ABN 34 093 877 331
Half Year Financial Report for the half-year ended 31 December 2020
Contents to financial report | |
Directors' Report | |
Interim Consolidated Statement of Financial Position | |
6 | |
Interim Consolidated Statement of Comprehensive Income | |
7 | |
Interim Consolidated Statement of Changes in Equity | |
8 | |
Interim Consolidated Statement of Cash Flows | |
9 | |
Notes to the interim consolidated financial statements | |
10 | |
1 | Corporate information |
11 | |
2 | Basis of preparation and changes to the Group's accounting policies |
11 | |
3 | Revenue from contracts with customers |
12 | |
4 | Segment information |
13 | |
5 | Research and development expenses |
14 | |
6 | Property, plant and equipment |
14 | |
7 | Inventories |
14 | |
8 | Financial assets and financial liabilities |
14 | |
9 | Cash and cash equivalents |
15 | |
10 | Intangible assets |
15 | |
11 | Dividends paid |
15 | |
12 | Share-based payments |
15 | |
13 | Commitments |
15 | |
14 | Related party disclosures |
16 | |
15 | Events after the reporting period |
16 | |
Directors' Declaration | 17 |
Directors' Report
Your Directors submit their report for the half-year ended 31 December 2020.
Directors
The names of the Directors of Seeing Machines Limited (the "Company") in office during the half-year and until the date of this report are listed below. All Directors were in office for this entire period covered by the report unless otherwise stated.
Kate Hill | Non-Executive Director and Chair |
Paul McGlone | Executive Director & Chief Executive Officer |
Yong Kang (YK) Ng | Non-Executive Director |
Gerhard Vorster | Non-Executive Director |
John Murray | Non-Executive Director |
Michael Brown | Non-Executive Director |
Les Carmichael | Non-Executive Director, Resigned: 30 November 2020 |
Rudolph Burger | Non-Executive Director, Resigned: 30 November 2020 |
Susan Dalliston | Company Secretary |
Review of Operations
Financial Results
As reported at the end of FY2020, the Company has identified two key operating segments, OEM and Aftermarket, reflecting the different paths to market for our products. The OEM segment includes the Automotive and Aviation businesses which generate largely license based revenue, channeled through Tier 1 customers. The Aftermarket segment includes Fleet and Off-Road and generates revenue from a mix of direct and indirect customers who retro-fit Seeing Machines technology into commercial vehicles.
The Company's total sales revenue for H1 FY2021 (excluding foreign exchange gains and finance income) increased by 14.6% to A$18.1m (H1 FY2020: A$15.8m).
Business unit | H1FY21 | H1FY20 | Variance |
OEM | $'000 | $'000 | % |
3,103 | 2,965 | 5 | |
Aftermarket | 15,040 | 12,866 | 17 |
Sales Revenue | 18,143 | 15,831 | 15 |
Monitoring services revenue in Aftermarket grew by more than 42% to A$5.8m for the half year, compared to A$4.1m for the same period last year. Installed Guardian units increased by over 3,000 to 26,597 connected units representing a 15.6% growth in connections over the six month period (FY20: 23,000 units), demonstrating ongoing momentum for Aftermarket, despite the challenges posed by COVID-19.
Total OEM revenue increased 5% to A$3.1m compared to the same period last year (H1 FY2020: A$3m).
Currently, OEM revenue is primarily made up of Non-recurring Engineering (NRE), which is revenue provided by OEMs to fund the development of DMS technology solutions and feature sets for their specific requirements. Over the next few years, the nature of OEM revenue will change to consist primarily of royalty revenue, and will increase significantly as OEMs begin mass production on vehicles under existing Seeing Machines DMS technology program awards.
The Australian Government COVID-19 Grant, JobKeeper, increased other income by A$1.6m to A$1.7m (2019: A$0.3m). Seeing Machines qualified for the initial phase of the JobKeeper Grant which ran from 1 March 2020 to 27 September 2020. Additional COVID-19 cost reduction initiatives reduced the cost base by A$3.5m for the period with a range of permanent (A$1.6m) and temporary initiatives (A$1.9m) which included a temporary 4-day work week, CEO and Director fee reductions and enforced travel restrictions. Of the total A$12m identified COVID cost-saving initiatives, the Company has achieved A$8.4m, in permanent and temporary savings and grants to date with remaining savings expected to be achieved by end of FY2021.
On 23 October 2020, Seeing Machines issued 372,000,000 new ordinary shares of no par value each ("New Ordinary Shares") to Federated Hermes, a well known US institutional investor, at a price of 4.10 pence per New Ordinary Share, raising gross proceeds of approximately US$20,000,000 (the "Purchase"). Subsequent to 31 December 2020, on 22 March 2021, Seeing Machines issued an additional 68,403,430 New Ordinary Shares to another US based investor, Toronado Fund, at a premium price of 10.50 pence per New Ordinary Share, raising gross proceeds of approximately US$10,000,000. The net proceeds of these Placings strengthen the Company's
Seeing Machines Limited | 3 |
Directors' Report
balance sheet as well as facilitating a range of incremental growth initiatives. Cash and cash equivalents at 31 December totaled A$52.4m (H1FY20: A$47.4m).
We highlight this report is unaudited. There is no requirement for the interim financial statements to be subject to audit review by the external auditor and accordingly no audit or review has been conducted.
Position Holders During the Period
Chief Executive Officer
The Group's Chief Executive Officer as at the date of this report is Paul McGlone.
Company Secretary
As at the date of this report the Company Secretary is Susan Dalliston.
Employee Numbers
At 31 December 2020 the Group had 203 full-time employees (228 employees at 30 June 2020).
Principal Activities
The Group's principal activities during the half year were:
- Developing, selling and licensing products, services and technology to detect and manage driver fatigue and distraction, including continued market development to secure sustainable channels to market for the product;
- Developing driver-monitoring technology to be incorporated into passenger cars;
- Entering commercial agreements with partners for the development, manufacturing and sale of products into key target markets;
- Research and development of the Group's core vision processing technologies to support the development and refinement of the Group's products.
Changes in State of Affairs
During the half year there was no significant change in the state of affairs of the Group other than those referred to elsewhere in this report and in the financial statements or notes thereto.
Environmental Regulations
The Group holds no licenses issued by relevant Environmental Protection Authorities and there have been no known breaches of any environmental regulations.
Directors and Officers Insurance
During the half year, the Company paid a premium in respect of a contract insuring the Directors of Seeing Machines Limited (and its wholly owned subsidiaries), the Company Secretary, and all executive officers of those companies against a liability incurred as such a Director, secretary, or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Non-Audit Services
Ernst & Young rendered consulting services in connection with the taxation affairs of Seeing Machines Limited.
The Board of Directors is satisfied that the provision of non-audit services during the half year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the services did not compromise the external auditor's independence as the nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES 110 Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.
Seeing Machines Limited | 4 |
Directors' Report
Signed at Canberra this in accordance with a resolution of the Directors made pursuant to section 298(2) of the Corporations Act 2001.
Paul McGlone
Executive Director & Chief Executive Officer
Seeing Machines Limited | 5 |
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Seeing Machines Limited published this content on 31 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 March 2021 22:55:02 UTC.