Significant Xeros license deal but Indian delay impacts short term revenues

Investors in Xeros saw it fall approximately 40% last week, despite news that it has won its most significant licence deal to date with the huge Chinese company Donlim

The main reason for the fall was a separate Trading Update warning of increased losses and reduced revenues for the current financial year and FY2025, putting back breakeven on a monthly basis to late 2025. House broker Cavendish stated: “Net cash was £4.0m on 30 August, with FY24 cash expected at £2.9m. The Board expects to have sufficient cash resource to see the company through until it achieves net monthly cash breakeven during the latter part of FY25. On lower near-term forecasts, we reduce our Target Price from 18p to 16p, although the longer- term market opportunity and the environmental benefits of its technology remain significant.”

The main reason behind this disappointing update was short term delays to the launch of its Indian partner IFB’s 9kg washing machine. Still, having spoken at length with CEO Neil Austin, I’m convinced that the share price fall to 0.7p is an over-reaction. My reasoning is fairly straightforward and outlined below: 

1) The quality of the licence deal with Donlim, opens up a huge global market in filtration for Xeros, which includes China. Donlim (owner of the Murphy Richards brand) is listed on the Shanghai Stock Exchange and trades in 120 countries with annual revenues of over ÂŁ1.5bn. It will be manufacturing its external washing machine filter (XF3), as well as the internal one (XF1). My understanding is that for each internal device sold Xeros will receive between ÂŁ2-3 licence fee and slightly more for the external device. Mass production of the XF3 external filter is set to begin in Q2 FY2025.

In addition the RNS states that ‘the strategic partnership further enables Donlim and Xeros to collaborate on the future development of innovative filtration and water saving products. For instance, given the fact that microplastic pollution is ubiquitous in the very air we breathe and water we drink everything from hoovers/fans to coffee makers could potentially use Xeros’ filtration expertise. 

2)  The delay to French legislation for microfibre filtration in washing machines, (which was supposed to come into effect in January 2025) is unlikely to stop it from happening within the next couple of years. Indeed, public concern and evidence of the dangers posed by such pollution is steadily growing and some with the EU are working to legislate standards to reduce microplastic pollution. Here in the UK environmental groups, such as the Marine Conservation Society are also pushing for such legislation. Before sceptics shout ‘Balls!’ – read this  article in The Guardian, which painfully brings home the need to reduce microplastic pollution in the environment.

3) The delay to the IFB launch of its 9kg machine with Xeros technology, doesn’t involve its water saving Xorbs technology and is merely a technical fix to avoid consumers overloading their machines. I expect it will be sorted out by the end of Q1 2025 given the ability of Indian companies such as IFB to quickly innovate. I’d also expect the new head of IFB’s consumer division to want to prove their worth by making this happen as soon as possible. 

4) Lastly, Neil Austin has proven he can make deals happen. He has said there are other significant license deals he progressing. Specifically, he mentioned “We are working with a major SE Asian washing machine brand, a major North American washing machine brand and a major European washing machine brand to effectively get them to license the Care technology.” While trials are ongoing I see no reason to doubt his ability to make close at least one or more of them in the next 6-8 months.

Cash position

Clearly, there are concerns over its cash position. It is expected to have £2.9m by year end and some fear it may need to raise again before the end of FY 2025. Currently, it is priced to go bust but I don’t think this is likely.

Of course, investors must be aware of the possible downside if deals/sales don’t pick up. Cash is set to be tight towards the end of 2025 and further funding could be needed. However, the company is aware of the constraints and has several levers at its disposal. Cost cutting is one option, it may also be possible to obtain an advance on license deal revenues. Other companies I follow have done this to avoid dilution, most notably Seeing Machines.

It’s certainly important to monitor the cash situation but I’m confident that further license deals currently under negotiation, revenues from sales from Yilmak, not to mention the launch of the IFB 9kg machine will raise revenues and increase the share price significantly over the next year.

I personally don’t view this as a get rich quick investment but more as a medium term one that could multi-bag on a 2-3 year time horizon. However, over the following months I will be monitoring it to ensure that my investment thesis remains intact.

As an investor it’s difficult to get in at the cheapest point and this is a high risk investment. However, I bought more on the 5th September (before speaking to Neil Austin) as I believed the deal with Donlim would prove to be hugely significant, while the delays are only temporary. Moreover, the backing of significant institutional investors who are in this for the long term gives me confidence that if the business continues to strengthen the revenues will rise, breakeven will be achieved and the price  has to rise significantly.

