Traffic enforcer Redflex in the red as losses widen and revenue falls
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Traffic enforcer Redflex’s numbers are at rock bottom this year — but at least it’s no longer being investigated for fraud by the city of Chicago and the US Department of Justice.
No word yet on whether an Australian Federal Police investigation into the US operations has concluded yet.
The traffic light manager saw revenues drop 11.7 per cent to $121 million in the past year. Net loss after tax worsened 572 per cent to $31.5 million. But it does still have just over $8 million in the bank.
Redflex’s (ASX:RDF) shares fell slightly to 57c, valuing the company at $63 million.
“The decrease in revenue was due to a reduced number of deployed systems in North America resulting from contracts not being renewed, contract expiry and the completion of some large international contracts during the year,” the company reported in its results.
The reason for fewer deployed systems in America was because several of Redflex’s biggest former clients have barred it from providing traffic light services, on the back of alleged corruption charges.
In February, Redflex settled a case with the City of Chicago, agreeing to pay $20 million in annual instalments until 2023 with $10 million coming this year. In 2012, services by its US subsidiary to Chicago were worth 13 per cent of the company’s earnings.
Redflex won a contract to supply red light cameras to Chicago in 2003, collecting some $400 million in fines — of which Redflex kept $100 million.
Last year Redflex settled a case with the US Department of Justice, agreeing to pay the City of Columbus Ohio $100,000.
Redflex’s America CEO Karen Finley pleaded guilty to bribery charges in the cities of Columbus and Cincinnati between 2005 and 2013, when the misconduct was discovered.
Finley was sentenced to 30 months in prison and $US2 million in restitution for paying bribes to a city official.
City Hall manager John Bills was sentenced to a prison term for accepting bribes of $2000 per camera.
Redflex is now hoping it is back on track.
Paul Clarke resigned as group CEO this month, after steering the company through the last three years of trauma, and is replaced by US businessman Mark Talbot.