Member Info for Brockwl

Funny I was expecting news of some sort today, as recent share price movement suggested someone knew something, and was buying cheaply.

It's potentially a big announcement if it delivers half of what they hope.

Pros

With 10.8m cars it could add 100m revenue per year to the P and L, in time which is significant. Assuming they put it in all their cars.

Decent aftermarket additional sales should come through in time.

Other opportunities both in Auto and outside.

Solves the breakeven worries if they were to come up short this year.

Cons

Further significant dilution, after management saying that wouldn't happen again. So further credibility loss. Showing its hard to believe anything they say.

I accept things change, and this may have been unexpected, and too good to turn down. But I continue to be invested knowing management rarely look after existing shareholders.

How will Ford BMW and VW view this deal.

Still not convinced they really want to cut costs, and this helps them avoid some of that.

So overall I see it as positive, but I doubt we will any benefit for at least 6 months.

I'm time it could be very significant. Providing other customers don't see it as a threat.

Lost thanks for that, always easier to take in exact detail, when it's written rather than spoken I find. The whole investor presentation is in text further down and worth the read.

It confirms the feeling I came away with from viewing the presentation about G3 supply being limited, which has not been mentioned on here.

He specifically states that he expects G3 to perform much better in H2 because availability of G3 product will be much better then.

I find that completely astonishing. So they launch a product in March, which will have limited stock availability until the following January. At the same time they sell all the G2 stock they have.

This seems extremely poor management to me.

Does anyone understand why G3 stock is so limited, when if I believe what I read on here, we have customers falling over themselves to buy this and G3 revenue is going to knock our socks off, and transform the company.

Also Allianz SE starting selling from 5% in late November and now completely out as of the 2nd December.

So nice to see someone else take them up. As of the 2nd if they wanted more they would have to buy in the market. Which might be why we are seeing a rise today.

Esc stop dreaming, they were desperate for money, there will be no future payments from Cat.

When you are strapped for cash you are not in a strong position. They have been deliberated vague and arguably judicious with the truth, when claiming this was a license payment.

So the actual detail won't be flattering. Future payments won't be an option.

I'm not overly critical of the deal, as a fund raise would have been far worse. But people on here need to wise up and accept it wasn't some freebie, it had a cost associated, and if they keep on doing stuff like this and fail to cut costs they will continue to push back meaningful profits.

They are not made up numbers.

Its all in the accounts.

Cat paid $3.463m in 2024. If we times that by 5 to get a 5 years revenue figure we get $17.315m.

See got an up front payment of $16.5m for the next 5 years.

Even if Cats revenue only grew 5% per year over the next 5 years we would have received another $1.8m.

Hence $18.415m, which is nearly $2m for $16.5m up front.

That works out at a cost of about 12.5%, assuming Cat only grow at 5%, and doesn't include any price increases due to inflation etc. At 10% growth it's over 20%.

I don't think it's unreasonable to assume without inevitable price increases it's cost them 20%, it's not a made up figure.

No one pays up front for free in the business world.

Chutz,

Been a bit busy last few days so didn't have time to reply to your completely misinformed post to me.

You said

"brockwl

you are far too ****y for someone who is so underinformed.

where do you get the 20% for invoice factoring????"

I assume 20% because that's what it cost them with the Caterpillar revenue they discounted. So it will have to be something similar again for anyone to pay $10m up front.

Your dreaming again if you think they can use invoice factoring. They don't have any invoices for those sort of amounts.

Although be happy for you to explain where they might come from. The whole of FY 2024 was only S10M in Auto, and factoring is usually done such that money might be brought forward monthly, not yearly.

So far, in the time you have been on this board, you continually suggest solutions to their current issues which are very ill-informed, and at the same time claim to be some sort of small cap investment expert. It's laughable.

I'm sure they will do some sort of financing deal to get them by, but it won't be invoice factoring, that's for sure.

