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Traffic Technologies targets strong growth with roll-out of Smart City platform

Killian Plastow
25 November 2021

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Strong financial performance in the face of last year’s sweeping coronavirus lockdowns has given Traffic Technologies (ASX: TTI) the confidence it needs to proceed with its bold growth strategy.

The company manufactures state-of-the-art lighting, signage and traffic management hardware approved for use by every Australian council and already implemented in more than 31,000 intersections worldwide.

The company has been designing and manufacturing innovative traffic solutions for over a decade, well before most councils and roads authorities fully understood the value these intelligent systems can add to traffic management, emissions reductions and cost savings.

As climate change becomes more prevalent and citizens demand a better quality of life from their community leaders, Traffic Technologies is positioned to benefit.

The company has been chasing revenue growth through its ‘smart cities’ platform – an Internet of Things (IoT) enabled software offering designed to make transport infrastructure safer, cheaper, less congested and more sustainable.

And demand is clearly present, evidenced by the company’s recent financial performance. Revenues have grown 18% to $52.3 million in the past year, including annuity revenue from the platform up 13%.

Last week, on Wednesday 17 November, the company won a $5.7 million contract from major equipment rental agency Coates, to supply portable lighting, signs and radar gear capable of monitoring road conditions and hazards and notifying drivers in advance.

Join managing director Con Liosatos on Friday at 1pm (AEDT) for a live investor briefing. Learn how they’ve recently grown revenue rapidly to $52.3 million, and are targeting over 40% recurring revenue in an industry predicted to grow up to $US12.6 trillion by 2030. Click here to book your spot.

The global IoT market is worth $US1.7 trillion, with forecasts suggesting it could grow up to $US12.6 trillion by 2030[1] amid accelerating demand for big data and smart city solutions. 

Traffic Technologies is Australia’s premier traffic control systems provider, supplying smart city-enabled IoT devices to help councils, road authorities and power companies better manage their assets.

Traffic Technologies managing director, Con Liosatos

In the 17 years since its inception, the company has grown from an early IoT adopter into a significant player within the sector, bringing in revenues of $52.3 million from clients in more than 20 countries.

With plans to scale up and meet growing demand, the company has never been more prospective and represents an interesting opportunity for investors.

A year of growth and expansion

Although many Australian businesses struggled through persistent lockdowns in FY21, Traffic Technologies bucked this trend to record significant growth in several key metrics.

Notably, the company was able to grow its EBIT 120%, off the back of an 18% increase in revenues to $52.3 million – recurring revenues from Traffic Technologies’ smart city platform saw similar growth of 13% during the year.

As a result, the business was profitable despite the challenging business conditions facing the Australian economy.

Traffic Technologies also made a number of strategic acquisitions. These included L&M Traffic Signals, a Melbourne-based business accredited by the Department of Transport Victoria to provide and install traffic lights and signals, electronic speed signs, road lights and more.

L&M Traffic Signals also holds numerous maintenance contracts with several councils across Victoria, which complement Traffic Technologies’ results.

In June this year, the company also acquired Artcraft’s i:TS business, which designs road signage that monitors roads and allows traffic conditions to be communicated to drivers.

This acquisition is expected to significantly enhance Traffic Technologies’ capabilities in the intelligent traffic systems market.

Source: TTI Investor presentation slide 25

Market catches up

These successes come as big data and smart city software-as-a-service (SaaS) platforms see an uptick in demand from governments both in Australia and globally.

As citizens demand more sustainable cities and a better quality of life in urban areas, councils, road authorities and power companies are looking for new and innovative ways to manage their assets.

Traffic Technologies provides the only SaaS platform capable of meeting the needs of all three of these stakeholder groups, offering them greater control and data-driven insights to make infrastructure better and simpler to manage.

The company has provided smart-city enabled hardware for close to two decades, with roughly 80,000 devices currently installed in 128 cities across 23 countries.

In Australia, Traffic Technologies’ solutions have passed the rigorous approvals process for use in each of the country’s 537 councils – a process that can, in some cases, take up to two years to complete.

These systems are being used by councils to make roads safer, cheaper, less congested and more sustainable, as well as to collect vast quantities of useful data, which councils can use to make informed decisions about street furniture upgrades and redevelopment of urban environments.

In some cases, the data is even being used to justify road safety hot-spot programs in areas where vehicle speed is of significant importance, including school zones and construction sites.

Guided by experienced leadership

Traffic Technologies is led by managing director Con Liosatos, a 35-year construction industry veteran with more than 25 years’ experience within the lighting industry.

Prior to his work with Traffic Technologies, Mr Liosatos was involved in numerous large-scale lighting design and manufacturing projects, including for major sporting venues such as Etihad Stadium and Vodafone Arena.

He is supported in his role by chair Mark Hardgrave, a former CEO of Bennelong Group and one of the co-founders of M&A Partners.

Mr Hardgrave’s lengthy resume includes a wealth of leading investment firms, such as Merrill Lynch and Alex Waislitz’s Thorney Investment Group.

The pair are joined on the board by Peter Fry, who brings extensive corporate experience to his role.

Mr Fry’s previous appointments span across Australia and the UK, working in senior roles across many different industries, including logistics, chemicals and engineering.

Each member of the board brings critical experience across a range of specialist fields related to the manufacture and supply of Traffic Technologies’ product range as well as the corporate know-how required to grow the business.

This article is sponsored content. The supplier of this content has a commercial arrangement with Switzer Financial Group.

[1] https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/iot-value-set-to-accelerate-through-2030-where-and-how-to-capture-it

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