Interestingly, it seems other canny investors are also viewing the fall as an opportunity. On September 5th  William Black of Armstrong Investments increased his holding to just under 7.3%.

The writer holds stock in Xeros and Seeing Machines.

Xeros Technology set to rerate on positive news flow

I’ve recently taken a position in Xeros Technology, which is delivering on its longstanding promise to place environmentally-friendly tech into washing machines.

It has already made substantial progress in it 3 target sectors:

  • Filtration – Its filter technology prevents plastic microfibres from clothes being expelled from washing machines goes into waste water. 
  • Finish –  XFN is an innovative technology (using its XOrb balls and an XDrum) for wet processing during garment manufacture. It halves the amount of water needed, and removes pumice in denim finishing, and can significantly reduce the chemistry, energy and time needed in the garment finishing stage.
  • Care – its XOrb and XDrum tech not only reduces the amount of water and energy used in washing machines but apparently can help extend the life of garments. 

Moreover, it appears set to deliver much more before the end of this calendar year. As Neil Austin, said in the RNS announcing its 2023 full year results on 28 May, 2024:

“Our agreements with licensees moved closer to commercial launch, as we embarked on the crucial technology transfer process with both IFB and Yilmak Makina. We completed the technology transfer for IFB domestic machines (Goa) in December 2023, and Yilmak Makina’s commercial denim processing machines (Turkey) in Q1 of the new financial year. All these machines have now moved to the manufacture and marketing stage, ahead of scale launch later this year.

“In addition, the work undertaken to increase the Group’s commercial focus has resulted in a stronger than expected pipeline of potential new agreements. We are now in discussion with 10 major organisations with interest across all the Group’s technologies.”

I’ve hesitated for a long time before investing, waiting for the fundraise in April that raised ÂŁ4.7m and brought in Amati and Milton as investors. 

Significant shareholders

Here’s the list of substantial shareholders lifted from its website:

Significant shareholders in Xeros Technology

Amati AIM VCT

In its April factsheet for the Amati Aim VCT, co-fund manager David Stevenson explained why he and CEO & Fund Manager Paul Jourdan had taken a new position in this business.

“Xeros is the developer of a patented polymer bead technology, which reduces laundry requirements for water, power and detergent. It also results in less garment damage through time. The company has spent a lot of time and money getting to this point, but now has growth potential from the incorporation of its technology into domestic and commercial washing machines, and the pre-wash treatment of garments by denim manufacturers. Xeros also has a novel filter device for removing micro-plastics from washing machine waste. The long lead time to commercialisation of these technologies has dragged the valuation of the company down to very low levels, making this an attractive entry point for new investors.”

Given it is so tightly held it will only take a little bit of buying from this level to see it rise substantially and I expect news flow over the next few months to deliver that momentum.

I see certain similarities between it and Seeing Machines in terms of its business model of licensing its tech out to major manufacturers, so I’m not surprised to see Lombard Odier holding a chunky 10.8% of its shares.

House broker Cavendish has a price target of 18p on the stock. Xeros is forecast to make an adjusted LBITDA loss for the year ending 31 December 2024 of ÂŁ2.6m on revenues of ÂŁ2.7m, before hitting cash flow breakeven next year, with a forecast adjusted EBITDA of ÂŁ1.3m on revenues of ÂŁ7.6m for the full year 2025.

In a note published on 28 May 2024, explaining its results for FY 2023, analyst Michael Clifton wrote: “Cash was bolstered post-period end by £1.7m from the exercise of warrants and £4.7m gross from the fundraise in April 2024. Following the fundraise, Xeros now has sufficient liquidity to operate to the end of H2 FY2024E (with some added buffer) by which point we continue to expect the business will have reached adj. EBITDA and cash flow breakeven.

He added: “We reiterate our 18p/share target price which reflects the market-leading quality of Xeros’s solutions; its high gross margins; the underlying environmental, commercial, and legislative drivers; and the size of the addressable markets.”

It’s certainly a high risk stock and ‘not one for widows and orphans’, as the saying goes. However, for those willing to do some research it seems to hold out prospects of near term profitability with a sensible business model. 

The writer holds stock in Xerox Technology and Seeing Machines.

Peel Hunt confirms Seeing Machines could capture 70 per cent auto market share

Peel Hunt confirms Seeing Machines could capture 70 per cent of the global auto market and proffers a 16p bull case target price, while reiterating its current 9p price target.