It will be another deal (probably with Magna) that costs them at least 20% of anything they receive.

Problem is we won't be able to work out the cost this time. The last time we could because we already knew what we

were receiving from Caterpillar. So it was fairly simple maths to work it out.

So they will sell it as another win, and hide the true cost.

I'm happy for that to happen as they have no other options, but I hate the way they continually just tell you the good stuff and hide the true cost of these things.

Maps,

Tell me their working capital concerns are put to bed, when they have actually done the deal, not when they are still in negotiations and only feel confident.

There are a whole host of things they have been confident about that have never come to pass. I won't bore you with the list.

Stop ramping and come back and gloat when it finally happens.

The fact they are even going down this road, shows poor previous mismanagement and further eroding of confidence in management.

People don't pay that sort of money up front for nothing, so expect another discounted deal, like the caterpillar deal, which further erodes future profits.

You can bet 10m will cost them at least 2m of future profits.

Let's hope there are some profits left when we eventually get there.

Whilst I'd like to believe that stat, it doesn't marry up with See's own predictions.

I'd expect them to do 3m Auto in calendar year 2025, based on the 100% increase they keep suggesting, (and mostly missing).

That doesn't come any where near the 40% market share of 22m.

So I'd be inclined to treat that figure with a pinch of salt.

Unless OMS on its own is a big percentage of that and we have none of that.

Maps,

I see no reason why SEE can't go from 3.5p to 35p in 6 months. After that £1 won't be a stretch ....

It's hard enough to believe that someone could actually believe this in private, but to actually put it out there, just makes me want to laugh. On top of that there are another 9 people so far, who recommended the post, so also think it's plausible.

Do you know how much revenue this company needs to be earning, or have contacts for to justify a share price of 35p?

In auto it would take something like 20 times the revenue of where they are now.

So after last quarter's KPI's increasing a massive 6%, you think in the next 6 months something is likely to happen, that's equivalent to Auto increasing 2000%.

You seriously need a reality check.

Webstrik,

If this company was already profitable, all those things would be wonderful, however we are losing serious amounts of money, and none of those bullets points was anywhere near good enough to meet needs or expectations.

Take OEM revenue increasing 40%. Sounds great. But we have repeatedly been told to expect 100% increase in units sold and this assumed this would also translate into 100% increase in revenue. That's what was expected and needed to stay on break even target. 40% was significant below market expectations.

Now we need 200% to make up for it, which won't happen.

So stop churning out the company spill, to try and make it sound like everything is fine and dandy, when it's not ideal.

In 2 years we need to pay Magna the 48m back if they choose not to take the shares, which they wont. Clearly we won't have that money, and will need to renegotiate, that will likely involve more serious dilution and share price destruction.

So save us all the company positive spin, and come back when you have some proper good news.

Still no director buys, funny they thought this a steal at 6.5p, yet not buying at 3.2.

I can't get excited about the possible Amazon trial. How many times have trials taken 2 years to complete, and then forever to roll out.

It's always been the problem with Fleet, someone buys 10 units and takes 6 months to fit them minimum. None of these companies like their transport off the road for the time of takes too fit.

Hopefully that improves significantly with G3 and the reduced fitting time, but as always with all this stuff I'll believe that is the case when the stats bear it out.

Maplinman,

As you asked, I’ll try and answer why I bought back in.

But first I guess you need to understand why I sold.

After seeing the results and then the presentation I was pretty disappointed, but once I started plugging in some of the figures to my model and realized that they were now selling Auto units for 20% less I was very concerned.

2 reasons mainly

1. This immediately reduced future profit potential, and pushed break-even further out. So risk/reward had decreased a fair amount.

2. I remember Paul saying at the Town hall they would never allow customers to negotiate price discounts based on volume. He used some analogy about us not selling pencils.

So if my perception of management wasn’t already damaged, that was the final straw.

It was clear that the price could only fall for the next few days and 4p would be unlikely to hold.

