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Seeing Machines Ltd

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Cars managed by computers don’t fall asleep at the wheel. So are Seeing Machines worth a look?


“…Seeing Machines is no untried tech new start: this is a company that has been building towards serving a defined market for some 20 years…”


Around 1.35 million people die and up to 50 million are injured every year because of transport accidents caused by human error, unpredictable events or unsafe conditions. The US National Highway Traffic Safety Administration says that distracted driving alone causes more than than 3,000 deaths a year, and drunken over 10,000

The prospect of autonomous vehicles steered and managed by computers that don’t fall asleep at the wheel, daydream or exceed the alcohol limit has entered the popular imagination as the ultimate solution to the issue of road safety. But despite undoubted progress, billions of dollars of investment – and much extravagant marketing – a world of cars, coaches and trucks that drive themselves is still only exists in the realm of science fiction.

Driver Monitoring Systems


Seeing Machines (AIM:SEE), based in Australia but with offices in the US, Europe and Asia, is developing a set of technologies that can make a difference now: AI-powered Driver Monitoring Systems (DMS) that monitor drivers and pilots, signalling alerts when the possibility of error is detected. The company launched in 2000 as a Volvo-sponsored spin-out from the Australian National University to develop driver monitoring for crash-proof vehicles. SEE now offers a range of DMS solutions for commercial fleet, cars, and airplanes.

SEE’s Guardian driver fatigue and distraction technology, a flagship product within its ‘Fleet’ range, is used by more than 400 commercial transport and logistics organisations and their drivers globally, including Coach USA, Toll Group and Transport for London. It uses face- and eye-tracking algorithms to measure the driver’s head position, eye gaze and tendency to eye closure to detect fatigue or distraction. When safety parameter thresholds are triggered, audio alarms and seat vibrations are activated, alerting the driver. Data and footage of the event are relayed to the organisation’s fleet managers through a secure connection, who use Guardian’s software interface to advise the driver to take appropriate action, such as taking a break or ending a shift. The recorded data allows managers to analyse patterns of their drivers’ behaviour, and thereby continually refine their operations. SEE’s Automotive and Aviation products, tailored for cars and planes, work on similar lines.

The trend towards (partial) automation


The company’s DMS solutions are designed to complement Advanced Driver Assistance Systems (ADAS), a related cluster of technologies designed to automate acceleration, deceleration and steering. ADAS emerged back in the 1950s with the introduction of anti-lock brakes, and today’s advanced systems can go some way towards automating many tasks, such as emergency breaking and motorway driving. But the fully autonomous car is not yet reality. Tesla’s much publicised Autopilot system, for example, can steer, brake and accelerate but still requires human supervision. The US National Transportation Safety Board says the company’s use of the term ‘Full Self-Driving’ to describe its software is misleading: it is still far from what regulators call the top ‘Level 5’ scale of autonomy: a fully computerised vehicle that users can instruct to go anywhere in any conditions, without further intervention.

In the meantime DMS can integrate with ADAS to make driving a much safer – and more leisurely – experience. ADAS can automate emergency braking, signal lane departure warnings, and detect blind-spots, all of which work best when combined with DMS. DMS can, for example, offer another layer of security to a car fitted with an emergency breaking system, detecting driver distraction and thereby giving the system additional time to kick-in. Or DMS might augment the lane-keeping functionality of an ADAS equipped vehicle, informing the system to take control when sensors detect the driver is drowsy. The two technologies can also work together to enhance comfort as well as safety. Gesture recognition, for example, might be used to change vehicle temperature, reduce music volume or allow the driver to have a conversation with a voice assistant.

Vehicle manufacturers are integrating DMS and ADAS technologies as standard features of their new product lines. In 2015 US automakers agreed to integrate ADAS as standard equipment by 2022, and the 2020 Moving Forward Act passed by the House of Representatives, a $1.5 trillion infrastructure bill designed to make roads safer, makes the installation of technology that detects inattentive or intoxicated driving mandatory in newly-produced vehicles. The Stay Aware For Everyone (SAFE) Act introduced to the Senate last year would require US regulators to mandate the installation of DMS to ensure motorists are engaged while using semi-autonomous driving systems. If the legislation is passed, every new car would need to adopt some version of the technology by 2027. General Motors’ next-generation system, UltraCruise, which uses DMS to ensure motorists can drive when needed, is an example: according to GM, this Level 2 system will allow for hands-free driving in 95pc of all driving situations.

