REG - Seeing Machines Ltd - Half year results and financial report
27/03/2025 07:15
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RNS Number : 4692C Seeing Machines Limited 27 March 2025
Seeing Machines Limited ("Seeing Machines" or the "Company")
27 March 2025
Half year results and financial report
~US$12m cost reduction underpins cash flow break-even in 2025
Market leading position with 2.88+ million cars on road across 8 automotive
production programmes
New partnerships to grow market share and a strong cash position
Seeing Machines Limited (AIM: SEE), 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 2024 ("H1 FY2025")
Paul McGlone, CEO of Seeing Machines, commented: "Our teams continued to make
strong operational progress over the period, underpinned by our best in class
technology and strong financial position, despite a backdrop of global
automotive industry volatility. To ensure we are best placed to achieve our
objectives in the current environment, we have taken fast and decisive action
to reorganise the management structure, lower our cost base and enhance
efficiency across our engineering and corporate functions. The Company's
strategy and value proposition remain unchanged, with a global road safety
agenda that closely aligns with our technology.
"We remain laser focused on execution and delivery - getting programmes
successfully to production to support acceleration of high margin royalty
revenue. We will continue to pursue opportunities driven by the compelling
structural tailwinds across our key target markets of Asia, Europe, and the
US, where we expect our transport customers to increase installations of
driver and occupant monitoring system technology, driven by unavoidable road
safety regulatory developments."
Financial Highlights:
- Reported Revenue for H1 FY2025 of US$25.3m, broadly flat compared to
the previous year (H1 FY2024: US$25.7m)
o OEM (Automotive and Aviation) revenue was US$14.5m, an increase of 27% on
the previous year (H1 FY2024: US$11.4m)
§ High margin per vehicle royalty revenue, derived from Automotive production
volumes, increased by 51% to US$6.3m (H1 FY2024: US$4.2m)
o Annualised Recurring Revenues of US$13.4m (H1 FY2024: US$13.0m)
o Aftermarket revenue of US$10.8m, a decrease from the previous period due
to delay in production of Guardian Generation 3 (H1 FY2024: US$14.3m)
- Gross Profit increased 32% across the business from US$10.6m in H1
FY2024 to US$14.0m in H1 FY2025 largely due to improved revenue mix and the
increased license fees (including high-margin royalty revenue derived from
Automotive production volumes)
- Reduction in operating expenses 1 for H1 FY2025 of US$4.8m compared
to H1 FY2024
- EBITDA loss continues to improve with H1 FY2025 of US$9.7m (H1
FY2024: loss US$14.3m), representing a decrease of US$4.5m over the period
- Adjusted EBITDA loss improved by US$8.8m to US$17.7m (H1 FY2024:
loss US$26.5m)
- Strong balance sheet, with cash at 31 December 2024 of US$39.6m (30
June 2024: US$23.4m)
Operational Highlights:
- Cars on the road with Seeing Machines' technology increased to
2,883,745 units, representing an increase of 90% from 12 months ago (Q2
FY2024: 1,516,545)
- Seeing Machines secured a landmark £26.2m (US$32.8m) investment as
part of its partnership with Mitsubishi Electric Mobility Corporation
("MELMB"), a global leader in the design and manufacture of automotive
products and technologies. Following an additional purchase of shares, MELMB
now holds 19.9% of Seeing Machines' issued share capital, strengthening the
Company's balance sheet and providing a strong foundation for future growth.
- Valeo and Seeing Machines entered a strategic collaboration to grow
market share in Automotive. Associated with this collaboration, the Company
acquired software company Asaphus Vision GmbH ("Asaphus"), now operating as
Seeing Machines Germany, providing a significant material boost to AI and
Machine Learning capabilities as well as local European presence.
- Post period end, Seeing Machines signed a Referral Agreement with
Mitsubishi Electric Automotive America Inc. ("MEAA"), enabling the Company to
leverage Mitsubishi's significant Aftermarket distribution network and
customer base of over 1 million individual vehicles across the Americas to
accelerate sales of the Company's Guardian Generation 3 AI-powered driver
monitoring solution.
- Guardian Generation 3, Seeing Machines' Aftermarket safety
technology targeting commercial transport and logistics segment, is now in
full production and being trialled globally in several large fleets. Despite
some delays, Seeing Machines is now able to begin to satisfy built up demand
for the product to operators globally, and commercial vehicle manufacturers,
looking to meet the upcoming EU General Safety Regulation.
