REG - Seeing Machines Ltd - Year End Results
24/11/2021 07:00
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RNS Number : 4247T Seeing Machines Limited 24 November 2021
Seeing Machines Limited
24 November 2021
Year End Results FY2021
Seeing Machines Limited (AIM: SEE, "Seeing Machines" or the "Company"), the
advanced computer vision technology company that designs AI-powered operator
monitoring systems to improve transport safety, has published its audited
financial results for the year ended 30 June 2021 ("FY2021" or "the period").
FINANCIAL HIGHLIGHTS:
- Revenue increased 18% to A$47.2m (2020: A$40.0m)
- Underlying revenue has grown 30% when using constant currency* to
A$47.4 (FY2020: A$36.5)
- Commencement of OEM royalty license revenue of A$2.3m (2020: nil) as
cars start production featuring the Company's driver monitoring system (DMS)
software. Remainder of OEM revenue was comprised of non-recurring engineering
revenue (NRE), licence and hardware revenue, giving total OEM revenue of
A$12.1m (2020: A$13m)
- Aftermarket revenue increased 30% to A$35.1m (2020: A$27.0m)
- Annual Recurring Revenue including royalties increased 23% to
A$17.2m reflecting growth in Guardian installed base to 31,771 units at 30
June 2021
- Gross Profit increased by 44% to A$20.8m (2020: A$14.4m)
- Cash at 30 June 2021 of A$47.4m (2020: A$38.1m)
CURRENT TRADING:
- Unaudited year to date results for Q1 FY2022 revenue are ahead of
budget, largely due to strong performance in Aftermarket signalling continued
momentum for this industry sector.
o Revenue of A$9.8m (Q1 FY2021: A$9.5m)
o Cash of A$40.3m (Q1 FY2021: A$35m)
- Successful fundraise completed on 23 November 2021 of US$41m to
accelerate growth in the rapidly expanding DMS technology market, across all
transport sectors globally. Seeing Machines intends to accelerate the
development of new core software and system features, acquire additional
specialised technology, expand sales channels and its product portfolio to
maximise its win rate of automotive programs, scale delivery capability and
speed up aftermarket revenue growth.
The Directors continue to see accelerating momentum for the business, with
current market conditions presenting a significant opportunity to capture an
even greater market share as the market benefits from a number of structural
tailwinds. The net proceeds of the recent fundraise will enable the Company to
make the necessary investment in order to secure this opportunity and gives
the Directors confidence, underpinned by its current 'active RFQ' pipeline,
that Seeing Machines will have an increased market share by 2025.
OPERATIONAL HIGHLIGHTS:
OEM (Automotive and Aviation)
- Seeing Machines DMS technology now on roads in more than nine
individual vehicle models globally, representing more than 120,000 cars
including General Motors' Cadillac CT6, CT5, CT4, Chevrolet Bolt and Escalade
and the new Mercedes Benz S-Class and Mercedes Benz EQS sedans.
- The Company is engaged on nine expanding programs with seven
automotive OEMs globally to deliver its DMS technology.
- Seeing Machines' leading Occula® Neural Processing Unit was
launched to the automotive industry and was successfully licensed to
Omnivision Technologies.
- A partnership with Qualcomm Technologies to deliver next-generation
ADAS and infotainment technology for intelligent vehicle interiors was
announced.
- Post period, in the USA, bipartisan infrastructure legislation was
passed through the House of Representatives and subsequently signed by
President Biden, which would require DMS technology to stop drunk and
distracted driving, signalling increased momentum on regulatory driven
tailwinds.
- Aviation division, together with CAE Australia, delivered its Crew
Training System into Royal Australian Air Force full mission simulator.
- Post period, the Company signed an Agreement with Airservices
Australia to enhance safety in Air Traffic Control.
AFTERMARKET:
- Aftermarket profitable on a standalone basis, supplying near-term
revenue for the Company, now working with more than 400 customers globally.
- Guardian installations increased by more than 8,350 units to 31,771
(FY2020: 23,415) globally, despite the ongoing challenges posed by Covid-19
where access to vehicles was limited for periods of time across a range of
geographies.
- Guardian sales increased and the Company has a backlog of around
5,000 units sold, awaiting installation.
- Max Verberne, telematics industry veteran, was appointed to lead the
Aftermarket business and develop a multi-channel approach to sell Guardian
into existing and additional markets.
- Post period, the Company signed a Global Framing Agreement with
energy giant, Shell Global Solutions International B.V., for the provision of
Guardian to enhance safety across its worldwide operations.
