REG - Seeing Machines Ltd - Half year results and financial report
18/03/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240318:nRSR2046Ha&default-theme=true
RNS Number : 2046H Seeing Machines Limited 18 March 2024
Seeing Machines Limited ("Seeing Machines" or the "Company")
18 March 2024
Half year results and financial report
Double-digit underlying revenue growth, continued operational and strategic
progress, with cars on the road exceeding 1.5 million
Production started on groundbreaking US$82m interior cabin monitoring program
for large German auto manufacturer
Seeing Machines Limited (AIM: SEE, "Seeing Machines" the "Company" or the
"Group"), the advanced computer vision technology company that designs
AI-powered operator monitoring systems to improve transport safety, today
published its unaudited results and financial report for the six months to 31
December 2023 ("H1 2024").
Financial Highlights:
- Underlying Revenue growth for H1 2024 of 28% to US$25.6m excluding
one-off Magna exclusivity payments (Reported Revenue growth of 5% including
these one-offs)
o OEM (Automotive and Aviation) revenue was US$11.4m (H1 2023: US$14m)
§ High margin per vehicle royalty revenue, derived from Automotive production
volumes increased by 35% to US$4.2m (H1 2023: US$3.1m)
o Annualised Recurring Revenues increased by 22% year on year to US$14.5m
(H1 2023: US$11.9m)
o Aftermarket (Fleet and Off-Road) revenue increased by 38% to US$14.3m (H1
2023: US$10.3m)
- Gross profit of US$10.6m, reduced due to revenue mix changes compared to
comparative period with lower proportion of revenue from license fees, a
higher proportion of revenue from hardware sales and a lower margin on
services revenue.
- Net loss of US$19.8m due to increased development expenditure compared
to the comparative period, mainly driven by increased amortisation of
previously capitalised expenditure. Several customer projects were completed
during the period, resulting in a short-term increase in total development
expense, including outsourced resources. The overall development expenditure
is expected to reduce in the second half to 30 June 2024
- Net operating cashflows improved to a net outflow of $1,109,000 (H1
FY2023: $6,832,000 outflow), thanks to disciplined focus on working capital
management
- Cash position at 31 December 2023 of US$22.2m with cash burn of
US$13.9m for the half year. Cash position supported by receivables and
inventory balance of US$31.1m with working capital unwind of $5-6m expected in
H2 FY2024
Operational Highlights:
- Seeing Machines' production debut of its highest volume program to date
with an initial lifetime value of US$82m, featuring interior cabin sensing
(driver and occupant monitoring system technology) via a single camera system,
a world-first, delivered for a large German OEM, has launched to schedule
- Total of 1,516,545 cars on the road as of 31 December 2023,
representing an increase of 116% over 12 months period (H1 2023: 701,049)
spanning six individual programs with five global OEMs
- Appointed to deliver two additional Automotive programs with a combined
initial lifetime value of US$45m, bringing the total won business to 17
programs with 11 individual OEM customers, building the cumulative initial
lifetime value of all OEM programs to US$366m, with the majority of that
revenue expected by 2028
- Guardian Generation 3, the Company's innovative new Aftermarket Driver
Monitoring System (DMS) for the commercial transport and logistics sector, was
independently tested at IDIADA's state of the art test and development
facilities and assessed to meet requirements for drowsiness detection in the
European Commission's General Safety Regulation (GSR), which is set to come
into effect in July 2024
- Guardian is now installed and monitoring 56,896 individual vehicles,
compared to 46,018 in December 2023, representing an increase of 24% over the
12-month period
- Collins Aerospace, the world's leading avionics tier 1 supplier,
exclusively working with Seeing Machines to target the aviation sector, has
begun joint development of the world's first aviation fatigue detection
solution, the first component of a potential multi-modal Pilot Support System
Driver and Occupant Monitoring trends in Automotive and the opportunities
ahead
To date, the majority of Seeing Machines' revenue generated by passenger
vehicle production royalties has been driven by optional Level 2/3 (partial
driving automation) 'hands off, eyes on' driving systems (leveraging Seeing
Machines' DMS on more than 30 car and truck models across Europe and the US).
These systems include General Motor's Super Cruise, Ford's Blue Cruise,
Daimler's Drive Pilot, BMW's Highway Assistant and others that the Company is
not yet permitted to disclose.
The popularity and deployment of these systems is growing, driven by OEM
investment and the need to enable vehicles with hands-free driving to extract
premiums from end customers of passenger and commercial vehicles.