Outlook and Current Trading
Seeing Machines is well-positioned to achieve continued progress in the coming
year, with an expected second-half skew despite some volatility in the
Automotive sector affecting the timing of anticipated royalty revenue. This
risk is partially mitigated by guaranteed portions of royalty revenue expected
to be received within the originally anticipated timeframe, positively
impacting cash flow starting in the second half of FY2025 and significantly
increasing in FY2026. Considering these factors, the Board anticipates that
Seeing Machines' performance for FY2025 will be in line with consensus
expectations 2 (#_ftn2) .
Organisational Update
The Company commenced a detailed review of the organisation in December 2024,
which was completed this month, and has led to a strategic reorganisation of
the Company's management structure and the Executive Team. As a result of the
consolidated changes over the review period, Seeing Machines has reduced
annualised operating expenses by ~US$12 million, significantly reducing its
ongoing cost base. Combined with expected increases in Aftermarket revenues
and gross margin, as well as anticipated growth in global adoption of DMS as
transport safety regulations ramp up in Europe by July 2026, the Board expects
that Seeing Machines will achieve a cash flow break-even run rate during the
calendar year 2025.
This announcement contains inside information under the UK Market Abuse
Regulation. The person responsible for arranging for the release of this
announcement on behalf of the Company is Paul McGlone, CEO.
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
Ben Good
Sarah Wong
Dentons Global Advisors (Media Enquiries) +44 20 7664 5095
James Styles
Methuselah Tanyanyiwa
Matthias Jarosz
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' 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
The Group's total revenue for the half-year (excluding foreign exchange gains
and finance income) decreased by 2% and adjusted EBITDA losses decreased by
33% compared to the six-month period ended 31 December 2023.
31 Dec 2024 31 Dec 2023 Change Change
$'000 $'000 $'000 %
OEM 14,522 11,413 3,109 27%
Aftermarket 10,785 14,321 (3,536) (25%)
Revenue 25,307 25,734 (427) (2%)
31 Dec 2024 31 Dec 2023 Change Change
$'000 $'000 $'000 %
OEM (8,979) (12,455) 3,476 (28%)
Aftermarket (8,733) (14,048) 5,315 (38%)
Adjusted EBITDA* (17,712) (26,503) 8,791 (33%)
*Adjusted EBITDA is a non-IFRS measure but included as an important metric for
shareholders understanding of the business. Please refer to Note 3(a) for a
reconciliation of adjusted EBITDA with loss before income tax.
OEM division
With 8 automotive programs at start of production by the end of H1 FY2025,
Seeing Machines has just under 3 million cars on the road featuring its DMS
technology, an increase of 90% from 12 months ago, despite some volatility in
OEM quarterly volumes.
During the period, Seeing Machines and Valeo formalised a strategic
collaboration to deepen their relationship with automotive Tier 1 suppliers
and expand their market share in the automotive sector. The market-leading
scale of Valeo, alongside its expertise in cutting-edge cameras and processing
units, software and system integration, will help to accelerate adoption of
the Company's AI-powered driver and occupant monitoring system (DMS/OMS)
technology. The two companies are working closely together to jointly pursue
new business as Seeing Machines strategically partners with a small number of
blue-chip Tier 1s to enhance opportunities for growth.
Linked to the collaboration with Valeo, Seeing Machines acquired software
company Asaphus Vision GmbH ("Asaphus") on 4 July 2024 for $6,000,000 (cash
consideration of $1,000,000 on acquisition and deferred consideration of
$5,000,000), providing a significant material boost to AI and Machine Learning
capabilities. Asaphus, now operating as Seeing Machines Berlin, provides the
Company with a European footprint, leaving it strongly positioned to support a
rapidly growing customer base with both technical and operational staff.
Please refer to Note 19 Business Combinations for further details.
Aftermarket division
Guardian Generation 3, the Company's aftermarket safety technology targeting
the commercial transport and logistics segment, is now in production and being
trialled across Europe, North America and Asia Pacific in several large
fleets. These trials are well underway and in direct comparisons, results have
seen Guardian outperform its competition due to its superior detection of
fatigue and distraction. The third generation of Guardian has been
significantly enhanced, leveraging the Company's automotive grade DMS
technology.
