Member Info for Seeing-2020

The de-rampers sharing their concerns about cash late last week were wrong, so just hold your hands up and say "I was wrong", the cash-burn in the 6 months to 30th June was A$18m better than the Cenkos forecast, or a small placing in your language. In the current macro environment that's great performance and shows the current management are running a tight ship and have control. They have confidence in the position so much so they issued the Trading Update 2 weeks early.

So today they try find a new problem and that problem seems to be having too much demand for our fleet product and having A$3.5m of guaranteed sales in FY23, such a problem to have.

I don't agree that Auto is "the big prize" it's 'a big prize' I believe Fleet will be bigger than auto.

Reasons to be happy, optimistic, delighted and all round cheerful about fleet
- A$3.5m of guaranteed sales in FY23
- Recurring revenue from monitoring A$20.7m+ as it increases every year, like magic
- New after manufacture product because of regulation
- Shell Oil, Coca-cola, it's like a game of name the 80's icon
- Gen 3 will launch in FY23
- No old stock to worry about, see its a positive
- BMDS is not dead its very much alive and kicking, could be shown as auto but it's the Fleet product
- 10bn KM of real-time data, gold

It's ok to be wrong, jeez I once 9or twice) said 100p by 2020, I was wrong...

My view after a review of the Trading Update and Cenkos note

Auto: - Out-perfoming

Cenkos had 370k cars on the road at June 30th, the company delivered 447k. That's high margin (90-95%) revenues delivered ahead of the plan.

Then we have the company comment on NRE "NRE revenue, 61%, year-on-year, as new programs begin, with additional, bespoke features, a strong lead indicator for future royalty revenue."

Fleet: - "growing demand"
Personally I am ok all the stock is sold, we are about to move to Gen3, I would be worried if we were holding a lot of stock. They are very clear in the extract below that the manufacturer has a solution, imo it's great to enter FY23 with guaranteed sales.

"This has resulted in all available stock being sold in FY2022 and over 2,000 Guardian units ordered and not yet supplied, representing around A$3.5m in forward orders to be recognised in FY2023. Supply chain issues have been resolved with the Company's manufacturer, resulting in their guarantee to deliver satisfactory levels of stock by the end of H1 2023 to meet the growing demand for Guardian hardware."

Cash - hugely out-performing
Outstanding cash performance, in a environment where interest rates are rising across the globe controlling the cash in vital, Cenkos had A$41.7m, I hoped for A$50m+, very surprised its almost A$60m.

In their note this morning Cenkos rule out the need for placing, imo if a strategic investor wants to pay above 11p Paul might consider it but the important thing in this environment is not having a "need".

Auto neutral so funny, they only won the biggest design win ever in DMS with VW Group, very bland

Chutz, with Gen 3 Guardian around the corner I would see the fleet position as a positive. They will be taking pre orders for Gen3 and not having to worry about being left with stock of the old version.

Cenkos forecasted A$41.5m company delivered A$59.3m

Amazing

Soul, you are correct its the capitalised R&D.

This is good imo, removes cost from the P&L and creates an IP asset on the balance sheet, so we start building a value for the IP. Only started in the FY21 financial year (from memory) and it means the auditors have agreed it can be classified as capital cost

Exactly G, you aren't a de-ramper you are helpful, now S Green is so much more informed as he can't read a set of accounts

Enjoy the sun

Have a day off Glandore, the price is up 3 days in a row. Ar least the other bloke has some humour and (losing) horse tips

Great article Terry, Gill Pratt mentioned also

https://www.linkedin.com/posts/seeingmachines_drivermonitoringsystem-driving-guardian-activity-6963720748079230976-gxsY?utm_source=linkedin_share&utm_medium=android_app

Major, hope you are well.

This feels like the Hunter Hall exit scenario to me

MrBB, not only is Fleet a profitable standalone business it farms all this data.

It took us many years to get 5bn KM (Sept 2020 RNS) and then less than 2 years for the next 5bn.