Prior to regulation coming into effect, initially in July 2024, DMS remains
optional, and there has been some moderation in short term demand for
hands-free driving systems due to the affordability of this (relatively
expensive) vehicle option in a challenging global financial environment. In
addition, there has been some testing of pricing models and levels by OEMs.
These factors have impacted the level of automotive royalty volumes across Q2
FY2024 and the resulting total for H1 2024. Seeing Machines is confident of
strong growth in royalties tied to Level 2/3 driving systems across all
regions.
The Company's confidence is further underpinned by the safety and regulatory
momentum that has continued to build across the globe, supporting increased
long-term demand for the Company's differentiated DMS technology.
This is led in part by the European New Car Assessment Program (Euro NCAP)
requirements for DMS, which started in 2023. A critical piece of EU
legislation, the GSR, will come into effect in July 2024 presenting
significant additional opportunities for the installation of Seeing Machines'
technology across existing and new automotive opportunities and for commercial
vehicles.
While OEMs have moved at different speeds in pursuit of NCAP ratings, EU GSR
mandates the use of direct (camera-based) DMS or indirect (steering-wheel
based) warnings for drowsiness on all new cars, vans, trucks and buses sold in
the EU from July 2024. With over 17 million new vehicles sold in Europe
annually and Automotive awards for Seeing Machines covering 6 OEMs selling
into Europe, GSR is a highly visible structural growth driver for FY2025 and
beyond.
GSR mandates will be extended to cover Driver Distraction in 2026, requiring
camera-based DMS on all new vehicles sold, bringing predictable, recurring
revenue growth for Seeing Machines. Mandates in the US market via the National
Highway Transport Safety Administration (NHTSA), dealing with distraction and
impairment (including alcohol) are also expected in the next few years.
The rise in demand for interior monitoring solutions that use a wide field of
view camera system to monitor the driver and full vehicle interior is driven
by a combination of Euro NCAP 2026 protocols requiring a broader view of the
cabin, as well as the motivation by OEMs to offer more in terms of occupant
focused comfort and convenience features at premium prices.
Seeing Machines is leading the industry in combining driver and occupant
monitoring using a single camera system (optionally integrated into a
rear-view mirror with partner, Magna) designed to address current Euro
NCAP/GSR and the emerging Euro NCAP 2026 requirements, positioning it for
ongoing success. This month, the Company became the first in the world to
launch such a system with a major European OEM as it starts production on its
largest Automotive award to date, supporting 2023 Euro NCAP, GSR and an array
of interior cabin sensing features for improved driver and occupant comfort
and convenience.
Outlook and current trading
The Group remains well-placed to deliver continued progress in the year ahead,
with a typical weighting to the second half, and the Board retains its
expectations that financial performance for FY2024 will be in line with
consensus 1 (#_ftn1) .
Paul McGlone, CEO of Seeing Machines, said: "We have continued to make good
progress in the first half, operationally and strategically, with double-digit
underlying sales growth and a greater contribution from our royalty revenue
stream, received for every car that is manufactured and fitted with our
technology.
Furthermore, we are delighted to see our first cabin sensing program, using
driver and occupant monitoring technology, start production with a new OEM
customer as scheduled and look forward to volume ramping up over the course of
the next few quarters as production gets into full swing. With more than 1.5
million cars on the road featuring our technology today, generating
high-margin royalty revenue, this milestone will play an important role in the
achievement of Seeing Machines' financial goals.
As transport safety regulatory deadlines mandating the fitment of driver
monitoring technology come into effect, we are focused on working with our
customers as they adjust to the changes. We remain well placed to deliver on
our attractive long term growth prospects, thanks to our market leading scale,
balance sheet strength and proven technology supported by regulatory changes."
Earnings call
The Company will host a presentation via Investor Meet Company platform at 8am
GMT Monday 18 March 2023. To register, please visit
www.investormeetcompany.com (http://www.investormeetcompany.com) .
