Half-year results and financial report

RNS Number : 5552G

Seeing Machines Limited

30 March 2022

 

Seeing Machines Limited

30 March 2022

Half year results and financial report

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 publishes its unaudited results and financial report for the six months to 31 December 2021 ("H1 2021").

Financial Highlights:

-  Total operational revenue of A$21.7m (H1 2021: A$18.1m), reflecting comparative growth of c.19.4% on previous period.

o  Underlying revenue growth[1] using constant currency is 24.6% year on year (exchange rate as at 31 December 2021)

o  OEM (Automotive and Aviation) revenue of A$5.2m, representing a 69% increase on the previous period (H1 2021: A$3.1m)

§ Includes a 170% increase in royalty revenue derived from the installation of the Group's DMS technology of $2.1m (H1 2021: A$0.78m)

o  Annual Recurring Revenue including royalties increased by 9.3% since 30 June 2021 to A$18.8m (FY2021: A$17.2m)

o  Aftermarket (Fleet and Off-Road) revenue grew by 9% to A$16.4m (H1 2021: A$15m)

o  Aftermarket Monitoring Service Revenues including royalties grew by 16% to A$6.7m (H1 2021: A$5.8m)

-  Net loss reduced by 17.8% to A$13.8m (H1 2021: A$16.8m)

-  Cash at 31 December 2021 of A$79.3m (31 December 2020: A$52.4m)

OEM (Automotive and Aviation) Highlights:

-  Global momentum calling for Driver Monitoring System (DMS) technology for enhanced safety continues and saw the USA introduce legislation that would require DMS to reduce risks of distracted and drunk driving.

-  Seeing Machines announced the largest driver and occupant monitoring system technology award to date and was appointed by a new Tier 1 partner for a leading German automaker, with an initial lifetime value of A$125m. This brings total cumulative initial lifetime value of all Company won automotive programs to more than A$325m.

-  With over nine vehicle models now past start of production, there are more than 250,000 cars on roads featuring Seeing Machines technology, representing an increase of 108% since 30 June 2021. A further 30 distinct vehicle models, featuring Seeing Machines technology, are expected to launch by early 2023.

-  Key commercial traction in Aviation, as Airservices Australia announced that it will collaborate with Seeing Machines Aviation to enhance safety in Air Traffic Management, and Air Ambulance Victoria announced its use of Seeing Machines in the world-first pilot fatigue detection system.

-  Seeing Machines and Collins Aerospace, the world's largest Tier 1 Avionics company, have signed a collaboration agreement to jointly market co-developed solutions across the Aviation industry.

Aftermarket Highlights:

-  Guardian, the Company's Aftermarket driver distraction and fatigue technology, is now fitted to 36,933 individual vehicles, a 16.2% increase of 5,000 connections over the six month period (FY 2021: 31,771 units).

-  The Company signed a Global Framework Agreement with Shell Global Solutions International B.V. for the provision of Guardian, to enhance safety across its worldwide operations.

-  EROAD Limited, a leading transportation technology company that offers fleet management software and products, has integrated Seeing Machines Guardian technology into its fleet management software to help combat driver fatigue and make roads safer.

-  Seeing Machines established a European sales team, headquartered in Amsterdam, the Netherlands, to lead the next phase of its business development and focus on growing demand in Europe for the Company's Aftermarket driver safety technology, Guardian.

Investment Highlights:

-  On 23 November 2021, Seeing Machines issued 277,123,492 new ordinary shares of no par value each (the "New Ordinary Shares") at a price of 11 pence per New Ordinary Share, raising gross proceeds of approximately US$41,000,000 (the "Placing"). The net proceeds of the Placing are being used to accelerate a range of features to meet technology demands and for general working capital and corporate purposes, as well as to strengthen the Company's balance sheet.

Outlook:

-  Seeing Machines continues to trade within the range of consensus expectations for FY2022.[2]

There is considerable accelerating momentum for the business, with current market conditions presenting a significant opportunity to capture an even greater market share as a number of structural tailwinds continue to support application of the Company's technology. The current 'active RFQ' pipeline, with program opportunities exceeding a cumulative total of A$1bn, underpins the board's view that Seeing Machines will have an increased market share by 2025.