Guardian units continue to be connected across transport and logistics fleets
as previously sold Guardian Generation 2 units are installed, particularly in
the Asia Pacific region, contributing to Annual Recurring Revenue.
Wrightbus, the UK's largest electric bus manufacturer, became the first
commercial vehicle manufacturer to achieve homologation with the Company's
Guardian Generation 3 product, for Europe's General Safety Regulation and the
detection of fatigue related driving events.
Post 31 December 2024, Seeing Machines signed a Referral Agreement with
Mitsubishi Electric Automotive America Inc. ("MEAA"), enabling the Company to
leverage Mitsubishi's extensive Aftermarket distribution network and customer
base of over 1 million individual vehicles across the Americas to accelerate
sales of the Company's Guardian Generation 3.
Industry update
Regulatory momentum continues to underpin Seeing Machines' investment thesis
as growing numbers of OEMs and transport operators in Europe are required to
enhance safety through the adoption of driver monitoring system technology.
While the global automotives sector has faced some challenges over the last
year, Seeing Machines' Automotive production volumes continue to grow
significantly, and this is expected to continue.
Other highlights
The 6-month period ended 31 December 2024 was defined by the landmark
£26,207,000 ($32,751,000) investment by Mitsubishi Electric Mobility
Corporation ("MELMB"), a global leader in the design and manufacture of
automotive products and technologies, into Seeing Machines. MELMB now hold
19.9% of Seeing Machines' issued share capital. This new partnership will
provide a strong foundation for future growth.
The two companies have also joined forces through a collaboration agreement to
grow their share of the Automotive market in Japan, at a time when OEMs are
looking to implement driver safety solutions ahead of regulatory deadlines in
Europe and beyond. The collaboration will extend to all areas of Seeing
Machines' transport related business and is intended to eventually expand into
adjacent markets where Seeing Machines' Intellectual Property may be leveraged
to enhance segments in which Mitsubishi has an existing competitive
advantage.
Assets
Current assets
Cash and cash equivalents 5 (#_CacNote_TOC) 39,642 23,361
Trade and other receivables 6 (#_CarNote_TOC) 11,833 25,293
Contract assets 5,231 7,044
Inventories 7 (#_CasNote_TOC) 3,604 3,625
Other financial assets 294 315
Other current assets 2,931 2,113
Total current assets 63,535 61,751
Non-current assets
Property, plant and equipment 8 (#_NaaNote_TOC) 3,076 3,486
Right-of-use assets 3,237 3,737
Intangibles 9 (#_NaiNote_TOC) 68,712 61,323
Total non-current assets 75,025 68,546
Total assets 138,560 130,297
Liabilities
Current liabilities
Trade and other payables 10 (#_ClpNote_TOC) 10,808 21,161
Contract liabilities 6,559 5,471
Lease liabilities 11 (#_ClmNote_TOC) 1,167 1,122
Provisions 4,911 4,909
Deferred consideration 19 (#_ObcNote_TOC) 640 -
Total current liabilities 24,085 32,663
Non-current liabilities
Contract liabilities 8,013 9,088
Borrowings 12 (#_CllNote_TOC) 48,447 45,701
Lease liabilities 11 (#_ClmNote_TOC) 3,230 4,097
Deferred tax 1,107 1,423
Provisions 328 342
Deferred consideration 19 (#_ObcNote_TOC) 3,279 -
Total non-current liabilities 64,404 60,651
Total liabilities 88,489 93,314
Net assets 50,071 36,983
Equity
Contributed equity 16 (#_EqcNote_TOC) 272,188 240,948
Other equity 13 (#_EqyNote_TOC) 5,582 5,582
Accumulated losses (235,033) (216,796)
Reserves 7,334 7,249
Total equity 50,071 36,983
Sale of goods 2,614 5,858
Royalty and license fees 8,789 8,153
Services revenue 13,904 11,723
Revenue 3 (#_AosNote_TOC) 25,307 25,734
Cost of sales (11,281) (15,161)
Gross Profit 14,026 10,573
Operations expenses (8,091) (8,232)
Research and development expenses (9,417) (8,176)
Customer support and marketing expenses (4,018) (4,306)
General and administration expenses (8,127) (7,180)
Net foreign exchange gains/(losses) 75 (67)
Expenses 4 (#_AexNote_TOC) (29,578) (27,961)
Operating loss (15,552) (17,388)
Finance income 483 252
Finance costs (3,448) (2,648)
Finance costs - net (2,965) (2,396)
Loss before income tax benefit/(expense) (18,517) (19,784)
Income tax benefit/(expense) 280 (18)
Loss after income tax benefit/(expense) for the half-year attributable to the (18,237) (19,802)
