8/18/2021Red Light Camera Industry Returns To Profitability
Company with near-monopoly in the US automated ticketing market plans to roll out 650 new speed cameras this year.
By Richard Diamond
Speed camera and toll road camera operator Verra Mobility (formerly American Traffic Solutions) earlier this month announced its return to profitability. For the second quarter of the year, Verra reported a net income of $4 million -- an improvement over the millions in losses the company racked up in 2020 as a result of people not renting cars and using toll roads during the Covid-19 virus scare as well as the shutdown of schools which reduced speed camera income.
"We've got these leisure travelers that are driving, and the patterns that we're seeing in their driving behavior are really driving revenue results and profitability for us," Verra chief financial officer Patricia Chiodo told investors during a conference call. "So they're taking longer rental agreements in that time period. They're running more tolls, which creates more billable administration fees."
The financial turnaround is also significant since the firm has just completed acquisition of the troubled Australian red light camera operator Redflex Traffic Systems, which has been losing money ever since its executives were caught in a corruption scandal in 2014. Verra quickly "established a new leadership team" at its formal rival and is working on integrating Redflex further. The biggest driver of growth in Verra's current photo ticketing business has been the massive expansion of New York City's speed camera program, which added $12 million to the company's bottom line last quarter.
"As we realign our teams, our focus remains on the greenfield opportunities we are pursuing in Georgia and Virginia, as well as our CrossingGuard [school bus camera] offering," Verra president David Roberts explained. "We plan to install 650 cameras in New York, Washington and Georgia during the second half of 2021."
The company currently operates a total of 5966 ticketing cameras, but executives noted that risks remain for the business, including the possibility that "audits and investigations" could cause trouble for Verra.
"The team is kind of running all out," Roberts said. "As it is, we've staffed appropriately to get up to eighty cameras a month. So I think that's going to be the pace and if we get lucky with some good weather."
Verra Mobility maintains a total debt of $1 billion.