Member Info for Brockwl

Soul,

Yes, looks like he has deliberately or inadvertently let slip the December Fleet numbers of 60K, which will be part of the KPis.

This is a decent rise and equates to 10.8% for Q2. Last years Q2 was also the highest Quarter at 11.1%, so looks like the customers seem to do most of their installs, during this period, for some reason. Its nice that patterns are starting to emerge.

He also stated that we can expect Auto numbers for the FY to be high double digits of growth.

This is slightly watered down from previous statements to expect 100% growth year on year.

Hard to know how to interpret that statement, as high double digits is a wide range. I’d expect that to mean anything from 70% to 99%.

So, if we go for the middle of that at 85%, we would get 1.18m for the year.

This would likely pan out roughly as illustrated below.

Q1 221K Actual ie already reported.

Q2 270K

Q3 320K

Q4 370k Total 1.18m

So next KPis should show Fleet 60K and Auto around 270K

Whilst Auto yearly total is slightly lower than I’d put in my revenue and cost spreadsheet. With slight increase in Fleet and early G3 sales, balancing out, if the above pans out I am starting to see a path to breakeven from the actual contracted numbers.

Won’t get too excited yet, until we see the KPIs, but I’m more positive today than I was yesterday,

There is no guarantee that remote monitoring will be taken up. Even the 3000 is only described as an opportunity based on initial orders.

Each customer will be given the opportunity to have G3 fitted, but they could just as easily say no and get elsewhere after Delivery.

If remote monitoring isn't taken which I expect to be the norm, there isn't much in it for us other than supplying the hardware.

Hopefully being mainly buses, it will be, as safety more important. However don't see this being the case in the trucking side. Anyone who hasn't seen the need so far, will be inclined to go for the cheapest option, and that won't include monitoring, and might mean they go elsewhere for a cheaper solution.

I strongly believe the new Euro truck regs will just become a box ticking exercise for the trucking OEMs.

We may get a bit of the top end market.

Ironic really, SEE do all the work to shape regulations and low cost competitors get the benefit.

Interesting to sit back and watch the debate, about recent Seye v See awards, and how supposedly Seye over-inflates their awards, against the See conservative approach.

Such that Seye probably double or triple likely value, whereas ours will likely be 3 times the initial value.

Whilst I can accept that Seye do over inflate awards in comparison, I don’t believe to date that See have been overly conservative.

This initial value of all See’s wins really being 3 times the value once we reach SOP seems to have become local folk law. Yet I see virtually no factual evidence which goes anyway to back this up.

Where does this premise actually come from, and has anyone actually challenged it?

It seems to stem initially from the company, who started to peddle this line in the early days, at a time when they had absolutely no experience of sales to OEMs. So quite how they could make that statement is beyond me.

This has been continued, firstly by broker Cenkos, and now Peel Hunt. Having read Cenkos notes continually over the years and seen them constantly over egg the position and then scale down their estimates with the next note, I’m not inclined to believe them. I suspect they were also guided by the company who have so far got this wrong.

Happy for anyone to show me factual evidence where any contract has delivered more than initial value.

We originally first went into GM production in 2017, with no financial details. In April 2019 we announced a $4.75m (US) initial value contract. Last known total GM super Cruise figures I am aware of, are 80,000 from a couple of months ago.

That suggests that in 4.5 years we have probably received around $1m US from GM.

Until someone proves otherwise I’ll base my revenue expectations on initial values.

I'll believe we are close to break even when I see it. Martin stated we are losing 3.5m a month which should come down next year to 1.5m, (Jan/mar) and 1m (Apr to jun), before hopefully cash flow breakeven July onwards.

Latest KPIs didn't provide much growth, of which we need quite a bit to achieve his projections.

Yes I saw that and was confused. I suspect the AGM document is wrong, ie a typo/copy and paste error.

But embarrassing if so.

There are also some EBitda conditions as well in the options award, which they don't disclose.

Yet more poor corporate governance.

50% of the award is based on these as I read it, so basically £3.7m will be decided using a measure we are not privy too.

Plus a decent accountant can make ebitda say pretty much anything if needed, which is why it's lost all credibility as a financial measure.

Only just finally got around to looking at this AGM stuff.

I'd been waiting for the normal opportunity to vote via my broker, as I do with all my other shares.

Anyway discovered today that it is too late, and also that if one wanted to vote it wasn't particularly easy, if not almost impossible. No idea why the normal broker voting method couldn't be used.