owners of Seeing Machines Limited
Other comprehensive loss
Exchange differences on translation of foreign operations (21) 70
Other comprehensive loss for the half-year, net of tax (21) 70
Total comprehensive income/(loss) for the half-year attributable to the owners (18,258) (19,732)
of Seeing Machines Limited
Cents Cents
Basic loss per share 15 (#_OepNote_TOC) (0.3712) (0.4765)
Diluted loss per share 15 (#_OepNote_TOC) (0.3712) (0.4765)
Contributed Other Accumulated Foreign Currency Translation Employee Equity Benefits & Other Total Equity
Equity Equity Losses Reserve Reserve
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 July 2023 240,948 5,749 (185,520) (13,818) 19,172 66,531
Loss after income tax expense for the half-year - - (19,802) - - (19,802)
Other comprehensive income/(loss) for the half-year, net of tax - - - 70 - 70
Total comprehensive loss for the half-year - - (19,802) 70 - (19,732)
Transactions with owners in their capacity as owners:
Share-based payments - - - - 1,017 1,017
Balance at 31 December 2023 240,948 5,749 (205,322) (13,748) 20,189 47,816
Contributed Other Accumulated Foreign Currency Translation Employee Equity Benefits & Other Total Equity
Equity Equity Losses Reserves Reserve
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 July 2024 240,948 5,582 (216,796) (13,844) 21,093 36,983
Loss after income tax benefit for the half-year - - (18,237) - - (18,237)
Other comprehensive income/(loss) for the half-year, net of tax - - - (21) - (21)
Total comprehensive income/(loss) for the half-year - - (18,237) (21) - (18,258)
Transactions with owners in their capacity as owners:
Share-based payments - - - - 106 106
Contributions of equity, net of transaction costs 31,240 - - - - 31,240
Balance at 31 December 2024 272,188 5,582 (235,033) (13,865) 21,199 50,071
Cash flows from operating activities
Receipts from customers (inclusive of GST) 42,178 36,113
Payments to suppliers and employees (inclusive of GST) (49,649) (37,448)
Interest received 481 252
Transaction costs relating to acquisition of subsidiary (95) -
Interest and other finance costs paid (42) (26)
Income taxes paid (44) -
Net cash used in operating activities (7,171) (1,109)
Cash flows from investing activities
Payments for property, plant and equipment 8 (#_NaaNote_TOC) (95) (272)
Payments for intangible assets (patents, licenses and trademarks) 9 (#_NaiNote_TOC) (21) (105)
Payments for intangible assets (capitalised development costs) 9 (#_NaiNote_TOC) (8,663) (12,350)
Maturity of term deposits 22 87
Net cash used in investing activities (8,757) (12,640)
Cash flows from financing activities
Proceeds from issue of shares 16 (#_EqcNote_TOC) 32,752 -
Repayment of lease liabilities (597) (439)
Net cash from/(used in) financing activities 32,155 (439)
Net increase/(decrease) in cash and cash equivalents 16,227 (14,188)
Cash and cash equivalents at the beginning of the financial half-year 23,361 36,139
Effects of exchange rate changes on cash and cash equivalents 54 264
Cash and cash equivalents at the end of the financial half-year 5 (#_CacNote_TOC) 39,642 22,215
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 2024 was authorised for
issue in accordance with a resolution of the Directors on 27 March 2025 .
2. Basis of Preparation
(a) Basis of Preparation
The interim financial report for the six-month period ended 31 December 2024
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 2024. 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 2024.
Certain new accounting standards, amendments to accounting standards and
interpretations have been published that are not mandatory for 31 December
2024 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.
3. Segment Information
a. Description of segments and principal activities
The Executives (including the Executive the Chief Executive Officer and Chief
Financial Officer) and the Board, examines the Group's performance from a
product and services perspective and have organised the Group into key
business units and identified two reportable operating segments of the
business:
1. The OEM operating segment includes both the automotive and aviation
business units, which generate largely licence-based royalty and non-recurring
engineering services-based revenue, channelled through Tier 1 customers.
