Member Info for Brockwl

Glandore,

What you are trying to work out is just too difficult currently. I'd also like to know some of this stuff but the following is what makes it nigh impossible.

1. You are using Fords yearly sales figures, but we are only in 2 to 3 ranges F-series, Mustang, and Lincoln ( no idea which Lincoln). At most that is only about 900k sales a year, in which we could be in, not 2m+

2. a fair number of those sales could also be invalid if in countries where Blue Cruise not mapped. No idea if they are putting our chip in if that is the case.

3. As I discovered last month when trying to guess our KPIs using ford bluecruise sales, they are selling Bluecruise subscriptions to customers who bought months ago. So for us that isn't a new sale as we already reported that in previous KPIs when our chip was installed.

4. There will also be unknown, unknowns.

If it helps Ford have averaged about 12,000 Bluecruise sales each moth since Sept 2022, except for Feb and March which was 36000 per month. I suspect Feb and March was when they did the bulk of subscriptions to cars purchased months previously, before BlueCruise could be bought.

I'd hope by 2024 they mean 1st Jan 2024. which isn't a massive stretch given 75k sales a month in the models currently available.

Has anyone seen the Shore Capital note?

Would be nice to know why they think aviation royalties will outpace Auto, (which is quite significant if true), yet only guide revenue increase of 6%.

The licence revenue alone increases revenue by at least 6%.

So a little confused by the statement that proactive quote.

Also I don't think anyone has ever suggested that Aviation could be bigger than auto, which is how I read that statement.

Won't count any chickens just yet, but interesting all the same.

Lost,
Love to see the share price rise. Also recognise the potential.
Difference between me and others is that I can see growth and delivery has been slower than predicted, and that breakeven targets are under threat. If we run out of money, and that becomes more likely with pedestrian growth, we will need to do another 40m find raise, and add another 1 billion shares to the shares in issue.
If that happens i 'd guess 50% of that potential just evaporates overnight.
Now some think that potential is so big it don't matter. Whereas I think it's somewhere between 50p and a £1.
If the potential becomes 50% of that, then I've wasted over 10 years here.

Boon,
Yes thanks I think that must explain the difference between Fords numbers and ours.
I should have thought of that.
It might also explain why Fords numbers where so light in March.
Ie they have switched on most of the sales from previous quarters, and are now only getting subscriptions from New sales.

Seethepotential,
No don't imagine what the SP could be on those numbers, work it out.
That's what serious investors do. But no-one on here seems to think it's a necessary requirement when investing.
Just believe everything management say, even if most of it has not been delivered.
This is a CEO who's failed to deliver his own easy share price targets, for his bonus most years.

Terry,
So if we get to Q4 at 55k monitored connections that's about $16m is guaranteed income for next year. Add 10% for extra connections during the year and we get 17.6m.
Costs are about 70m, so that leaves auto, and hardware sales to make up the difference. So that's 52.4m for breakeven.
Let's take 5.4m off from the magna deal and it leaves 47m.

No way they reach my measure of breakeven in 24 FY.
No doubt they will ignore R and D costs, and say they are close, but it's all smoke and mirrors.

Horz/Matm,
No I haven't got the wrong figure.
32k is the increase in last quarters auto number. 141k v 173k.
That's our total increase across all OEMs
However if you track the bluecruise numbers Ford issue, they increased by 56k.
Now if we are in Ford and in bluecruise, our number should have increased at least by 56k.
It didn't why not?

Last 6 months auto increased about 50%, Fleet about 9%, aviation 0%.
Put them all together and it's probably about 20%, so less than cost increases.
You can't just compare with the good bits, costs apply to everything.

I still don't understand how Ford can sell 56k more Blue Cruise and we only increase 32k. Someone needs to explain that one to me.

Q2 to Q3 cost figures not available as yet.
But last half year results show the relevant expenses r and d, g and a etc, going from 16m to 21m. That's over 30%.
They have hired more staff since then, so it ain't hard to work.

Jeez that is just dire.

Ford increased Blue Cruise by 56k, but we only increase 32k. I just don't get it.
There is something seriously wrong here.

Fleet only sells another 1850 in quarter, which is very pedestrian given all the hype about customers queuing around the corner after they had no stock.
What's going to happen to the 29000 units they ordered for stock when G3 comes along.

25% growth isn't good enough if your cost base has also risen 25%.

Very disappointed

Boonboon,
Yes 253k or 254k is correct, mine was a typo, put 1 instead of 2. I used the correct figure for yearly calcs, but typo'd on the 6 month figure.

Given I don't see Fleet delivering anything other than steady as see goes KPIs for some time, and aviation is a complete unknown, I think the Auto KPIs have to do all the heavy lifting to show the path to profitability, and hopefully share price appreciation in the short term.
The KPIs are due this month, and so far this year, (6 months), auto units sold have come to approx 154,000, (based on previous 2 KPI announcements).
Previous Cenkos targets were for just below 1m this year, but recent updates have seen this reduced to 650,000. Quite a large reduction
So clearly we need to reach 650K, as a minimum, and hopefully slightly more to retain market confidence.
Remember at $11 a pop 650K a year is only around $7m revenue, and Auto will need to be doing at least $40 to $50m a year before we reach breakeven.
So what is the likely figure for Q3 which is due this month, and where does that leave us for the full year?