So I sold in the knowledge/hope that I would always be able to get back in later if events changed.

He’d also given a clue about KPI’s, which suggested they weren’t going to be sensational, but probably okish, which would likely be neutral to the share price in my view.

So I sold as many as I could.

Over the next few days, I finished plugging in all the other figures and adjustments to my model, and could now see what it showed as to the updated reduced potential of the business.

That shows that providing growth holds up, and costs savings are achieved, a conservative estimate in 3 years for the share price is 13p and 4 years is 18p.

At around 3.5p as it was yesterday, that represents a reasonable risk/reward.

There is still plenty I’m worried about, such as their ability to cut costs, and sales not growing quick enough, but there is enough room in that reward potential for things to be difficult and still make money.

I only intended to buy back half yesterday, but suspect my emotional attachment to this share caused me to buy them all back far too early.

I’m hoping the bad news is now out of the way for a bit, and they can cut costs rather than pull future revenue forward via loans etc. I’m hoping that the fall in the share price will make Paul realize that this is the key issue, and to address it.

Whilst I have a good deal of respect for a lot of what management have done, it’s very unfortunate that every time Paul opens his mouth to suggest something good down the road it comes back to haunt him.

So, I’m back in but in no way convinced I’ve made the right decision.

The way I see it following the KPIs which I think will be share price neutral, there will either be no news for a while or positive news.

Either in the form of new orders, directors buying, G3 contracts, or even a bid if it goes much lower.

So on that basis, I'm back in.

I'm rather hoping that management will start buying given where the price is today.

Whether they do or not will say quite a lot at this point in time.

What Martin does is particularly relevant.

I suspect a lot of his early buys, were the result of being seduced by Paul convincing him of all the business that was coming their way.

I suspect he is much wiser now about the companies future.

What he does will be quite telling.

S2020,

Of course you will never try to convince anyone to sell just to lower the price, but you are more than happy to try and convince people to buy and raise the price.

I wasn't trying to scare people to sell. Just happened to discover in analysis of the results, that the Auto unit price had gone down 20%, and monitoring revenue didn't increase after adding 5000 new trucks.

As management hadn't mentioned any of these pretty relevant facts either in the results or the presentation, I thought it worth sharing, and if I was wrong someone could correct me.

Isn't that what these boards are for?

Lets hope so Terry, as a couple of those was me buying back the ones I sold last week.

I've still got lots of major doubts, but think it's got cheap enough to take a chance again :-)

Esc,

Magna's exclusivity agreement runs out end June 2025.

I'm not convinced they will need to renew. If you believe everything on here they should have the market sown up by then.Cheers

However given the first deal have them 3 years head start, I doubt renewing will be worth anywhere near as much to SEE.

Time will tell but I wouldn't be backing on this to get them out of an issue of running out of cash.

S2020,

I agree he said 5 * margin increase, and I've already shown an example of how that actually translate to about 58k a month extra.

Which doesn't sound anywhere near as impressive, and why that don't want to speak about it in those terms.

Be great to see what you reckon the numbers are, given you think it's so impressive. But I doubt you will engage on that, as you only like to quote PM, and he's not talking about G3 profitability.

It remains to be seen if G3 is more profitable than G2.

Management have never stated that to my knowledge.

What they continually say is that it has much better margins.

However it's quite possible to have better margins on 2 differently priced products and not make more profit.

It won't become clear until next results, and even then I suspect it will be muddied.

The other thing that worries me more now, is that for all these companies the next year its all about staying in the game.

As a result I don't think you can rely on management to be totally straight with share holders.

Aaron,

It wasn't Baxter it was brockwl.

I wish I had your confidence about prices rising, so far the evidence suggests the opposite.

To put the drop in perspective, if they announce the next KPI at 400k auto units, and we are selling at 20% less pricewise, it only brings in the equivalent revenue of what 320k units did last year. So they have basically gone backwards.