Paul McGlone, CEO of Seeing Machines commented: "These results demonstrate positive momentum across the company. Our Automotive business continues to grow with more cars starting production, generating high-margin royalty revenue. This is underpinned by our increasing confidence in ongoing RFQ processes as we focus on feature development and integration options to support OEM demands, in partnership with our Tier 1 customers. Aftermarket is experiencing similar positive momentum with growth in our direct business resulting in a more profitable business model and a growing sales pipeline through our expanding global team.

"There are obviously challenges with the current geopolitical and global inflationary environment and supply chain that affect the market as a whole. We are focused on mitigating these risks as they are identified and are confident in our ability to continue to grow the business."  

Enquiries:

Seeing Machines Limited	[phone]
Paul McGlone - CEO Sophie Nicoll - Corporate Communications
Stifel Nicolaus Europe Limited (Nominated Adviser and Broker)	[phone]
Alex Price Nick Adams Ross Poulley Lionsgate Communications (Media Enquiries) Jonathan Charles	[phone]

Seeing Machines (LSE: 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' 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.

Review of Operations

Financial Results

The Company's total sales revenue for H1 FY2022 (excluding foreign exchange gains and finance income) increased by 19.4% to A$21.7m (H1 FY2021: A$18.1m).

Businessunit	31 Dec 2021	31 Dec 2020	Variance
OEM	$'000 5,243	$'000 3,103	% 69
Aftermarket	16,421	15,040	9
SalesRevenue	21,664	18,143	19

Royalty revenue, derived from installation of Seeing Machines' Driver Monitoring System (DMS) technology, increased by 170% to A$2.1m compared to the same period last year (H1 FY2021: A$0.78m) as vehicles start production across a number of Automotive OEM programs. This demonstrates the significant ramp up of royalty revenues, earned at a substantial margin, that is set to continue as more of these programs are delivered.

Monitoring services revenue in Aftermarket grew by 16% to A$6.7m for the half-year, compared to A$5.8m for the same period last year. Installed Guardian units increased by over 5,000 to 36,933 connected units representing a 16.2% growth in connections over the six-month period (FY21: 31,771 units), demonstrating ongoing momentum for the Aftermarket business, despite ongoing challenges posed by COVID-19 and supply chain pressures.

The Company continued to invest in its core technology development to further strengthen our 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 A$18.1m during the six-months ended 31 December 2021 (2020: A$8.9m), of which A$11.8m (2020: nil) was capitalised.

Customer support and operations cost categories increased to A$4.3m (2020: A$3.2m) and A$5.8m (2020: A$3.5m) respectively in line with strengthening of business pursuit and emerging markets activities to support increased pipeline and channel market expansion.

On 23 November 2021, Seeing Machines issued 277,123,492 new ordinary shares of no par value each (the "New Ordinary Shares") at a price of 11 pence per New Ordinary Share, raising gross proceeds of approximately US$41,000,000 (the "Placing"). The net proceeds of the Placing are being used to accelerate a range of features to meet technology demands and for general working capital and corporate purposes, as well as to strengthen the Company's balance sheet.

Cash and cash equivalents at 31 December totaled A$79.3m (2020: A$52.4m).

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

ASAT	Notes	31Dec 2021 Unaudited A$000	30Jun 2021 Audited A$000
ASSETS
CURRENTASSETS Cashandcashequivalents	5	79,261	47,393
Other short-term deposits		472	472
Tradeandotherreceivables	6	17,633	19,851
Inventories	7	7,039	2,627
Othercurrentassets		5,348	5,438
TOTALCURRENTASSETS		109,753	75,781
NON-CURRENTASSETS Property,plant&equipment	8	3,347	3,361
Intangible assets	9	21,477	9,540
Right-of-use assets		3,847	4,252
TOTALNON-CURRENTASSETS		28,671	17,153
TOTALASSETS		138,424	92,934
LIABILITIES
CURRENTLIABILITIES Tradeandotherpayables	1 0	9,218	8,839
Lease liabilities	1 1	998	918
Provisions		5,579	4,893
Contractliabilities		1,733	772
TOTALCURRENTLIABILITIES		17,528	15,422
NON-CURRENTLIABILITIES Provisions		261	192
Lease liabilities	1 1	4,772	5,272
TOTALNON-CURRENTLIABILITIES		5,033	5,464
TOTAL LIABILITIES		22,561	20,886
NETASSETS		115,863	72,048
EQUITY Contributedequity	1 4	312,822	257,382
Accumulatedlosses		(215,821)	(202,046)
Otherreserves		18,862	16,712
Equityattributableto theownersoftheparent		115,863	72,048
TOTALEQUITY		115,863	72,048

