Redflex CEO resigns after company forecasts $10.5M loss
The company is struggling to cope with public and political disdain for automated ticketing systems.
Redflex' US CEO, James Saunders, has resigned after spending less than two years behind the wheel of the traffic-camera ticketing company.
An official statement suggests Saunders is leaving to "pursue other opportunities," however the timing follows a troubling revenue forecast.
The company expects a net loss of $10.5 million in 2015, with revenue potentially down by 13 percent to $59.9 million for the year. Laws restricting the use of traffic-camera enforcement recently passed in Ohio, while contracts in Chicago and New Jersey are not expected to be renewed.
"US legislative environment continues to be extremely challenging," Redflex warned in an investor briefing.
The Chicago contract was terminated after federal investigators accused former Redflex CEO Karen Finley -- Saunders' predecessor -- of providing illegal bribes to city officials. The scheme allegedly provided kickbacks worth more than $500,000 in return for securing the $124 million contract.
Congressman Ed Perlmutter recently introduced legislation that could lead to a federal ban on red-light and speed cameras. The bill is not likely to be a high priority on the federal level, but anti-enforcement ballot measures at the state and city level typically receive broad public support. The recent initiatives in Cleveland were passed by a three-to-one margin.
In a November investor briefing, Redflex noted that the US market "thrives on negative publicity" and ticket revenue has been dropping in established enforcement areas. The company is now putting significant resources into school-bus photo enforcement to help pad its bottom line.