Enquiries:
Seeing Machines Limited +61 2 6103 4700
Paul McGlone - CEO
Sophie Nicoll - Corporate Communications
Stifel Nicolaus Europe Limited (Nominated Adviser and Broker) +44 20 7710 7600
Alex Price
Fred Walsh
Nick Adams
Ben Burnett
Dentons Global Advisors (Media Enquiries) +44 20 7664 5095
James Styles
Jonathon Brill
Methuselah Tanyanyiwa
seeingmachines@dentonsglobaladvisors.com
(mailto:seeingmachines@dentonsglobaladvisors.com)
About Seeing Machines (AIM: SEE), a global company founded in 2000 and
headquartered in Australia, is an industry leader in vision-based monitoring
technology that enable machines to see, understand and assist people. Seeing
Machines is revolutionizing global transport safety. Its technology portfolio
of AI algorithms, embedded processing and optics, power products that need to
deliver reliable real-time understanding of vehicle operators. The technology
spans the critical measurement of where a driver is looking, through to
classification of their cognitive state as it applies to accident risk.
Reliable "driver state" measurement is the end-goal of Driver Monitoring
Systems (DMS) technology. Seeing Machines develops DMS technology to drive
safety for Automotive, Commercial Fleet, Off-road and Aviation. The company
has offices in Australia, USA, Europe and Asia, and supplies technology
solutions and services to industry leaders in each market vertical.
www.seeingmachines.com (http://www.seeingmachines.com)
Review of Operations
Overview
For the six-month period ended 31 December 2023, sales revenue increased by 6%
compared to the corresponding period. Cash balances decreased by $13,924,000
to $22,215,000 (FY2023: $36,139,000) when compared to the preceding financial
year.
Financial Results
The Company's total sales revenue for H1 FY2024 (excluding foreign exchange
gains and finance income) increased by 6% to $25,734,000 (H1 FY2023:
$24,383,000).
Business unit 31 Dec 2023 31 Dec 2022 Variance
$'000 $'000 %
OEM 11,413 14,037 (19%)
Aftermarket 14,321 10,346 38%
Sales Revenue 25,734 24,383 6%
Royalty revenue, derived from installation of Seeing Machines' Driver
Monitoring System (DMS) technology, increased by 35% to $4,200,000 (H1 FY2023:
$3,116,000) compared to the same period last year. The growth in royalty
revenues in the OEM business has resulted in the revenue mix moving to a
greater proportion of higher margin revenue streams, which is expected to
continue as Automotive programs become the dominant source of revenue for this
business unit. In addition to production royalties, revenue of $2,249,000 (H1
FY2023: $5,354,000) from license fees was earned from exclusive collaboration
agreements. The reduction in license fee revenue compared to the prior period
is a result of revenue for the provision of prior services that was recognised
in the comparative period at the commencement of the agreement with Magna
Electronics Inc.
Aftermarket hardware and installation revenue increased by 202% to $5,954,000
(H1 FY2023: $1,971,000). Connected Guardian units increased to 56,896 units in
December 2023 representing 24% annual growth from 46,018 in December 2022. As
a result of this growth monitoring services revenue increased by 19% to
$6,256,000 for half-year, compared to $5,249,000 for the same period last
year, continuing the accumulation of recurring revenue from the Guardian
connections.
The Company continued to invest in its core technology development to further
strengthen its competitive moat, rapidly expand features and leverage systems
approach across global OEM and Aftermarket industries. As a result, the
Company incurred total research and development expenses of $20,526,000 (H1
FY2023: $17,236,000) during the six-month period ended 31 December 2023 of
which $12,350,000 (H1 FY2023: $11,146,000) was capitalised.
Loss for the 6-month period ended 31 December 2023 increased to $19,802,000
(H1 FY2023: $4,619,000 loss) compared to the same period last year. Gross
profit reduced due to sales mix changes compared to the comparative period
with a lower proportion of revenue from license fees and services.
