TIDMSEE
RNS Number : 7764Y
Seeing Machines Limited
04 December 2014
Seeing Machines Limited
("Seeing Machines" or the "Company")
Capital Raising
Placing to raise GBP5.7m
Australian Offer and Overseas Offer to raise up to GBP1m
-- Oversubscribed placing to support growth opportunities above and beyond initial plan
-- More than 10 automotive OEMs engaged in assessment of our
ADAS (Advanced Driver Assistance Systems) driving monitoring
systems technology following announcement of Takata deal
-- Accelerated interest by fleet operators in de-ruggedised DSS
unit for fleet sales (trucks and coaches)
4 December 2014
Seeing Machines Limited (AIM: SEE), the AIM listed technology
company with a focus on operator monitoring and intervention
sensing technologies and services, is pleased to announce that it
has raised GBP5.66 million, before expenses, through an equity
placing. finnCap Ltd ("finnCap"), as the Company's broker, has
conducted an oversubscribed placing of 102,963,652 new ordinary
shares in the Company ("Ordinary Shares") (the "Placing Shares" and
the "Placing") with new and existing institutional investors at a
price of 5.5 pence per share (the "Placing Price"). The Placing
demonstrates continued strong support by key shareholders and adds
several further blue-chip institutions to the share register. In
addition, the Company will provide an opportunity to certain
existing shareholders to raise up to a further GBP1 million at the
Placing Price or an AUD equivalent under an overseas offer and an
Australian offer, details of which are set out below.
The net proceeds of the Placing, the overseas offer and the
Australian offer (the "Fundraising") will provide the Company with
working capital and further flexibility to pursue its six-sector
business strategy, in particular to accelerate its engagement with
a growing list of global car makers as well as launching a new
product for the commercial transport market next year.
Automotive opportunities
Following the announcement of our agreement with Takata and the
initial order received by Takata from a top tier automotive OEM,
Seeing Machines has experienced strong initial indications of
interest from multiple further OEMs. Over 10 further OEMs are at
various stages in assessing our technology for inclusion in their
vehicles scheduled for market release between 2016-2021.
The different applications of the technology under assessment
range greatly in scope and require investment in dedicated
engineering resource from Seeing Machines and Takata to develop
these applications from technology evaluation through to vehicle
launch.
Whilst no guarantee can be made that any of these OEMs will
ultimately decide to purchase Seeing Machines' technology from
Takata, given the early successes under the Takata relationship,
the Board feel there is a significant opportunity to capitalise
upon Seeing Machines' early mover advantage in the space.
Fleet opportunities
Separately, Seeing Machines has invested over the past year in
developing a de-ruggedised, lower cost version of the DSS unit for
the commercial fleet market, due for launch in April 2015.
The near-term sales pipeline for the commercial fleet market is
far stronger than the Company had anticipated at the time of the
last raise, and there is a requirement for additional working
capital to support the roll out of this de-ruggedised unit to a
number of fleet operators with whom Seeing Machines is in advanced
negotiations.
While there is again no guarantee on the rate of conversion of
this pipeline to firm purchase orders, given the scale of the
opportunity and the advanced stage of these discussions, the Board
feel that it is important that the Company has the necessary
resources to close out the sales opportunities currently under
negotiations.
The rapid acceleration of the interest from automotive OEMs and
commercial fleet operators, as detailed above, necessitates
additional investment in order to take full advantage of the
opportunity to Seeing Machines.
The Fundraising does not require shareholder approval, as the
maximum number of shares to be issued is within the cap of 15
percent of total issued shares as set out in the Company's
Constitution.
Terry Winters, Seeing Machines' Chairman, commented: "This is an
exciting time for the Company. In the last few months we have
successfully delivered several important milestones in our
strategic plan, by establishing formal partnerships with industry
leaders in the automotive, rail and consumer electronics markets.
We are seeing very strong demand for advanced driver assistance
systems from global car makers, and from commercial fleet
customers. The additional funds we have raised will allow the
Company to pursue these opportunities. I would like to thank
investors for their support, and invite eligible existing
shareholders to participate in the proposed capital raising which
is being offered on the same terms as the placing."
