TIDMSEE
RNS Number : 9298R
Seeing Machines Limited
06 March 2023
Seeing Machines Limited ("Seeing Machines" or the "Company")
6 March 2023
Half year results and financial report
Record revenue with significant growth in high margin automotive
royalty revenue
Seeing Machines Limited (AIM: SEE, "Seeing Machines" or the
"Company"), the advanced computer vision technology company that
designs AI-powered operator monitoring systems to improve transport
safety, today published its unaudited results and financial report
for the six months to 31 December 2022 ("H1 2023").
As a result of the proportion of revenue and funding being
derived in US Dollars, the Company has changed its reporting
currency from Australian Dollars to US Dollars, in order to give a
clearer understanding of its financial performance. All figures
provided below, along with comparative information, are therefore
provided in US Dollars.
Financial Highlights:
- Total operational revenue of US$24.4m (H1 2022: US$15.8m)
reflecting comparative growth of 54% on the previous period
o OEM (Automotive and Aviation) revenue up by 268% year on year
to US$14.0m (H1 2022: US$3.8m)
-- Higher margin royalty revenue, derived from cars on road,
increased by 102% to US$3.1m (H1 2022: US$1.5m)
-- Revenue of US$5.4m from license fees earned from the
exclusive collaboration agreement with Magna (2021: nil)
o Annual Recurring Revenue(1) increased to US$11.9m (H1 2022:
US$10.2m)
o Aftermarket (Fleet and Off-Road) revenue was US$10.3m (H1
2022: US$12.0m)
- Gross profit of US$15.5m, up 109% year on year (H1 2022: US$7.4m)
- Net loss reduced by 47% to US$5.4m (H1 2022: US$10.1m)
- Strong balance sheet, with cash at 31 December 2022 of US$52.2m (30 June 2022: US$40.5m)
Operational Highlights:
- Entered into an exclusive collaboration with Magna
International, to pursue driver and occupant monitoring system
business targeting the vehicle's interior rear-view mirror
- Magna also provided additional investment in the Company
through a Convertible Note of up to US$47.5m, maturing in October
2026 with a conversion rate per ordinary share of 11 British pence.
To date, Seeing Machines has drawn down US$30m of the US$47.5m
- Seeing Machines continues to grow as an automotive technology
leader in driver and occupant monitoring system technology and was
appointed to an additional program with an existing large
European-based global automotive group (OEM) customer, carrying an
initial lifetime value of US$32m
- The Company has now won a total of 15 automotive programs
spanning 10 individual OEMs, covering more than 160 distinct
vehicle models, underpinned by over 11bn km of driving data and
delivered with proven global automotive Tier-1 customers and
partners
- Cumulative initial lifetime value of all awarded Automotive
OEM programs now stands at US$321m
- The Company reported a total of 701,049 cars on road as at 31
December 2022, representing an increase of 188% over the 12 months
period (H1 FY2022: 243,722) spanning six individual programs with
four global OEMs
- Guardian, Seeing Machines' Aftermarket driver distraction and
fatigue technology, is now installed into and monitoring 46,018
individual vehicles , compared to 36,933 in December 2021
representing a 25% increase over the 12-month period
- As at 31 December 2022, there were 6,085 Guardian units sold and yet to be connected
- Martin Ive, a highly experienced finance professional and
chartered accountant, was appointed to the position of CFO in
November 2022
- Seeing Machines' balance sheet was significantly strengthened
following the receipt of financing through a Convertible Note from
Magna International and the Company is now fully funded to deliver
on its current business plan for the foreseeable future
Outlook and current trading
- Seeing Machines' total addressable market is expanding,
underpinned by compelling structural drivers and regulatory
tailwinds which present an exciting opportunity to grow market
share and deliver long-term growth
- Company financial performance for FY2023 is expected to be in
line with consensus expectations(2)
Paul McGlone, CEO of Seeing Machines, said : "We are pleased
with the continued progress made during the first half of the year
and I'd like to thank all colleagues for their hard work. Transport
safety has moved meaningfully up the regulatory agenda around the
world and our market leadership, scalability and balance sheet
strength means we are ideally positioned to deliver on our business
objectives. Whether inside the car, cabin or cockpit, our
mission-critical technology is achieving strong take-up by a range
of customers. Whilst we have contended with some industry wide
supply chain challenges relating to automotive manufacturing, we
expect the impact of these to ease on our Aftermarket business in
the second half of the year, and are confident of meeting FY2023
expectations."
[1] The definition of Annual Recurring Revenue has been refined
to include only the annualised value of revenues recurring through
an ongoing service provision and excludes values related to
one-time purchases such as hardware royalties
(2) Consensus expectations for FY2023 are for revenue of
US$53.9m and EBITDA of US$(12.7m)
Earnings call
The Company will host a presentation via Investor Meet Company
platform on Tuesday 7 March 2023.
