MIDAS SHARE TIPS: Wake up at the wheel! Visionary firm Seeing Machines that's saving lives on the road
More than a million people die every year worldwide in road accidents and millions more are injured. Between 20 and 30 per cent of these accidents are thought to be fatigue-related, particularly when vans and lorries are involved.
Seeing Machines has developed a system that monitors driver behaviour and sets off alerts if a driver is falling asleep or distracted by activities such as texting on a mobile phone or eating at the wheel.
Alerts can be configured to warn not only the driver that they are tired or not paying attention but other people too, such as fleet managers.
In safe hands: Seeing Machines’ eye tracking technology alerts drivers when they are tired
The system saves lives, it has started to be rolled out internationally and is expected to be widely adopted. Seeing Machines shares are 4.625p and should increase considerably in value over the next two to three years.
The company was founded in Australia in 1999 by four researchers working with the Australian National University and car maker Volvo. From the start, the group ambition was to improve road safety by moderating driver behaviour.
Seeing Machines’ kit was initially adopted by the mining industry. Mining vehicles are huge, and cost up to £3million apiece. Accidents are not only very expensive but can easily involve fatalities, so mining companies are understandably keen to mitigate the risks.
However, mining territory is rough, so Seeing Machines had to ensure its units were stable and robust, whatever the external environment. This made them expensive – about £14,000 each. That was a reasonable price to pay in the context of a £3million vehicle, but impractical in the mainstream lorry and car market.
Now, the company is broadening its scope. Under chief executive Ken Kroeger, Seeing Machines has developed a less rugged version of its technology, as efficient as the mining kit but cheaper and more appropriate for on-road vehicles.
The first 750 units were sold last month to a South African insurance company, which will offer them to lorry fleets in return for lower premiums. Trials are being undertaken by a number of other potential customers and it is estimated that 10,000 of these units, which sit on the dashboard, will be sold over the next couple of years.
Kroeger has also signed an agreement to provide a version of the kit to General Motors, which will be embedded in certain models of the 2016 Cadillac.
New system: Alerts can be configured to warn not only the driver that they are tired or not paying attention but other people too, such as fleet managers
Semiautomated cars – which allow drivers to take their hands off the wheel and feet off the pedals – are being rolled out worldwide, but regulators insist that drivers should still be at tent ive. Seeing Machines’ technology makes this possible and other car makers are expected to adopt it soon.
The technology can be used in the aviation and rail industries too. About 500,000 new pilots will be needed over the next decade. Seeing Machines systems can enable airlines to monitor would-be pilots in real-time to see if they are fit for the job and focused on the right equipment in the cockpit.
The group is working with Boeing to develop appropriate equipment and the joint venture is making good progress. There are promising developments in the mining sector as well.
Seeing Machines has historically provided the hardware and the software for mining vehicle units. Now it has signed an agreement with machinery giant Caterpillar, so that it will gradually assume responsibility for making the units and Seeing Machines will receive a monthly software licence.
Last month, Kroeger announced that Caterpillar Safety Services, which uses Seeing Machines’ technology, has signed a number of sales contracts in Australia and Canada and amassed a strong pipeline of future sales.
Difficult conditions in the mining sector had prompted concerns that mine owners would be reluctant to splash out on expensive new kit. Results so far suggest that they are prepared to pay for Seeing Machines equipment, knowing it will deliver long-term financial and reputational benefits.
Midas verdict: Seeing Machines has struggled in the past and it remains loss-making, but sales are expected to double over the next two years and the group should move convincingly into profit by 2018. The group operates in growing markets, its technology is world-class and it has signed agreements with leading plane, machinery and car makers. At 4.625p, this is a good punt for the bold investor.
Traded on: AIM Ticker: SEE
Contact: seeingmachines.com or 0061 2 6103 4700
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