I think taking a guess based on what we know and has been released in the public domain, is worth the effort, as there are a lot of unknowns. After the figures are published it might make clearer some of the unknowns, and where our assumptions are right or wrong.

For instance.

We know the Q2 figure, so even if no new models are added Q3 should be at least equal to that.

Ford publish monthly Bluecruise figures, by looking at the monthly increases, we can see the minimum units we have sold to Ford that month.
I say minimum because, my understanding is that we deploy to all cars in that model, and then Ford sell BlueCruise, as an add on. So whatever the BlueCruise total is, ours should be greater, as I'm sure not everybody takes up BlueCruise. There is also greater confusion because they give it as a Free 3 month trial, when the car is purchased.

Growth from new models, plus extra sales of recently introduced models ramping up.

So here's my stab at what the Q3 figure should be.

Using the below formula
Current Q2 figure + Known Ford BlueCruise number increases + Other new model growth etc
141747 + 56000 + 4000 = 201747

Fords latest BlueCruise figure published yesterday was 199K. I keep a record and this quarter they have sold 56K more than last Q. So I have used 56K
4000 for other models is deliberately conservative, and is only about 4%.

So I'm expecting a minimum of 202K auto unit KPI for Q3, which will make a total of 455k so far this year with one quarter to come.
I've think I've been deliberately conservative, as I've only counted BlueCruise numbers and not units deployed into Ford, which should be more, and I've been very light on other model increases.
Even being conservative at 455K total yearly units after Q3 we should comfortably achieve the 650K forecast by Cenkos

However if we fail to hit this conservative target it will be a serious red flag for me.
Less than 202K - Not good, and puts all the company projections in serious doubt
202K to 220K - Ok
Greater than 230K - Take up is real

Seize,
Share price not affected by the news, because it wasn't released until market closed.
Sometimes you just need to do the most basic checks before commenting.
Sure the price will be affected Monday.
Companies struggling always release bad news on Friday evenings.
Big red flag for me, they didn't find out about this today, that's for sure.

Soulboy,
One of my biggest concerns is oems delaying DMS, for whatever reason.
But I don't think you can assume that because mobileye say adas is growing, that means DMS is delayed.

Mrbb,
What he said was, we are ahead of the last HY Fleet sales after just over 2 months in. Which at first glance is a very punchy headline.
However when you check the previous HY sales figures it's barely over 1500, due to the supply issues.
Which suggests they have sold about 750+ a month.
Before the supply issues Fleet was doing around 1000 a month.
So I'm not particularly impressed, and equally concerned that they try and make something which is fairly average sound great.

MrBB,
Before you tell me that the Fleet sales numbers MUST be good, because we are substantially ahead of comparatives, I'd want to know exactly what the comparatives are.
If they are the ones I think they are, it doesn't suggest anything particularly good.
I'll be interested in what you think the comparatives are ?
By the way I don't think they said the installation rate was substantially ahead, but sales of units.
But happy to be corrected.

Sn1234,
For FY 2023 Cenkos were originally forecasting just under 1m, (960K). However they changed that at the last update and reduced to about 760K. Not good.
As you say in 1st half we have 253,800 so need at least 506,200 in 2nd half to meet that forecast.
I see that target as the bare minimum we need to achieve, if we are going to meet profitability timescales.
226K Q3 and 280K Q4 would achieve that. Hence why anything less than 200K at next KPI, would be a very poor performance in my view.
I'm still hoping we can beat the 760K Cenkos target by a decent margin, but doubt we will get close to the original 1M target.
The next Auto KPI will be particularly illuminating, to see whether the Ford Blue Cruise released numbers actually feed through to us. They should do but as yet I have no data point I can use to establish if they do or not.
Because they are fairly significant this quarter it should be fairly obvious.
If they do we should be able to predict some element of future KPi's using the Ford monthly figures.
If we assume that each quarter will always do at least as many units again, then we can add the increased Ford numbers, to get a minimum value for the next KPI.
We will also get to understand how other non Ford sales are increasing. This will only work for a short while, during the time that Ford is providing the significant growth. However I'll take any info I can get ahead of See releasing it, because we are typically starved of indicators.
I have a figure which I think we have already reached for Q, based on the extra Ford numbers.
I will further update once Ford publish March data.
If the Ford data does feed directly through, as I believe it should, I'll confirm once I see the KPIs