Please correct me if wrong. Be interested if anyone managed it, and what they had to do.

Looking at the PM options proposals, it appears that most of the old ones are being rolled over, and in addition new ones are being added.

In total I make it that he now has 37 million share options which vest June 2026. 10m +15m +12m.

So in June 2026

At a price of 12p he would get 14.8m shares worth £1.776m

At a price of 20p he would get 37m shares worth £7.4m

With a sliding scale between 12p and 20p.

I think they are being a little over generous with regard options to PM, as it really shouldn't be too difficult to hit those targets.

The £7.4m is a touch above my ideal tolerance zone of rewards to CEO's. But as he hasn't received anything so far I'll live with it.

However if they propose any more before these vest, I'll start to hold my nose.

If he pulls it off, given his reasonable salary, and the options he shouldn't need to work again.

Offtake agreements aren't the same as pure royalties.

They are just an agreement to BUY the produce at a pre agreed price.

Trident would then sell it on at a profit hopefully.

It should be a nice earner, but nothing like what you are thinking.

"Honda and GM. Only the two largest automakers in the world and the price is sat at 5.5-6p like a limpet"

Sounds good put like that.

On the other hand GM have been using for at least 4 years and have still only put it in 80K cars.

That works out at 20K a year, so about $200K revenue contribution to a company with costs of about $60m a year.

Don't sound quite as good put like that.

We need some of these big auto companies to start rolling it out in volume. So far it hasn't happened.

No share price movement until it happens unfortunately.

Lets hope BMW roll it out a bit quicker than the others, however last KPIs didn't show that is happening. Given they were supposed to be starting in July.

I have to say I thought I had some idea why directors were buying especially Ives purchases.

However after today's RNS I now fail to understand the reasoning.

Auto was 5% growth after guiding us to expect 23%, plus BMW was supposedly starting there ramp up.

BMW now does 2.4m cars per annum, and a number on here continue to say we will be in all of them.

I expected much more than 5%, even without BMW. But apparently seasonality is the cause, which has never been mentioned before.

No one has even mentioned Fleet, but those numbers were pretty bad too. Last year we did just over 12k, and this Quarter was just over 2K. Last 2 quarters were 3K normalizing after a big 4.6K quarter following the supply issues.

So 3k was my minimum expectation and we got 2.1k.

This Suggests 10K will for this year will be a struggle. Last year we had supply issues but still managed 12K, so whats the problem this year.

The award for 2026 is fine, but needs to be put in perspective. $15m will be split over at least 5 years so will contribute about $3m a year in years where our revenue should be increasing by significant amounts based on forecast, ($100 a year). This doesn't really move the needle much toward that.

So I'm at a complete loss as to why they have been buying, and must assume they are either bonkers, or know something very significant which they aren't or can't come clean on.

The figures they present in results and RNSs, get further away from their actions and presentations by the day.

Good growth companies continually outperform expectations, this company has never once achieved that, and I'm continually having to downgrade expectations despite, having been on an inflection point for about 2 years.

My initial reaction was why release 2 news items together, as clearly they could have held KPIs back another day if wanted, and keep momentum going.

Then I read the auto numbers and immediately knew why.

I had a number of expectations 're auto numbers, but none were anywhere near this disappointing, given all the company hype, and BMW starting in July.

I immediately sold 200k and will think about what to do with the rest over the course of the day.

Clearly 23% and above, is where they need to be, plus it needs to be at $11 a pop to start hitting the expected financials.

As far as Auto is concerned these are the 2 KEY metrics.

I'm not impressed by less relevant numbers such as "cars on road". Its all about how many we sold this quarter, how much for, and how much more revenue was that.

So whilst the 23% gets us to very decent revenue and profit in 4/5 years, the recent large insider/director buying, suggests they think its either better than that, or something else will surprise on the upside.

I don't know how good a judge Martin is, (background suggests he should be), but to invest what he has tends to suggest supreme confidence.

I just wish I knew over what time frame he is making his assessments.

It's all very difficult to judge, as on one hand Martin mentioned 23% per quarter, but they also said "expect us to at least double each year".

Which is a lot less than 23%, and whilst not tragic, would be quite disappointing.

Seems to me if we achieve 23% a quarter, then we have a very safe investment, with a 3/4 year wait.

More than that ,is very good, and very possible.

Less than that would be somewhat disappointing, depending on how much less.