There is also momentum in Europe and China. In November 2019 the EU introduced regulations to mandate the presence of advanced safety systems in automobiles by mid-2022. Under this General Safety Regulation (GSR) compliance all motor vehicles including trucks, buses, vans and sport utility vehicles will have to be equipped with DMS. Jiangsu has become the first province in China to implement regulations requiring long-distance trucks and vehicles transporting hazardous goods to use driver monitoring. Consumer advocacy groups and safety organisations like the NCAP – a European, government-backed group that rates cars for safety – and US product testing pressure group Consumer Reports have revised their ratings systems to prioritise DMS-enabled vehicles.

SEE’s progress this year


SEE has long been seeking to position itself to take advantage of the mainstreaming of DMS technology, work reflected in positive trends in its most recent trading updates. An update earlier this month reported that there are now more than 447,000 SEE-equipped cars on the road, spanning 24 vehicle models across five original equipment manufacturers (OEMs), a 246pc year-on-year increase. A further 30 distinct vehicle models featuring the technology are expected to launch by the turn of the year. SEE says its cumulative order book for its Automotive division now stands at AUD$395m with the majority expected to be recognised over the next six years. The company has also recorded an underlying year-on-year increase in non-recurring engineering (NRE) revenues, which it describes as ‘a strong lead indicator for future royalty revenue’. Reported Revenue for FY2022 is expected to be AUD$54.2m, representing a 15pc increase on the previous period and in line with market consensus. Cash at 30 June 2022 is expected to be AUD$59.3m, ‘29pc above market consensus’. SEE also reports robust performance in its ‘after manufacture’ business, the retrofitting of DMS to older vehicles, as manufacturers seek to meet the EU’s deadline for GSR compliance. The company’s Guardian system is now connected to 39,832 vehicles, up from 31,771 in the previous period. It should be noted that SEE’s most recent interims results said the company is still reporting a loss, but at AUD$13.8m this was down 17.8pc from H1 2021 (AUD$16.8m).

Besides the upturn in its financial performance, SEE has reported several notable developments this year. In February the company announced ‘the world’s first operational pilot fatigue monitoring system’, an eye-tracking solution for the air ambulance service of the Australian state of Victoria, designed to reduce the risk of pilot fatigue. The contract, which is for an initial 10 year period with the option to extend it for a further two years, has an initial value of around AUD$1m. In May SEE obtained a licence to introduce new image-sensor and optical systems technology to boost the performance of its cabin-monitoring systems. The $AUD5m contract ‘is expected to improve the probability of winning new automotive awards, whilst simplifying the complexity and cost of delivering to the most demanding customer requirements.’ The following month SEE said it had secured its tenth OEM customer in a deal worth an initial AUD$27m. The company now provides products for 13 automotive programmes spanning 10 individual OEMs, covering more than 110 distinct vehicle models.

SEE has acknowledged supply chain issues are affecting its ability to roll out units to meet demand, the company’s August trading update stating that ‘global supply chain pressures have affected Guardian hardware costs and the Company’s ability to secure adequate supply of hardware to meet demand.’ All available stock has been sold already this year. More than 2,000 Guardian units have been ordered and not yet supplied, representing around AUD$3.5m in forward orders to be recognised in the next financial year. SEE does say, however, that the issues ‘have been resolved with the Company’s manufacturer, resulting in their guarantee to deliver satisfactory levels of stock by the end of H1 2023 to meet the growing demand for Guardian hardware.’

The supply crunch is also affecting the capacity of SEE’s customers to produce vehicles. Semiconductor company ASML expects supply chains will be affected for ‘the next two years’ as chipmakers struggle to secure critical equipment. Fears of recession are also weighing on the automative sector. General Motors has said it is cutting spending and reducing hiring in preparation for a potential economic slowdown, the US carmaker’s second-quarter earnings falling short of market expectations. The Detroit giant does however expect semiconductor supply, which has affected production, to pick up by 25 to 30pc by the end of the year. Indeed it seems that global supply issues may be easing somewhat, the global supply chain pressure index overseen by the Federal Reserve Bank of New York falling 57pc from its July peak. International freight company Freightos says the average cost of taking the standard 40-foot metal box across the world’s oceans is down by about 45pc from its peak in the autumn of last year, and more than 40pc of US manufacturers polled by the Philadelphia Fed expect improvements in delivery times over the next six months.



SEE’s stock performance has broadly followed that of the wider tech sector over the past couple of years, rising sharply in 2020 to touch 12p before falling back this year to its current level of around over 6p, taking the company’s market cap to just under £257m. SEE is no untried tech new start: this is a company that has been building towards serving a defined market for some 20 years. It seems well positioned to benefit from the mass adoption of DMS technology, as the vector of its recent financial figures indicate. The company’s long term prospects look promising, but prospective investors should expect volatility during the journey, as demand for vehicles is buffeted by the ebb and flow of the world economy, and the possibility of ongoing turbulence in the supply of components. With those provisos SEE might make for an interesting longer term hold.