To register for the Investor Meet Company presentation, please
visit www.investormeetcompany.com .
Enquiries:
Seeing Machines Limited +61 2 6103 4700
Paul McGlone - CEO
Sophie Nicoll - Corporate Communications
Stifel Nicolaus Europe Limited (Nominated
Adviser and Broker) +44 20 7710 7600
Alex Price
Fred Walsh
Nick Adams
Ben Burnett
Dentons Global Advisors (Media Enquiries)
James Styles
Jonathon Brill
seeingmachines@dentonsglobaladvisors.com +44 20 7664 5095
About Seeing Machines (AIM: SEE), a global company founded in
2000 and headquartered in Australia, is an industry leader in
vision-based monitoring technology that enable machines to see,
understand and assist people. Seeing Machines is revolutionizing
global transport safety. Its technology portfolio of AI algorithms,
embedded processing and optics, power products that need to deliver
reliable real-time understanding of vehicle operators. The
technology spans the critical measurement of where a driver is
looking, through to classification of their cognitive state as it
applies to accident risk. Reliable "driver state" measurement is
the end-goal of Driver Monitoring Systems (DMS) technology. Seeing
Machines develops DMS technology to drive safety for Automotive,
Commercial Fleet, Off-road and Aviation. The company has offices in
Australia, USA, Europe and Asia, and supplies technology solutions
and services to industry leaders in each market vertical.
www.seeingmachines.com
Review of Operations
Overview
The Company achieved a record result for the six months to 31
December 2022 as well as securing significant additional investment
through a Convertible Note. Revenue increased by 54% and cash
balances increased to US$52.2m with a remaining US$17.5m of funding
available.
As a result of the increasing proportion of revenue and funding
being derived in US dollars, the Company has changed the functional
currency of the parent entity of the group, Seeing Machines
Limited, to US dollars.
Financial Results
The Company's total sales revenue for H1 FY2023 (excluding
foreign exchange gains and finance income) increased by 54% to
US$24.4m (H1 FY2022: US$15.8m).
Business unit 31 Dec 2022 31 Dec 2021 Variance
US$'000 US$'000 %
OEM 14,037 3,832 266%
Aftermarket 10,346 11,982 (14%)
Sales Revenue 24,383 15,814 54%
OEM revenue more than doubled compared to the previous
corresponding period in line with the early stage ramp up of
vehicle production for a number of Automotive OEM programs. Royalty
revenue, derived from installation of Seeing Machines' Driver
Monitoring System (DMS) technology, increased by 102% to US$3.1m
compared to the same period last year (H1 FY2022: US$1.5m). In
addition to production royalties, revenue of US$5.4m from license
fees was earned from the exclusive collaboration agreement with
Magna (2021: nil). The growth in royalty revenues in the OEM
business has resulted in the revenue mix moving to a greater
proportion of higher margin revenue streams, which is expected to
continue as Automotive programs become the dominant source of
revenue for this business unit.
Limited hardware supply in the half-year restricted potential
revenue growth in the Aftermarket business. Guardian hardware sales
generally constitute a majority of Aftermarket revenue, however,
they were limited to 1,536 units compared to 4,285 units for the
prior corresponding period resulting in an overall revenue decline
in the Aftermarket business for the half-year. Supply of the
reengineered Guardian 2 units commenced towards the end of the
period and will enable pent-up demand to be met for the remainder
of the financial year. Connected Guardian units increased to 46,018
units in December 2022 representing 15% growth from 39,892 in June
2022 and 25% annual growth from December 2021. As a result of this
growth monitoring services revenue increased by 7% to US$5.2m for
the half-year, compared to US$4.9m for the same period last year,
continuing the accumulation of recurring revenue from the Guardian
connections.
The Company continued to invest in its core technology
development to further strengthen its competitive moat, rapidly
expand features and leverage systems approach across global OEM and
Aftermarket industries. As a result, Seeing Machines incurred total
research and development expenses of US$17.2m during the six-months
ended 31 December 2022 (2021: US$13.2m), of which US$11.1m (2021:
US$8.6m) was capitalised.
Customer support and operations cost categories increased to
US$3.3m (2021: US$3.2m) and US$5.4m (2021: US$4.2m) respectively in
line with strengthening of business pursuit and emerging markets
activities to support increased pipeline and channel market
expansion.
On 4 October 2022, Seeing Machines received funding of US$47.5m
from Magna International in the form of a non-transferable 4-year
convertible note maturing in October 2026 (the "Convertible Note").
