Note: My comments are in blue text.
We can win this!
Dear CameraFrauders, and lovers of constitutional government across the Republic. I am more than pleased report to you that one of the major offenders of our constitutional rights and the right to due process, Redflex is in serious financial trouble.
What does this mean?
It means we are having a major effect on their ability to expand their racketeering efforts, and to even continue to operate here in the United States. The most effective strategy to rid ourselves of this scam has been, and still is, to “starve the monster” by denying them revenue and the collection of citizen’s initiative signatures. I believe because we present a very credible threat to this scam by using our constitutional authority they will be and are being forced to look for more controllable, compliant populations as is stated in their report. Populations that are not in Arizona, or even in the U.S.
How do we deny them revenue?
The most effective way to deny them revenue is to take all measures (whatever they may be) to insure that as few tickets as possible can be issued, and that the ones that are issued are unenforceable, the ones that appear to be enforceable are not responded to in any way, and finally the ones that cannot be avoided are contested in court to the full extent of the law.
What do we need to do right away?
It is imperative that we strike now while the opposition is in a weakened state. The jugular of Redflex is exposed; we can end this quickly if we act now. We need funds for advertising and signature collection events and we need it right away.
What can YOU do today?
If ever there was a time when your generous contributions would be most effective it’s now, right now.
Come to every CF event you can… We’re in the home stretch folks… let’s not gas out now!
Excerpts from the REDFLEX FY2010 First Half Results 25 February 2010
Redflex has recorded revenue from operations of $65.08 million which is a 13.1% increase on the corresponding first half of the previous financial year.
Earnings before interest, tax, depreciation and amortization (EBITDA) were up 2.2% from $19.5 million to $19.9 million.
Read: “We didn’t make any more money even though our overall revenue went up”
The net profit before tax for the Group from operations was $4.29 million compared to the previous corresponding half-year profit of $6.10 million, a decrease of 29.7%.
Read: “We are bleeding money so fast that we can hardly keep the lights on”
The net profit after tax for the Group from operations was $2.86 million compared to the previous corresponding half-year after tax profit of $4.20 million, a decrease of 32.0%.
Read: “And after we pay our taxes, we’ve lost 1/3 of our business”
The increased revenue occurred despite a 10.1% adverse movement in the average AU$/US$ exchange rates between the comparative periods. The average AU$/US$ exchange rate for the half was 0.870 cents compared to 0.782 in the corresponding first half of FY2009.
Read: “Here’s some inane, distracting information that means absolutely nothing to the bottom line”
Redflex has maintained and enhanced its number one position in its industry over the past half year, with a record installation base in the USA and significant sales in key regions in the rest of the world.
Read: “We know it doesn’t mean much when we are hemorrhaging money but hey, we’re still number 1 in spite of it.”
However, the business, particularly in the US, has become more difficult over recent years, and the results reflect the influence of a range of adverse issues and circumstances on the business, including:
Read: “CameraFraud and similar organizations are kicking our asses.”
• the increase in the scope and cost of litigation against the company;
Read: “The suckers are getting wise and are starting to sue us.”
• the adverse impact of a major program in the USA which is running at a loss;
Read: “We’re losing money in Arizona like crazy!”
• the difficulty in collecting fines in some key jurisdictions, and the consequent effect on revenues;
Read: “Go figure…Americans don’t like to be lied to and robbed.”
• adverse developments in legislation at state level;
Read: “Dang! my ass hurts…”
• the rise of opposition from various groups opposed to photo enforcement, resulting in challenges to programs through citizen initiated referenda;
Read: “No, Really…CameraFraud is kicking our asses.”
• the cost of a targeted public safety awareness campaign in the state of Arizona to highlight the dangers of speeding and the contribution of Redflex in that environment;
Read: “Selling this BS to intelligent people costs a lot of money, especially when CameraFraud is kicking our asses.”
• the litigation action taken by Redflex Holdings Limited against the arranger of the Interactive
Telephony Partnership; and costs associated with the action which led to the changes to the board at the AGM.
Read: “There is no honor among thieves.”
At the AGM in November 2009 shareholders voted to change the board with the election of three new nonexecutive directors. The new board has moved quickly to understand and assess the business and has set the following key parameters for the strategic direction of the group:
• Reduction of risk in the business, particularly in the USA where Redflex currently assumes almost all of the risk of shared programs;
Read: “We need to make the cities and states take the risk so we don’t have to. So what if elected officials lose their jobs over it.”
• Maximising revenue from existing, new and renewed contracts;
Read: “We need to squeeze as much out of the remaining suckers as we can before we sink.”
• Investigation of new sources of revenue from existing customers;
Read: “We need to find more new suckers.”
• Improvement in the performance of the poorly performing state wide contract;
Read: “We could try to bribe more officials to change the rules, even if it’s against the law.”
• Diversification of the business into lower risk collateral areas; and a specific focus on reducing the capital costs of camera systems through technology development.
Read: “Abandon Ship! We need to get the hell out of Arizona, and maybe even the US altogether.”
The issues that have dominated the first half of the 2010 financial year are expected to continue in some measure for the remainder of the year.
Read: “CameraFraud is NOT going to stop kicking our asses so we should probably get used to it…”
There have been many initiatives taken already to improve on the poor performance of the Arizona statewide program, which should give rise to progressive and incremental improvement. Over time the collection rates on this program should rise to the average level achieved in Arizona, however that average rate in the State is significantly lower than in other states. There remains a risk that the contract could be terminated in July 2010.
Read: “ARE YOU LISTENING TO ME? CAMERAFRAUD IS KICKING OUR ASSES!”
As has been experienced over prior years, there is no guarantee that all contracts will be renewed at completion of their base contract term. Some cities have decided not to continue, and we have experienced early shutdowns in two cities. This can result in write-downs where there are assets that are not fully amortised.
Read: “It sucks we still have payments to make on all this damn camera equipment, but the truth is, eventually some of the suckers get wise and kick us out, let’s just be glad that they still don’t tar and feather people.”
The rate of new contract signings has clearly decreased since a year ago. It is not clear at this stage whether this is driven by the economic environment, by the level of opposition, or by a slowdown in the rate of growth in the industry as a whole. However, Redflex’s rate of capture of new contracts is much greater than any of our competitors.
Read: “No, Really… We’re having real trouble selling this BS to people, but look on the bright side we’re not having as much trouble as the rest of the thieves.”
Revenue is expected to grow broadly in line with new installations planned, and efforts are under way to reduce risks to that revenue and improve margins, which are currently at low levels. A range of initiatives in technology and operations should reduce direct costs and give rise to some improvement in margins progressively.
Read: “Please, Pleeeeeeeaase don’t bail out on us now, I really need this job, I just built a new house, and my wife spends money like they’re monopoly bills!”
Outside of the United States, some of the larger projects are expected to be implemented progressively, both in the second half of the current financial year and into the next year. The Saudi Arabia and Ireland projects are key examples. Margins have generally held up well in these markets. In Australia, our relationships with state governments are good and we expect ongoing opportunities in most states.
Read: “So in conclusion… Let’s get the hell out of the United States. There are not enough suckers to go around here, and besides these people are just plain mean.”
For further information:
Chief Executive Officer
Redflex Holdings Limited
+61 3 9674 1715
Chief Financial Officer
Redflex Holdings Limited
+61 3 9674 1754