Interim Consolidated Statement of Financial Position - Unaudited
Consolidated
31 Dec 30 Jun 31 Dec
AS AT Notes 2023 2023 2022
Unaudited Audited Unaudited
$000 $000 $000
(Restated)
ASSETS
CURRENT ASSETS
Cash and cash equivalents 5 (#_bookmark15) 22,215 36,139 52,186
Trade and other receivables 6 (#_bookmark14) 18,249 27,039 14,843
Contract assets 5,702 6,513 4,656
Inventories 7 (#_bookmark13) 6,621 11,191 5,742
Other financial assets 226 312 321
Other current assets 2,255 1,116 4,100
TOTAL CURRENT ASSETS 55,268 82,310 81,848
NON-CURRENT ASSETS
Property, plant & equipment 8 (#_bookmark12) 3,529 3,861 3,152
Right-of-use assets 4,259 1,853 2,114
Intangible assets 9 55,332 45,064 33,581
TOTAL NON-CURRENT ASSETS 63,120 50,778 38,847
TOTAL ASSETS 118,388 133,088 120,695
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 1 (#_bookmark14) 0 10,282 11,646 7,692
Contract liabilities 3,973 4,634 5,734
Lease liabilities 1 (#_bookmark14) 1 804 708 686
Provisions 5,246 4,414 4,012
TOTAL CURRENT LIABILITIES 20,305 21,402 18,124
NON-CURRENT LIABILITIES
Borrowings 1 (#_bookmark14) 2 42,705 40,322 22,151
Lease liabilities 1 (#_bookmark14) 1 4,776 2,195 2,620
Deferred tax liabilities 2,464 2,464 2,217
Provisions 322 174 212
TOTAL NON-CURRENT LIABILITIES 50,267 45,155 27,200
TOTAL LIABILITIES 70,572 66,557 45,324
NET ASSETS 47,816 66,531 75,371
EQUITY 1 (#_bookmark14) 6 240,948 240,948 240,948
Contributed equity
Other equity 13 5,749 5,749 5,172
Accumulated losses (205,322) (185,520) (174,592)
Other capital reserves 6,441 5,354 3,843
Total equity attributable to the owners of Seeing Machines 47,816 66,531 75,371
TOTAL EQUITY 47,816 66,531 75,371
The above interim consolidated statement of financial position should be read
in conjunction with the accompanying notes
Interim Consolidated Statement of Comprehensive Income - Unaudited
Consolidated
2023 2022
FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER Notes Unaudited Unaudited
$000 $000
(Restated)
Sale of goods 5,858 2,322
Services revenue 11,723 12,193
Royalty and license fees 8,153 9,868
Revenue 3 (#_bookmark9) 25,734 24,383
Cost of sales (15,161) (8,901)
Gross profit 10,573 15,482
Net foreign exchange gains/(losses) (67) 1,942
Other expenses - (81)
Research and development expenses (8,176) (6,090)
Customer support and marketing expenses (4,306) (3,325)
Operations expenses (8,232) (5,447)
General and administration expenses (7,180) (6,470)
Expenses 4 (#_bookmark9) (27,894) (21,332)
Operating loss (17,388) (3,989)
Finance income 252 369
Finance costs (2,648) (876)
Finance costs - net (2,396) (507)
Loss before income tax (19,784) (4,496)
Income tax expense (18) (123)
Loss for the period (19,802) (4,619)
Loss for the period attributable to:
Equity holders of the parent (19,802) (4,619)
Other comprehensive income/(loss)
Exchange differences on translation of foreign operations 70 (2)
Other comprehensive income/(loss) net of tax 70 (2)
Total comprehensive loss (19,732) (4,621)
Total comprehensive loss attributable to: (4,621)
Equity holders of the parent (19,732)
Total comprehensive loss for the period (19,732) (4,621)
Loss per share for loss attributable to the ordinary equity holders of
the parent:
Cents Cents
Basic loss per share 15 (#_bookmark11) (0.476) (0.111)
Diluted loss per share 15 (#_bookmark11) (0.476) (0.111)
The above interim consolidated statement of comprehensive income should be
read in conjunction with the accompanying notes.
Interim Consolidated Statement of Changes in Equity - Unaudited
FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER Contributed Equity Other Equity Accumulated Losses Foreign Currency Translation Reserve Employee Equity Benefits & Other Reserve Total Equity
$000 $000 $000 $000 $000 $000
(169,973)
As at 1 July 2022 240,948 - (14,128) 16,968 73,815
Loss for the period (Restated) - - (4,619) - - (4,619)
Other comprehensive loss - - - (2) (2)
Total comprehensive loss (Restated) - - (4,619) (2) (4,621)
Transactions with owners in their capacity as owners:
Value of conversion rights on convertible notes (Restated) - 5,172 - - - 5,172
Share-based payments - - - - 1,005 1,005
At 31 December 2022 - Unaudited (Restated) 240,948 5,172 (174,592) (14,130) 17,973 75,371
As at 1 July 2023 240,948 5,749 (185,520) (13,818) 19,172 66,531
Loss for the period - - (19,802) - - (19,802)
Other comprehensive gain - - - 70 - 70
Total comprehensive loss - - (19,802) 70 - (19,732)
Transactions with owners in their capacity as owners:
Share-based payments - - - - 1,017 1017
At 31 December 2023 - Unaudited 240,948 5,749 (205,322) (13,748) 20,189 47,816
The above consolidated statement of changes in equity should be read in
conjunction with the accompanying notes.