Details of the Convertible Note can be found in Note 12 to the
Financial Statements. The proceeds of the Convertible Note are
being used to meet technology demands, for general working capital
and corporate purposes, as well as to strengthen the Company's
balance sheet so that it is fully funded to deliver on its current
business plan.
Cash and cash equivalents as at 31 December 2022 totalled
US$52.2m (2022: US$40.4m) with an additional US$17.5m being
available as part of an undrawn Convertible Note facility.
We highlight this report is unaudited. There is no requirement
for the interim financial statements to be subject to review by the
external auditor.
Interim Consolidated Statement of Financial Position -
Unaudited
Consolidated
31 Dec 30 Jun 31 Dec
AS AT Notes 2022 2022 2021
Unaudited Audited Unaudited
US$000 US$000 US$000
(Restated) (Restated)
---------------------------------- -------------------- ----------- ------------ ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents 5 52,186 40,470 57,564
Other short-term deposits 321 325 343
Trade and other receivables 6 14,843 18,586 12,806
Inventories 7 5,742 933 5,112
Other current assets 8,756 5,676 3,883
----------- ------------ ------------
TOTAL CURRENT ASSETS 81,848 65,990 79,708
----------- ------------ ------------
NON-CURRENT ASSETS
Property, plant & equipment 8 3,152 3,033 2,431
Intangible assets 9 33,581 23,610 15,597
Right-of-use assets 2,114 2,376 2,794
----------- ------------ ------------
TOTAL NON-CURRENT ASSETS 38,847 29,019 20,822
----------- ------------ ------------
TOTAL ASSETS 120,695 95,009 100,530
----------- ------------ ------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 1 0 7,692 11,290 6,697
Lease liabilities 1 1 686 653 725
Provisions 4,012 3,511 4,052
Contract liabilities 5,734 2,495 1,258
----------- ------------ ------------
TOTAL CURRENT LIABILITIES 18,124 17,949 12,732
----------- ------------ ------------
NON-CURRENT LIABILITIES
Provisions 212 245 189
Lease liabilities 1 1 2,620 3,000 3,465
Borrowings 1 2 22,955 - -
Financial liability at fair value
through profit or loss 1 3 7,389 - -
----------- ------------ ------------
TOTAL NON-CURRENT LIABILITIES 33,176 3,245 3,654
----------- ------------ ------------
TOTAL LIABILITIES 51,300 21,194 16,386
----------- ------------ ------------
NET ASSETS 69,395 73,815 84,144
=========== ============ ============
EQUITY
Contributed equity 1 6 240,948 240,948 240,805
Accumulated losses (175,396) (169,973) (161,533)
Other reserves 3,843 2,840 4,872
----------- ------------ ------------
Equity attributable to the owners
of the parent 69,395 73,815 84,144
----------- ------------ ------------
TOTAL EQUITY 69,395 73,815 84,144
=========== ============ ============
The above interim consolidated statement of financial position
should be read in conjunction with the accompanying notes.
Interim Consolidated Statement of Comprehensive Income -
Unaudited
Consolidated
2022 2021
FOR THE SIX-MONTH PERIODED 31 Notes Unaudited Unaudited
DECEMBER
US$000 US$000
(Restated)
---------------------------------------- ----------------- ----------- ----------------
Sale of goods 2,322 5,489
Services revenue 12,193 7,335
Royalty and license fees 9,868 2,990
----------- --------------
Revenue 3 24,383 15,814
----------- --------------
Cost of sales (8,901) (8,416)
----------- --------------
Gross profit 15,482 7,398
----------- --------------
Net gain in foreign exchange 1,942 95
Finance income 369 160
Net change in fair value of financial
liability (loss) (804) -
Other (expense) / income (81) (7)
Expenses
Research and development expenses 4 (6,090) (4,634)
Customer support and marketing expenses (3,325) (3,155)
Operations expenses (5,447) (4,230)
General and administration expenses (6,470) (5,498)
Finance costs (876) (175)
----------- --------------
Loss before tax (5,300) (10,046)
Income tax expense (123) (82)
----------- --------------
Loss after income tax (5,423) (10,128)
=========== ==============
Loss for the period attributable
to:
Equity holders of the parent (5,423) (10,128)
----------- --------------
Other comprehensive loss
Exchange differences on translation
of foreign operations (2) (1,447)
----------- --------------
Other comprehensive loss net of tax (2) (1,447)
----------- --------------
Total comprehensive loss (5,425) (11,575)
----------- --------------
Total comprehensive loss attributable
to:
Equity holders of the parent (5,425) (11,575)
=========== ==============
Total comprehensive loss for the
period (5,425) (11,575)
=========== ==============
Loss per share for loss attributable to the ordinary equity
holders of
the parent:
Basic loss per share 15 (0.001) (0.002)
Diluted loss per share 15 (0.001) (0.002)
The above interim consolidated statement of comprehensive income
should be read in conjunction with the accompanying notes.