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

FORTHESIX-MONTH PERIODENDED31DECEMBER	Notes	2021 Unaudited A$000	2020 Unaudited A$000
Saleofgoodsandlicence fees		11,480	9,159
Renderingofservices		10,184	8,981
Researchrevenue		-	3
Revenue	3	21,664	18,143
Costofsales		(11,528)	(11,804)
Grossprofit		10,136	6,339
Netgain/(loss)inforeignexchange		164	(2,002)
Financeincome		219	196
Other (expense) / income		(9)	1,672
Expenses Researchanddevelopmentexpenses	4	(6,286)	(8,853)
Customersupportandmarketingexpenses		(4,327)	(3,194)
Operationsexpenses		(5,790)	(3,476)
Generalandadministrationexpenses		(7,530)	(7,186)
Financecosts		(239)	(267)
Lossbeforetax		(13,662)	(16,771)
Incometaxexpense		(113)	-
Lossafterincometax		(13,775)	(16,771)
Lossfortheperiod attributable to:
Equityholdersoftheparent		(13,775)	(16,771)
Othercomprehensiveincome/(loss) Exchangedifferencesontranslationofforeignoperations		172	(22)
Othercomprehensiveincome/(loss)netoftax		172	(22)
Totalcomprehensiveloss		(13,603)	(16,793)
Totalcomprehensivelossattributableto: Equityholdersoftheparent		(13,603)	(16,793)
Totalcomprehensivelossfortheperiod		(13,603)	(16,793)
Loss pershareforlossattributabletotheordinaryequityholdersof
theparent:
Basiclosspershare	13	(0.01)	(0.01)
Dilutedloss pershare	13	(0.01)	(0.01)

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

FORTHESIX-MONTH PERIODENDED31DECEMBER	Contributed Equity	Accumulated Losses	Foreign Currency Translation Reserve	Employee Equity Benefits & Other Reserve	Total Equity
	A$000	A$000	A$000	A$000	A$000
As at1July2020	217,204	(184.626)	(1,516)	15,147	46,209
Lossfortheperiod	-	(16,771)	-	-	(16,771)
Other comprehensive loss	-	-	(22)	-	(22)
Total comprehensive loss	-	(16.771)	(22)	-	(16,793)
Transactions with owners in their capacity as owners:
Issue of new shares	27,526	-	-	-	27,526
Share-based payments	-	-	-	1,943	1,943
At31 December 2020 - Unaudited	244,730	(201,397)	(1,538)	17,090	58,885
As at1July2021	257,382	(202,046)	(1,685)	18,397	72,048
Lossfortheperiod	-	(13,775)	-	-	(13,775)
Other comprehensive income	-	-	172	-	172
Total comprehensive loss	-	(13,775)	172	-	(13,603)
Transactions with owners in their capacity as owners:
Issue of new shares	56,855	-	-	-	56,855
Capital raising costs	(1,415)	-	-	-	(1,415)
Share-based payments	-	-	-	1,978	1,978
At31 December 2021 - Unaudited	312,822	(215,821)	(1,513)	20,375	115,863

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Interim Consolidated Statement of Cash Flows - Unaudited

