8/30/2005Redflex Reports 183 Percent Increase in Profits
New red light camera contracts drive growth in profit for Australian camera maker Redflex this year.
Redflex, the company that runs the greatest number of digital red light camera traffic systems in the US, today reported that its profits for the fiscal year had grown 183 percent, down from 413 percent growth previously reported. The company made the increased fiscal year 2005 earnings claim in a filing with the Australian Stock Exchange. Redflex is a 100 percent Australian-owned company.
Redflex cited its photo enforcement programs, particularly in the US, as the primary source of revenue growth. The company offers two different types of financial arrangements with cities that want to share the benefits of red light and speed cameras. Some like Minneapolis, Minnesota pay the company a flat-rate of $1 million a year to run the camera program on behalf of the city. Others, like Council Bluffs, Iowa hand over between half and three-quarters of the amount of each citation to Redflex. In both cases, the company has a financial interest in ensuring a steady stream of citations to drive growth.
The company has also ensured growth by boosting the total number of Australian cameras watching American roads from 301 last year to 489 now, despite the loss of cities like Virginia Beach after the Virginia legislature outlawed the use of photo enforcement in the state.
A similar move to outlaw cameras in Ohio worries Australian investors. In May the Ohio state House passed a ban sending Redflex stock plunging. With state Senate consideration pending, there is concern its ultimate passage could lead to the problems that brought the demise of two other Australian camera companies, Poltech and Transol. In its filing, Redflex promised to use its lobby group, the National Campaign to Stop Red Light Running, which it funds together with other camera manufacturers, to prevent passage of legislation that could affect profits.