By on August 26, 2010

Despite collecting A$137 million in revenue from automated traffic ticketing, the Australian photo enforcement giant Redflex Traffic Systems yesterday announced its net profit before tax had fallen to a mere $442,000 for the first half of 2010. Redflex remains the number one player in the US market with US motorists providing 79 percent of the company’s ticket revenue. Redflex management, however, blamed recent losses primarily on “considerable public opposition” to photo radar and red light cameras in the US.

Earlier this year, public protests organized by the group CameraFraud.com helped convince Arizona Governor Jan Brewer (R) to shut down the statewide photo radar program run by Redflex. This cost the company $13.1 million in expenses and write downs. Similarly, as cities elsewhere in the country have decided to cancel their photo ticketing programs, Redflex has been forced to write down another $2.8 million in canceled contracts.

Citizen-led ballot initiatives at both municipal and state levels are potential threats,” the company warned.

Redflex explained to Australian investors that it would fight back against the public through a “managed media interface.” In Arizona, the company cited the creation of the Safer Arizona Roads Alliance as a front group to advance the firm’s corporate agenda in the guise of a non-profit “grassroots” organization. Redflex highlighted a similar effort it is undertaking in Illinois through a “group of advocates.”

Tough market competition accounted for additional losses. Arizona-based rival American Traffic Solutions (ATS) filed an ambitious lawsuit that cost Redflex $4.3 million in legal expenses, even though the Australian firm won the case. ATS also expanded its market share significantly in buying out the German firm Traffipax and the UK firm Lasercraft, bringing Redflex and ATS even in red light camera deployments. Overall, however, Redflex claimed a 47 percent market share with ATS taking 40 percent and Xerox-owned Affiliated Computer Services (ACS) dropping to a mere 9 percent.

ACS, the offshoot of Lockheed Martin IMS, used to hold the number one position in US automated ticketing machines. It has since shifted focus to ticketing in non-US markets. Redflex likewise has looked aggressively to install its products in friendlier, authoritarian regimes. Redflex recently signed three contracts in Saudi Arabia worth $34 million, added 36 new cameras in Qatar, delivered $3 million in cameras for Hong Kong and has secured approval for its products in Turkey.

International exchange hit the Redflex bottom line as an eighteen percent drop in the value of the US dollar against the Australian dollar cost the company $19 million. The company’s net debt now stands at $43 million. Redflex announced it would save money through new software that would “automate citation screening” and reduce the human effort involved in collecting on a ticket by seven percent.

[Courtesy:Thenewspaper.com]

Get the latest TTAC e-Newsletter!

Recommended

5 Comments on “Photo Ticket Firm Redflex Approaches Zero Profit...”



Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • Re: No Fixed Abode: Dealers Gone Wild!

    DeadWeight - “And you wonder why the manufacturers would tear down the pillars of heaven to get to a direct-sales model? The first automaker to turn that...
  • Re: Piston Slap: Foiled by a Dome Light?

    heavy handle - My guess is that your 12v battery is done, and/or you have some other power drain. Have your battery tested. Ideally, you should do both a load test...
  • Re: QOTD: What Should Replace the Chrysler 200?

    npaladin2000 - I might pay money to see that. If it wasn’t NASCAR anyway.
  • Re: No Fixed Abode: Dealers Gone Wild!

    John - Amen. Bring back Home Economics, make it a mandatory high school course for the boys and girls. How to manage a bank account, credit card, loan, grocery shop,...
  • Re: No Fixed Abode: Dealers Gone Wild!

    Alfisti - Why are interest rates quoted on ttac so damned high? Aren’t rates barely above 0%? I just secured a line of credit to purchase a vehicle and it’s...
  • Re: Piston Slap: Foiled by a Dome Light?

    zoomzoomfan - That’s really odd that it doesn’t shut the light off after a pre-determined time. Even my ’99 Pontiac Grand Am did that. I think it was...
  • Re: No Fixed Abode: Dealers Gone Wild!

    Kendahl - It’s a pity your dad didn’t go with you, let you make your deal but, just before you signed, took over the negotiations to get you a fair one. You...
  • Re: No Fixed Abode: Dealers Gone Wild!

    Suto - High schools should make sure that every student has a good grasp on 8-9th grade algebra. Unless the kid is a computer nerd or wants to be a carpenter or...
  • Re: No Fixed Abode: Dealers Gone Wild!

    Kendahl - The only thing Destiny and her mother might salvage from this disaster is interest on the loan. Destiny should put every spare dime into paying off the loan...
  • Re: No Fixed Abode: Dealers Gone Wild!

    mankyman - Great story. These types of things do happen to young white dudes too though. It’s not just financial illiteracy that makes dealers happy. They also...

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Matthew Guy, Canada
  • Seth Parks, United States
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Moderators

  • Adam Tonge, United States
  • Kyree Williams, United States