FORTHESIX-MONTH PERIODENDED 31DECEMBER	Notes	2021 Unaudited	2020 Unaudited
		A$000	A$000
Operatingactivities Receiptsfromcustomers		25,919	18,519
Paymentstosuppliers		(36,641)	(32,556)
Receiptofgovernmentgrants		-	1,565
Interestreceived		219	45
Interestpaid		(239)	(267)
Incometaxpaid		(113)	-
Netcashflowsusedinoperatingactivities		(10,855)	(12,694)
Investingactivities Purchaseofproperty,plantandequipment	8	(304)	(92)
Payments forintangibleassets (patents, licences and trademarks)	9	(181)	(190)
Payments for intangible assets (capitalised development costs)	4, 9	(11,783)	-
Maturityoftermdeposits		-	180
Netcashflows(usedin)/frominvestingactivities		(12,268)	102
Financingactivities Proceedsfromissueofnewshares		56,855	28,160
Costofcapitalraising		(1,415)	(634)
Principal repayment of lease liabilities		(421)	-
Repaymentofborrowings		-	(700)
Netcashflowsfromfinancingactivities		55,019	26,826
Net increase incashandcashequivalents		31,896	14,030
Net (decrease)/increase due to foreignexchangedifference		(28)	193
Cashandcashequivalentsat1July		47,393	38,138
Cashandcashequivalentsat31December	5	79,261	52,361

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") 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 2021 was authorised for issue in accordance with a resolution of the Directors on 30 March 2022.

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 2021 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 2021.

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)  New standards, interpretations and amendments adopted by the Group

The accounting policies applied are consistent with those of the consolidated financial statements for the year ended 31 June 2021, except for the adoption of new amendments to the existing standards as set out below.

The Group has adopted all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for an accounting period that begins on or after 1 July 2021.

(i)  Amendments to existing standards effective and adopted with no significant impact to the Group

There has been no significant impact due to the adoption of any of the following standards or amendments thereto.

AASB 2020-8	Amendments to Australian Accounting Standards - Interest Rate Benchmark Reform - Phase 2
AASB 2021-3	Amendments to Australian Accounting Standards - Covid-19-Related Rent Concessions beyond 30 June 2021

(ii)  New and amended standards and interpretations that have been issued but not yet effective or early adopted by the Group

At the date of authorisation of the interim financial report, the Group has not applied the following new and revised Australian Accounting Standards, Interpretations and amendments that have been issued but are not yet effective.

Standard / Amendment		Effective for annual reporting periods beginning on or after
AASB 17 and AASB 2020-5	Insurance Contracts and Amendments to Australian Accounting Standards - Insurance Contracts	1 January 2023
AASB 2014-10; AASB 2015-10; and AASB 2017-5	Amendments to Australian Accounting Standards - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture; Amendments to Australian Accounting Standards - Effective Date of Amendments to AASB 10 and AASB 128; and Amendments to Australian Accounting Standards - Effective Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections	1 January 2022 (Editorial corrections in AASB 2017-5 applied from 1 January 2018)

Notes to the Interim Consolidated Financial Statements - Unaudited

2  Basis of preparation and changes to the Group's accounting policies (continued)

(b)  New standards, interpretations and amendments adopted by the Group (continued)

(ii)  New and amended standards and interpretations that have been issued but not yet effective or early adopted by the Group (continued)

Standard / Amendment		Effective for annual reporting periods beginning on or after
AASB 2020-1 and AASB 2020-6	Amendments to Australian Accounting Standards - Classification of Liabilities as Current or Non-Current and Amendments to Australian Accounting Standards - Classification of Liabilities as Current or Non-current - Deferral of Effective Date	1 January 2022
AASB 2020-3	Amendments to Australian Accounting Standards - Annual Improvements 2018-2020 and Other Amendments	1 January 2022
AASB 2021-2	Amendments to Australian Accounting Standards - Disclosure of Accounting Policies and Definition of Accounting Estimates	1 January 2023

In addition, at the date of authorisation of the interim financial report the following IASB Standards and IFRS Interpretations Committee Interpretations were on issue but not yet effective, but for which Australian equivalent Standards and Interpretations have not yet been issued:

Standard / Amendment	Effective for annual reporting periods beginning on or after
Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to IAS 12	1 January 2023

The Group is currently in the process of assessing the impact of the above standards or amendments.

