain for the business.
"Disappointingly, the state of Texas in the US passed a law that effectively banned the use of automated photo enforcement cameras," Redflex told Australian investors. "This resulted in the effective termination of our existing contracts in that state. Despite the loss of Texas, other large new business opportunities have emerged."
States and cities continue to reject the use of red light cameras and photo radar, so Redflex has had to adjust. The company now makes the majority of its new sales outside the United States. Deals to sell automated ticketing equipment to the UK, Belgium, Australia and Saudi Arabia helped boost receipts by $41 million.
The firm explained that it now intends to target "enabled" US jurisdictions that have large photo ticketing programs and lawmakers willing to pass "strong public policy initiatives" favoring automated ticketing machines. The company expects to land a $30 million deal to operate speed cameras on Pennsylvania freeways next year.
"The ethos of Redflex has indeed changed," Board chairman Adam L. Gray wrote in his introduction to the annual report. "We are proactively pursuing more, bigger and higher quality opportunities with a demonstrated and growing ability to win... We will continue to monitor public sentiment by jurisdiction and prudently steward resources in those markets most receptive to photo enforcement."
While Redflex competitor Verra Mobility has returned to profitability, Verra Mobility has over $1 billion in debt. Redflex, by contrast, has $48,555,000 in total liabilities.
Based on the results, Redflex rewarded its top management with significant raises. New CEO Mark Talbot boosted his take 39 percent to $1,107,981. General counsel Craig Durham's $23,000 raise brought his salary and benefits to $337,501.