In an interesting note issued today, Peel Hunt analysts have clarified their thoughts regarding Seeing Machines, stating it is the leading company in the Driver Monitoring (DMS) space with the opportunity to capture around 70 per cent of the 90-100m cars sold globally each year.

In the note, its team of analysts Oliver Tipping, Damindu Jayaweera and James Lockyer, stated: “We  believe Seeing  Machines has  a medium-term opportunity  to  sell  Driver  Monitoring  Systems  (DMS) to  c.70%  of  the  90-100m  cars sold p.a.,  equating to a c.US$650m/year market.”

They added: “By dissecting competitors’  KPIs,  we  conclude  that  Seeing  Machines already has a leading position ahead of the market inflection.”

Of course it’s well-known that the  EU General  Safety  Regulation  (GSR),  provides  a  layer  of  certainty  as  it  mandates  DMS in  all  cars  by  July 2026.

Moreover, from January 2026 the Euro NCAP 2026 protocols will require advanced, camera-based DMS if passenger cars are to achieve a 5 star rating. Given production lead times, I personally believe that means leading OEMs need to lock in this technology now for delivery by then.

Bull/Bear case

Peel Hunt explained its bull/bear case scenarios for Seeing Machines. Its bull case target price is 16p. Its bear case target price is 3.5p. 

“Our bull case assumes Seeing Machines can win in the Chinese market. This sees cars on the road ramp to c.25m units. This is still lower than the 30m+ rear view mirrors Gentex ships p.a., so it is not an unreasonable number for a key player in the Automotive market.

Our bear case assumes that Seeing Machines only ever wins a 15% of its Total Addressable Market, equating to 10m cars on the road p.a. and that the ramp happens slower  in  the  short  term.  We  forecast  a  46%  growth  rate  for  FY26E,  vs  100%  growth  in  our  base  case. A  delay  in  adoption,  and  increased  competition,  especially  in  the  rear-view  mirror  market,  that  leads  to  a  lower market share are the two key risks.”

It should be borne in mind that even this valuation doesn’t fully reflect the huge growth that Gen 3 Guardian is likely to deliver in the current financial year. In my opinion, with contracts ranging from the tens of thousands to hundreds of thousands of units likely to be won by Seeing Machines there is ample scope for upgrades to every broker’s target price. 

In addition, Aviation will provide further upside when Collins delivers its finished its AI-powered eye-tracking product for use in aeroplanes, in collaboration with Seeing Machines.

Of course, do you own research and don’t rely on the views of any single source before investing.

The writer holds stock in Seeing Machines

Seeing Machines’ canny acquisition outweighed by Peel Hunt’s reduced price target

Investors were left scratching their heads as a bargain acquisition by Seeing Machines that enhances its automotive DMS/OMS offering, cements its presence in Europe and secures it more automotive contracts, was outweighed by news that Peel Hunt has reduced its price target from 12p to 9p.

The acquisition was of Asaphus Vision, a Berlin-based company that was owned by Valeo and which has strong IP in AI and machine learning relating to facial recognition and DMS. According to the RNS issued today, it supports a strategic collaboration with Valeo to grow market share in automotive. Moreover, the  acquisition for US$6m (only $2m in the first two years) is “expected to be cash neutral on an operating basis.”

Peel Hunt had previously stated (in a note dated 26th June) that it would reduce its forecasts “to reflect the timeline for the expansion of its driver monitoring systems (DMS) shifting to the right and slower-than expected roll-out of the Gen 3 aftermarket product.”

It that note it stated:“Greater uptake in ‘basic’ DMS has diluted royalty per car, whilst Gen 3 delays mean Aftermarket sales are low-margin end-of -life Gen 2.”

Today, Peel Hunt analyst Oliver Tipping confirmed that view: “Greater demand for low-priced ‘basic’ DMS and the delay in getting its Gen 3 aftermarket product ready to ship, mean FY24 margins are lower than expected. Underlying progress remains solid, today’s acquisition further differentiates its expertise, and the EU regulations mandating more advanced DMS (at a higher ASP) in 2026 keep us bullish on the medium term prospects. We revise our numbers based on this shift to the right and lower our 12-month TP from 12p to 9p, but retain our Buy rating.”

Its forecast revenue figures for the financial year ending 30 June 2025 has been reduced to $76.8m from $91m, with its pre-tax loss forecast to rise to $11.8m from $1.2m, with cash EBITDA falling to $1m from $11.3m. 