2. The Aftermarket operating segment includes Fleet and Off-Road business
units, which generate revenue from a mix of direct and indirect customers who
retro-fit Seeing Machines technology into commercial vehicles.
The Executive Leadership Team uses a measure of adjusted earnings before
interest, tax, depreciation and amortisation (EBITDA) to assess the
performance of the operating segments. However, the Executive Leadership Team
also receives information about the segments' revenue on a monthly basis.
b. Segment revenue and adjusted EBITDA
FOR THE SIX-MONTH PERIOD ENDED 31 Dec 2024 31 Dec 2024 31 Dec 2023 31 Dec 2023
Segment Revenue Adjusted EBITDA Segment Revenue Adjusted EBITDA
$'000 $'000 $'000 $'000
OEM 14,522 (8,979) 11,413 (12,455)
Aftermarket 10,785 (8,733) 14,321 (14,048)
Total 25,307 (17,712) 25,734 (26,503)
There are no inter-segment revenues and there have been no changes to how each
segment's adjusted EBITDA is measured.
Corporate costs and overheads within adjusted EBITDA have been allocated to
the operating segments using a percentage of revenue. Research and development
costs are allocated based on actual costs that relate to an operating segment.
Adjusted EBITDA excludes the effect of significant items of income and
expenditure which may have an impact on the quality of earnings such as
restructuring costs and acquisition costs. It also adds back capitalised
expenditure during the period to help assess the free cashflow of the business
units.
Adjusted EBITDA reconciles to loss before income tax as follows:
FOR THE SIX-MONTH PERIOD ENDED 31 Dec 2024 31 Dec 2023
$'000 $'000
31 DECEMBER
Total adjusted EBITDA (17,712) (26,503)
Finance costs - net (2,965) (2,396)
Depreciation & amortisation expense (5,855) (3,136)
Capitalised costs 8,663 12,350
Restructuring costs and acquisition costs (625) -
Other (23) (99)
Loss before income tax (18,517) (19,784)
c. Disaggregation of 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.
OEM Aftermarket Total
FOR THE SIX-MONTH PERIOD ENDED $'000 $'000 $'000
31 DECEMBER 2024
Sales at a point in time
Hardware and Installations 665 2,273 2,938
665 2,273 2,938
Sales over time
Driver Monitoring - 6,934 6,934
Non-recurring Engineering 5,381 1,264 6,645
Royalties 6,346 - 6,346
Licensing 2,130 314 2,444
13,857 8,512 22,369
Total Revenue 14,522 10,785 25,307
OEM Aftermarket Total
FOR THE SIX-MONTH PERIOD ENDED $'000 $'000 $'000
31 DECEMBER 2023
Sales at a point in time
Hardware and Installations 426 5,954 6,380
Royalties - 1,704 1,704
426 7,658 8,084
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
10,987 6,663 17,650
Total Revenue 11,413 14,321 25,734
d. Revenue from contracts with customers by geographic information
FOR THE SIX-MONTH PERIOD ENDED 31 Dec 2024 31 Dec 2023
$'000 $'000
Australia 7,488 7,341
North America 8,407 12,606
Asia-Pacific (excluding Australia) 1,536 1,567
Europe 6,490 2,714
Other 1,386 1,506
Total revenue 25,307 25,734
The revenue information above is based on the locations of the customers.
4. Expenses
FOR THE SIX-MONTH PERIOD ENDED 31 Dec 2024 31 Dec 2023
$'000 $'000
a. Research and development expenses
Research and development expenses 18,080 20,526
Capitalised development costs during the period (8,663) (12,350)
Total research and development expenses 9,417 8,176
b. Depreciation and amortisation expense
Depreciation expense - owned assets 637 605
Depreciation expense - leased assets 488 344
Amortisation expense - development costs 4,692 2,160
Amortisation expense - others 38 26
Total depreciation and amortisation expense 5,855 3,135
c. Employee benefits expense
Wages and salaries and on-costs (excluding superannuation) 24,332 24,680
Superannuation expense 1,969 2,030
Share-based payment expense 106 1,017
Wages and salaries reported as cost of sales (5,265) (7,877)
Wages and salaries capitalised to development costs (7,215) (9,776)
Total employee benefits expense 13,927 10,074
d. Other operating expenses
Non-recoverable foreign withholding taxes 8 99
Restructuring costs 530 -
Acquisition costs 95 -
Total other operating expenses 633 99
5. Cash and cash equivalents
AS AT 31 Dec 2024 30 Jun 2024
$'000 $'000
Current assets
Cash at bank 39,642 23,361
39,642 23,361
6. Trade and other receivables
AS AT 31 Dec 2024 30 Jun 2024
$'000 $'000
Current assets
Trade receivables 11,866 24,850
Deferred finance income - (2)
Less: Allowance for expected credit losses (235) (235)
11,631 24,613
Net other receivables 202 680
11,833 25,293
7. Inventories
AS AT 31 Dec 2024 30 Jun 2024
$'000 $'000
Current assets
Stock on hand - (at lower of cost and net realisable value) 3,725 3,746
Less: Provision for obsolescence (121) (121)
Total inventories 3,604 3,625
8. Property, plant and equipment
During the six-month period ended 31 December 2024, the Group incurred
expenditure of $95,000 for Property, Plant and Equipment (H1 FY2024:
$272,000).