23% should be a certainty this quarter, as they would have had at least 2 months of numbers at the last presentation.

Dream,

Nice post, but I think you are being somewhat over optimistic, re revenue growth especially for next year 2024.

Main reason is that they have stated that they will do no more licencing deals, and last years revenue benefited from Magna’s $11.5m licencing contribution. Next year’s licencing revenue will only be about $7m. ($3.5m each from Magna and Collins). So, they have $4.5m to make up before they start.

They are indicating Auto royalties will double, so a $7.5m increase, Fleet was about $3m increase last time, and Aviation should be about $1m increase from NRE.

That makes $11.5m extra, minus $4.5m licensing loss to give $7m. This excludes any G3 factory fit revenue which is a bit of an unknown right now. It also won’t start until Q4 this year, so won’t be much. I’ll be generous and say $3m, to give $10m increase.

So $10m increase on $58m, is only about 17% revenue growth. I’m struggling to find much more.

Now clearly, I could be wrong, but whatever I do I can’t see 50% growth next year.

Trouble with compounding growth, is that one small change makes a big difference, especially if it’s in the first year. Using 20% this year instead of 50%, reduces 2028 by $100m, which is very significant.

Matml74,

This 90% margin stuff that Paul continues to put out there is very misleading, and shouldn’t be used so glibly.

It’s completely meaningless until we hit breakeven. But does become relevant thereafter.

Once we sell enough each year to pay for software support, software ongoing development, and G and A costs, then any extra auto software sales will start to achieve 90% margin. The first 5m or so each year will be at 0% margin, to cover running costs. He never seems to mention that.

The Auto projection is the one that sticks out, but others stick out as well.

They know Fleet Aftermarket Factory fit is a European market of 330K commercial vehicles a year, where GSR makes it mandatory, and we have virtually no competitors. Yet they are only projecting 10% market share.

Strange, given all I’ve heard for the last few years is 40% market share.

I get it’s a big unknown, but only 10% by 2026 seems extremely conservative. I wasn’t over impressed by the limited supply comment, which makes me think they will struggle to meet any demand here if it takes off in the early days, and may miss the boat.

The $125m revenue projection in 2026, needs to be set against whatever costs are in 2026. Current costs are $95m, but as mentioned they had to overspend on inventories. So, let’s assume $82m would be normal. With general cost inflation, you can easily see that back to $95m in 2026.

So possible $30m profit in 2026? Which might support a share price of 7p, just based on earnings.

If we see visibility of other contracts or other forms of growth, maybe 10p. Remember Magna’s bond is due to be converted in October 2026, or repaid. If we are still at only 7p that’s an issue.

Question is does it justify the buying? I’m inclined to agree with Chutz, that they must think, or know this is all very low ball, and there is more. However I and others have thought that for a number of years.

I’ll be interested to see if it continues, or the more recent post results buys were just token buys.

Especially with 2024 being a tough revenue year, due to the Magna revenue reducing by about $8m, now wouldn't seem to be the time to buy.

Following the recent results and presentation from management I’ve never been more confused as to SEE’s future prospects.

Previously, as a result of management guiding brokers, and making numerous projections, such as 40% auto market share, one could plug an approximation of those numbers into a spreadsheet, and easily make a case for the share price being many multiples of the current price, in relatively few years.

However, since then we have had multiple delays, in both Fleet and Auto, due to well known supply issues in Fleet, and much slower take up than expected in Auto, and now further delays with turning RFQs to contracted orders.

During that time, we have probably incurred at least 18 months extra cash burn, and have ramped up our cost base to about $95m a year in costs. Our wage bill is now running at $45m a year. See most recent detailed financial report, where both figures are clearly documented.

On the positive side the unexpected Magna and Collins licencing deals have helped pay for the above delays and cost issues.

The reason I’m confused is that if you examine the numbers that were given in the recent presentation, predominately by Martin, the projections going forward have been massively marked down, from what we could have expected. To a point where you could easily conclude that any serious multi-bagger potential has significantly reduced, and the short-term outlook so poor, that selling up and coming back later would be the right investment decision.

Yet on the other hand the very people giving these projections have bought big stakes and continue to buy shares at this point in time.

So why do I think these numbers have been so drastically reduced?

Well Martin said the following – 2026 revenue will be $125m of which auto will be $60m.

The $60m will be made up of $5m NRE and $55m auto royalties from 6.5 to 7.5m cars.

