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Seeing Machines – interims include “multi-sector strategy continues to gain momentum”, but also “reduced expectations”. Er…

By Steve Moore | Thursday 16 March 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

“Seeing Machines (SEE), the AIM listed technology company with a focus on operator monitoring and intervention sensing technologies and services is pleased to announce its unaudited financial results for the six months to 31 December 2016” and CEO Ken Kroeger is “pleased with the progress towards the achievement of our long-term goals as our multi-sector strategy continues to gain momentum”. Good, good… er, what? The shares currently more than 15% lower in response?

This is with the results showing a loss of more than Australian$14 million on lower revenue of A$3.6 million, with cash reducing to A$11.6 million, though also emphasising A$6.9 million of fleet (‘Guardian’) new customer contracts signed in the half, “equal to the total value of contracts signed in FY15 and FY16 combined”.

However, due to how quickly customers are prepared to make their fleets available for installation, “this has not translated to sales revenue as quickly as expected” – and there are thus “reduced expectations for full year revenues”.

The announcement does also note that the stated “cash balance does not include the proceeds from the recent capital raise totalling GBP16.4m (A$27m) which was received in January 2017” and seeks to mitigate that “2016 was a transitional year… with the business moving from a direct-to-market model in mining to a royalty arrangement with Caterpillar, allowing the company to refocus its efforts toward the Automotive, Fleet, Aviation and Rail markets and technologies”.

On the numbers reported though, a very serious amount of refocusing of efforts looks needed! For me, currently another for the bargepole list. Sell/avoid.

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