Bargain acquisition

Far from being dismayed at these developments, I think the market is being far too pessimistic. Seeing Machines has got a bargain acquisition in Asaphus, which only a year ago was valued at $12.5m by owner Valeo, for whom it was its internal DMS/OMS product development division.  Moreover, it’s tech reached commercial deployment in 3 automotive programmes, including one in China.

According to Peter McNally at house broker Stifel: “While Seeing Machines has worked with Valeo in the past, its work has had to be carefully delineated to account for Aphasus. With the company taking ownership of this asset, it appears that Valeo has now aligned itself with Seeing Machines technology and is evidenced by a statement from a representative of Valeo in today’s release which states, ‘We are delighted with this collaboration. Combining their teams with Seeing Machines, we will benefit from the best-in-class perception software to integrate into our hardware and software architecture for driver and occupant monitoring systems. Together, we will be able to provide more competitive solutions.’

McNally believes this tie up with another Tier 1 automotive supplier, in addition to Magna, is “a sign that the market is increasingly moving toward Seeing Machines’ solution.”

Deepening partnerships

So what are the implications for the future? Well, this is McNally’s take. “We note that less than a year ago, Valeo announced its Smart Safety 360 product that was suggested within the industry to use Mobileye (MYLY.O, not covered) advanced driver assistance (ADAS), as well as Seeing Machines DMS in the same product. We also note that Seeing Machines signed a non- exclusive distribution agreement with Mobileye in February 2023. We wonder what the combination of partnerships including these companies could be in the future. It appears that Seeing Machines has made partnerships/agreements with these companies that could be deepening the involvement amongst them.”

I believe this deal makes Seeing Machines an even more attractive target for an acquisition in the near future as its global dominance grows and high quality DMS/OMS becomes the only game in town.

The writer holds stock in Seeing Machines.

The falsification of history

The mainstream media is trying to convince us that Labour won a great victory in the 2024 General Election. However, it achieved a landslide because of our archaic and unfair electoral system of first past the post.

Here are some facts that make this pretty obvious.

  1. The turnout for this election was apparently the second lowest since 1885, at 60%.
  2. Labour only won 34% of the votes of the 60% who bothered to vote.
  3. In other words, we now have 412 Labour MPs, elected by only 20.4% of voters.
  4. Lastly, don’t forget that in 2019 Corbyn secured 10,269,051 votes against Starmer’s 9,686,329!

Okay, Labour will say, “So what? We now control the House of Commons”. 

The point is that Keir Starmer has no genuine mandate from the people of the UK. He has taken money from various lobbyists, private health care providers, supporters of Apartheid Israel and has vowed to stick to Tory fiscal rules.

When he embarks on further NHS privatisation, continues to support war against Russia, Israeli Apartheid and genocide, fails to support NHS doctors and striking workers and those opposed to economic austerity that lack of support will matter. He also has no real desire to tackle climate change and won’t manage to revive the UK economy.

When the shit hits the fan over the next few years, the choice will likely boil down to Farage or a genuine left/green opposition. At the moment Farage seems well placed to benefit from Labour failure but the left/greens can build from here. 

Corbyn’s legacy remains, as does he in the House of Commons. Resistance isn’t futile. The Uniparty may have won this electoral battle but we, the people, can resist it effectively if we organise.

$16.5m license deal for Seeing Machines with slight delay for Gen 3 ramp

Seeing Machines (AIM: SEE) surprised the market with a ‘good news-bad news’ RNS, that led to house broker Stifel reducing its price target to 13p, while still maintaining its ‘Buy’ recommendation.

The good news was that it has renewed its software license for its Guardian aftermarket product with Caterpillar. It appears that is has received a $16.5m upfront payment covering a period of 5 years.

Unfortunately, it was effectively overshadowed by the bad news; a statement that “cash EBITDA” was behind expectations, due to a slower transition to the Gen 3 product.

Stifel analyst Peter McNally doesn’t appear to be overly concerned by the Gen 3 delay, reducing revenue estimates by 7.1% and 6.0% for FY25/26. He also assumes a higher level of operating costs going forward resulting in his reported EBITDA estimates dropping from $14.3m in FY25E to $7.0m and cash EBITDA loss falling to $10.8m from $3.5m. With the benefit of the cash from Caterpillar, his FY25 gross cash estimate reduces by a smaller amount to $14.2m from $17.9m.

