Member Info for Brockwl

Nice to see the share price recover somewhat, but not sure that I agree that under 3p is unwarranted.

Sure you can make a bull case for any price, but that's been the case for years and none of it has come to fruition.

Until we get further good news, I think its approaching fair value.

There are just so many unknowns, and the industry is a nightmare for continually delaying and letting down.

I remember a few years back when we won a number of contracts, which were all estimated using a minimum value.

Brokers, management, and analysts all touted the view that the likely deployment would be 3 times the minimum value at least.

In the last presentation they made a big point of the fact that some of those contracts have never hit minimum value, and presumably because they had a clause in the contract that the minimum was payable, whether deployed or not, we will receive extra revenue beyond Auto sales .

Who could have predicted OEMs would not deploy DMS units, but have to pay anyway.

Its all still very unpredictable.

It could be another point in time, amongst many, where it might be their time. But the market will need solid proof this time to buy into it seriously.

Hope I'm wrong and the price continues to rise.

Auto numbers better than the "just over 300k" Martin guided, which is a first for this stock.

Fleet poor but had been guided that way, so overall better than expected.

I was waiting for these KPIs before buying back in as they could have caused another fall.

Risk reward balance looks very good if they can continue to deliver against expectations.

Price held up well against FM selling.

As a result I've bought back 2/3s of what I sold previously.

Wouldn't be surprised to see Martin buying again tomorrow.

You can only make gains of that kind as a result of 2 things.

1. People believing the potential is truly remarkable. This share has been through that phase and trust and belief is lost. It doesn't happen twice, unless they actually start to deliver, for a number of years.

2. The revenue and profit earnings actually warrant that price. Even by their own optimistic forecasts, their earnings in 3 years time would only suggest 8p was possible by then.

Things would have to go extremely well for that to be possible, and that has yet to happen.

Maps,

It's not a stretch, Martin stated in the presentation that the Gen3 product was manufactured in Indonesia, and would attract those tariffs when selling into the US.

Listen to it again.

He was trying to suggest before the tariff was known that because it no longer came from china, it wouldn't be worse than anywhere else.

But 32% is worse than a lot of places, and shows how best laid plans can come unstuck.Cheers

No idea whether it will have any affect, but more chance than there was last week.

Worth noting Indonesia attracted 32% tariffs from Trump.

That's where G3 is manufactured.

Clearly not helping G3 sales.

Sorry aftermarket sales will be poor.

I'm assuming about 304k Auto based on what Marin expected, given he's seen a couple of OEM results.

After sales will be poor as the product wasn't fixed until March.

So one is poor, and the other returns to slow growth, but is significantly below previous highs.

Nothing to excite the market there.

From the presentation there are many incremental things that need to happen to turn this profitable.

But there is one standout stat, that I suspect is what drives his confidence and continual buying.

He states that last quarters European auto unit KPI was 160k.

With that number being just below 10% of the models they cover in Europe.

Hence come March/April 26 when the full compliment needs to be in production to meet the regulations, Europe will be generating over 1.6m a quarter sales.

He sees that as the banker which customers have no choice but to fulfill.

If and when that happens, he sees sales at 2m a quarter worldwide, which should be about 76m dollars a year.

This makes them quite profitable in FY 27, and very profitable if G3 and other things go well.

Whilst I fully understand his logic in buying, any indications it's happening as expected isn't going to be visable until May 26 when the q1 KPIs are published.

So whilst I can clearly see his rational I suspect ordinary punters have plenty of time to load up, before key stuff plays out.

Especially given the current market conditions, you may get them cheaper as time goes on, or it could just be dead money for over a year.

I finally think that at this price and the conditions he's banking on that the odds are shifting in his favour.

But want to get the next KPIs out of the way, which l suspect will again disappoint, before I buy back in any volume.

Nathan,

They suggested that decrease in auto was spread equally across customer base, and therefore although not specifically asked or answered, have the impression no one contract was lost.

Their explanation was that the industry, concentrated production in low trim versions of models to save costs. Which isn't where our product is.

The one interesting stat, which surprised me, was given by Martin.

Of the 266k units last quarter, only 100k were US, and 160k Europe.

With Ford declaring 180k same quarter, makes you wonder how that works.

VW not really started production. Starts late 2025.

Collins covered but nothing much to say, other than will be a little revenue next year, which I'm guessing is from NRE.

Dream,

They didn't mention that option, although it doesn't mean it isn't one.

They hoped to be in a position by then to pay off 30m from cash flow, and take a loan for the rest. If cash flow is less, they would look at other options of basically getting someone to pay up front similar to what they did with caterpillar, or loan, or combination of both.

Trouble with getting someone to pay up front means they have to give very generous discount to get them to do it. Hence less profit.

As someone who thinks the technology is top class, but is extremely doubtful about them becoming profitable any time soon, I thought that the presentation was remarkably frank and honest about the problems that have caused serious issues over the last year.

Paul was his usual bullish self, exuding confidence and self belief in the company strategy.

Martin was also pretty good, but he had the much harder sell, as trying to show how they expect to reach break-even, then profitability, and finally pay off the Magna loan was an altogether tougher task.

Even with their pretty bullish sales expectations from Auto and G3, they were still struggling to cover the Magna loan.

Which apparently is going to be $60 now as they have been capitalizing the interest.

My expectations from the original RNS was that this was a very cheap loan at 8% all in yield, (ie 8% over 3 years), which should only come to about $4m, plus the $47.5m = $ 51.5m to be repaid.

Yet we hear today it’s $60m So another $8.5m they need to find, that wasn't made clear to investors as far as I can see.

