Seeing Machines focuses on Fleet business to improve costs and cash flow
Computer vision technology company Seeing Machines provided a “comprehensive” update on its Fleet business on Thursday, explaining that the success of the business and its implementation of ‘Guardian 24/7’ monitoring services was fundamental to the firm.
The AIM-traded business aid that as at 30 April, more than 1,500 Guardian units had been installed since 31 January, with more than 14,500 units now installed in vehicles globally.
That recent momentum had strengthened as the Guardian installation rate continued to accelerate with expectations that the group would reach 16,000 Guardian units connected by 30 June, and approximately 27,000 Guardian units connected by June, which the group said it remained on track to achieve.
The naturalistic driving data collected by monitored vehicles underpinned the Seeing Machines' technology validation and ongoing machine-learning capability with access to over 2.3 billion kilometres of driving data to inform its FOVIO driver monitoring platform with hundreds of thousands of driving-related events and volumes of “highly valued, difficult to obtain” edge case scenarios, Seeing Machines explained.
Following the internal review of the Fleet division, and under the leadership of senior vice-president and general manager Paul McGlone, the company said it had modified its approach to sales, marketing and supply with a number of structural changes.
It said its Fleet team was reduced by over 30% to remove cost and “right size” the business unit, with business development primarily channelled through an expanding distribution network.
Direct sales were being pursued with global customers who demanded consistency across geographic regions, the majority of whom were passenger transport or sizeable logistics operators such as Coach USA, First Group, Total, Air Liquide and Chevron.
The installation of Guardian hardware and hardware servicing was also being increasingly channelled through third parties, to accelerate connections and ongoing monitoring services revenue and reduce Seeing Machines' cost to deliver first-line services.
Commercial terms with direct clients and distribution partners had been reset to improve near-term cash flow and sustain ongoing monthly service fees for the longer term.
Those new trading terms included increased wholesale prices, hardware revenue payable on delivery and an introduction of contractually agreed timeframes for installation of Guardian hardware into vehicles, accelerating connections and recurring revenue from the 24/7 Guardian Monitoring Centre services, the board explained.
The company said the combined Fleet business unit, including Guardian, Mining and Rail, revenue to 31 December rose 22.5% to $8.8m over the same period last year, resulting in a gross profit of $4.5m.
Significantly, recurring revenue from Guardian services had doubled while the business focussed on an operational turnaround during the first half.
The group said it had nine established distribution partners globally, and boasted more than 340 customers through direct sales and distribution channels, having established an additional 50 customers since January.
Seeing Machines recently signed an agreement with UK distributor, The Vehicle Group (TVG), to help accelerate sales and installation rates across the UK and Ireland.
TVG has more than 300,000 vehicles across Europe fitted with their technology, and was described by Seeing Machines as a market leader in automotive camera technology, vehicle safety, telematics and automation technology.
TVG would complement the business development undertaken by the Seeing Machines' direct business development team, the board said, and would facilitate accelerated installations across the region.
In Mexico, Guardian DMS was established in 2018.
The company said that, working closely with a “leading” Mexican insurer which provided premium incentives to fleets that installed Guardian, as well as with insurance brokers, Guardian DMS had installed more than 800 Guardian units since February, and the group expected to deploy an additional 700 Guardian systems by the end of November.
Most recently, Guardian DMS had secured a deal to install 200 units into Corporativo UNNE's fleet - Mexico's largest fuel distribution company - and reportedly continued to work closely with many of the country's large commercial fleet organisations.
Seeing Machines said it continued to have a “strong” pipeline of opportunities through its existing distribution network, which it also expected to expand throughout 2020 and 2021.
“After analysing the financial performance of each contract we have modified the Fleet business model to bring forward recurring revenue, the biggest driver of value,” said Paul McGlone.
“Sales momentum is building in all our major markets through initiatives to expand geographic footprint with global customers, new distributors and the addition of new channel partners like leading Australian truck insurer, NTI.
“Combined with improvements in direct costs, hardware simplification and cost reduction, as well as efficiencies in monitoring services, we expect to deliver scale benefits from 2020.”