3  Segment information

a.  Segment revenue based on operating segment

The following table presents revenue and net profit/(loss) information for the Group's operating segments for the six-month periods ended 31 December 2021 and 2020, respectively:

Segment Revenue  Segment Profit/(Loss)

FOR THE SIX-MONTH PERIOD ENDED  2021 31 DECEMBER  A$000 Unaudited		2020 A$000	2021 A$000	2020 A$000
OEM	5,243	3,103	(6,495)	(7,515)
Aftermarket	16,421	15,040	844	(267)
Other	-	-	(8,124)	(8,989)
Total	21,664	18,143	(13,775)	(16,771)

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.

FORTHESIX-MONTH PERIOD ENDED 31 DECEMBER2021 Unaudited	OEMA$000	AftermarketA$000	TotalA$000
RevenueTypes Salesatapointin time
Consulting	-	839	839
HardwareandInstallations	519	6,869	7,388
Royalties	2,099	-	2,099
Sales overtime
DriverMonitoring	-	6,726	6,726
Non-recurringEngineering	2,625	-	2,625
Licencing and royalties	-	1,987	1,987
Total revenue	5,243	16,421	21,664

FORTHESIX-MONTH PERIOD ENDED 31 DECEMBER2020 Unaudited	OEMA$000	AftermarketA$000	TotalA$000
RevenueTypes Salesatapointin time
Paid Research	3	-	3
Consulting	-	544	544
HardwareandInstallations	221	6,679	6,900
Royalties	778	-	778
Sales overtime
DriverMonitoring	-	5,811	5,811
Non-recurringEngineering	2,101	253	2,354
Licencing and royalties	-	1,753	1,753
Total revenue	3,103	15,040	18,143

c.  Geographic information

FOR THE SIX-MONTH PERIOD ENDED  2021 31 DECEMBER  A$000 Unaudited		2020 A$000
Revenuesfromexternalcustomers Australia	7,943	6,882
North America	10,038	5,420
Asia-Pacific (excluding Australia)	1,832	2,010
Europe	1,042	3,202
Other	809	629
Totalrevenuefrom externalcustomers	21,664	18,143
The revenue informationaboveisbasedon thelocationsofthecustomers.

   

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 A$18,069,000 during the six-months ended 31 December 2021 (2020: A$8,853,000), of which A$11,783,000 (2020: nil) were capitalised.

As part of the assessment of research and development expenses at 30 June 2021, total costs of A$8,311,000 were capitalised for the year ended 30 June 2021, of which A$3,134,000 pertained to the six-month period ended 31 December 2020.

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:

	31Dec 2021 Unaudited	30June 2021 Audited
	A$000	A$000
Cashatbank	29,307	47,393
Cash held for enhanced yield deposit (maturing on 10 January 2022)	49,954	-
Totalcashandcashequivalents	79,261	47,393

On 10 December 2021 the Group entered into an enhanced yield deposit with HSBC for principal amount of GBP 27,000,000. This is classified as short-term, maturing on 10 January 2022 with an interest rate of 4.75%.

6  Trade and other receivables

Current	31Dec 2021 Unaudited A$000	30June 2021 Audited A$000
Tradereceivables (net of provisions)	16,673	19,427
Deferredfinanceincome	(237)	(302)
	16,436	19,125
Otherreceivables	1,197	726
Totaltrade andother receivables-current	17,633	19,851

The Group recognised nil impairment losses on receivables and contract assets arising from contracts with customers for the six-month period ended 31 December 2021 (2020: A$27,000).

7  Inventories

 

	31Dec 2021 Unaudited	30Jun 2021 Audited
	A$000	A$000
Finishedgoods(atlowerofcostandnetrealisablevalue)	7,052	2,640
Provision for obsolescence	(13)	(13)
Totalinventoriesatthelowerofcostandnetrealisablevalue	7,039	2,627

     

Notes to the Interim Consolidated Financial Statements - Unaudited

8  Property, plant and equipment

Acquisitions and disposals

During the six-month period ended 31 December 2021, the Group acquired assets with a cost of A$304,000 (2020: A$92,000).

No assets were disposed by the Group during the six-month period ended 31 December 2021.

9  Intangible assets

During the six-month period ended 31 December 2021, the Group incurred expenditure of A$11,964,000 (2020: A$190,000) related to intangibles. A$181,000 (2020: A$190,000) of this expenditure related to patent and trademark applications and licences. A$11,783,000 (2020: nil) related to capitalised development costs.

