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Despite a strong forward-order book and its technology being adopted by council authorities nationally, Melbourne-based traffic solutions company Traffic Technologies (ASX: TTI) has been placed into administration after a challenging year for the business, driven by a massive shortfall to a $2.8 million share placement announced last year.
Glenn Franklin and Jason Stone, of PKF Melbourne, were appointed administrators to the company and its related entities just hours after Traffic Technologies paused trading in its shares on the ASX at midday. The shares are now suspended.
In a brief statement, the administrators have announced they are undertaking investigations into the company’s affairs, including the asset and liability position, to secure a better understanding of its financial situation.
Founded in 2004 and listed on the ASX a year later, Traffic Technologies specialises in “Smart City” control systems and LED road and streetlights, as well as the design, manufacture and installation of traffic signals, urban traffic controllers, pedestrian countdown timers, electronic road signs, emergency telephones and road lighting products.
The company posted a net loss of $6.7 million in the first half of FY25, up from a $3.3 million loss a year earlier, as revenue more than halved to $9.9 million.
Managing director Con Liosatos told shareholders in February that Traffic Technologies has been “adversely affected by capital constraints” despite its potential to grow.
“Demand for the company’s products and services however remains strong with significant ongoing investment by federal and state governments in road infrastructure projects across Australia,” he said at the time.
“The company’s order book remains significant with forward orders of over $6.8 million and several long-term customer term contracts extending up to five years with a value of over $25 million.”
To shore up its balance sheet, Traffic Technologies announced in November plans to raise $2.8 million through an entitlement offer, but by December it managed to raise just $175,000.
In March, the company announced a further $517,000 had been secured via a shortfall placement, bringing the total to a quarter of its original capital raising target.
During the release of its FY25 interim earnings results in February, Traffic Technologies revealed that it had net liabilities of $13.3 million at the end of December, a blowout from $7.6 million in liabilities six months earlier. The company said this reflected the net loss for the interim period.
At the time, Traffic Technologies said its Smart City platform, known as TST, was gaining traction among local councils and large-scale infrastructure projects nationally.
The technology uses data analytics to make “informed decisions in real time” to make roads “safer, greener and adaptable to the needs of communities”.
“This has led to an increase in recurring annuity revenue in new and existing contracts where the focus has moved to a SaaS (software-as-a-service) model with annual subscription and service fees,” Liosatos told shareholders in February.
“The company continues to experience significant growth in its Smart City-ready lighting products across Australia, with future revenues and earnings underpinned by a material level of long-term customer contracts and orders from state and local government agencies and power companies.”
The group’s subsidiaries include Aldridge Traffic Systems, a manufacturer of traffic signals, hardware, and pedestrian push buttons including touchless, and Quick Turn Circuits, which develops and manufactures cost-effective traffic and transport control systems.
The group’s signage products are distributed from depots nationally while its manufacturing facilities are located in Victoria and Western Australia.
Traffic Technology’s shares last traded at .002c each, which valued the company at $3 million prior to the share suspension.
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