Seeing Machines to miss profit targets, but signs major new deal with Caterpillar

(Sharecast News) - Seeing Machines, the AIM-listed group that designs tech to improve transport safety, has announced that profits will be lower than market expectations as it unveiled a new five-year license renewal with mining giant Caterpillar. Ahead of its year-end date of 30 June, the company - known for its Guardian driver fatigue and distraction solution - said that revenues and cash will be "at or ahead" of market expectations, but cash EBITDA will be lower.

"This has been largely driven by Aftermarket margin mix due to the slower than expected transition from Guardian Generation 2 to Generation 3 and the previously reported adverse Automotive royalty volumes and mix during the year," the company said.

Nevertheless, it still expects to achieve a cash flow break-even run rate next financial year.

Seeing Machines also said it had signed a new master licence and marketing agreement with Caterpillar ahead of the expiration of their exiting agreement in August, securing a $16.5m upfront licence fee payment related to its Guardian operator monitoring tech. The new deal extends a partnership between the two companies that started in 2015.

The company said the agreement opens up access to sell Guardian for on-highway vehicles directly as well as other market segments in general construction and other industries.

"As we enter this next phase of our strategic collaboration with Caterpillar, we are delighted to be signing this revised agreement, setting the agenda for the next five years," said chief executive Paul McGlone. "The $16.5m payment will bolster our cash reserves and help deliver on our business plan as we move closer to achieving a cash flow break-even run rate in FY2025."

The stock was down 2.1% at 4.62p by 1049 BST.