Let’s take a look at that “$55m auto royalties from 6.5 to 7.5m cars.” Statement.

It’s been common knowledge here for some time that each royalty is worth at least $11 per unit. Some think more. Latest accounts confirm this at $11.80 per car for 2023.

6.5m at $11.80 is over $80m yet they only project $55m. Why? Seems very odd to me.

For the last few years, they’ve made a big thing in telling us that contracted numbers end up being much greater, (possibly double) contracted values, after SOP. Yet they are not even forecasting contracted values now.

2026 should be the peak year of current contracts, and $55m is quite low when allocating the $325m contracted values.

Features were supposed to add $1 a feature, so clearly none of those expected to be taken up either.

6.5m cars in 2026 is at least 50% of previous broker already reduced projections.

continued above

For those who like numbers – Here’s my understanding of what Martin and Paul detailed.

All numbers are taken from presentation, plus some basic maths applied by me to derive others

We have already won $321m Auto contracts.

54m global auto DMS shipments expected in 2027, based on 40% market share that would be 21m per year for SEE.

2026 projections and how they get there.

Minimum $125m revenue

Comprises of $60m Auto, $60m Fleet, $5m Aviation

Broken down that is :-

Auto 6.5 to 7.5m units per year, from RFQs already won. Could be up to 8.5m if current RFQs are won.

Auto NRE of $5m

Fleet $30m Hardware, $25m Monitoring, $5m NRE and Caterpillar

330k new commercial vehicles produced in Europe every year, which are affected by GSR.

Currently assuming we get 10% market share ie 33K per year, 50% of that will sign up for monitoring.

Total of 45k per year when 12k G2 sales are added onto the 33k G3 sales

Between 110k and 120K of monitored units.

Aviation $6.5 to $13m in Royalties

2024 Revenue and Cash burn

Magna revenue contribution will reduce from $10.9m to $3.5 to $4.

Auto 100% increase

Fleet 25% increase.

Aviation 5% of total revenue.

Started end June with $36.1m, and will see $15m to $20m receivables unwind over first 3 Quarters.

I’ll assume $15m to be conservative. So $51.1m left

Current cash burn $3m

Q1 2024 cash burn $3.3m per month = $9.9m

Q2 2024 cash burn $3m per month = $9m

Q3 2024 cash burn $2.2m per month = $6.6m

Q4 2024 cash burn $1.25m per month = $3.75m

2024 cash burn = 29.25m

Leaves 21.85m at start of 2025

I have a number of issues with certain elements of the above which concerns me. Especially on the Auto numbers, but I’ll leave that for another post.

Just wanted to get all this down somewhere to refer back to.

Be interested if anyone disagrees with any of the above or I have got anything wrong.

Unfortunately all the good bits were previously released in the trading update.

Only new news here is the stuff they don't highlight in that, but have to now.

Examples being that they have 30m left, plus a little cash flow unwind, and are burning 3m a month.

Profitability pushed back to 25. So money will be tight, and little room for any more delays.

Loads of potential, and if they hit the 125m revenue in 26 all will be very good.

Not de-ramping just trying to highlight why people are still not buying.

This market wants certainty.

Still happy to hold.

Glandore,

We don't know that there are only 80k GM cars with our tech on board.

We only know for sure that GM have 80k cars with Super Cruise in them.

It's possible that our technology is going in more GM cars than those with Super Cruise.

Ford have 250k Blue Cruise, GM 80k Super Cruise, but we have installed 1m.

So where have the rest come from?

I'd love to know the answer to this question.

Terry,

Whilst 20% per quarter growth sounds impressive, it should actually be much stronger than that in the short term. If it isn't then something is wrong.

20% on 211k per quarter, would be about 438k per quarter in a years time.

Given BMW should be contributing at least that number on their own, and the success of super cruise and blue cruise, plus other contracts starting to roll out,

20% compound per quarter would be extremely disappointing.

To truely break even this year, they need at least 25 to 30m revenue from auto.

Which means somewhere in excess of 2.2m cars in the year.

20% compound growth doesn't get them close to that.

Note I class breakeven as covering all costs, including the R and D they capitalise.

Unless we start to see some 30%+ quarters, I suspect profitability will get pushed back.

But more important than that it starts to undermine credibility of what we have been told.

I'm still optimistic that there is a viable business here, just not the serious multi-bagger I originally bought into.

So next KPIs are key to me and they need to start delivering inflection point numbers.