FINANCIAL PERFORMANCE SUMMARY

GROUP OVERVIEW
Redflex Holdings Limited was incorporated in 1995 and was listed on the Australian Securities Exchange (ASX) in 1997. The company has a total focus on traffic photo-enforcement for public safety. In the USA, Redflex Traffic Systems Inc, a wholly owned subsidiary is the leading provider and operator of photo enforcement solutions with the largest market share and the largest growth in its market.

The Australian/International Traffic business is responsible for provision of photo-enforcement solutions to the rest of the world and has achieved substantial sales in Australia and a number of other countries, with recent announcements of major new contract wins with the Department of Justice in Victoria and with the Government of Hong Kong SAR. Redflex has continued to deliver its Public Safety solutions to the global market, particularly the USA. Road crashes continue to be a major cause of death and injuries world wide, with World Health Organization estimates of 1.2 million people killed on roads around the world each year, and up to 50 million people injured. Speed is a major cause of preventable death on roads, and speed cameras are a key tool in addressing the safety problem. Estimates of the economic costs of road crashes are over US$200 billion in the US alone, and over US$500 billion globally.

The safety problems are enormous and Redflex is proud to be the key player in an industry that is assisting in saving lives and making roads safer.

OPERATING RESULTS FOR THE 2008/2009 FINANCIAL YEAR
The 2008/2009 financial year has been profitable, however the year has been a challenging one, and while a number of growth indicators (revenue, EBITDA and installed base of cameras) have been strongly positive, this has not reflected in growth in profit relative to the prior year.

We have been adversely affected by reduced collection rates on some of our US contracts, write-downs on several contracts that have not been renewed, extended start-up difficulties with a major state-wide speed contract in Arizona, and costs in dealing with litigation and legislative issues. These and other factors have affected profitability for the year.

Despite the adverse effects and challenges of the 2009 financial year, there have been some positives that have emerged, and there is considerable optimism for the future.

GROUP HIGHLIGHTS FOR THE YEAR

• Revenue – up from $88.2 million to $130.9 million, an increase of 48%.
• Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) – up from $32.3 million to $45.5 million, an increase of 41%.
• Net Profit Before Tax (NPBT) of $13.4 million. This is down on the $15.3 million profit from continuing operations in the previous financial year.
• Net Profit After Tax (NPAT) of $9.6 million. This is 9.1% down on the prior period.
• Our number one position in the key US market has been maintained.
• We have successfully negotiated a new banking facility for US$100 million on favourable commercial terms with a syndicate of three Australian banks.
• Our Australian based International traffic enforcement business has made further inroads into both the Australian and overseas market.
• Ongoing research and development investment in new technology that places Redflex at the forefront of the industry.

OUTLOOK FOR THE 2010 FINANCIAL YEAR

• Despite the adverse effects on profitability for the current year, we remain optimistic about the year ahead. Some of the cost increases that have been incurred will flow into the 2010 financial year, and some of the issues identified may continue.
• We expect, after a very difficult start-up period, that the performance of the Arizona state wide freeway program will improve significantly in the 2010 financial year.
• The growth that has been flagged to the market, at least 25% per year growth in the installed base over a five year period is on track, with an expectation that we will install over 450 new cameras in the USA in the 2009/2010 financial year. The number of new contracts that have been signed in the current year provide a base for that growth into the year ahead.
• Also, the number of contract renewals confirms that the business is long term in nature and in general we expect that there will be revenue flowing from the installed base of cameras for much longer than the base duration of current contracts.
• Collection rates remain an issue, and collection rate improvement is a particular focus of the US team for the year ahead.
• In our European market we have engaged new senior management to capitalise on the opportunities that are emerging in the region in future years.
• We will continue to invest in Research and Development to ensure that out technologies remain at the forefront of the industry. Our planned expenditure on R&D is around 3% of revenue for the 2009/2010 financial year.
• The global economic environment may present opportunities and challenges in the year ahead. Municipalities will still need to address road safety issues and photo-enforcement is a crucial tool in that task. However in non-US markets, uncertainty for customers may: add complexity to decision making processes; result in deferred decisions or changes to priorities; or delay anticipated implementation work.

This is an abstract of the Redflex Group Profit Announcement Year ended 30 June 2009. The complete document (37 pages) is available at the Redflex website.