A bit late to the party, but in early Dec the SA Government announced information about the rollout of new MPDC across South Australia.

https://www.dit.sa.gov.au/news/articles/2025/december/more-detection-cameras-to-catch-drivers-red-handed

I have highlighted a few key items below which may be pertinent to Acusensus.

There is no mention of Acusensus in the release, or this lates round of cameras in the latest capital raise information released by Acusensus (see excerpt below)

Why do I think that these new cameras are likely to be awarded to Acusensus in the future?

-       Governments would typically need to announce a market process when they are purchasing new materials. After a quick search of the SA government Forward Procurement Plan and tenders page, I can only see that they are out to market to replace 15 Jenoptik speed/red light cameras. It would be unlikely that a new market process could be run between now and the required delivery timeframe.

-       Initially, SA went out to market with a proposal to buy 7 Mobile Phone Detection Cameras. They then expanded this by another 10 cameras at a later date. From my count, 13 cameras have already been deployed across SA across 5 locations, with 4 cameras to still be rolled out in the future.

-       The 8 Jan 2024 announcement from Acusensus confirming the contract award mentioned that there will be a staged rollout in South Australia (see excerpt below)

-       It would be very bizarre if the remaining four cameras funded under this budget announcement aren’t operated by Acusensus.

If Acusensus is the likely operator of the new cameras in SA, why has nothing been announced to date?

-       As the remaining cameras are being built on new gantries, DIT would have had to complete due diligence investigations and design processes before confirming any potential camera locations for Stage 2.

-       While there has been a formal announcement by the SA Government, it is my take that Acusensus have not officially disclosed anything to the market, as they have not signed any contractual/variation to officially increase the number of cameras they operate in SA.

-       My gut feel is that something like that will likely come out early next year (especially if they are to make the mid 2026 rollout date)

If awarded to Acusensus, I would expect that ongoing revenue from SA will increase to around $1m per annum in July, and further increase to around $1.4-1.6m per annum once phase 3 is rolled. Not huge in comparison to the NZ deal, but would still help them to nudge closer to generating a positive NPAT.

This is by no way a guarantee that any new cameras in SA will be awarded to Acusensus, as my hypothesis is based on publicly available information to date.

DISL: one of my largest holdings IRL and on SM.

Redflex Commences Legal Proceedings Against Acusensus and CEO Alexander Jannink

Today it was announced that Redflex Traffic Systems has initiated Federal Court proceedings against Acusensus IP Pty Ltd (a subsidiary of Acusensus), Acusensus Limited, and Managing Director Alexander Jannink.

https://announcements.asx.com.au/asxpdf/20250618/pdf/06kw6d5h4h2ckm.pdf

This legal action relates to alleged intellectual property infringement. Notably, Acusensus disclosed this issue in its 2022 IPO prospectus as a risk factor:

Section 4.1.6 – Intellectual Property Infringement Claim

“In December 2020, a competitor alleged that the Company and/or Mr Alexander Jannink may have infringed copyright in certain code. The competitor also alleged that Mr Jannink may have breached obligations owed to the competitor under his previous employment.

The Company engaged legal advisers, responded to the allegations, and received no further communication after March 2021. The Board considers the allegations to be without merit and did not disclose them to any customers or potential customers.”

Alexander Jannink’s Background

Before founding Acusensus in 2018, Alexander Jannink spent over a decade at Redflex Traffic Systems:

·       Joined as a Software Engineer around 2006

·       Progressed to Product Engineer and Development Team Leader

·       From 2015 to 2017, served as Head of Future Product Group, leading R&D efforts across Australia and the U.S.

About Redflex

Redflex, founded in 1997 and based in Melbourne, was a major provider of road safety and traffic enforcement systems. It was previously listed on the ASX before being acquired by U.S.-based Verra Mobility in 2021 and delisted. In 2011, it was the target of a failed $300 million takeover bid by Macquarie and Carlyle Group. The company has operated extensively in Australia and the U.S., though it has faced legal controversies in the past, including bribery investigations tied to U.S. contracts.

Apologies for this being a bit light on specifics as I didn't bring my model with me to vietnam.

ACE update with the AGM is good. Revenue on track for mid to high $50ms ($57m) and depending on the timing for when WA comes on, there is scope to upgrade closer to $60m (and with it my valuation). GMs were also strong in the 47% range and I think is higher than I model. So unless they're about to load up some more costs, they may actually grow EBITDA with the guide being flat to down potentially. Reiterated doubling of international revenue which based on today and recent disclosure is supported but customer contracts.

So overall the business is tracking well, growing well with positive operating leverage with the potential to surprise a little to the upside.

For those wondering what a tender scope looks like, attached is WA's tender scope doc WAPOL11823 Safety Camera Industry Briefing.pdf

ACE takes One task to court

Shares rally 10%

Now we know why they were silent on One Task

Getting the popcorn out...

[Held]

Acusensus (ACE) is a tech co that provides automated traffic enforcement solutions with a specific focus on distracted driving/mobile phone use. ACE’s solutions are fixed camera or portable trailer based cameras which can detect a range of traffic offenses with the company’s IP in their Algos and knowhow of optimal detection set ups. Whilst ACE’s tech has been predominately used for mobile phone detection, it has been deployed for speeding, seatbelt and more recently, tailgating awareness in QLD.

