Seeing Machines sees share price increase after boosting revenue by 60 per cent

Shares in software firm Seeing Machines (LON:SEE) saw a strong improvement today after the firm announced a 60-per cent increase to its revenue for the year to the end of June 2011

Seeing Machines share price was up 16.4 per cent at lunchtime today at 3.2 pence.

House broker Daniel Stewart noted that a surge in demand for both Seeing Machines’ DSS and faceAPI products resulted in expansion of its sales and services channels. The broker said that this, combined with the appointment of new chief executive officer Ken Kroeger in July, “sets the stage in financial year 2012 for further development and, in particular, emphasis on recurring revenue streams”.

Seeing Machines, which specialises in face and eye-tracking software for a variety of applications, said its revenue increased to A$7.2 million (2010: A$4.5 million). Gross profit for the firm’s 2011 financial year also improved, to A$4.9 million from A$3.2 million but operational expenses incurred increased to A$6.7 million (2010: A$5.2 million) on account of investments in R&D for its DSS (Drive State Solution) offering that uses face-tracking techniques to deliver information on driver (or operator) fatigue and distraction, as well as investments in the firm’s sales and marketing function and support staff.

As a result, Seeing Machines net loss for its 2011 financial year came in at A$2.2 million (2010: A$1.8 million loss). The firm’s cash position was also down, at A$1.6 million compared with A$3.9 million on June 30 2010, mainly due to investments made in DSS.

Highlights during the year included Seeing Machines’ DSS offering almost quadrupling revenue to A$4.3 million (2010: A$1.1 million). The firm said that its pipeline of customers continues to grow, and its strategy for DDS remains focused on the global mining and resource sectors through direct sales and channel partners; blue chip customers for DSS currently include Freeport-McMoRan, BHP Billiton, Newmont Mining Corporation, Toll Mining Services and Xstrata.

The firm also signed a significant production licensing deal for its faceAPI technology for glasses-free 3D displays for consumer electronics. faceAPI achieved revenue during the period of A$484,446 (2010: $A506,555)

For its 2012 financial year, Seeing Machines plans to significantly expand its customers for DSS in Australia as well as directly grow installations of the product in countries where that it directly services and supports, including the US, Canada and Indonesia, it said. It also plans to expand through channel partners in Africa and South America.

“2011 has been a period of considerable investment for Seeing Machines as we move forward with our strategy of commercialising our products and technology,” said Bill Mobbs, Seeing Machines’ chairman. “During the period we have expanded our sales teams, improved our technology and further developed our service offerings. As a result, we are seeing an increasing number of opportunities and this in turn is leading to an expanding pipeline. As such, we are confident of continued revenue growth in 2012 along with an improved financial performance.”

Daniel Stewart said that it was revising its outlook and target price for Seeing Machines.