Background to the Fundraising and use of funds
Seeing Machines is a leading supplier of Driver/Operator Safety
Monitoring technology and services, and is developing technology
for next-generation Advanced Driver Assistance Systems (ADAS).
Headquartered in Australia, with offices in USA and Chile, the
Company has grown strongly over the last year, with revenue
increasing by 39 percent to A$17.7m (or GBP9.6m) for the year to 30
June 2014, and staff numbers doubling to more than 100.
The Company is partnering with major original equipment
manufacturers (OEMs) for product development and sales in large
global markets, including:
-- Caterpillar: the world's largest mining equipment supplier
and one of the largest rail suppliers;
-- Takata: one of the world's leading automotive safety suppliers;
-- Samsung: the world's largest mobile device manufacturer.
The Company remains focused on expanding market share and
driving long-term revenue growth in its six strategic markets -
automotive, commercial fleet, mining, rail, consumer electronics
and aviation. The funds raised through the Fundraising will allow
the Company to pursue these opportunities, in particular to
accelerate its engagement with a number of global car makers to
develop driver monitoring systems for passenger cars, and to launch
a new driver safety product for the commercial fleet market.
Working with its partner Takata, the Company plans to
aggressively pursue the rapidly growing number of ADAS
opportunities presented by global car makers. Proceeds from the
Fundraising will be used to expand engineering resources for the
Company's OEM core technology, to begin several new OEM projects
expected to commence in FY15, and for potential further new OEM
projects beyond June 2015.
The Company is also developing a new aftermarket driver safety
solution specifically for on road commercial fleets, to be launched
in April 2015. The Company has received strong interest in this
product from existing customers and potential distributors.
Proceeds from the Fundraising will be committed to purchasing a
significant level of initial inventory, and to expand sales and
marketing.
The Company's financial profile will continue to evolve with
this strategic investment. Our revenue sources are expected to
diversify: from mining to many markets; from direct sales to many
sales channels; and from hardware sales to a mix of product sales,
recurring fees and licence fees / royalties. Revenue is expected to
continue to grow from FY14, weighted towards the second half of the
current financial year, with a meaningful contribution from sales
of the new product for the commercial fleet market in the year
ending 30 June 2015. Impacts of softness in the mine site industry,
below the major producers, will continue to be mitigated by the
marketing of DSS for non-haul trucks. The planned investment in new
markets and capabilities will mean a higher EBIT loss in the near
term. The Company will continue to build its resources and assess
strategic options to accelerate its product portfolio and long term
revenue growth.
The Board believes that the Fundraising is in the best interests
of all Shareholders and can place the Company in a stronger
position to capitalise on the significant global opportunities for
its products.
The investor presentation relating to the fundraising is
available at www.seeingmachines.com/investors.
Details of the Placing
The Company will issue 102,963,652 Placing Shares at 5.5 pence
per share. Application will be made to the London Stock Exchange
for the Placing Shares to be admitted to the AIM market and
admission is expected to occur on 5 December 2014. The Placing
Shares will rank equally in all respects with the existing Ordinary
Shares. The Placing is not being underwritten by finnCap.
Director participation in the Placing
James Walker, Chief Financial Officer, and David Gaul,
Non-executive Director, have informed the Company that they will
participate in the Placing. Their participation and resultant
interest following admission is set out in the table below:
Director/key Number of Existing Interest in Total interest Percentage of enlarged
executive Placing interest LTIP including share capital following
Shares subscribed in Ordinary Placing Shares admission, pre
Shares subscribed completion of the
offers
James Walker 280,000(1) 320,000(1) 2,691,532 3,291,532 0.354%
David Gaul 100,000(2) 3,300,000(2) - 3,400,000 0.365%
1: Held through his investment vehicle Kirri Cove Pty
Limited.
2: Held through his investment vehicle Jaiclimb Pty Ltd.
Total Voting Rights
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