ACE was founded and is lead by Alexander Jannink who owns ~13% of the company. Alex founded the business off the back of a friend who was killed by a distracted driver and whilst this as good a driver as any, Alex was formerly responsible for research and development as the Head of Future Product Group for Redflex Traffic Systems Limited (previously ASX:RDF). RDF was an Australian based traffic enforcement business which was ultimately taken over by Vera Mobility in 2021. I also note the board and management own/control ~30% of the business with the Chairman controlling ~16% via Ador Powertron Ltd.

Distracted driving is increasingly presenting as a major cause of serious collisions and deaths on the road and is becoming a new focus area globally for authorities in reducing road trauma. Use of a mobile phone whilst driving is of most concern and the key distraction type that is being legislated with the TAC stating that “drivers are 10 times more at risk of crashing if they are texting, browsing or emailing on their mobile phone” and “Taking your eyes off the road for two seconds or more doubles your crash risk. At 50kmh you will travel 28m in 2 seconds, that’s about the length of a cricket pitch”.

To date, enforcement has been challenging and considered resource intensive from a policing perspective and as such, has required technology advancements, such as that from ACE, for widespread enforcement to be possible. Technology providers like ACE not only enable broader enforcement, but they have also been used to better understand the extent of the problem through data collection programs.

ACE’s solutions come in 3 versions with:

-The flagship being Heads Up which is the fully automated captures system which can identify drivers speeding, using phones, not wearing seatbelts etc… and comes as either fix cameras or trailer based mobile units.

-Heads Up Real Time which is a trailer version which flags an infringing motorist to a police car down the road who enacts the enforcement. This solution is focused on the US market where automated enforcements can be tricky politically.

-Harmony is a basic version of the core system that offers a lower price point for speed capture solutions.

The revenue model is simple. The company wins contracts from government authorities and is paid for providing the requested enforcement solutions of the tender charging a fixed monthly fee per deployment.  The contracts are akin to a MSA which means variations and ongoing expansions of enforcement coverage can occur without retendering. Tenders are typical 3-5yrs with options to extend. As they are service contracts, ACEs own all gear, IP/data and the contracting party only tells them where to put cameras. ACE is not paid for rate of offences captured.

Since being first to go commercial with their camera technology in 2019, ACE has won multiple contracts for mobile phone enforcement in Australia as well as a speed contract in NSW. In addition, ACE has established a presence in the UK and US with regular deployments of their technology being used to collect data and test pilot the efficacy of the solution. ACE was awarded its first contract in the US in June 2023 in North Carolina and although it is a small contract, it is a stepping stone to accelerating adoption across further US states.

I believe ACE has and retains a global first mover advantage against the competition with Jenoptik winning in VIC (head to head) and Sensys Gatso winning in TAS (extension of a speeding contract), with the underlying tech for both from a small start-up called Onetask AI. Other technologies have been tested in the UK and Europe however there have been no broad enforcement contracts conducted to date in these regions. Whilst others have been used, I note that in the UK, ACE’s tech appears to be the most used and tested solution with the company having 5+ trailers on rotation across 15+ constabularies. However, ACE’s competition are larger and more established traffic enforcement solution companies thus one can’t discount their ability to close the competitive gap.

ACE IPO’d in Jan 2023 raising $20m ($24m total cash post IPO) to provide funding for long term growth and currently has ~$25m cash on hand to fund future growth whilst on a pre-capex basis, the company has lived within in means spending only the incremental growth. This provides a long runway for ACE to maintain its growth potential and see that growth compound and reflect in the share price.

As for growth, I think ACE is capable of delivering revenue of $50m+ in FY24 whilst in FY25, revenue could be close to $60m with a high case potential closer $75-80m which the high case being driven by a significant European contract win expected to be awarded in the second half of FY24. This growth will be profitable growth as well but how much flows through to the bottom line depends on how much incremental investment management decide to put into the business (i.e. major success offshore likely precipitates large investment).

I have a base case target price of $1.40/sh based on 15x (current multiple) EBITDA on FY25 ($1.97/sh on the higher case), on a fully diluted share count of ~136m. Another way to consider valuation is what is a “cash cow” which is if the company abandoned growth spend and maintained existing contracts. Based on FY24 revenue and reducing opex by ~$6m and using a 10x multiple, this gives a target price of $1.16/sh.

Between the global thematic tailwinds and the near term prospects of the company, I think the risk/reward is skewed to the upside from here.

Catalysts

·      South Australian tender award 1H CY24

·      Further NSW contract variation award 1H CY24

·      European tender award 1H CY24

·      Western Australian tender award CY24

Risks

·      Competition catching up tech wise and outcompeting in tenders which; reduces overall growth potential, and; can create pricing pressure and reduces margins

·      Contract cancellation (noting a gov can cancel a contract with 30 days notice)

·      US market risk on economic funding model beyond existing infra spending funding pool.