5/24/2005Ohio Anti-Camera Bill Moves Australian Stock Market
Redflex stock tumbles on the Australian Stock Exchange on news that the Ohio House passed a bill that would effectively ban red light cameras.
Investors in Australia are taking note of state House passage of a bill that would effectively ban the use of red light cameras in the Ohio. Analysts with Credit Suisse First Boston Australia Equities Ltd. downgraded their recommendation for red light camera contractor Redflex to "underperform." Because the bill requires Senate passage before becoming law, Australian analysts do not think the ban is an immediate threat, but it represents a significant risk to Redflex which has ten percent of its camera business in the state of Ohio. Redflex stock tumbled 8.2 percent on the news to AUD $3.12, off 28 cents.
Redflex profits have recently boomed as a result of U.S. cities choosing the Australian camera company, which has an edge in digital camera technology. In February, the company cited a 413 percent growth in profits, at the time giving the stock a 4 percent boost to $3.82. Redflex has offices in the United States, but it is a wholly owned Australian company which reports all profits to the Australian Stock Exchange.