A$1,000 (2020: nil) of intangibles relating to trademark applications were disposed by the Group during the six-month period ended 31 December 2021.

10  Trade payables

At 31 December 2021, the balance of the trade payables was A$2,372,000 (30 June 2021: A$2,186,000), of which an amount of A$2,123,000 (30 June 2021: A$2,043,000) was aged less than 60 days; and an amount of A$249,000 (30 June 2021: A$144,000) was aged over 60 days.

11  Lease liabilities

	31Dec 2021 Unaudited	30June 2021 Audited
	A$000	A$000
Current
Lease liabilities	998	918
Non-current
Lease liabilities	4,772	5,272
Total lease liabilities	5,770	6,190

The table below summarises the maturity profile of the Group's liabilities based on contractual undiscounted payments:

AT 31 DEC 2021	<=6 monthsA$000	6-12 monthsA$000	>1 yearA$000	TotalA$000	Carrying Value A$000
Leaseliabilities	697	712	5,638	7,047	5,770

AT 30 JUN 2021	<=6 monthsA$000	6-12 monthsA$000	>1 yearA$000	TotalA$000	Carrying Value A$000
Leaseliabilities	685	694	6,345	7,724	6,190

12 Dividends paid

No interim dividends or distributions have been made to members during the six-month period ended 31 December 2021 (2020: 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 2021 (2020: nil).

 

Notes to the Interim Consolidated Financial Statements - Unaudited

13 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                     

FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER	2021 A$000	2020 A$000
Forbasicand diluted earningsper share: Net loss	(13,775)	(16,771)
NetlossattributabletoordinaryequityholdersoftheCompany	(13,775)	(16,771)
Weightedaverage numberof shares
AT 31 DECEMBER	2021 Thousands	2020 Thousands
Weightedaveragenumberofordinaryshares forbasic earningspershare	3,931,717	3,506,736
Weightedaverage numberof ordinarysharesadjusted for the effect of

dilution                                                                                                                             3,931,717    3,506,736

14 Share capital

 

		Consolidated
		31Dec 2021 Unaudited A$000	30June 2021 Audited A$000
Ordinary shares		312,822	257,382
Total contributed equity		312,822	257,382
Number of ordinary shares
Consolidated
		31Dec 2021 Unaudited	30June 2021 Audited
		Thousands	Thousands
Issued and fully paid		4,155,419	3,875,618
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 parvalue.
Movement in ordinary shares:
		Shares
		Thousands	A$000
As at 1 July 2021		3,875,618	257,382
Shares issued		279,801	56,855
Transaction costs		-	(1,415)
As at 31 December 2021		4,155,419	312,822

 

Notes to the Interim Consolidated Financial Statements - Unaudited

15 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. 

There is no cash settlement of the rights.

16 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 2021 and 2020:

		Balance 1-Jul	Granted asRemuneration	Acquired orsoldforcash	Balance31-Dec
		A$000	A$000	A$000	A$000
Directorshares: Directors'securities	2021	5,714	-	238	5,952
Directors'securities	2020	6,837	1,604	-	8,441

17  Commitments

As at 31 December 2021, the group had commitments of A$32,598,000 (31 December 2020: A$23,674,000) relating to the manufacturing contract for the Group's Guardian 2.1 product for the period January 2022 to March 2023 (31 December 2020: January 2021 to January 2022).

     

Notes to the Interim Consolidated Financial Statements - Unaudited

18  Events after the reporting period

Other than the matters outlined below, 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.

· As noted in cash and cash equivalents (refer Note 5), the enhanced yield deposit matured on 10 January 2022. The strike rate of the transaction was 0.5365 GBP/AUD, resulting in a principal amount of A$50,326,000 and interest of A$203,000.

 

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[1]This refers to underlying growth rates at constant currency or adjusting for currency so business results can be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of Seeing Machines business performance. To present this information, current period results and comparative period results are converted into Australian dollars at the 31 December 2021 exchange rate.

[2]Market expectations for FY2022 are for revenue of A$55.6m and EBITDA of A$(32.7m)

 

END

 

 

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