Toyota interview, 13 mins in

"We do use Driver Monitoring Cameras to understand the drivers state"

https://brandonbartneck.com/futureofmobility/derekcaveney/

No need to tell us when you buy we can wait for the TR1.

As for the CEO renumeration he gets paid in Green Shield Stamps, pretty normal for a high tech AIM listed business

I take a different view to my older namesake and tend to agree with Oldfool that we decided to buy and hold, I have no interest in trying to trade this, so I just hold and wait.

In terms of progress the company has made over last 7 years, in my view its better than even the most optimistic of us predicted, I list below just a few from memory

Auto
Getting to SoP, others have proved how hard that is
- GM
- Mercedes
- Ford
- BMW
- FCA

Design wins
- VW Group, that's the one I always wanted
- Stellantis
- Fisker
- Byton
- Japan win, I think it's Jane Fonda others say Scooby Doo

Tier Ones & Partners
- Qualcomm, I had never heard of them 7 years ago
- working with all the major tier ones, 7 years ago we were exclusive with Takata, that was a mis-step so much better placed now
- We nearly spun off Auto, again glad that didn't happen
- Per unit margins are 90-95% as cars hit the roads and materially higher than RNS values

Fleet
Installed base is lower than I would have predicted 7 years ago, however
- Shell Oil, name a big oil company and people say Shell
- Fleet is profitable as a standalone business
- Gen3 will make a huge difference in terms of volumes
- New After manufacture product
- 10bn KM of data, later this week
- IMO Fleet will be the largest division in terms of profits going forward, that's a big statement as Auto will be a cash-cow

Aviation
This is the big unknown for me, impossible to value atm so most brokers say zero, but no competition and we are working with big names, fewer and bigger as the big man says
- CAE
- Collins
- Aussie Air force
- Flying Doctors
- ATC

I finish with a few predictions for the next 7 years, 7 months, 7 weeks or even a Craig David
- Toyota design win
- Coca Cola win for Fleet
- $10m+ Aviation contract win

I watched the video with Paul and Dr Mike again this morning.

https://seeingmachines.com/video/science-innovation-update-august-2022/

He mentions Safety a lot, which seems obvious but if one looks at our previous design wins they are more focused on helping a system (supercruise or bluecruise or Idrive8) work more safely rather than for DMS in its purest safety form ie to keep the driver awake and alert at all times.

When OEM consider DMS safety critical they would be wise to choose the provider who has signed the MOU with NHTSA and who explained to Euro NCap the difference between an Owl and a Lizard

https://seeingmachines.com/insight/lizard-glances-the-achilles-heel-of-dms-that-rely-on-head-pose/

At 07:20 in
@seeingmachines
August update: “We are actively engaged with key safety bodies in the United States. We actually just recently signed an MOU (memorandum of understanding) with
@NHTSAgov
” That’s big. The DMS company with the HF scientists & data is now advising NHTSA.

They were Terry, that looks very positive

If i was planning an Automotive Investor day for Sept the worlds largest OEM would be a great headline announcement, do I let the small Australian tier 2 announce first, let me think about that one.

"Winning Ford is a guess, but Qualcomm has already nabbed Volkswagen and might even have won Toyota too."

Great to hear from Dr Mike again, wow he is a clever chap, even more cleverable than TLS.

The RFQ/Regualtion chat with Paul is very good
- "explosion" of customers wanting to know what drivers and passengers are doing.
- He explains the regulation (gets it in the car) coming in 2024 and the NCAP (rewards for features) from 2023. Rather than read random bs on here, listen to the expert.
- We have "signed an MOU with NTHSA" who knew that?, so we are assisting / telling them what to do same as we did with EU.
- In terms of Aftermarket or After Manufacture, the "requirements are exactly the same" and we have a "huge interest".
- Drunk driving he explains very clearly why our system is the best solution.

All in all a great interview, he always looks confident but today was extra so, as he said years ago "we saw it coming and we are ready"