Seeing Machines reassures the market as long-term outlook remains unchanged
(AIM: SEE) has provided a comprehensive update to the market regarding the potential effects of COVID-19 on their business divisions.
Importantly, the company’s long-term outlook, driven by strong order books and the growing global movement for improved road safety, remains unchanged. However, the Company notes that COVID-19 is already having an impact on the movement of people and goods, which will undoubtedly present some challenges to the transport industry and, in turn, to the company in the short and medium term:
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Automotive - With an order book of over $200m to be recognised between 2021 and 2024 Seeing Machines see no material impact on this division at this stage.
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Fleet - The Company holds enough stock to achieve previously stated targets for 2020 and to date the supply chain for the company’s Guardian product has had minimal disruption. Although confirmation of stock for 2021 installations is yet to be confirmed indecision on capital spend and potential supply chain pressure reducing availability of vehicle is likely to have significant impact on installation rates and sales over the coming months. The company still expect to see year on year growth in the division, despite the lack of visibility in the near and medium term.
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Aviation - Even though COVID-19 has had a significant impact on airline operators globally, aviation business is only a small proportion of the Company’s revenue therefore the ongoing situation is unlikely to have any material impact in the near term.
Strong Balance Sheet - As at 31 December 2019 the Company has net cash of A$47.3m and is implementing contingency plan and containment initiatives in order to maximise their cash runway leaving them in a strong position to finance ongoing operations.
Despite this reassurance to the market, the Stock is currently trading down 13%
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