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I have had my own go at testing the liklihood of breakeven being achieved during FY 2025. They look good to me.
In FY 2023 revenue was 57m USD, ( roughly half from OEM and half from the aftermarket). The loss was 15m USD so costs 72m USD. Inflation will add say 5 per cent a year in FY 2024 and 2025: taking costs around 77m USD.
Revenue from OEMs will increasingly reflect cars on the road with Seeing Machine tech: 1.5m at Dec 2023. We need 250,000 new cars a quarter to double that by June 2005 (end 2005 FY). As the number is growing most quarters a number published next week of 220,000 or above would be fine.
Doubling royalty and licensing revenue from OEMs would be enough to get revenue above 77m USD enough to get to breakeven. In addition, the after market revenue is growing: by closer to 20 per cent a year. And Seeing Machines gets 10m USD from Collins over three years. So unless the cars on the road figure published next week is hugely disappointing breakeven in 2025 FY seems very achievable to me. DYOR.
Bonzo,
You seem to have forgotten the 11.5m of magna licence revenue which was in 2023. 2025 only sees 3.75m from magna. That's quite a shortfall to make up.
220,000 won't cut it from auto. Needs to be 300k minimum.
Thanks. Was not clear on licence revenue so accept your point. Still slack from after market. But with dip in cars on the road in last figures reported, next week's figures will be interesting. And my looked for figure will not be far behind yours.
For completeness, we had zero Aviation license revenue in FY23, based on the 2 Collins RNS we should have $5m+ in FY24.
Also let's not forget most loss making AIM shares set themselves a target of "making a profit"
SM, lead by 2 of our largest PI shareholders have set a higher bar of "cash profit"
For me, yes license revenue is important, but control of costs will decide when we hit cashfloe breakeven. In the recent interview Martin explained that they had achieved $6m of annualised external cost savings that is in place and flows from Jan 24. That $6m cost savings is the equivalent of 600k cars on the road and has way more impact than if a particular qtr is 220k, 250k or 300k+.
"For completeness, we had zero Aviation license revenue in FY23, based on the 2 Collins RNS we should have $5m+ in FY24."
Another over -estimmation
There was 750k aviation revenue in 2023.
The Colins license revenue is 10m spread over 3 years, so not sure how you expect 5m+ in 2024.
My workings are $10m/ 3 + 1 year of tha additional Collins income from the RNS below. Hence the additional $5m.
Perhaps you could share your workings for no increase in Aviation?
"16 October 2023
Seeing Machines and RTX begin joint development of aviation fatigue detection solution
- Follows signing of exclusive license agreement to jointly develop pioneering eye-tracking solutions for the Aviation industry
- Non-recurring Engineering revenue (NRE) of US$2.65 million payable to Seeing Machines over 2 years covering product development and certification"
We have incomplete information, particularly on licensing. But with the welcome focus on cost control, continued growth in the aftermarket of 5 per cent a quarter or so, tripling royalties from OEMs from 7.6m USD in FY 2023 should get close to cash flow breakeven. There were an average of 159,000 cars on the road during 2023 FY. So once Seeing Machines reaches 480,000 cars on the road they will probably be at, or approaching, that point. With EU regulations about to taje effect, seems feasible to me.
S2020,
You say " My workings are $10m/ 3 + 1 year of tha additional Collins income from the RNS below. Hence the additional $5m.
Perhaps you could share your workings for no increase in Aviation?"
Firstly, I didn't say at any point, that there was no increase in Aviation. You have just made that up.
I really wish you wouldn’t do stuff like that as you lose all credibility, and shows your contempt, for anyone trying to be realistic rather than dancing to your daily ramp.
As for aviation revenue in 2025 I’ve worked it out the same as you but come out with the correct answer rather than your inflated figure of $5m+
By your own figures and the one’s I used, aviation will be $10/3 + $2.65m/2 = $4.655m.
Which isn’t $5m+
First rule of investing, never inflate figures, unless company has repeatedly shown that they beat estimates. Certainly not the case here so far.
Brock, I admire the great handle you have on the numbers.
Makes one wonder why when mentioning the drop in Auto one off license revenue you didn't mention the Aviation increase as it doesn't appear to be news to you. Maybe you only like to post negative not as balanced as you like to think.
What's your thoughts on the $6m annualised external cost savings, as that was my main point.
I can't mention every figure, when I post. I was responding to someone who felt 220k auto a quarter was enough to get to break even, which I don't believe is enough, and explained why. They had made some effort to suggest an outcome , so thought they deserved a response on what they may have missed.
I don't believe I'm particularly negative, just looking for a balanced view.
I've listened to all the presentations, and have not heard Martin say $6m annual cost savings next year.
Did he actually say that or is that you coming to a conclusion from other stuff he said? and where was this said?
Be nice if true, and is genuine cost savings such as staff costs, rather than inventory costs.
I assume you listened to the recent investormeet presentation, he clearly says $6m of annualised external cost savings achieved and in place from Jan 2024, so will feed into all future years.
If you weren't aware of this material saving, I assume you need to rework your numbers to ensure you remain balanced
Good morning and greetings from the north , this date of " Break Even in 2025 " seems to stir some ancient past posts from various Seeing share holders , I have been looking at this board for a number of years , both as a holder and not , at this time i,m in , the number of times I have noted posts with the " next year we will break even or could be the year " tag attached is astronomical ,
Mrs B Good sends her best to all and as Hamilton and Chester Racing have a number of events in the following days she has graced me with her presence , She has just returned from A&E , she thought she had twisted both her ankles severely at Hamilton on Sunday , glad to report that she had only put on her Jimmy Choo shoes on the wrong feet , I blame the copious amount of Bollinger she consumed , as always , have A GOOD day