More than a million people die around the world every year as a result of car crashes, mostly due to driver error. Consequently, amid the many outlandish claims about the world-changing capacity of artificial intelligence, its deployment by the Aim-listed Seeing Machines to slash the number of fatal road accidents is compelling — not least as its technology is already in situ in more than a million vehicles.
Launched in 2000 as a spin-off from the Australian National University, and initially backed by Volvo, Canberra-based Seeing Machines makes monitoring systems that alert drivers to their tiredness or fading attention. It uses AI along with data amassed by monitoring drivers’ behaviour and eye movements over two decades and eight billion kilometres of real driving. Its “driver monitoring system” then triggers an alarm — a vibrating seat — or sends a message to a fleet manager of a commercial vehicle if it spots a dozy driver. Seeing Machines’ technology is already fitted in tens of thousands of heavy commercial vehicles and more than a million cars; customers include Transport for London’s buses, Ford, Mercedes Benz and General Motors.
Rule changes mean that momentum is with this business: a camera-based driver monitoring system will be a prerequisite for a five-star rating in the new European car safety regulations, Euro NCAP, from 2026. And later this year, a driver monitoring system becomes mandatory in all new vehicles sold in the EU.
This stock has, for some time, been one of those repeatedly tipped for glory yet never quite making it: the shares are currently trading at about 5.3p, down by nearly a quarter in the past 12 months, and Seeing Machines’ market capitalisation is still just £220 million. It is also still loss-making: having spent $35 million (£27.5 million) on research and development last year, it posted a $15.5 million loss — albeit better than 2022’s $18.5 million loss.
The balance sheet is strong, though, with $36 million of cash, and the firm is set to break even next year, when higher-margin royalties are poised to rise for every car manufactured with Seeing Machines’ system embedded. Its relative longevity is notable, too: realms of tiddlers have disappeared since it listed on the junior market in 2005, and it has maintained growth. Revenues rose by 48 per cent to $57.8 million for the year to last July, with the firm increasing the installation of its “Guardian” technology in commercial vehicles, as well as growing in aviation, where Seeing Machines’ technology is keeping check on pilots’ alertness levels.
The company predicts that revenues will exceed $125 million by 2026, and the City has shown renewed interest. Investment bank Stifel names Seeing Machines as one of its top stock picks of the year, with analyst Peter McNally naming a hefty 15p target price and flagging the shares as currently “attractively valued”.
Seeing Machines is a market leader in a safety market with huge potential as vehicle-monitoring regulation ramps up. Plus, an accident-prevention company feels virtuous to invest in. Buy.
