Traffic Technologies (ASX: TTI) has been awarded a significant contract to supply “Smart City IoT”-ready LED (light-emitting diode) streetlights to the Sydney City Council, one of Australia’s largest.
Signed for an initial period of five years, the contract may be extended for up to a maximum term of nine years and is estimated to be worth up to $3 million over the initial five-year term, or up to $5 million if the option to extend is exercised.
Traffic Technologies will provide for the bulk replacement of existing LED streetlights at the end of their service life, as well as network growth, renewals and maintenance for use within the City of Sydney’s local government and central business district (CBD) areas.
Managing director Con Liosatos said the City of Sydney has more than 16,000 streetlights covering the Sydney CBD and surrounding inner-city suburbs of the greater metropolitan area.
“The award of this contract to one of the most prestigious local government areas in Australia is a fantastic vote of confidence in the company’s state-of-the-art LED streetlights,” Mr Liosatos said.
“The length of the contract provides an opportunity for the company to supply a range of additional products throughout the Sydney area.”
The contract award is a positive start for the company after a 2024 that saw it face several significant challenges, including delays on government projects and major capital constraints.
Those financing issues impacted the group’s existing working capital facility, leading to supply chain issues and resulting in trading revenue far below expectations at $31.9m for the year ended 30 June 2024.
To assist with overcoming the disappointing FY24 result, the group subsequently completed a reorganisation of its debt facilities.
This refinancing involved a convertible note valued at approximately $4.8m, a share placement and an agreement with Hong Kong-based electronic manufacturing services provider Season Group.
Traffic Technologies also undertook a cost-saving program involving the relocation and consolidation of its Victorian production, installation and maintenance facilities into a single entity.
This helped achieve significant manufacturing and management efficiencies and delivered $2.2m in cost savings for FY24.
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