Interim Consolidated Statement of Changes in Equity -
Unaudited
FOR THE Employee
SIX-MONTH Foreign Equity
PERIOD Currency BenefitsED 31 Contributed Accumulated Translation & Other
DECEMBER Equity Losses Reserve Reserve Total Equity
US$000 US$000 US$000 US$000 US$000
--------------- -------------------- -------------------- -------------------- -------------------- ------------------
As at 1 July
2021
(Restated) 200,558 (151,405) (8,457) 13,334 54,030
Loss for the
period
(Restated) - (10,128) - - (10,128)
Other
comprehensive
loss
(Restated) - - (1,447) - (1,447)
Total
comprehensive
loss
(Restated) - (10.128) (1,447) - (11,575)
Transactions
with owners
in their
capacity as
owners:
Issue of new
shares
(Restated) 41,275 - - - 41,275
Share issue
costs
(Restated) (1,028) - - - (1,028)
Share-based
payments
(Restated) - - - 1,442 1,442
At 31 December
2021 -
Unaudited
(Restated) 240,805 (161,533) (9,904) 14,776 84,144
As at 1 July
2022 240,948 (169,973) (14,128) 16,968 73,815
Loss for the
period - (5,423) - - (5,423)
Other
comprehensive
loss - - (2) - (2)
Total
comprehensive
loss - (5,423) (2) - (5,425)
Transactions
with owners
in their
capacity as
owners:
Issue of new - - - - -
shares
Capital - - - - -
raising costs
Share-based
payments - - - 1,005 1,005
At 31 December
2022 -
Unaudited 240,948 (175,396) (14,130) 17,973 69,395
The above consolidated statement of changes in equity should be
read in conjunction with the accompanying notes.
Interim Consolidated Statement of Cash Flows - Unaudited
FOR THE SIX-MONTH PERIODED 2022 2021
31 DECEMBER Notes Unaudited Unaudited
US$000 US$000
(Restated)
-------------------------------------------- ------- ----------- --------------
Operating activities
Receipts from customers 32,398 18,967
Payments to suppliers (39,476) (26,813)
Interest received 369 160
Interest paid - (175)
Income tax paid (123) (83)
----------- --------------
Net cash flows used in operating activities (6,832) (7,944)
----------- --------------
Investing activities
Proceeds from sale of property, plant 48 -
and equipment
Purchase of property, plant and equipment 8 (524) (222)
Payments for intangible assets (patents,
licences and trademarks) 9 (91) (132)
Payments for intangible assets (capitalised
development costs) 4, 9 (11,146) (8,623)
Net cash flows used in investing activities (11,712) (8,977)
----------- --------------
Financing activities
Proceeds from issue of new shares - 41,275
Cost of capital raising - (1,028)
Proceeds from issue of Convertible Note
(net of arrangement fee) 12 28,798
Principal repayment of lease liabilities (481) (308)
Net cash flows from financing activities 28,317 39,939
----------- --------------
Net increase in cash and cash equivalents 9,772 23,018
Net increase/(decrease) due to foreign
exchange difference 1,944 (995)
Cash and cash equivalents at 1 July 40,470 35,541
Cash and cash equivalents at 31 December 5 52,186 57,564
=========== ==============
The above interim consolidated statement of cash flows should be
read in conjunction with the accompanying notes.
Notes to the Interim Consolidated Financial Statements -
Unaudited
1 Corporate information
Seeing Machines Limited (the "Company" or the "Group") is a
limited liability company incorporated and domiciled in Australia
and listed on the AIM market of the London Stock Exchange. The
address of the Company's registered office is 80 Mildura Street,
Fyshwick, Australian Capital Territory, Australia.
Seeing Machines Limited and its subsidiaries (the "Group")
provide operator monitoring and intervention sensing technologies
and services for the automotive, mining, transport and aviation
industries.
The interim consolidated financial report of the Group (the
"interim financial report") for the six-month period ended 31
December 2022 was authorised for issue in accordance with a
resolution of the Directors on 3 March 2023.
2 Basis of preparation and changes to the Group's accounting policies
(a) Basis of preparation
The interim financial report for the six-month period ended 31
December 2022 has been prepared in accordance with AASB 134 Interim
Financial Reporting in order to fulfil the reporting requirements
of Rule 18 of the London Stock Exchange's AIM Rules for Companies
issued July 2016.
The interim financial report does not include all the
information and disclosures required in the annual financial report
and should be read in conjunction with the Group's annual
consolidated financial statements as at 30 June 2022. The interim
financial report has also been prepared on a historical cost basis,
except for derivative financial instruments which have been
measured at fair value.