Paul McGlone, chief executive officer of Seeing Machines, commented: "The
landscape for Seeing Machines and our technology has taken a dramatic turn
with ongoing momentum driven by industry demand and regulatory tailwinds
across all of our focused transport sectors. As a result, we are seeing
success across all business divisions, and this is very pleasing.
"The Aftermarket business is thriving under the new leadership of Max and we
are expecting this to continue as the direct and indirect sales channels are
bolstered around the world and large multi-national companies recognise the
impacts of installing Guardian technology, like Shell. In Automotive, more and
more cars are being sold with our DMS technology installed across the world
and we look forward to talking about more of our globally recognised OEM
customers as new models start production over the coming year.
"Aviation has also advanced significantly and this is emphasised by our post
period Agreement with Collins Aerospace, the world's largest Tier 1 avionics
company, who has big plans to work closely with our team to deliver
eye-tracking solutions across the industry to deliver training efficiencies
and enhance safety. It's exciting times for the company and we are working
hard to ensure we maximise the growing opportunities and deliver value to our
shareholders."
* This refers to underlying growth rates at constant currency or adjusting for
currency so business results can be viewed without the impact of fluctuations
in foreign currency exchange rates, thereby facilitating period-to-period
comparisons of Seeing Machines business performance. To present this
information, current period results and comparative period results are
converted into Australian dollars at the 30 June 2021 exchange rate.
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
Nick Adams
Lionsgate Communications (Media Enquiries) +44 07791 892509
Jonathan Charles
About Seeing Machines
Seeing Machines (LSE: 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
Financial Highlights
The Company's total revenue for the financial year (excluding foreign exchange
gains and finance income) was A$47,167,000 compared to
the 2020 revenue of A$40,012,000, representing an 18% increase on prior
year results.
Product 2021 2020 Variance
A$'000 A$'000 %
OEM 12,088 12,789 (5)
Aftermarket 35,079 27,019 30
Scientific Advances - 204 (100)
Sales Revenue 47,167 40,012 18
The previously anticipated start of production for our Original Equipment
Manufacturer ("OEM") business unit (Automotive) contributed $2.3m in revenue
marking the start of an increasing stream of royalty license revenue that will
continue to be received over the model lifetime of awarded OEM programs. FY21
revenue was also boosted by a US$3,250,000 (2020: USD$5,000,000)
pre-production license deal with a major Automotive Tier 1 partner. The
remainder of the revenue in the OEM segment represents NRE revenue which is
software development activities undertaken to embed DMS technologies into the
specific OEM vehicle configuration prior to the commencement of vehicle
production.
The Aftermarket business grew by 30% on the prior year despite a slowdown in
installations arising as a result of local and global pandemic-related changes
to business conditions. Revenue momentum accelerated through the second half
of the year with revenue in H2 increasing by 33% on H1 results to A$20,039,000
(H1: A$15,040,000). Hardware and installation revenue increased by 55% over
the prior year to A$18,798,000 (2020: A$12,130,000) and driver monitoring
revenues increased by 13% to A$11,064,000 (2020: A$9,812,000).
Gross profit increased from A$14,433,000 in FY2020 to A$20,765,000 this year,
reflecting increased sales of Guardian units and a 4% improvement in
Aftermarket gross margin.
In line with the continued accelerating momentum in automotive safety
legislation in both Europe and more recently in the US, the Company continued
to invest in its core technology development across global OEM and Aftermarket
industries. As a result, Seeing Machines has reflected a portion of
development expenditure attributable to future revenues as an intangible asset
amounting to A$8,311,000 (2020: A$nil). The remaining research and development
costs have been expensed and amount to A$9,876,000. The total investment in
research and development for the
current year amount is A$18,187,000 (2020: A$24,736,000).
All cost categories across the business have reduced in line with a sustained
focus on business performance and cost optimisation and reduced expenditure on
tradeshows and travel that has been heavily impacted by COVID restrictions.
Australian Government COVID-19 Grants, JobKeeper and PAYG subsidy reduced other income
to A$1,664,000 (2020: A$2,234,000). The initial phase of the JobKeeper Grant
ran from 1 March 2021 to 27 September 2021 with Seeing Machines, like many
other Australian companies, not qualifying for subsequent phases.
Cash used in operations fell from A$24,246,000 to A$19,641,000 primarily from
the reduction in research and development expenditure, and increase in trade
receivables in the second half of the year. Increased revenues, particularly
in the later months of the financial year have not all converted to cash
within the reporting cycle, however overall revenues were generated from a
reduced cost base in line with continued focus on working capital management.