He wrote: 

“The cash EBITDA weakness has been due to a slower transition to Gen3 Aftermarket products, and we think this will have an effect on our forward estimates, which we adjust to reflect today. However, the company reiterates its guidance for FY25 cash flow run-rate breakeven and the payment from Caterpillar helps boost the company’s already healthy balance sheet.

As the company gets closer to cash flow breakeven, we think the shares will appeal to a much broader group of investors, which should have a beneficial effect on the share price.

Seeing Machines remains one of our top picks within the sector. The shares trade at 4.1x EV/Sales for FY24E or 3.4x for FY25E. The estimate changes result in a revised target price of 13p from 15p, but leave plenty of upside to the current price.”

My personal view

I was very pleased with the license deal, particularly as it enables SEE to sell into the on-road portion of the General Construction category. As the RNS stated: “The changes open up access for Seeing Machines to sell its Guardian solution for on-highway vehicles directly and through its distribution network to select customers in many market segments of the General Construction and other core industries.” 

I wonder if it might even open up the possibility of further licence deals with other manufacturers in the near future, covering vehicles ranging from asphalt pavers, backhoe loaders, cold planers, fork lifts and so on?

What was a mistake in my view was combining an RNS detailing a positive licence deal and one attempting to explain the slower sales of Gen 3. Indeed, I would have preferred the ‘cash EBITDA” issue to have been dealt with in a separate RNS as part of the Trading Update. 

Unfortunately, the way the information was presented effectively killed what was a very good news story without giving any real insight into the issues with Gen 3 uptake. It’s not the first time great news has been upstaged by something negative and it was a clumsy way to communicate to the market.

Regarding the ‘bad’ news, the RNS that was published this week posed more questions than it answered. The reasons for the slower transition to Gen 3 weren’t properly explained, so I expect management to soon clarify exactly what has caused the delay. I’d also like to know if it correct to assume a higher level of operating costs going forward.

That said, Gen 3 is a game changer once it gets going. And that isn’t like to be far off. One source, who prefers to remain nameless but is so accurate that I refer to him as Nostradamus, told me: “I’m expecting sales to ramp up around November/December.” 

Another source has indicated that getting final sign off from the regulatory authorities for the Aftermarket Gen 3 Guardian solution in situ was the delaying factor. (I guess we should be thankful that the EU’s GSR standards are so high). However, that has apparently been achieved recently, so I’m expecting announcements regarding that. 

But why wasn’t that communicated in the original RNS, which would have made clear that the slow Gen 3 uptake really is just a temporary issue that has effectively been resolved? Somehow there appears to have been a miscommunication that cost investors dearly.

Mercifully, for the impatient, auto is doing very well. Not only am I confident that SEE will hit 3m cars on the road by the end of this financial year but Colin Barnden, the renowned analyst at Semicast Research, confirmed the likely ramp on LinkedIn. “The assumption is just the BMW and VW programs will lead to DMS deliveries exceeding 1 million units per quarter within the next twelve months. After many years of delays and frustration, 2024 will be the year DMS deliveries finally exceed ten million units.”

Apparently, the mix in terms of auto vehicles in Q2 led to a slight miss on the profit front for auto but with volumes shooting up it’s of little concern going forward. So why mention it in the RNS? 

I’m still very keen on this stock but would really like a little more care taken in the way news flow is handled and the RNSs are put together. It appears a bit too amateurish for a company that is a global leader in an increasingly hot niche market.

The writer holds stock in Seeing Machines

Is Seeing Machines set to be a 10-bagger?

Seeing Machines has hit a 3-year low but my research leads me to believe that it will announce contract news before the end of the current financial year that should catapult it well into double figures. Inside the next year I’m hoping it will become a ten-bagger.

Mr Market is looking in the rear view mirror instead of focusing on the direction of travel; near-term profitability and years of profitable growth ahead across Auto, Aftermarket and Aviation. 

Yes, anticipated auto contracts have been delayed but through no fault of Seeing Machines. According to my sources delays have been caused by haggling between Tier 1s and the OEMs. Nothing to do with the superlative technology of SEE. As the OEMs need a quick solution I anticipate the delay will be overcome soon.

Nevertheless, I’m still expecting auto contract wins before the end of this financial year, probably with Japanese OEMs. These should be sizeable contracts and one name that keeps on popping up is Honda, but I’m optimistic we win another too. Japanese OEMs are behind the curve on interior sensing and Seeing Machines could help improve their position.