There is no requirement for the interim financial report to be
subject to audit or review by the external auditor and accordingly
no audit or review has been conducted.
(b) Accounting policies
The accounting policies applied are consistent with those of the
consolidated financial statements for the year ended 30 June 2022,
except for the change in accounting policy in relating to change in
presentation currency from Australian Dollars ("AU$") to United
States Dollars ("US$"), as set out below:
Effective 1 July 2022, the Group's functional currency has
changed from AU$ to US$. This change in functional currency is
primarily indicated by the following factors:
(i) Sales and cash inflows: The currency that mainly influences
sales prices for goods and services. This will often be the
currency in which sales prices for goods and services are
denominated and settled. During the financial year ended 30 June
2022, approximately 65% of the Group's revenue were denominated in
US$. This proportion of revenue denominated in US$ is expected to
significantly increase for the financial year ending 30 June 2023
and thereafter. Therefore, change in functional currency for
periods commencing 1 July 2022 is considered appropriate.
(ii) Financing Activities: The Group's share capital is
denominated in Great Britain Pounds ("GBP") as the Company's shares
are listed on the AIM market of the London Stock Exchange. However,
a significant funding arrangement and a significant exclusive
collaboration arrangement, totalling to US$ 65 million with Magna
International were in the final stages of execution on 1 July 2022.
These arrangements were executed on 4 October 2022. Considering the
materiality of these arrangements to the Group's financial
position, together with the stage of execution on 1 July 2022,
change in functional currency to US$ for periods commencing 1 July
2022 is considered appropriate.
(iii) Expenses and cash outflows: The Group's expenses are
primarily comprised of salaries and wages for employees who are
mostly domiciled in Australia and these expenses are incurred and
settled in AU$. However, majority of other expenses for the Group
are incurred and settled in US$. During the financial year ended 30
June 2022, approximately 30% of the Group's expenses were
denominated in US$. This proportion of expenses denominated in US$
is expected to significantly increase for the financial year ending
30 June 2023 and thereafter. Further, all of the Group's
inventories are purchased and denominated in US$, with the Group
having significant commitments to make these purchases in US$.
Therefore, change in functional currency for periods commencing 1
July 2022 is considered appropriate.
The change in functional currency will significantly reduce the
volatility of the Group's earnings due to foreign exchange
movements, in particular due to translation of foreign currency
balances.
Notes to the Interim Consolidated Financial Statements -
Unaudited
2 Basis of preparation and changes to the Group's accounting policies (continued)
(b) Accounting policies (continued)
Applying the guidance provided in AASB 121: The Effects of
Changes in Foreign Exchange Rates ("AASB 121"), the change in
functional currency to US$ has been effected on 1 July 2022 using
the following procedures:
i) All items of assets and liabilities were translated from AU$
to US$ using the US$/ AU$ exchange rate prevailing on the date of
change, i.e. start of 1 July 2022. The exchange rate used was US$
0.68879/ AU$. As all assets and liabilities are translated using
the exchange rate at the date of change, the resulting translated
amounts for non-monetary items are treated as their historical
cost.
ii) Equity items were translated from AU$ to US$ using the
historical rate at the date of the transactions.
iii) Resulting differences in the historical rates and rate on
date of change is recognized in the Foreign Currency Translation
Reserve.
In line with the change in functional currency from AU$ to US$,
and to provide investors and other stakeholders a clearer
understanding of the Group's performance over time, the Directors
have elected to change the Group's presentation currency from AU$
to US$. The change in presentation currency is a voluntary change
which is accounted for retrospectively and comparatives in the
interim financial report have been restated accordingly. Applying
the guidance provided in AASB 121, the Group's interim financial
report has been restated to US$ using the procedures outlined
below:
i) Interim Consolidated Statement of Comprehensive Income and
Interim Consolidated Statement of Cash Flows have been translated
into US dollars using average foreign currency rates prevailing for
the relevant period.
ii) Assets and liabilities in the Interim Consolidated Statement
of Financial Position have been translated into US$ at the closing
foreign currency rates on the relevant balance sheet dates.
iii) The equity section of the Interim Consolidated Statement of
Financial Position, including foreign currency translation reserve,
retained earnings, share capital and the other reserves, have been
translated into US$ using historical rates.
iv) Earnings per share and dividend disclosures have also been
restated to US$ to reflect the change in presentation currency.
Certain new accounting standards, amendments to accounting
standards and interpretations have been published that are not
mandatory for 31 December 2022 reporting periods and have not been
early adopted by the Group. These standards, amendments or
interpretations are not expected to have a material impact on the
Group in the current or future reporting periods and on foreseeable
future transactions.
