Once considered impervious to recession, some photo enforcement companies are showing signs of distress during the ongoing economic downturn. Long-struggling Nestor Traffic Systems has been the worst hit. On Wednesday, a Rhode Island superior court judge appointed Jonathan N. Savage, a partner with the Shechtman Halperin Savage law firm, to take charge of selling the failed company. Former members of Nestor’s inner circle have pointed fingers at the company’s leadership.
“In the past twenty months you and the board have removed Nestor from the industry as a competitor, broken crucial strategic partnerships, ran the company out of money, lost customers, defaulted on its debt, but somehow, managed to increase senior management compensation during this time frame,” former Nestor CEO William B. Danzell wrote in an open letter to the company’s CEO in March.
The firm’s impending bankruptcy was first revealed in February when Nestor failed to pay subcontractors for work performed in Fullerton, California. The company also backed out of a recently secured contract with the city of Lima, Ohio.
While still profitable, Redflex Traffic Systems, a company based in Melbourne, Australia, is no longer pulling in the impressive growth figures delivered in the past. For 2009, the company predicted it would boost profits by 40 percent. Instead, it delivered profit 10 percent lower than the previous year. The company pointed to trouble with Arizona speed cameras and the sinking value of the US dollar as the prime culprits.
“Redflex’ financial performance in the Arizona statewide program has not met original expectations due to: the removal of mobile enforcement vehicles as mentioned above; the hold on the anticipated rollout of 24 additional fixed camera systems; and technical issues causing delays in receiving information from the various courts in the state,” Redflex Chairman Chris Cooper explained in a letter to Australian shareholders.
“Although the medium to longer term prospects for the Arizona program appear to be very good, the program will not meet original expectations this year. Also, the Australian dollar has firmed against the US dollar in recent times, although exchange rates obviously remain volatile.”
Cooper insisted that the company had plans for massive growth as more local jurisdictions turning to red light camera and speed camera programs in the tough economic times. The company is enticing cities like Phoenix, Arizona with the possibility of ramping up the number of tickets issued with “secondary violation capturing and processing.”
That means the existing automated camera systems will begin issuing extra tickets to drivers who fail to wear a seatbelt, drive without both hands on the wheel or have a burnt-out turn signal. Such tickets are commonly issued in England, which has even issued tickets to drivers accused of making an obscene gesture toward a speed camera.
“Redflex is the most qualified partner for the city to vastly expand upon the current scope of the program to include large-scale rollouts of new enforcement solutions such as the ones highlighted above,” Redflex Holdings Board Member Karen Finley said in a statement on Monday.
With the company’s financial health tied so intimately with Arizona speed camera programs, passage of the CameraFraud.com referendum banning photo enforcement in the state would be devastating to Redflex stock which currently trades at A$2.18 (US $1.75) a share on the Australian Securities Exchange
Chalk this up as one good thing to come from this recession.
-ted
All readers of TTAC should each send in ten dollars (or however much it takes) to Robert and we’ll BUY the company. We’ll ONLY ticket politicians’ and cop’s cars. ;-]
May they rot in hell.
“In the past twenty months you and the board have removed Nestor from the industry as a competitor, broken crucial strategic partnerships, ran the company out of money, lost customers, defaulted on its debt, but somehow, managed to increase senior management compensation during this time frame
Shouldn’t they qualify for Federal bailout?
Gosh, that’s too damned bad. I weep for their lost money.
Ask yourself what organizations would want to have access to the ability to pull up plate numbers, and tell by simply entering license number, where that vehicle was at given times, even though the vehicles are not in violation of any laws, this goes on 24/7. If you passed any number of Redflex cameras going across the state or country even 6 months ago they can tell you where and when. Homeland security has a disclosed contract with Redflex to track American citizens. They can pull up your plate number, and track you by a simple push of a button. That is any Red light, highway, or in fact any surveillance camera any where in world you may drive. Why are they so very strong in Arizona, where you are afraid to go to the bathroom their are so many cameras? Napolatano, Homeland security director was until the new administration came into office the governor of Arizona, so you can now kiss the privacy of every U S citizen in the country good bye.
you can now kiss the privacy of every U S citizen in the country good bye.
Oh, NOW we can? “Warrantless wiretaps” ring a bell?
” For 2009, the company predicted it would boost profits by 40 percent. Instead, it delivered profit 10 percent lower than the previous year. T”
So, they are predicting profits 66% of last year’s forward estimate. In the absence of a crystal ball that is a pretty good outcome, in my opinion, in the current climate.
Still, any stick will do to bash them with, eh?
As I’ve said before, if you want to get even with Redflex, buy shares in them. I haven’t, but maybe I will just so I can rub my hands with glee at these stories.