I’m also expecting to see some decent Aftermarket contracts announced. A big name client could have a huge impact so I would be grateful if it’s not buried in an RNS on the grounds of an NDA.

As positive news comes out many PIs will be tempted to sell, some may need to. Yet, I think the momentum will continue, driven by auto KPIs, aviation products being developed with Collins Aerospace, and a growing realisation that Seeing Machines is going to be profitable on a monthly cashflow basis during the 2025 financial year. This was confirmed by Peter McNally, an analyst for house broker Stifel, in a recent interview with Safestocks.

That momentum, accelerated by broker upgrades, should enable holders to experience the joys of holding a ten-bagger within a year from now.

Of course, nothing is certain. Especially with two ongoing conflicts in Ukraine and the Middle East, not to mention some sectors of the US stock market in bubble territory. So, do your own research and  always question assumptions.

The writer holds stock in Seeing Machines.

Lexus DMS found wanting by Euro NCAP

Toyota’s luxury brand Lexus recently had its DMS tested by Euro NCAP and got a miserable 0.3 out of 2 points. The vehicle in question was the 2023 Lexus RZ. 

It must have come as a huge shock to Toyota, which is struggling like Tesla to deal with the influx of quality Chinese cars. I understand that Woven (not Smart Eye) was the supplier.

It’s actually a huge positive for Seeing Machines and I’m feeling pretty confident that Toyota will do the sensible thing and find itself a supplier that can deliver maximum points from the Euro Cap DMS test. I certainly don’t expect it to choose Smart Eye, by the way.

I’m also hearing that Volvo may be experiencing buyer’s remorse for its choice of DMS. Let’s wait and see what happens there.

While the share price of Seeing Machines is an annoyance, I’m increasingly confident that the couple of auto wins predicted by Paul McGlone will come to fruition by the end of the first quarter of 2024. He delivered on Gen 3 Guardian and I can only reiterate my belief that all the auto contract delays have been due to the OEMs.

The writer holds stock in Seeing Machines.

5 predictions for 2024

I’ve started to celebrate New Year early in solidarity with the people of Samoa (any excuse will do). Therefore, having imbibed a lot of the amber nectar (Irish Whiskey in my case), I’m fearlessly making 5 predictions for 2024.

  1. Donald Trump becomes US President as many in the US start to realise that its global military hegemony is coming to an end. Ex-President Biden’s handlers do the decent thing and put him into a retirement home.
  2. Sir Keir Starmer becomes head of a minority Labour Government. He is then forced to resign over a scandal involving his relationship with Israeli lobbyists and links to the ‘deep state’.
  3. As Ukraine continues to lose in NATO’s proxy war against Russia, President Zelensky is assassinated by his own security services and Ukraine sues for peace with President Putin.
  4. Israeli genocide in Gaza is stopped not by the US but by a failed invasion of Lebanon. Hezbollah shows the world that it is a formidable fighting force. The world starts to realise that a one-state solution, creating a democratic entity that offers full human rights to both Israelis and Palestinians is the future for both Israelis and Palestinians.
  5. The future of autonomous driving is postponed for another decade and driver assistance using Artificial Intelligence becomes the hottest part of the tech sector. Seeing Machines is bought for 76.5p following a bidding war.

It only remains to wish all of you a happy, healthy and prosperous New Year!

US$30m contract for Seeing Machines

Great news from Seeing Machines today, as it announced a US$30m auto contract, which I think may well be PSA (part of Stellantis). However, others think it is likely to be Volvo (owned by Geely) moving from Smart Eye or even Jaguar, (owned by Tata).

If it is PSA, I look forward to state-of-the-art driver monitoring being launched in Peugeot, Citroen, DS, Opel and Vauxhall cars.

On the face of it the deal is much smaller than Smart Eye’s US$150m but, given that Seeing Machines tends to be ultra conservative, if you multiply the Seeing Machines minimum value by three and cut the Smart Eye one in half I think you’ll end up with a more realistic estimate of the value of both deals; US$90m versus US$75m.

Importantly, the announcement has confirmed that SEE management does deliver on its promises. Moreover, with the huge Consumer Electronics Show (CES) only 3 weeks away (9-13 January, 2024), I expect a lot more news to push the share price up considerably over the next month. We’ll see, I guess.

The writer holds stock in Seeing Machines.