I didnt get a chance to attend the meeting for this one due to a conflicting work discussion, however will have a look later when I get a chance.
Things I like about their current update
- Revenue up 20% from the previous year
- Net cash from operating activities up 231% YoY
- ACT deploying Seatbelts from 3 November which will further increase revenue from the same assets
- Expansion into US and UK starting to go well with revenue starting to come in
- NZ rollout is going well, with rollout commencing in May and full capacity expected to be rolled out by FY 26
- Trialling of the railway safety cameras (which are very popular from a political perspective) which could lead to further revenue streams in the future
- ISO27001 Certification for the UK entity should provide them with future tenders
Things not to like:
- Like @BkrDzn said, the litigation from Redflex is still a big unknown from a price impact perspective.
- Statutory NPAT and FCF significantly down from the previous year, albeit from amortisation of assets, with $9.5m spent on trailers for future rollouts
- Staffing costs up 30% and cost of services up 20%, some of which will increase further once full year of NZ cameras is realised
- Significant expansion in USA and UK underway which could divert their attention away from core revenue in Aus/NZ.
The annual report does not also mention the additional camera locations for SA which could come live later this FY. Given the track record to date, it is very likely that new contractual announcements will also occur over the coming year.
While there's some big expenditure being outlaid in the short term the thesis for this one is well in tact and still expecting NPAT for 2027 to be in the $15-20m range (pending future contracts).
My calculations are still showing that 2026-27 will be the best year for revenue, before some of the bigger contracts will need to be renegotiated. Still very bullish of the opportunity here, especially if the legal proceedings with Redflex are not to materialise.
I would be keen to hear from Alex about their experience with tenders and how the value proposition is being received in the market amongst existing/new customers.
Disc: Held IRL and SM.