Seeing Machines ends tougher year in line with consensus

The AIM-traded firm said reported revenue for the 12 months ended 30 June was expected to be AUD 47.3m (£25.12m), representing 18% growth year-on-year, and in line with market consensus expectations.

It said that importantly, the year had marked the “long-anticipated” start of automotive royalty revenues, as more than 100,000 new vehicles hit the roads with its Driver Monitoring System (DMS) technology embedded.

Those royalty revenues were expected to increase sharply over the next two to three years, as production of vehicles carrying the DMS technology ramped up.

In addition, the company said it continued to experience “significant” growth in its aftermarket business, with record ‘Guardian’ hardware sales achieved in the final quarter of the year, providing momentum going into the new financial year.

Guardian connections at 30 June totalled 31,771, which represented growth in the installed base of more than 5,000 units in the six months prior, with a backlog of around 5,000 sold units yet to be installed.

Notwithstanding the challenges faced by the aviation industry over the last 18 months, Seeing Machines said it had signed commercial contracts to embed its eye-tracking technology into the training environment with simulator installations, as well as into the air traffic control sector, demonstrating “strong” momentum in the “nascent” market, with limited competition.

On a constant currency basis, Seeing Machines said underlying revenue had grown 30% over the prior period, with cash at year-end on 30 June expected to be AUD 47.7m, or 24% ahead of market consensus.

“Our progress over the past financial year has been really pleasing, and the signs are there for increased opportunity as the 2022 period gets underway,” said chief executive officer Paul McGlone.

“The automotive requests for quote (RFQs) from Europe, North America and Japan currently represent total revenue potential of over AUD 900m, signalling a step change in the value of our automotive pipeline.

“In addition, we have increased the number of relationships with key tier 1 customers to 16, enabling us to bid each opportunity with several parties.”

McGlone said that the significant increase in RFQs was “extremely encouraging”, adding that the firm expected the number to increase at a similar rate over the new financial year.

That, he added, affirmed the board’s view that DMS was now established as “central” to the automotive industry.

“The aftermarket business is also strengthening as safety monopolises agendas across the world, and this division is now profitable as a standalone business.

“While our Guardian installation rate has slowed during the 2021 financial year, given the Covid-19 backdrop, hardware sales continued to increase as commercial fleets consider this technology a key advantage in terms of safety, but also to ensure efficiencies against the current evolving regulatory environment for commercial driving.

“The aftermarket sales pipeline has increased steadily throughout the year and remains strong for 2022.”

At 0952 BST, shares in Seeing Machines were up 7.43% at 9.25p.