---ADDS BROKER COMMENT AND SHARE PRICE REACTION---
Seeing Machines (LON:SEE) shares advanced in early deals as it started the ignition for its new bus and truck fleet product, with the signing its first customer.
South African firm Insurance Underwriting Managers (IUM), which focuses on commercial fleet markets, is purchasing 750 units of the driver fatigue monitoring device.
IUM will in turn offer the product to its customers in the expectation that driver behaviour will improve, reducing accidents and associated insurance costs, Seeing Machines said.
Seeing Machines' manufacturing partner began producing the fleet product in mid-May and it is expected that the 750 units will be delivered to IUM this month.
A strong sales pipeline is now building for the fleet product, Seeing Machines noted, as it also highlighted that the product was launched in the US at the annual National Private Truck Council (NPTC) conference during April.
Seeing Machines sales staff are currently following up on a large number of positive leads, it added.
Lorne Daniel, analyst at broker finnCap, said: “This was one of several large fleet deals in negotiation at the time of the interim results and it is pleasing to see it come to fruition, validating the quality of, and market for, this new product, which we expect to revolutionise the road logistics and transportation industry.
“Fleet will build strong recurring revenues in the years ahead.”
Seeing Machines also highlighted a number of other potential industry sectors that it is also focussing upon such as aviation, cars and rail.
The company’s existing alliance agreement with Caterpillar, which initially focused on monitoring in mining vehicles, was in March expanded to also incorporate broader industry applications including vehicles used in construction, quarry and forestry.
House broker said Seeing Machines is making “remarkably rapid progress”.
Either as a capital expenditure (capex) or operating expenditure (opex) sale, the Fleet product line will build strong recurring revenues in the years ahead, the broker predicts.
Meanwhile, in the aviation market, Seeing Machines (SM) is developing a product in collaboration with Boeing as well as other aerospace partners and regulators, particularly for use in training, with demand for new pilots increasing rapidly, notes finnCap analyst Lorne Daniels.
“More immediately, the partnership with CAT [Caterpillar] continues to deepen, taking SM beyond the mining industry into construction, quarry and forestry; combining the company’s products into a complete care package offered by the US giant,” Daniels observed.
“In Automotive, the work with Takata’s electronics division continues for a number of automotive OEMs [original equipment manufacturers] to meet launch targets for both ADAS (driver assistance systems) and autonomous vehicles.
“In rail, recent high-profile accidents have added urgency to the rail roll-out, and trials will begin in multiple markets over the next few months. We expect these to be revenue generating.” Daniels said.
The company also continues to work closely with consumer electronics giant Samsung on applications of its technology that could address the lucrative consumer gizmo market.
The broker has a 12p price target for the stock, which was trading at 4.89p in afternoon trading, up 11.9% on the day.