3 Segment information
a. Segment revenue based on operating segment
The following table presents revenue and net loss information
for the Group's operating segments for the six-month periods ended
31 December 2022 and 2021, respectively:
Segment Revenue Segment Loss
FOR THE SIX-MONTH PERIODED 2022 2021 2022 2021
31 DECEMBER US$000 US$000 US$000 US$000
Unaudited (Restated) (Restated)
--------------------------------------- ------------------ --------------- ------------------
OEM 14,037 3,832 (2,282) (6,805)
Aftermarket 10,346 11,982 (3,141) (3,323)
Total 24,383 15,814 (5,423) (10,128)
b.
Notes to the Interim Consolidated Financial Statements -
Unaudited
3 Segment information (continued)
b. Revenue from contracts with customers
In the following tables, revenue segments have been
disaggregated by type of goods or services which also reflects the
timing of revenue recognition.
FOR THE SIX-MONTH PERIODED OEM US$000 Aftermarket Total US$000
31 DECEMBER 2022 US$000
Unaudited
------------------------------- ------------------------- ------------------ ---------------------
Revenue Types
Sales at a point in time
Consulting - - -
Hardware and Installations 436 1,971 2,407
Royalties - 1,012 1,012
Sales over time
Driver Monitoring - 5,249 5,249
Non-recurring Engineering 4,745 2,114 6,859
Royalties 3,116 - 3,116
Licensing 5,740 - 5,740
Total revenue 14,037 10,346 24,383
FOR THE SIX-MONTH PERIODED OEM US$000 Aftermarket Total US$000
31 DECEMBER 2021 US$000
Unaudited (Restated) (Restated) (Restated)
-------------------------------- -------------------------- ------------------- ----------------------
Revenue Types
Sales at a point in time
Consulting - 613 613
Hardware and Installations 377 5,019 5,396
Royalties - 1,448 1,448
Sales over time
Driver Monitoring - 4,902 4,902
Non-recurring Engineering 1,913 - 1,912
Royalties 1,542 - 1,542
Total revenue 3,832 11,982 15,814
c. Geographic information
FOR THE SIX-MONTH PERIODED 2022 2021
31 DECEMBER US$000 US$000
Unaudited (Restated)
------------------------------------------------------------------- ------------------
Revenues from external customers
Australia 4,153 5,452
North America 15,117 7,253
Asia-Pacific (excluding Australia) 1,763 1,340
Europe 2,198 849
Other 1,152 920
Total revenue from external customers 24,383 15,814
The revenue information above is based on
the locations of the customers.
3
Notes to the Interim Consolidated Financial Statements -
Unaudited
4 Research and development expenses
Research and development expense relates to ongoing investment
in the Group's core technology.
The Group incurred total research and development expenses of
US$17,236,000 during the six-months ended 31 December 2022 (2021:
US$13,191,000 (Restated)), of which US$11,146,000 (2021:
US$8,623,000 (Restated)) were capitalised.
As part of the assessment of research and development expenses
at 30 June 2022, total costs of US$16,558,000 (Restated) were
capitalised for the year ended 30 June 2022, of which US$8,623,000
(Restated) pertained to the six-month period ended 31 December
2021.
5 Cash and cash equivalents
For the purpose of the interim consolidated statement of cash
flows, cash and cash equivalents are comprised of the
following:
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
---------- ------------
Cash at bank 22,570 40,470
Term deposits maturing in less than 3 months 29,616 -
---------- ------------
Total cash and cash equivalents 52,186 40,470
========== ============
6 Trade and other receivables
Current 31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
--------------------------------------- -------------------- ---------------------
Trade receivables (net of provisions) 14,289 18,138
Deferred finance income (89) (105)
14,200 18,033
Other receivables 643 553
Total trade and other receivables
- current 14,843 18,586
7 Inventories
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
---------- ------------
Finished goods (at lower of cost and net realisable
value) 5,758 949
Provision for obsolescence (15) (16)
---------- ------------
Total inventories at the lower of cost and
net realisable value 5,742 933
========== ============
7
Notes to the Interim Consolidated Financial Statements -
Unaudited
8 Property, plant and equipment
Acquisitions and disposals
During the six-month period ended 31 December 2022, the Group
acquired assets with a cost of US$524,000 (2021: US$222,000
(Restated)).
Assets costing US$17,000 (2021: nil) relating to plant and
equipment were disposed by the Group during the six-month period
ended 31 December 2022.
9 Intangible assets
During the six-month period ended 31 December 2022, the Group
incurred expenditure of US$11,237,000 (2021: US$8,755,000
(Restated)) related to intangibles. US$91,000 (2021: US$132,000
(Restated)) of this expenditure related to patent and trademark
applications and licenses. US$11,146,000 (2021: US$8,623,000
(Restated)) related to capitalised development costs.
