Traffic Technologies’ (ASX: TTI) position in the Tasmanian street light market has been extended beyond its initial contract term after TasNetworks submitted a forward order for about $3 million of its smart city-ready LED street lights.
Earlier this year, Traffic Technologies revealed the contract term with Tasmanian Government-owned TasNetworks had been extended to October 2022, but this latest order lengthens the contract to 2023.
TasNetworks is responsible for electricity transmission and distribution, along with the operation and maintenance of more than 50,000 street lights across Tasmania.
“These orders secure the company’s position in Tasmania, which has become an important market for our products and provides a significant opportunity for the roll-out of our smart city platform TST into the state of Tasmania,” Traffic Technologies managing director Con Liosatos said.
Traffic Technologies currently partners with TasNetworks to assist its street light replacement program and assist with reducing carbon dioxide emissions while also cutting annual power and maintenance costs.
The company has supplied 26,000 smart city LED street lights to TasNetworks so far.
Under this latest purchase, Traffic Technologies will be supply smart city V-category LED street light fittings, which have the latest LED technology and lower wattages.
Traffic Technologies has also been working with TasNetworks’ engineers to design suitable light fixtures for the state’s environment.
This latest order from TasNetworks follows recent contracts with the Queensland Government’s Department of Transport and Main Roads (TMR), which are valued at up to $9 million.
These contracts could potentially expire in 2032 and provide long-term recurring revenue in the state.
Strong cash position
To fund its ongoing expansion strategy, Traffic Technologies launched a $10.13 million rights issue earlier this month.
The company revealed its financier ADM Capital has agreed to participate in any shortfall following closure of the issue – inking a binding agreement to commit to at least 6.66 million shortfall shares.