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Commentary 1H FY21 Results
Outlook and Business strategy
Continued roll-out of our “SmartCity” platform
LED street, road and tunnel lighting installations
Term supply contracts
Further export sales to a range of overseas markets
Traffic Technologies is expanding rapidly, and the $9m contract win today follows closely on the heels of another contract won last week worth $5.7m.
Provider of end-to-end traffic management, IoT and Smart City solutions, Traffic Technologies LTD (ASX:TTI), has secured long-term recurring revenue in Queensland after being awarded contracts worth $9m.
The contracts were awarded by the Queensland Department of Transport and Main Roads (TMR), for the supply of a wide range of traffic management solutions including hardware and associated software across the state.
The five-year contract also contains two options for further three-year extensions, which means that it could potentially expire as far out as 2032.
Traffic Technologies’ (ASX: TTI) position in the Tasmanian street light market has been extended beyond its initial contract term after TasNetworks submitted a forward order for about $3 million of its smart city-ready LED street lights.
https://smallcaps.com.au/traffic-technologies-secures-further-purchase-tasnetworks/
This is one I looked at a few weeks ago and then got distracted (by my day job) and promptly forgot about it. From my recollection they are the only one in this space still manufacturing in Australia – resisting the temptation to go offshore as their competitors have done – to retain control of both quality control and speed to market.
The story must be working with a recent extension of an agreement with TasNetworks for an LED lighting until late 2022 in a deal worth an additional $3M, plus a $9M linkup with Transport and Main Roads in Queensland proving hardware and software. This one is a 5+2+2 agreement which is the kind of deal that you boast to your mum about.
Today they have also announced a $10M contract for supply of traffic and safety signage for councils in Victoria. The company notes their kit, now installed in over 30,000 sites, is approved for use in every council in Australia.
More than that tough, they have not limited themselves to the Australian market with something like 80,000 of its “smart city” hardware devices installed in 128 cities in more than 20 countries.
Looking back at FY21 revenue was ~$52M from the global customer base, almost 20% higher than in FY20. This delivered an after-tax profit of $200k, a huge turnaround from the nearly $14M hole the previous year.
The market was, in a world, underwhelmed.
The share price has been in a slide for some time now but on the back of recent wins has it become investible? Managing Director Con Liosatos for one thinks so, he bought in multiple tranches through 2019 and 2020.
Initial contract $1.3mill for Sydney. Fingers crossed it leads to more councils.
Ausgrid estimates reduction of greenhouse gas emissions by 56% annually through energy savings, fault detection, optimising dimming functions.
Quietly plodding along...