Interim Consolidated Statement of Cash Flows - Unaudited
FOR THE SIX-MONTH PERIOD ENDED 2023 2022
31 DECEMBER Notes Unaudited Unaudited
$000 $000
Operating activities
Receipts from customers 36,113 32,398
Payments to suppliers (37,448) (39,476)
Interest received 252 369
Income tax paid (26) (123)
Net cash flows used in operating activities (1,109) (6,832)
Investing activities
Proceeds from sale of property, plant and equipment - 48
Purchase of property, plant and equipment 8 (272) (524)
Payments for intangible assets (patents, licences and trademarks) 9 (105) (91)
Payments for intangible assets (capitalised development costs) 4, 9 (12,350) (11,146)
Maturity/(purchase) of term deposits 87 -
Net cash flows used in investing activities (12,640) (11,713)
Financing activities
Proceeds from issue of convertible note (net of arrangement fee) - 28,798
Principal repayment of lease liabilities (439) (481)
Net cash flows from financing activities (439) 28,317
Net increase in cash and cash equivalents (14,188) 9,772
Net increase/(decrease) due to foreign exchange difference 264 1,944
Cash and cash equivalents at 1 July 36,139 40,470
Cash and cash equivalents at 31 December 5 (#_bookmark15) 22,215 52,186
The above interim consolidated statement of cash flows should be read in
conjunction with the accompanying notes.
Notes to the Interim Consolidated Financial Statements - Unaudited
1 Corporate information
Seeing Machines Limited (the "Company" or the "Group") is a limited liability
company incorporated and domiciled in Australia and listed on the AIM market
of the London Stock Exchange. The address of the Company's registered office
is 80 Mildura Street, Fyshwick, Australian Capital Territory, Australia.
Seeing Machines Limited and its subsidiaries (the "Group") provide operator
monitoring and intervention sensing technologies and services for the
automotive, mining, transport and aviation industries.
The interim consolidated financial report of the Group (the "interim financial
report") for the six-month period ended 31 December 2023 was authorised for
issue in accordance with a resolution of the Directors on 15 March 2024.
2 Basis of preparation
(a) Basis of preparation
The interim financial report for the six-month period ended 31 December 2023
has been prepared in accordance with AASB 134 Interim Financial Reporting in
order to fulfil the reporting requirements of Rule 18 of the London Stock
Exchange's AIM Rules for Companies issued July 2016.
The interim financial report does not include all the information and
disclosures required in the annual financial report and should be read in
conjunction with the Group's annual consolidated financial statements as at 30
June 2023. The interim financial report has also been prepared on a historical
cost basis, except for derivative financial instruments which have been
measured at fair value.
There is no requirement for the interim financial report to be subject to
audit or review by the external auditor and accordingly no audit or review has
been conducted.
(b) Accounting policies
The accounting policies applied are consistent with those of the consolidated
financial statements for the year ended 30 June 2023.
Certain new accounting standards, amendments to accounting standards and
interpretations have been published that are not mandatory for 31 December
2023 reporting periods and have not been early adopted by the Group. These
standards, amendments or interpretations are not expected to have a material
impact on the Group in the current or future reporting periods and on
foreseeable future transactions.
(c) Correction for accounting for convertible notes
For the 6-month period ending 31 December 2022 the option provided to Magna was deemed to be an embedded derivative and was accounted for as a financial liability at fair value through profit or loss. This should have been classified as other equity (see Note 12 and 13) and not subject to a revaluation at each reporting period.
The accounting has been corrected by restating each of the affected financial statement items for the prior period as follows:
Interim Consolidated Statement of Financial Position 31 Dec 31 Dec
(extract) 2022 Increase/ (decrease) 2022
$000 (Restated)
AS AT $000 $000
Borrowings 22,955 (804) 22,151
Financial liability at fair value through profit or loss 7,389 (7,389) -
Deferred tax liabilities - 2,217 2,217
TOTAL NON-CURRENT LIABILITIES 33,176 (5,976) 27,200
TOTAL LIABILITIES 51,300 (5,976) 45,324
NET ASSETS 69,395 5,976 75,371
Other equity - 5,172 5,172
Accumulated losses (175,396) 804 (174,592)
TOTAL EQUITY 69,395 5,976 75,371
Interim Consolidated Statement of Comprehensive Income (extract) 2022 Profit Increase/ (decrease) 2022
FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER $000 (Restated)
$000 $000
Net change in fair value of financial liability (loss) (804) 804 -
Loss for the period (5,423) 804 (4,619)
Notes to the Interim Consolidated Financial Statements - Unaudited
3 Segment information
a. Segment revenue based on operating segment
The following table presents revenue and net loss information for the Group's
operating segments for the six-month periods ended 31 December 2023 and 2022,
respectively:
Segment Revenue
Segment Loss
FOR THE SIX-MONTH PERIOD ENDED 2022 2023 2022
2023
$000 $000 $000
31
DECEMBER (Restated)
$000
Unaudited
OEM 11,413 14,037 (9,582) (1,944)
Aftermarket 14,321 10,346 (10,220) (2,675)
Total 25,734 24,383 (19,802) (4,619)
b. Revenue from contracts with customers
In the following tables, revenue segments have been disaggregated by type of
goods or services which also reflects the timing of revenue recognition.
FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2023 OEM $000 Aftermarket $000 Total
Unaudited $000
Revenue Types
Sales at a point in time
Hardware and Installations 426 5,954 6,380
Royalties - 1,704 1,704
Sales over time
Driver Monitoring - 6,256 6,256
Non-recurring Engineering 4,538 407 4,945
Royalties 4,200 - 4,200
Licensing 2,249 - 2,249
Total revenue 11,413 14,321 25,734
FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2022 OEM $000 Aftermarket $000 Total $000
Unaudited
Revenue Types
Sales at a point in time
Hardware and Installations 436 1,971 2,407
Royalties - 1,012 1,012
Sales over time
Driver Monitoring - 5,249 5,249
Non-recurring Engineering 4,745 2,114 6,859
Royalties 3,116 - 3,116
Licensing 5,740 - 5,740
Total revenue 14,037 10,346 24,383
c. Geographic information
FOR THE SIX-MONTH PERIOD ENDED 2022
2023
$000
31 DECEMBER
$000
Unaudited
Revenues from external customers 7,341 4,153
Australia
North America 12,606 15,117
Asia-Pacific (excluding Australia) 1,567 1,763
Europe 2,714 2,198
Other 1,506 1,152
Total revenue from external customers 25,734 24,383
The revenue information above is based on the locations of the customers.
Notes to the Interim Consolidated Financial Statements - Unaudited
4 Expenses
31 Dec 31 Dec
2023 2022
Unaudited Unaudited
$000 $000
a. Research and development expenses
Research and development expenses 20,526 17,235
Capitalised development costs during the period (12,350) (11,146)
Total research and development expenses 8,176 6,089
b. Depreciation and amortisation expense
Depreciation expense - owned assets 605 417
Depreciation expense - leased assets 344 261
Amortisation expense - development costs 2,160 1,246
Amortisation expense - others 26 20
Total depreciation and amortisation expense 3,135 1,944
c. Employee benefits expense
Wages and salaries and on-costs (excluding superannuation) 24,680 20,057
Superannuation expense 2,030 1,516
Share-based payment expense 1,017 1,004
Wages and salaries reported as cost of sales (7,877) (5,831)
Wages and salaries capitalised to development costs (9,776) (9,628)
Total employee benefits expense 10,074 7,118
d. Other operating expenses
Non-recoverable foreign withholding taxes 99 124
Total other operating expenses 99 124
5 Cash and cash equivalents
For the purpose of the interim consolidated statement of cash flows, cash and
cash equivalents are comprised of the following:
31 Dec 30 Jun
2023 2023
Unaudited Audited
$000 $000
Cash at bank 8,283 36,139
Term deposits maturing in less than 3 months 13,932 -
Total cash and cash equivalents 22,215 36,139
Notes to the Interim Consolidated Financial Statements - Unaudited
6 Trade and other receivables
Current 31 Dec 30 Jun
2023 2023
Unaudited Audited
$000 $000
Trade receivables (net of provisions) 17,849 25,793
Deferred finance income (14) (101)
17,835 25,692
Other receivables 414 1,347
Total trade and other receivables - current 18,249 27,039
7 Inventories
31 Dec 30 Jun
2023 2023
Unaudited Audited
$000 $000
Finished goods (at lower of cost and net realisable value) 6,768 11,206
Provision for obsolescence (147) (15)
Total inventories 6,621 11,191
8 Property, plant and equipment
During the six-month period ended 31 December 2023, the Group acquired assets
with a cost of $272,000 (H1 FY2023: $524,000).
No assets relating to plant and equipment were disposed by the Group during
the six-month period ended 31 December 2023 (H1 FY2023: $17,000).
