Redflex Holdings, (RDF:ASX), everyone’s favorite scamera company, just dropped some pretty awful forecasts to its shareholders in a release to the Australian Securities Exchange. Citing major issues with collection and “infringement detection,” the operations in Arizona were all but called a flop.
Redflex says the problems won’t get any better in the coming months. Quoted from the release, “the net profit before tax result for the first half of the 2010 financial year is expected to be lower than the result for the previous corresponding period.”
In simpler terms, Redflex is expecting their earnings to drop next year as compared to this year. 2010 is shaping up to be a tough year for them, which doesn’t come as a surprise to anyone who has ignored a photo radar ticket. You can’t make money if people aren’t paying for your services and people won’t pay if they know you are trying to scam them.
Shareholders didn’t like the news much, as shares of the company dropped 10% in early trading Wednesday on the Aussie Exchange. Arizona is turning out to be an “expensive failure” for the company, which led to the ouster of its chairman and two directors in November.
Year to date, Redflex common stock is down 35%. They are truly “in the red” for 2009.