Property, Plant and Equipment of $97,000 (net) was acquired as part of the
Asaphus acquisition.
No assets relating to plant and equipment were disposed by the Group during
the six-month period ended 31 December 2024 (H1 FY2024: Nil).
9. Intangibles
During the six-month period ended 31 December 2024, the Group incurred
expenditure of $8,684,000,000 (H1 FY2024: $12,455,000) related to intangibles.
$21,000 (H1 FY2024: $105,000) of this expenditure related to patent and
trademark applications and licenses. $8,663,000 (H1 FY2024: $12,350,000)
related to capitalised development costs.
Intangibles with a value of $500,000 was acquired as part of the Asaphus
acquisition.
No intangible assets were disposed by the Group during the six-month period
ended 31 December 2024 (H1 FY2024: nil).
10. Trade and other payables
At 31 December 2024, the balance of the trade payables was $2,277,000 (FY2024:
$11,500,000), of which an amount of $1,984,000 (FY2024: $9,211,000) was aged
less than or equal to 60 days; and an amount of $293,000 (FY2024: $2,289,000)
was aged over 60 days.
11. Lease liabilities
AS AT 31 Dec 2024 30 Jun 2024
$'000 $'000
Current
Lease liabilities 1,167 1,122
Non-current
Lease liabilities 3,230 4,097
4,397 5,219
AS AT 31 DECEMBER 2024 6 6-12 >1
months months year Total Carrying value
$'000 $'000 $'000 $'000 $'000
Lease Liabilities 747 814 3,818 5,379 4,397
AS AT 30 JUNE 2024 6 6-12 >1
months months year Total Carrying value
$'000 $'000 $'000 $'000 $'000
Lease liabilities 641 829 4,830 6,300 5,219
12. Borrowings
AS AT 31 Dec 2024 30 Jun 2024
Non-current $'000 $'000
Unsecured
Convertible notes (i) 48,447 45,701
Total borrowings - non-current 48,447 45,701
(i) Convertible notes
On 4 October 2022, Seeing Machines received funding of $47,500,000 from Magna
International 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 13.14%
and 11.84% 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.
AS AT 31 Dec 2024 30 Jun 2024
$'000 $'000
Face value of notes issued 47,500 47,500
Other equity securities - value of conversion rights (7,974) (7,974)
Transaction costs on borrowings (1,202) (1,202)
Other costs on borrowings (513) (317)
37,811 38,007
Interest expense 10,636 7,694
Total borrowings - non-current 48,447 45,701
13. Other equity
AS AT 31 Dec 2024 30 Jun 2024
$'000 $'000
Value of conversion rights - convertible notes 7,974 7,974
Deferred tax liability component (2,392) (2,392)
Total other equity 5,582 5,582
(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
Borrowings
14. Dividends paid
No interim dividends or distributions have been made to members during the
six-month period ended 31 December 2024 (H1 FY2024: 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 2024 (H1 FY2024: nil).
15. Loss per share
The following table reflects the loss and share data used in the basic and
diluted loss per share computations:
Loss used in calculating loss per share
FOR THE SIX-MONTH PERIOD ENDED 31 Dec 2024 31 Dec 2023
$'000 $'000
Loss per share for loss
Loss for the period (18,237) (19,802)
Loss after income tax attributable to the owners of Seeing Machines Limited (18,237) (19,802)
used in calculating diluted loss per share
Weighted average number of shares
AS AT 31 DECEMBER 2024 2023
Thousands
Thousands
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating basic loss per 4,912,392 4,156,019
share
Weighted average number of ordinary shares used in calculating diluted loss 4,912,392 4,156,019
per share
16. Contributed equity
AS AT 31 Dec 2024 30 June 2024 31 Dec 2024 30 June 2024
Shares Shares $'000 $'000
'000
'000
Ordinary shares - issued and fully paid 4,912,392 4,156,019 272,188 240,948
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.