9 Intangible assets
During the six-month period ended 31 December 2023, the Group incurred
expenditure of $12,455,000 (H1 FY2023: $11,237,000) related to intangibles.
$105,000 (H1 FY2023: $91,000) of this expenditure related to patent and
trademark applications and licenses. $12,350,000 (H1 FY2023: $11,146,000)
related to capitalised development costs.
No intangible assets were disposed by the Group during the six-month period
ended 31 December 2023 (H1 FY2023: nil).
10 Trade payables
At 31 December 2023, the balance of the trade payables was $4,244,000 (FY2023:
$3,450,000), of which an amount of $3,431,000 (FY2023: $3,383,000) was aged
less than or equal to 60 days; and an amount of $813,000 (FY2023: $67,000) was
aged over 60 days.
Notes to the Interim Consolidated Financial Statements - Unaudited
11 Lease liabilities
31 Dec 30 Jun
2023 2023
Unaudited Audited
$000 $000
Current
Lease liabilities 804 708
Non-current
Lease liabilities 4,776 2,195
Total lease liabilities 5,580 2,903
The table below summarises the maturity profile of the Group's liabilities
based on contractual undiscounted payments:
<=6 6-12 >1
AT 31 DEC 2023 months $000 months $000 year $000 Total $000 Carrying Value $000
Lease liabilities 464 708 5,773 6,945 5,580
<=6 6-12 >1
AT 30 JUN 2023 months $000 months $000 year $000 Total $000 Carrying Value $000
Lease liabilities 445 452 2,451 3,348 2,903
12 Borrowings
31 Dec 30 Jun
2023 2023
Unaudited Audited
Non-current $000 $000
Convertible notes 42,705 40,322
The convertible notes are presented in the balance sheet as follows:
Face value of notes issued 47,500 47,500
Other equity securities - value of conversion rights (see Note 13) (8,213) (8,213)
Transaction costs on borrowings (1,202) (1,202)
Other costs on borrowings (187) (74)
37,898 38,011
Interest expense 4,807 2,311
Non-current liability 42,705 40,322
On 4 October 2022, Seeing Machines received funding of $47,500,000 from Magna
International ("Magna") in the form of a non-transferable 4-year convertible
note maturing in October 2026 (the "Convertible Note"). The Convertible Note
can be drawn down in two tranches across the 4-year term. The Convertible Note
has an all-in yield of 8%, inclusive of fees. The Convertible Note contains
standard covenants, and anti-dilution provisions. The interest due at the end
of the facility can be paid in cash or converted into equity at Seeing
Machines' election.
The first tranche of $30,000,000, was drawn on 5 October 2022 and the second
tranche of $17,500,000 was drawn down on 27 June 2023. The liability portion
of tranches 1 and 2 are valued at amortised cost in accordance with AASB 9
Financial Instruments ("AASB 9") and have effective interest rates of 13.03%
and 10.03% respectively.
Magna may elect to convert the principal and at Seeing Machines' election,
interest outstanding under the Convertible Note at any time during its term,
up to a maximum of 349,650,350 shares which, when added to Magna's existing
shareholding in the Company, will represent approximately 9.9% of the fully
diluted share capital of the Company. The conversion will be at a price of 11
British pence per share. The option provided to Magna is deemed to be an
embedded derivative and is classified as other equity (see Note 13).
Notes to the Interim Consolidated Financial Statements - Unaudited
13 Other equity
31 Dec 30 Jun
2023 2023
Unaudited Audited
$000 $000
Value of conversion rights - convertible notes 8,213 8,213
Deferred tax liability component (2,464) (2,464)
Total other equity 5,749 5,749
(i) Conversion right of convertible notes
The amount shown for other equity securities is the value of the conversion
rights relating to the convertible note, details of which are shown in Note
12.
14 Dividends paid
No interim dividends or distributions have been made to members during the
six-month period ended 31 December 2023 (H1 FY2023: nil) and no interim
dividends or distributions have been recommended or declared by the directors
in respect of the six-month period ended 31 December 2023 (H1 FY2023: nil).