The resultant loss for the period represented a decrease of A$29,068,000 at
A$17,420,000 (2020: A$46,488,000). Net cash and cash
equivalents at 30 June 2021 totalled A$47,393,000 (2020: A$38,138,000).
On 23 November 2021, Seeing Machines issued 277,123,492 new ordinary shares of
no par value each (the "New Ordinary Shares") at a price of 11 pence per
New Ordinary Share, raising gross proceeds of approximately US$41,000,000
(the "Placing"). The net proceeds of the Placing will be used to strengthen
the Company's balance sheet, fund core technology expansion, and enhance OEM
Business pursuit and Aftermarket product development and regional expansion.
Operational Highlights
Seeing Machines has managed to continue its growth track despite the obvious
pressures stemming from Covid related interruptions, reporting a pleasing
increase in revenue which is underpinned by the increase in global demand for
safety technology across Fleet and Automotive. The regulatory landscape is
transforming quickly to keep up with safety requirements in Europe, now
increasing in North America and expected to continue around the world.
Driver Monitoring System (DMS) technology is fundamental to transport safety
but is also a key enabler in Automotive as the intelligent cabin advances and
semi-automated features emerge across an increasing number of vehicles, where
understanding what the driver is doing is critical in maintaining driver
attention and vehicle safety.
Seeing Machines is now actively engaged with seven automakers on nine ongoing
automotive programs to deliver its FOVIO DMS and as vehicle models start
production, the shape of the automotive revenue is changing from NRE
(Non-Recurring Engineering) to royalties, which are expected to significantly
ramp over the coming two to three years.
The Automotive pipeline continues to grow with the Company actively working on
RFQ's (Request for Quote) from OEMs in Europe, North America and Asia. The
current known pipeline (active and anticipated) of opportunities have a
lifetime value of more than A$1,100m.
Seeing Machines' Aftermarket business has also achieved good growth as
Guardian sales have continued to accelerate, despite the economic challenges.
As a profitable, standalone business, Aftermarket is gaining good ground and
attracting interest of key global organisations as they seek to enhance safety
across their vehicle fleet. Post-period, the Company announced a Global
Framing Agreement with Shell Global Solutions International, for the provision
of Guardian across their global fleet.
Guardian connections now stand at 31,771 and were slower than expected due to
the complications posed by Covid-related lockdowns and pressure on transport
companies. However, hardware sales continued at the expected rate and the
Company now has a backlog of around 5,000 units that have been sold and are
due to be installed.
The Aviation industry is now emerging from the pressures of the global
pandemic and Seeing Machines remains engaged on key opportunities associated
with Simulated Training as well as Air Traffic Control applications of the
Company's eye-tracking technology. With customers like the Royal Australian
Air Force and Airservices Australia, Seeing Machines continues to invest in
the Aviation business and is experiencing good momentum, with limited
competition, in this growing market.
The announcement, post-period, of the Company's collaboration with Collins
Aerospace, the world's largest Tier 1 Avionics company, is an extremely
positive indication of the industry's desire for eye-tracking technology to
enhance safety, training and efficiencies.
Consolidated Statement of Financial Position
Notes 2021 2020
AS AT 30 JUNE A$000 A$000
ASSETS
CURRENT ASSETS
Cash and cash equivalents 14 47,393 38,138
Other short-term deposits 20 472 512
Trade and other receivables 15 19,851 9,584
Inventories 16 2,627 4,743
Other current assets 17 5,438 4,245
TOTAL CURRENT ASSETS 75,781 57,222
NON-CURRENT ASSETS
Property, plant & equipment 18 3,361 3,208
Intangible assets 19 9,540 899
Right-of-use assets 29 4,252 4,371
TOTAL NON-CURRENT ASSETS 17,153 8,478
TOTAL ASSETS 92,934 65,700
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 21 8,839 7,874
Lease liabilities 29 918 1,057
Provisions 22 4,893 3,763
Contract liabilities 24 772 263
Current financial liabilities 25 - 553
TOTAL CURRENT LIABILITIES 15,422 13,510
NON-CURRENT LIABILITIES
Provisions 22, 23 192 215
Lease liabilities 29 5,272 5,766
TOTAL NON-CURRENT LIABILITIES 5,464 5,981
TOTAL LIABILITIES 20,886 19,491
NET ASSETS 72,048 46,209
EQUITY
Contributed equity 26 257,382 217,204
Accumulated losses (202,046) (184,626)
Other reserves 16,712 13,631
Equity attributable to the owners of the parent 72,048 46,209
TOTAL EQUITY 72,048 46,209
The above consolidated statement of financial position should be read in
conjunction with the accompanying notes.
