SEE: when will you deliver for investors?

Iā€™ve tried being subtle, not that it suits me. Still the question now needs to be asked, when will Seeing Machines start delivering, instead of taking from its investors?

Iā€™m concerned that the management of Seeing Machines has long forgotten that it runs the company not for itself but for its investors. This was brought home to me by a quick look at the latest Annual Report.

A case in point is the huge payment that Ex-CEO Ken Kroeger received last year: A$654K (Ā£347K), revealed on page 47. Thatā€™s great pay considering the share price plummeted 75%. Admittedly, AIM CEOs are well known for paying themselves well regardless of performance, but (as a shareholder) I find this instance especially outrageous.

Nor does it end there, as staff recently received huge share bonuses for work over the same period. Clearly, management arenā€™t sharing the pain with us long-term investors.

Iā€™d hoped that new CEO Paul McGlone would chart a new path but I donā€™t see it yet. Here areĀ 3Ā issues I personally have:

  • There still seems to be no discernible PR strategy in place. For example, SEE has a fancy US PR firm that donā€™t seem able to generate mass coverage for what is an easy sell to editors; car tech that saves lives. As a case in point, when I tried to get some simple answers to some obvious questions about their RNS on Alaska Airlines recently they failed to deliver. Am I being singled out for special treatment or are all journalists treated so poorly?
  • Lack of transparency for shares awards to the CEO; why have no targets been set and communicated via RNS? This is how SEE do it. This is how another AIM company, Parity did it. Take a look at page 17 ofĀ Seeing Machines’ annual report to learn about a remuneration policy with no policy.
  • Lack of disclosure re. relationships with partners. For example, what is going on with Mix Telematics and why arenā€™t we being told? Itā€™s been years since a contract was signed and we still have yet to see it bear any fruit. Hiding behind NDAs just looks weak.

I hope next week at the Capital Markets Day the management under new CEO Paul McGlone will adjust course and address longstanding investor concerns about the lack of transparency and poor news flow. After all, investing should work for the many, not the few.

This isn’t meant to knock the staff of Seeing Machines or its technology. I have the highest respect for the brilliant technology coming out of this company and the dedication of the majority of its staff to delivering life-saving technology to the masses. I just want more transparency and better execution from management.

The writer holds stock in Seeing Machines.

DMS requirement to become law in EU

I can now confirm that the new European Union ā€˜General Safety Regulationā€™ rules are set to enter into force in January/February 2020, then start applying 30 months later.

The process, Iā€™ve been told by an EU spokesperson, is as follows:

  1. The Council of the EU decides to adopt by accepting the European Parliamentā€™s (EP) amendments to the Commission Proposal (8th November)
  2. Then the act is signed by the President of the EP and the General Secretary of the Council in the week beginning 25th November.
  3. Within a month it gets published in the Official Journal of the EU.Ā  The act in this case provides that it enters into force (obtains legal existence) 20 days after publication in the OJ.

The act also provides for a 30-month transitional period for most provisions, which means it will only start to apply 30 months after entry into force.

Note: the exact date(s) will be known only once the act has been published in the OJ as all deadlines depend on that date.

2020 the year of DMS

Enough of EU procedures: the good news is that from 2020 there will be a legal requirement for all completely new car models to have systems to monitor drivers for drowsiness and also distraction by June 2022, while even refreshed models will have to comply by 2024.

Euro NCAP, which has traditionally set car safety standards well beyond legislative requirements, is pushing equally hard for advanced driver monitoring. It is developing test and assessment protocols that will be introduced at the beginning of 2021. Moreover, requirements to measure driver distraction and fatigue/drowsiness will be built into Euro NCAPā€™s 5 star safety ratings from 2022.

Thatcham Research, is also working with Euro NCAP to develop testing protocols to ensure future cars have effective driver monitoring systems.

While these regulations and standards are intended to be ā€˜technology neutralā€™, it is now obviousĀ that the only technology that can effectively meet these requirements is camera-based DMS.

This is very positive news for Seeing Machines, in particular, and I’m expecting some big auto contracts to be announced soon.

The writer still holds SEE stock!

CAT-style Aviation licence deal is coming

The announcement by Seeing Machines that it is collaboratingĀ with Alaska Airlines is significant as it underlines its intention to extract value from its leadership position in this niche of the Aviation market.

In a note issued today by house broker Cenkos, analyst John-Marc Bunce reiterated Seeing Machines’ determination to sign a CAT-style license agreement with two major aviation simulator manufacturers.

Bunce wrote: “With Seeing Machines many years ahead of its nearest rival in this sector, it is looking like the company could be in a strong negotiating position in discussions with the two major simulator manufacturers for a license. We believe a successful outcome could include an upfront payment as well as a value driven or recurring royalty element.”

It doesn’t require too much detective work to find out who these two are likely to be but, as I don’t want to prejudice any final negotiation or comms plan, I’ll avoid speculating publicly for the time being.

Such a deal should certainly bring forward breakeven and act as a catalyst for a significantĀ re-rating. This is before the announcement of further auto OEM auto wins in Europe — never mind Japan.

The writer holds stock in Seeing Machines