Seeing Machines Limited (LON:SEE) has issued an in line trading update for the first half of the year as it said it had seen “an increasing interest” in its driver monitoring systems (DMS) across all of its transport sectors.
In the update, the firm said it expected to report first half revenues of A$13.5mln compared to A$14.6mln last year, in line with its revised projections following a review of its fleet business in September.
The group’s full year expectation that 2019 revenues would be in line with those from 2018 was also unchanged.
Seeing Machines develops technology which is designed to track the face and eyes of vehicle operators such as pilots and drivers to ensure they are not distracted.
Investment in Automotive
In a review of its divisions, the company said it had “invested significantly” in its automotive arm over the last year to build further capacity and de-risk delivery on current programmes with original equipment manufacturers (OEMs), which represent projected revenues of A$138mln between 2019 and 2026.
The group’s five existing automotive programs were on track at various stages of development, with the firm adding that it was currently engaged with six submitted proposals representing around A$140mln of revenue potential, the majority of which were due to be decided before the end of its 2019 fiscal year.
The company’s Guardian backup driver monitoring system (BdMS), which is designed to mitigate the risk of testing autonomous vehicles on the road, was currently in active pilots with several US-based technology developers, with opportunities expected to “crystallise” in 2019.
Cost reduction in fleet division
For its fleet division, Seeing Machines said it had established a new leadership team and was focused in the short-term on cost reduction, primarily by closing its North American business development and operations teams in order to focus on higher-value markets such as UK and Europe, Australasia and Latin America.
There had also been an impact on installation rates of the group’s Gen 2 product in the first half due to delays in product availability from manufacturing issues affecting its FOVIO platform technology.
However, the firm retained nine distribution partnerships across Australia, Asia, Africa, Middle East and Latin America and said it would continue its subscription software-as-a-service (SaaS) model via its 24/7 Guardian Centre in Tucson, Arizona as the segment was profitable on a stand-alone basis and provided “a regular and repeatable annuity style income stream going forward”.
In the Aviation business, Seeing Machines said a number of commercial deals for its eye tracking technology with customers including the Royal Australian Air Force and L3 Training Solutions for a major Australian airline were expected to continue and grow in size as the industry embraced the technology.
WATCH: Seeing Machines Ltd clinches Australian Air Force deal for eye and face-tracking sensor technology
For Mining and Rail, the firm was continuing to grow its strategic partnership with machinery maker Caterpillar Inc (NYSE:CAT) and its subsidiary Progress Rail while also discussing the consolidation of contractual arrangements to simplify product offerings.
The company also said a number of key appointments had been made over the last six months, including Jack Boyer as chairman, Kate Hill as non-executive director, Luke Oxenham as finance director, Ryan Murphy as chief operating officer and Paul McGlone as general manager of fleet.
Ken Kroeger, chief executive of Seeing Machines, said the group had seen “an increasing interest” in its DMS technology over the period, adding that the transformation of the fleet business was making “good progress” and that it was leveraging its channel partners to grow the footprint of the Guardian product.
Kroeger also said the firm had had a series of “productive” meetings with OEM and Tier 1 manufacturers at the International Consumer Electronics Show in Las Vegas which took place last week.