Consolidated Statement of Comprehensive Income
Notes 2021 2020
FOR THE YEAR ENDED 30 JUNE A$000 A$000
Sale of goods and licence fees 28,542 24,665
Rendering of services 18,620 14,915
Research revenue 5 432
Revenue 7 47,167 40,012
Cost of sales (26,402) (25,579)
Gross profit 20,765 14,433
Net loss in foreign exchange 8 (417) (382)
Net gain/(loss) on disposal of property, plant and equipment 5 (72)
Other income 8 1,664 2,234
Finance income 322 829
Expenses 9
Research and development expenses (9,876) (24,736)
Customer support and marketing expenses (6,092) (8,079)
Operations expenses (7,946) (11,506)
General and administration expenses (14,590) (17,480)
Finance costs (518) (705)
Loss before income tax (16,683) (45,464)
Income tax expense 10 (737) (1,246)
Loss after income tax (17,420) (46,710)
Loss for the period attributable to:
Equity holders of the Company (17,420) (46,710)
(17,420) (46,710)
Other comprehensive (loss)/income
Exchange differences on translation of foreign operations (169) 222
Other comprehensive (loss)/income net of tax (169) 222
Total comprehensive loss (17,589) (46,488)
Total comprehensive loss attributable to:
Equity holders of the Company (17,589) (46,488)
Total comprehensive loss for the year (17,589) (46,488)
Loss per share for loss attributable to the ordinary equity holders of the
Company:
Basic loss per share 12 ($0.01) ($0.01)
Diluted loss per share 12 ($0.01) ($0.01)
The above consolidated statement of financial position should be read in
conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
Contributed Equity Treasury Shares Accumulated Losses Foreign Currency Translation Reserve Employee Equity Benefits & Other Reserve Total Equity
FOR THE YEAR ENDED 30 JUNE
A$000
A$000 A$000 A$000 A$000 A$000
As at 1 July 2019 217,204 (1,109) (137,916) (1,738) 11,051 87,492
Loss for the period - - (46,710) - - (46,710)
Other comprehensive income
- - - 222 - 222
Total comprehensive
loss - - (46,710) 222 - (46,488)
Transactions with
owners in their capacity as owners: Reclassification of treasury shares
- 1,109 - - (1,109) -
Shares to be issued - - - - 1,109 1,109
Share-based payments - - - - 4,096 4,096
At 30 June 2020 217,204 - (184,626) (1,516) 15,147 46,209
217,204 (184,626) (1,516) 15,147 46,209
As at 1 July 2020
Loss for the period - - (17,420) - - (17,420)
Other comprehensive loss
- - - (169) - (169)
Total comprehensive
loss - - (17,420) (169) - (17,589)
Transactions with
owners in their capacity as owners:
Shares issued 41,199 - - - - 41,199
Capital raising costs (1,021) - - - - (1,021)
Share-based payments - - - - 3,250 3,250
At 30 June 2021 257,382 - (202,046) (1,685) 18,397 72,048
The above consolidated statement of financial position should be read in
conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
Operating activities
Receipts from customers 37,990 42,702
Payments to suppliers and employees (58,985) (67,222)
Interest received 322 -
Interest paid (518) (705)
Income tax paid (15) (1,246)
Receipt of government grants 1,565 2,043
Receipt for research and development tax incentive - 182
Net cash flows used in operating activities 28 (19,641) (24,246)
Investing activities
Proceeds from sale of property, plant and equipment 5 27
Purchase of plant and equipment (446) (815)
Payments for intangible assets (patents, licences and trademarks) (484) (246)
Payments for intangible assets (capitalised development costs) (8,311) -
Maturity of term deposits 40 9,049
Net cash flows (used in)/from investing activities (9,196) 8,015
Financing activities
Principal repayment of lease liabilities (1,459) (716)
Proceeds from issue of new shares 41,071 -
Cost of capital raising (1,021) -
Repayment of borrowings - (30)
Net cash flows from financing activities 38,591 (746)
Net increase/(decrease) in cash and cash equivalents 9,754 (16,977)
Net (decrease)/increase due to foreign exchange difference (499) 306
Cash and cash equivalents at 1 July 38,138 54,809
Cash and cash equivalents at 30 June 14 47,393 38,138
The above consolidated statement of financial position should be read in
conjunction with the accompanying notes.
To read the FY2021 Annual Financial Report and access accompanying notes to
the above tables, please visit
https://www.seeingmachines.com/investors/announcements/
(https://www.seeingmachines.com/investors/announcements/)
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