Seeing Machines Ltd (AIM:SEE, OTC:SEEMF, FRA:M2Z) (AIM: SEE) said it expects its automotive royalty revenues to “increase sharply” over the next two to three years as production of vehicles containing its driver monitoring system (DMS) technology ramps up.
In a trading update for the year ended June 30, the designer of operator monitoring systems said it had continued on its growth path despite the challenges of the COVID-19 pandemic, adding that over 100,000 new vehicles embedded with its DMS technology had hit the road during the year.
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The firm also said it is continuing to experience “significant growth” in its aftermarket business with record sales of its Guardian hardware achieved in the final quarter of the year. Guardian connections at the end of the year totalled 31,771, representing growth in the installed base of over 5,000 units compared to six months ago, with around 5,000 more sold units yet to be installed.
In terms of finances, Seeing Machines said revenue for the full year is expected to be A$47.3mln, an 18% increase year-on-year and in line with expectations, while cash at the end of the period was A$47.7mln, 24% ahead of market consensus.
Looking ahead, the group said it has signed commercial contracts in the aviation industry to embed its eye-tracking technology into the training environment with simulator installations, as well as into the Air Traffic Control sector, which it said demonstrated “strong momentum in a truly nascent market, with limited competition”.
"Our progress over the past financial year has been really pleasing, and the signs are there for increased opportunity as FY2022 gets underway. The Automotive RFQs (requests for quotes) from Europe, North America and Japan currently represent total revenue potential of over A$900mln, signalling a step change in the value of our automotive pipeline. In addition, we have increased the number of relationships with key Tier 1 customers to 16, enabling us to bid each opportunity with several parties. This significant increase in RFQs is extremely encouraging and we do expect this number to increase at a similar rate over FY2022,” Seeing Machines chief executive Paul McGlone said in a statement.
“This affirms our view that DMS is now established as central to the automotive industry and we look forward to closing out the current RFQs and announcing new business wins in due course.
"The Aftermarket business is also strengthening as safety monopolises agendas across the world, and this division is now profitable as a standalone business. While our Guardian installation rate has slowed during FY2021, given the COVID backdrop, hardware sales continued to increase as commercial fleets consider this technology a key advantage in terms of safety, but also to ensure efficiencies against the current evolving regulatory environment for commercial driving.
"In summary I can safely say we have never been busier, nor been faced with such a raft of opportunities for significant growth," McGlone added.