11/16/2016Redflex Continues Its Move Away From US Photo Enforcement
Along with a new logo, Redflex Traffic Systems of Australia decides to move away from photo ticketing in the United States.
Beset by major scandals and an ongoing federal corruption investigation, Redflex Traffic Systems realizes it needs more than a new logo to demonstrate that the company is moving in a new direction. During a meeting with Australian investors earlier today, top Redflex management outlined the latest strategy for survival in more detail.
"As you know we've got two major markets -- Australia and North America -- which together account for the vast majority of the group's recurring revenue and profitability," Redflex CEO Paul Clark said. "The US continues to face the same headwinds you've heard us report for several years... in particular it is a mature market punctuated with banning legislative threats and populous pushback."
Last month, Vista, California became one of the over seventy towns in the Golden State that tried red light cameras and decided it was a mistake. Even when local politicians do not change their minds about cameras, citizens force the issue with ballot initiatives, such as the one currently circulating in El Paso, Texas.
"In light of these realities, the decision we have had to make is between retrenchment or to invest for growth and diversification," Clark said. "We chose the latter... In other words to meaningfully advance our geographic diversification beyond the Australia and the US."
With the former head of US operations for Redflex being sentenced last week to thirty months in jail and a $2 million fine, cities around the country have decided not to do business with this Australian photo ticketing vendor. Overseas, however, Redflex has successfully expanded enough to turn last year's $38.6 million loss to a mere $3.6 million loss for fiscal 2016, as non-US revenue jumped 40 percent.
"Your board and management continue to work to resolve the US Department of Justice criminal investigation and the civil litigation relating to the now historical misconduct in the United States," Clark explained. "We are committed to the highest standard of conduct for the New Redflex, and to helping to responsibly close out these matters."