15 Earnings per share
The following table reflects the income and share data used in the basic and
diluted earnings per share computations:
Earnings used in calculating earnings per share
Consolidated
FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2023 2022
$000 $000
(Restated)
For basic and diluted earnings per share:
Net loss (19,802) (4,619)
Net loss attributable to ordinary equity holders of the Company (19,802) (4,619)
Weighted average number of shares
AT 31 DECEMBER 2023 2022
Thousands Thousands
Weighted average number of ordinary shares for basic earnings per share 4,156,019 4,156,019
Weighted average number of ordinary shares adjusted for the effect
of dilution
4,156,019
4,156,019
16 Contributed equity
Consolidated
31 Dec 30 Jun
2023 2023
Unaudited Audited
$000 $000
Ordinary shares 240,948 240,948
Total contributed equity 240,948 240,948
Consolidated
31 Dec 30 Jun
2023 2023
Unaudited Audited
Number of ordinary shares Thousands Thousands
Issued and fully paid 4,156,019 4,156,019
Fully paid shares carry one vote per share and carry the right to dividends.
The Company has no set authorised share capital and shares have no par value.
Notes to the Interim Consolidated Financial Statements - Unaudited
17 Share-based payments
Long Term Incentive - 2020 Performance rights or share options offers - Executive and key staff
From 1 July 2015, senior staff and other key staff are offered long term
incentive (LTI) performance rights or share options. Under this structure, the
staff are only able to exercise the rights, and have new ordinary shares
issued to them, if any performance, market and vesting conditions are met.
These conditions typically include a performance condition requiring the staff
member to achieve a minimum "meets expectations" rating and some rights have
included a market condition in the form of a minimum Target Share Price (TSP).
The vesting period ranges from 9 months to 5 years from the end of the
relevant financial year or grant date. Performance rights or options are often
offered as part of the annual remuneration review and may be offered at other
times. Any offer of performance rights or options requires Board approval and,
when granted, is announced to the market.
In March 2023 the Company awarded a total of 12,420,232 performance rights in
respect of ordinary shares to Executive and key staff to be issued at nil
cost.
8,004,838 of the performance rights under the LTI have been awarded in
recognition of the past achievement of the Company's objectives in FY2022. The
rights were valued at the spot rate of the shares at grant date, and the value
is amortised over the vesting period. The rights vest annually over 3 years in
equal tranches with the first vesting date being 1 July 2022 and require the
employee to remain continuously employed by the Company until each relevant
vesting date. If an employee leaves before the rights vest and the service
condition is therefore not met, the rights lapse.
The remaining 4,415,394 performance rights have been granted under a Key
Person Agreement in respect of one nominated person. This person has been
identified as having a key role directly related to the Company's long-term
success and the allocation of accelerated performance rights has been
implemented by the Board to successfully retain this employee and affirm
successful delivery on a range of projects and customer commitments. These
awards have an accelerated grant with delayed vesting taking place on 1 July
2024 and require the employee to remain continuously employed by the Company
until the vesting date. If the employee leaves before the rights vest and the
service condition is therefore not met, the rights lapse.
In some cases, for 'good leavers', determined on a discretionary basis by
management, options are prorated for service in the current period and that
portion is vested on termination, the remaining rights are cancelled.
There is no cash settlement of the rights. The Group accounts for the
Executive Share Plan as an equity-settled plan.
18 Related party disclosures
The following table provides the total amount of transactions that have been
entered into with related parties during the six-month period ended 31
December 2023 and 2022:
Balance Acquired or sold for cash Other changes during the period Balance 31-Dec
1-Jul
Thousands Thousands Thousands Thousands
Director shares: 2023 8,002 850 7,500 16,352
Directors' securities
Directors' securities 2022 6,552 - - 6,552
19 Commitments
As at 31 December 2023, the group had commitments of $5,881,000 (H1 FY2023:
$15,289,000) relating to the manufacturing contract for the Group's Guardian
2.1 product for the period January 2024 to June 2024.
20 Events after the reporting period
There have been no matters that have occurred subsequent to the reporting
date, which have significantly affected, or may significantly affect, the
Group's operations, results or state of affairs in future periods.
1 Consensus expectations for FY2024 are for revenue of US$66.3m, Cash EBITDA
of US$(28.4m) and Cash position of US$26.1m.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FZGMFVRRGDZGRecent news on Seeing Machines
See all newsREG - Seeing Machines Ltd - Director/PDMR Shareholding
AnnouncementREG - Seeing Machines Ltd - Director/PDMR Shareholding
AnnouncementREG - Seeing Machines Ltd - Half year results and financial report
AnnouncementREG - Seeing Machines Ltd - Notice of Results
AnnouncementREG - Seeing Machines Ltd - H1 FY2024 Trading Update & Quarterly KPIs
Announcement