Plus H2 will have a redundancy cost in the overall figures. So don’t expect the $12 cost saving to really take effect until July 1st.

The big issue for me is that they actually need all parts of the business to deliver strong growth, with no blips or external issues to meet those projections, and that has just never happened.

So, no European Auto deciding to leave it later than they expect, but ramping up at least 6 months ahead of regulation.

They indicated they expect this quarter will only get back to about 300,000 units, yet think December will show 750,000.

Again not convinced.

Expecting 6,000 G3 a quarter sales, when previously the average has been much lower.

I think G3 is the more likely performer, assuming there are no production or software issues, although that is a big if.

They still haven't reached production of 6,000, although hope to be nearly there by end of quarter.

So not convinced they can hit their sales targets leading up to 2026, I’ll wait and see.

Still finding it hard to understand why Martin is continually buying.

I’d also be concerned that they seem to be happy with a G3 production rate of 6000 a quarter. Europe produces over 600k trucks a year, so why are we only expecting to produce 24K units to sell.

Would have liked to have seen an answer to that

Overall summary - lots of questions answered, but route to profitability, is still strongly in doubt within their timeline, and is still very much in the hands of others.

I've already asked a number of questions via the investormeet option.

Not expecting any of them to be answered though.

We shall see.

I thought we already established that Ford did 180k in Q4.

Which means it's the others that have fallen off a cliff.

Ntdream,

Yes there Q3 = our Q1.

That is exactly the point I am making.

Others (ie everyone other than Ford), went from 283k auto units in our Q1 to 86.6K in Q2

It just doesn't make any sense.

Chris,

Thanks for posting that, I usually spot these but missed that one.

Mainly because I thought I already had the numbers from another source.

However this number is bigger than the one I had, so am somewhat confused.

Given this has come from Ford authority and senior management, I'll assume this one is right.

However in doing that it poses other questions.

Our last quarter KPI was 266k, this suggests 180k of that came from Ford alone.

What happened to all the rest? GM, BMW etc, it's almost as if someone completely switched off using us, and others were well down.

It's all very odd and time the company started providing some explanations.

If anyone has any credible explanations I'm all ears.

If it was just the question of when we hit breakeven, I might take a punt.

However the following additional issues, keep me on the sidelines until I see more certainty.

The Magna loan looming

The $8.6m development costs they capitalised in H1, which happens every 6 months and is a real cost that doesn’t show in the P and L accounts.

The Auto industry continues to a very difficult and unpredictable place to do business.

I thought it would be interesting to see just what the company needs to do to reach break-even.

So, let’s just forget all the hype and potential, and just look at how they get to break even by end of CY 2025.

Rather than break things down into a monthly position, I’m assuming that if they can do FY2026 at breakeven, then they must have hit monthly breakeven somewhere close to the middle of that ie December 2025.

If that seems very plausible then this starts to become investable, to me at least, with all the hype and potential as the cherry on the cake.

So, what is the case in simple terms?

The company states in their latest results that “Consensus expectations for FY2025 are for revenue of US$58m, Adjusted EBITDA of US$(28.9)m”

We also know they have taken $12m of cost out of the business starting now.

That suggests that for FY 2026 with similar revenues they would make a loss of

$28.9m - $12m = $16.9m.

Clearly revenues won’t be the same next year, but it helps to illustrates how much revenues need to increase during the year for that to be possible.

However increased revenues unfortunately come with cost of sales, whereby Auto is supposedly 95% margin and Aftermarket anything from 30% to 60% depending on whether it’s a direct or indirect sale.

To make it simple let’s assume Aftermarket is 50%, This is probably being generous to the company, but I don’t want to be accused of being a de-ramper.

So, the revenue required needs to be increased exponentially to account for the additional cost of sales.

Let’s also assume that Auto will deliver 60% of the extra revenue and Aftermarket 40%.

Therefore, Auto needs to deliver 60% of $16.9m = $10.1m extra revenue after costs.

At a margin of 95% = $10.65m

Aftermarket to deliver 40% of $16.9m = $6.7m extra revenue after costs

At a margin of 50% = $13.4m

Total revenue increase needed = $24.05m = 41% increase on 2025 company consensus.

To achieve the Auto increase they would need to do about 1.1m cars more than they do in FY2025. My calcs based on their 2025 revenue predictions suggest that need about 1.6m this year. So that’s 2.7m cars next year to achieve the Auto revenue needed.

It’s certainly possible, but I suspect unlikely.

Can Aftermarket deliver $13.4m extra revenue?

Well monitoring is pretty consistent in delivering an extra $1m every year, which leaves hardware sales having to deliver the extra $12.4m.

Assuming its $1000 a unit, that’s 12400 units.

(The cost of a G3 unit is difficult to work out as costs from latest figures are mixed in with G2 sales. It’s possible they are cheaper than $1000, we won’t know for sure until next results.)

Can they sell 12400 G3 units in one year? Well, G2 typically only managed about half that total except in 2023 where it achieved around that number.

So again, it’s possible, but it would require a good year in Aftermarket.

So, while I can see the possibilities, I’m yet to be convinced.

Other

And currently down, well over 50%.

How is that a recommendation?

2025 FY Forecasts for those who missed it.

Considering these factors, the Board anticipates that Seeing Machines' performance for FY2025 will be in line with consensus expectations[2].

[2] Consensus expectations for FY2025 are for revenue of US$58m, Adjusted EBITDA of US$(28.9)m

Maybe you should read the RNS, and you might see the forecast.

It's right there in black and white.