On 26 November 2024 Board issued a total of 118,904,187 new ordinary shares of
no par value in the Group ("New Ordinary Shares") for the benefit of key
members of staff for previously announced performance awards under the terms
of the Group's Long Term Incentive ("LTI") scheme (the "Award").
On 23 December 2024, the company issued 640,746,822 new shares at a price of
4.09 pence per share, resulting in a total investment of $32,752,000. The
shares were issued to Mitsubishi Electric Mobility Corporation. The
contributed equity (net of transaction costs) and the cash balance increased
by $31,240,000 due to the issuance of new shares.
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 (80%) and specific market conditions to be met (20%).
If the employee leaves before the rights vest and the service condition is
therefore not met, the rights lapse. During the half-year 3,532,315 of the
performance rights vested and 892,079 rights were cancelled as market
condition were not met.
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 2024 and 2023:
Balance Acquired or sold for cash Other changes during the period Balance
1-Jul
31-Dec
Thousands Thousands Thousands Thousands
Directors shares:
Directors' securities 2024 15,533 200 - 15,733
Directors' securities 2023 8,022 850 7,500 16,352
19. Business combinations
On 4 July 2024 Seeing Machines Limited acquired 100% of the issued shares in
Asaphus Vision GmbH, a highly specialised development group with leading
Machine Learning (ML) and Artificial Intelligence (AI) capability, for
consideration of $4,665,000. The acquisition is expected to increase the
Group's market share in OEM.
Details of the net assets acquired, goodwill and purchase consideration are as
follows:
Fair value
$'000
Cash and cash equivalents 938
Receivables 391
Other current assets 186
Plant and equipment 110
Other intangible assets 500
Payables (142)
Other liabilities (217)
Net assets acquired 1,766
Goodwill 2,899
Acquisition-date fair value of the total consideration transferred 4,665
Representing:
Cash paid or payable to vendor 1,000
Deferred consideration 3,665
4,665
Acquisition costs expensed to profit or loss 95
Goodwill is attributable to Asaphus Vision GmbH unique Intellectual Property
which will add complementary skills that will accelerate the Company's feature
roadmap with advanced AI and ML capability, optimise development costs and
deliver enhanced engineering talent in Germany, an ideal location to support
Seeing Machines' growing customer base in Europe. Goodwill is not tax
deductible.
The fair value of the acquired intangible assets of $500,000 is provisional
pending receipt of the final valuations.
(i) Acquisition-related costs
Acquisition-related costs of $376,000 are included in general and
administration expenses in the statement of comprehensive income in the
reporting period ending 30 June 2024 and $95,000 in general and administration
expenses in the statement of comprehensive income in the reporting period
ending 31 December 2024.
(ii) Deferred consideration
The Company has agreed to pay Asaphus $1,000,000 cash on the one-year
anniversary and a further $4,000,000 over the five years from acquisition date
based on 20% of royalties earned from specific customer programs. In order to
account for the deferred consideration's fair value at the date of
acquisition, the company has discounted the consideration to $3,665,000. At 31
December 2024, the fair value of the deferred consideration had increased to
$3,919,000.
(iii) Revenue and profit contribution
The acquired business contributed revenues of $2,074,000 and net profit of
$76,000 to the group for the period from 4 July 2024 to 31 December 2024.
20. Commitments
As at 31 December 2024, the group had no commitments (H1 FY2024: $5,881,000 -
relating to the manufacturing contract for the Group's Guardian 2.1 product).
21. Events after the reporting period
No matter or circumstance has arisen since 31 December 2024 that has
significantly affected, or may significantly affect the consolidated entity's
operations, the results of those operations, or the consolidated entity's
state of affairs in future financial years.
1 (#_ftnref1) Operating expenses include capitalised research and
development costs and exclude depreciation and amortisation
2 (#_ftnref2) Consensus expectations for FY2025 are for revenue of US$58m,
Adjusted EBITDA of US$(28.9)m
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