No intangible assets were disposed by the Group during the
six-month period ended 31 December 2022 (2021: US$1,000).
10 Trade payables
At 31 December 2022, the balance of the trade payables was
US$7,692,000 (30 June 2022: US$11,290,000 (Restated)), of which an
amount of US$7,659,000 (30 June 2022: US$11,264,000 (Restated)) was
aged less than 60 days; and an amount of US$33,000 (30 June 2022:
US$26,000 (Restated)) was aged over 60 days.
11 Lease liabilities
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
---------- ------------
Current
Lease liabilities 686 653
Non-current
Lease liabilities 2,620 3,000
---------- ------------
Total lease liabilities 3,306 3,653
========== ============
The table below summarises the maturity profile of the Group's
liabilities based on contractual undiscounted payments:
<=6 6-12 >1
AT 31 DEC 2022 months US$000 months year US$000 Total US$000 Carrying
US$000 Value US$000
------------------- ----------------------- ------------ ------------------ -------------------- --------------
Lease liabilities 447 456 3,002 3,905 3,306
======================= ============ ================== ==================== ==============
<=6 6-12 >1
AT 30 JUN 2022 months US$000 months year US$000 Total US$000 Carrying
(Restated) US$000 Value US$000
------------------- ----------------------- ------------ ------------------ -------------------- --------------
Lease liabilities 446 452 3,478 4,376 3,653
======================= ============ ================== ==================== ==============
Notes to the Interim Consolidated Financial Statements -
Unaudited
12 Borrowings - Non-Current
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
---------- ------------
Convertible Note - Tranche 1 at amortised
cost 22,955 -
Total 22,955 -
========== ============
Movements during the period:
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
---------- ------------
Opening balance - -
Drawdown during the period 30,000 -
Adjustment of arrangement fees to effective
interest rate (1,202) -
Reclassification to Financial liability at
fair value through profit or loss (6,585) -
Interest amortised during the period 742 -
Closing balance at amortised cost 22,955 -
========== ============
On 4 October 2022, Seeing Machines received funding of US$47.5m
from Magna International in the form of a non-transferable 4-year
convertible note maturing in October 2026 (the "Convertible Note").
The Convertible Note can be drawn down in two tranches across the
4-year term. The Convertible Note has an all-in yield of 8%,
inclusive of fees. The Convertible Note contains standard
covenants, and anti-dilution provisions. The interest due at the
end of the facility can be paid in cash or converted into equity at
Seeing Machines' election.
The first tranche ("Convertible Note - Tranche 1) of US$30m, was
drawn on 5 October 2022 and the remainder is available until
December 2024. The Convertible Note - Tranche 1 is valued at
amortised cost in accordance with AASB 9 Financial Instruments
("AASB 9") and has an effective interest rate as per AASB 9 of
14.4643% per annum inclusive of all fees.
Magna may elect to convert the principal and at Seeing Machines'
election, interest outstanding under the Convertible Note at any
time during its term, up to a maximum of 349,650,350 shares which,
when added to Magna's existing shareholding in the Company, will
represent approximately 9.9% of the fully diluted share capital of
the Company. The conversion will be at a price of 11 British pence
per share. The option provided to Magna is deemed to be an embedded
derivative and is accounted for as a financial liability at fair
value through profit or loss. Refer to Note 13 below.
13 Financial liability at fair value through profit or loss
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
---------- ------------
Option component of Convertible Note - Tranche
1 7,389 -
Total 7,389 -
========== ============
Movements during the period:
