Nice news. Fleet already profitable. New avenues opening up with more elegant fitment solutions / integration / networking on customer based etc etc. You name it, it is good. Fleet, from being a destroyer of cash & CEOs is set now to become a cash cow - which isn't in anyone's valuation. Could really speed up SEE going cash positive.
Is it so important? There is an explanation, I'm sure e.g. they only redo the NPV model every so often therefore it gets progressively out of date. Doubtless, say after the release of audited Results in October Cenkos will do a fresh full note with the updated valuation. Another e.g. is that SEE might think discretion the better part of valour. We all notice that SEE unlike SmartEye think it commercially expedient to be very secretive. As to IIs, agreed Cenkos cd have done better
I don't agree at all. It isn't cash holding them back. They have loads of cash and can easily raise more.
It is rather human resources. They are recruiting constantly but they might, courtesy of covid restrictions, not be able to simply get enough software engineers. I recall McGlone saying in an interview that the one thing that kept him up at night was the difficulty of recruiting enough software engineers
Fleet at its current sales level of 32k fitted is of course nothing. Just a bit of fluff in comparison with the 300m commercial vehicles worldwide. But even to hit 32k acceptances over the 6 years or so of Guardian involved overcoming endless problems. New entrants will learn from SEE but fall nonetheless into some of the traps and value chain frailties that have characterised Fleet till recently. Nonetheless SmartEye has decided it needs to enter the Fleet market - so they also see it as a sine qua non despite the costs and learning curve.
Looking forward, the big question for SEE is what is stopping mass take up of Guardian now? Why aren't they going for 10% of the 300m aftermarket? Could be that by Guardian 4 they might have the key to the highway. But obviously, SEE needs to keep problem solving because it is obvious kit to fit and they have a product the market needs - and will soon enough also want.
soulboy - of course it has to come. simply no other outcome is conceivable. trucks with sleeping drivers kill at approx. 5x more than normal vehicles [vague recall on number]. Road accidents and health etc costs mean road accidents cost 2% of world's GDP.
This tech is coming OEM
SEE wd have been wrong to just go software only. It is also their expertise in hardware components of the system which is an important part of their competitive advantage. A lot was earned early on beginning with CAT. Smarteye lack this know how. Know how is also a type of IP. SEE have know how.
Look at Fleet. What a pain in the kyber. I said it myself recently. I cd lists its various griefs. But it is essential. Ken was bang on to understand its role. Not just the data. Also has been a test bench to iron out how the tech works with professional drivers and thereby optimise how it works. Further, it is a test bed for so called big box eye tracking i.e. getting eye tracking to work in a large space with the driver moving around. This is a big part of their know how / IP. Further, by sticking at Fleet for 7 years, SEE have painstakingly got the product up to a level where OEM will follow naturalistically. How is this cheap or pain free? It aint but it is so vital.
What are these accumulated losses on Fleet anyway? They are really R&D costs and it is an anomaly of accounting that these are shown as P&L profits rather than assets on the Balance Sheet [with suitable % depreciation on the P & L]. (FT had a great article on this subject which I posted the link to on here before.) If the ultimate outcome of these expenditures is a large and growing flow of cash in the years ahead then everyone will say how clever they were. Amazon also lost money for years before it became hugely profitable.
Get Fleet right and it will produce mindblowing dosh. Remember that Ken wanted to and tried to float off Fovio and keep Fleet.
This is a major development in raising awareness of the value of ADAS / DMS.
Hoping against hope that SEE remain independent. Their non exclusive range of commercial relationships might be a shield.
SEE are at the very beginning of a golden period of 10 years plus. How sad to sell itself short by being bought out before that happens. How easy is it to identify a genuine winner? To find one like this for a PI is a rare event. Personally, I just want this story to run and run. We might be surprised at just how big SEE cd get to be.
Agree that PG saw the upside in Fovio. But, if I recall correct, the suggestion to stop giving forecasts was based on one of those periodic fails in Fleet. Hence slashing the valuation SP by 90%. That I'm confident was based on their feeling that SEE's management together with Fleet was the major threat to Fovio being funded and succeeding.
Worth recalling the very original Fleet target numbers assumptions. [Can't be bothered to dig them out but something like 250k units by 2020?? - a guess]. There have been any number of strategy reviews / product problems and reformulations /marketing changes / changes of Fleet boss / changes of CEO. Talk about learning on the job.
PG were right. The Co even then was worth 28p / 30p - but Fleet and shocking execution / naivete discounted all of that to 3p.
Bravo McGlone & team. At this point, imo, if SEE execute the plan then everyone will understand the real reason McGlone & fellow Directors bought shares. I think it is some sort of minor miracle that Fleet is now beginning to take off - especially since the guys now know what they are doing. The potential valuation of Fleet dwarfs Fovio [though Aviation might be huge as well]
Cenkos in constructing the NPV model to arrive at the target SP, assume that SEE's DMS will reduce in selling price as it becomes a commodified. My view is that it will go the other way [as per previous post] ergo the cash flow values used in Cenkos's NPV are erroneously low. [This is without repeating the issue of correct disc rate etc. - or that start positive cash flows are now coming into view which should rebase the NPV model upwards]