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11/20/2015
Redflex CEO Confirms Photo Enforcement On The Decline
Redflex admits there is no more room for growth in the US red light camera or speed camera market.

Redflex strategy
Redflex Traffic Systems no longer considers the US red light camera and speed camera market an opportunity for growth. The firm's top leader told Australian investors on Wednesday that he had a plan to deal with the company's $38.6 million loss for the year -- ten times the red ink in 2014.

"Negative US public sentiment and emerging new vehicle technologies will reduce the demand for photo enforcement in the future," Redflex CEO Paul Clark said.

In California, for instance, more than sixty cities that once had photo enforcement have eliminated camera use, with automated ticketing being voted down at the ballot box three times. There are now more former red light camera customers than active users of cameras in the Golden State.

In previous statements, Redflex has hinted at its intention to shift focus away from photo ticketing. This year's annual general meeting served as an opportunity to explore those plans in greater detail. Redflex, for example, hopes to acquire smaller companies that would move Redflex out of the red light camera and speed camera business. This is a significant reversal of priorities, considering Redflex in 2007 divested its defense contracting business to focus exclusively on automated ticketing.

"Redflex's future is in providing Intelligent Traffic Systems or ITS solutions," Clark explained. "We need to leverage our ability to integrate hardware and software into the parking, tolling and traffic management markets... These markets will diversify us away from speed and red light which will continue to be impacted by negative public sentiment and increasing in-car automation."

Even if diversification is successful, the company's future remains clouded by an ongoing federal bribery investigation. Chicago, Illinois filed a $300 million "qui tam" lawsuit to recover the damage done by Redflex executives in the corruption scandal that has seen four individuals plead guilty, including Redflex executive vice president Aaron M. Rosenberg and US operations chief Karen Finley.

The company has since replaced its entire board of directors and top management, a move supported by investors on Wednesday. The move to new markets is seen as the company's only hope to return to profitability.

"The two capabilities that we need to develop are an ability to process, issue and receive payments for infringements, such as tolls and parking and to extract information that can be used to develop traffic management strategies," Clark said. "Redflex needs to be faster, smarter and better than our competitors. This has been an inherent part of our DNA but our execution needs to improve and the number of markets we operate in needs to expand."



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