Cheers

As I continue to weight up my investment here on a day to day basis, like Baxter, I’m getting extremely frustrated.
It’s bad enough watching the share price performance, but the constant ramping and listing of all the wonderful things about to happen by the fan boys is even worse.
It’s increasingly obvious that Paul has little visibility, about when OEM’s and Tier 1’s will actually commit, yet I continue to read incessant posts here that they must drop soon, mainly because of Paul’s insistence of the regulations driving this.
Over a year ago we were hearing that if they didn’t commit imminently, they would all be too late. Now we hear, that as they are so late, they will have to use the Mirror if they haven’t already committed. Which will be at least 50% of market share. Yet apparently today there are still loads that are yet to make a decision.
Whatever the truth regarding the above, it’s clear no one knows, and the continue delays have pushed profitability 2 years further down the line.
My worry here is that many of the remaining OEMs are either paying lip service to the regs, or where they are actually required, (ie only really Europe), they are going increasingly for the box ticking cheap option.
Some OEMs will go with SEE but it may only be the premium brands/models of the remainders.
What’s really clear to me is that only by demonstrating that profitability is in the bag within 2 years, will this investment have any chance of succeeding.
For that to happen only auto has the near time potential to get us there.
Fleet will continue to increase, and aviation may produce an announcement, but neither can deliver the revenue needed in the next 2 years to provide profitability on their own.
Please don’t tell me, as I keep reading here that G3 or after manufacture will turbo boast Fleet. It may produce more sales, and do well in future years, but it won’t be significant in the time remaining to achieve profitability. It’s still months away, and Fleet lead times means it won’t begin to become meaningful in any way for at least 18 months +.
This means that the next few KPIs for AUTO are crucial. They alone will decide if we make profitability when forecast. If the next quarter doesn’t deliver somewhere between 200K and 300K units, we will struggle to meet those profitability targets.
Any further signs that those forecasts are put back will cause the price to fall back further.
As Baxter says anyone still dreaming of £1 to £3 a share must reside in a completely different investing world to me.
I’m still hopeful that 20p to 30p is possible, but that seems much further out than it looked a year ago.
I’ll hold until the next KPI’s in May, but if Auto doesn’t make 200K units that quarter, my patience may have run out.

GLA

Part 2

I think the above fully illustrates how various elements on the board have such a different perspective of how easy or hard it’s going to be for shareholders to see a good return.
My view based on the above is that we should see a good return, if we execute correctly and forecasts are delivered. However unexpected delays or problems like Fleet, could be enough to wipe out any decent return.
Others see this as another Apple or Microsoft, where the sky is the limit, and proper analysis don’t matter, as we have so much business coming, that nothing that could go wrong can possibly stop it succeeding.

HurlyBurly,
Interesting to see how someone who values this so highly does their calculations to get there.
However, I couldn’t let your maths go unchallenged as it’s wrong in so many ways.

You said – They said that the TAM in 2028 would be £600 million per year, and they are confident they'll get a 50% share, so £300 million, at 90% margin that's £270 Million in earnings, so roughly EPS of 7p per share for automotive. I can't find a specific average PE ratio for auto tech, but auto is around 10 and auto parts is around 30, so lets take 20 as the middle ground... So 0.07 * 20 * 4 billion gives you a market cap of £5.6 billion or £1.40 a share. And that's without anything for fleet or aviation.

I’d have to disagree on the following elements

1. You show £ when it’s $ (which you later acknowledged in another post), however there is more than one point in your figures where this isn’t reflected and is material.
2. You appear to use 4billion as the share count, it’s currently 4.157b, but by 2028, it will be far closer to 5bililon. That’s because we need to account for the Magna note conversion, and the various CEO, and key staff options which will have taken place by then. I’ll use 5billion.
3. Ignore the guff about 90% margin, which is a cost of sales figure, and nothing like the true cost which will be shown in the accounts. So, lets include the real costs of running the business, like G and A and development costs etc.
Given Cenkos show 2025 at $66m, let’s say $75m in 2028. To take into account inflation, and the fact that if they really are that successful, and growing there costs need to increase to support that.
4. If we really get the 50% TAM by 2028, we will have saturated the Auto market, and there is no growth left for Auto. Consequently, I’d be inclined to value PER at closer to 10 than your 20 in 2028.
It may be much higher during the growth phase, but will receed once growth has been exhausted.
5. You take no account of tax in your EPS calculations.

So based on my stricter view on the numbers lets see what we get.
50% TAM market share at $300m minus running costs of $75m = $225
Convert $225 to £ = £189m using 1.19 FX exchange rate
Australian Federal tax rates are 30% for companies with turnover > than 50m.
So £189m taxed at 30% leaves £132.3m
EPS = £132.3m / 5billion shares = 2.646p per share.
Using a PER of 10 we get a share prices value of 26.46p in 2028, based on Auto alone.
That’s a long way from your eps of 7p and value of 140p a share.

Given we are at 7p now and based on the above, it’s going to be at least 5 years before Auto is worth 26p, I’m still happy to hold, as Fleet and aviation are in for free.
However I can see how, many market participants are still reluctant to buy at this point.
Once you discount for risk and time cost as II’s always will, it’s probably around 16p.
So, I can fully see why others don’t see it as a complete no brainer.