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
---------- ------------
Opening balance - -
Reclassification from Borrowings - Non-Current 6,585 -
Movement in fair value 804 -
Closing balance 7,389 -
========== ============
Notes to the Interim Consolidated Financial Statements -
Unaudited
14 Dividends paid
No interim dividends or distributions have been made to members
during the six-month period ended 31 December 2022 (2021: nil) and
no interim dividends or distributions have been recommended or
declared by the directors in respect of the six-month period ended
31 December 2022 (2021: nil).
15 Earnings per share
The following table reflects the income and share data used in
the basic and diluted earnings per share computations:
Earnings used in calculating earnings per share
Consolidated
2022 2021
US$000 US$000
FOR THE SIX-MONTH PERIODED 31 DECEMBER (Restated)
-------------------------------------------- ------------------ ------------------
For basic and diluted earnings per share:
Net loss (5,423) (10,128)
Net loss attributable to ordinary equity
holders of the Company (5,423) (10,128)
Weighted average number of shares
2022 2021
AT 31 DECEMBER Thousands Thousands
-------------------------------------------- ------------------ ------------------
Weighted average number of ordinary shares
for basic earnings per share 4,156,019 3,931,717
Weighted average number of ordinary shares
adjusted for the effect of
dilution 4,156,019 3,931,717
16 Share capital
Consolidated
31 Dec 30 June
2022 2022
Unaudited Audited
US$000 US$000
(Restated)
--------------------------------------------- ---- ------------------ ------------------
Ordinary shares 240,948 240,948
Total contributed equity 240,948 240,948
Number of ordinary shares
Consolidated
31 Dec 30 June
2022 2022
Unaudited Audited
Thousands Thousands
--------------------------------------------------- ------------------ ------------------
Issued and fully paid 4,156,019 4,156,019
Fully paid shares carry one vote per share
and carry the right to dividends.
The Company has no set authorised share capital
and shares have no par value.
14
Notes to the Interim Consolidated Financial Statements -
Unaudited
17 Share-based payments
LTI 2021 - Performance rights or share options offers -
Executive and key staff
From 1 July 2015, senior staff and other key staff are offered
long term incentive (LTI) performance rights or share options.
Under this structure, the staff are only able to exercise the
rights, and have new ordinary shares issued to them, if any
performance, market and vesting conditions are met. These
conditions typically include a performance condition requiring the
staff member to achieve a minimum "meets expectations" rating and
some rights have included a market condition in the form of a
minimum Target Share Price (TSP). The vesting period ranges from 9
months to 5 years from the end of the relevant financial year or
grant date. Performance rights or options are often offered as part
of the annual remuneration review and may be offered at other
times. Any offer of performance rights or options requires Board
approval and, when granted, is announced to the market.
In November 2021 the Company awarded a total of 64,996,414
performance rights in respect of ordinary shares to Executive and
key staff to be issued at nil cost.
14,845,702 of the performance rights under the LTI have been
awarded in recognition of the past achievement of the Company's
objectives in FY2021. The rights were valued at the spot rate of
the shares at grant date, and the value is amortised over the
vesting period. The rights vest annually over 3 years in equal
tranches with the first vesting date being 1 July 2022 and require
the employee to remain continuously employed by the Company until
each relevant vesting date. If an employee leaves before the rights
vest and the service condition is therefore not met, the rights
lapse.
In some cases, for 'good leavers', determined on a discretionary
basis by management, options are prorated for service in the
current period and that portion are vested on termination, and the
remaining rights are cancelled.
The remaining 50,150,712 performance rights have been granted
under Key Person Agreements in respect of a total of 27 nominated
key people. These people have been identified as having key roles
directly related to the Company's long-term success and the
allocation of accelerated performance rights has been implemented
by the Board to successfully retain these employees and affirm
successful delivery on a range of projects and customer
commitments. These awards have an accelerated grant with delayed
vesting taking place on 1 July 2024 and require the employee to
remain continuously employed by the Company until the vesting date.
If an employee leaves before the rights vest and the service
condition is therefore not met, the rights lapse.
In October 2022 the Company awarded a total of 11,151,003
performance rights in respect of ordinary shares to Executive and
key staff to be issued at no cost. These rights have been awarded
in recognition of the past achievement of the Company's objectives
in FY2022. The rights were valued at the spot rate of the shares at
grant date, and the value is amortised over the vesting period. The
rights vest annually over 3 years in equal tranches with the first
vesting date being 1 July 2023 and require the employee to remain
continuously employed by the Company until each relevant vesting
date. If an employee leaves before the rights vest and the service
condition is therefore not met, the rights lapse.
There is no cash settlement of the rights. The Group accounts
for the Executive Share Plan as an equity-settled plan.
18 Related party disclosures
The following table provides the total amount of transactions
that have been entered into with related parties during the
six-month period ended 31 December 2022 and 2021:
Balance Granted Acquired Balance
1-Jul as Remuneration or sold for 31-Dec
cash
Thousands Thousands Thousands Thousands
--------- --------------------- -------------- ----------
Director shares:
Directors' securities 2022 6,552 - - 6,552
Directors' securities 2021 5,714 - 238 5,952
19 Commitments
As at 31 December 2022, the group had commitments of
US$15,289,000 (31 December 2021: US$23,673,000 (Restated)) relating
to the manufacturing contract for the Group's Guardian 2.1 product
for the period January 2023 to June 2023.
Notes to the Interim Consolidated Financial Statements -
Unaudited
20 Events after the reporting period
There have been no matters that have occurred subsequent to the
reporting date, which have significantly affected, or may
significantly affect, the Group's operations, results or state of
affairs in future periods.
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END
IR MZGGFGVMGFZG
(END) Dow Jones Newswires
March 06, 2023 02:00 ET (07:00 GMT)
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