DTI Group Limited (DTI) Earnings Call Transcript & Summary

Yes. Yes. [indiscernible]. Anyone else...

Anyone else voting for this? [Voting]

Okay. Well, thank you. That now concludes the business of which notice has been given, and I therefore declare this formal part of the meeting closed. Matt Strack will now provide a presentation on the company. And following this, we welcome anyone in attendance to ask questions about the company. And again, I'd like to thank everyone for their attendance. And again, I would like to thank the shareholders and the staff of DTI for a year that has just passed and look forward to the next year.

Thank you, Greg, and good morning or good afternoon, everyone. What I'd like to do is just to run through a quick presentation for you, which will outline the year that's been as well as some of how we've gone in the first quarter of this year and what our targets or what our focus is on for the remainder of the year. I'll also give you a little bit of an overview about the company and the solutions that we provide. As you're hopefully aware, DTI supports the global transport industry through the delivery or the development and delivery of telematics, surveillance, video analytics and passenger information systems. Our main customer bases are both vehicle operators, vehicle manufacturers, emergency services providers, law enforcement agencies and now waste truck operators. We have a global presence through our integrated network as well as direct relationships with customers. There are over 20,000 vehicles around the world deployed with DTI surveillance systems, and we capture over 300 hours of footage daily. In FY '24, we released our new mobile data server. This servers is the workhorse of our fleet. It's able to work on everything from a road vehicle through to a light rail to heavy rail. It also allows us to capture realtime data by integrating to the onboard systems of these vehicles as well as powering the DTI solution. The MDR-7 has undergone extensive testing and is being deployed on about [ 80 ] vehicles in the last financial year. To date, this has proved very solid and is setting us up as our main quarter for the future. In FY '24, we also entered a new market. As Greg mentioned earlier, the waste management sector allows us to install our system on trucks and provide improved safety and surveillance for the operators. Not only is it providing a driver aid, but it also is providing telematics information such as the weight of the vehicle, which is enabling the operator to understand better the patents of pickups and to improve the accuracy of billing. This first customer has been a very good one for us, and they've agreed to be a reference site, and we're using that to engage other operators and waste management solutions. We also have taken the next level of our LiveView. So our back-office solution can be either hosted locally on the premise of our operator or it can be up in the cloud. Through that, we're also able to connect realtime to the vehicles, and we can view multiple cameras on those vehicles to better understand what is happening at the time. Some of the benefits and use cases of this in a public transport situation if the driver is pressed an emergency or a panic button, that can open up a connection back to the remote operations center and allow the operators there to see realtime what's happening on that vehicle to better understand what the response should be, whether it requires transit police to attend or other emergency services. In the case of the waste truck operator, they're using it as a safety audit tool. So when they see the operators of the vehicle is doing a pickup, they're able to look in realtime at their work practices and ensure that the following safe work practices. So it gives them realtime feedback on how the operator is performing. We're also successful in our solution being selected by a number of bus manufacturers to be an option on the procurement panel for in New South Wales. When an operator purchases a bus in New South Wales, there is a purchasing panel, which they select options from. Last year was the first time that DTI has been on that panel and now enables operators to select DTI solution when purchasing a new vehicle. We've undergone a number of discussions with operators and engaging them with some trials and expect over the course of this year to start receiving some benefits from this. We also completed all our deliveries to Alstom in India for the new driverless trains running on the Sydney Metro. These trains entered revenue service in the first quarter of this year. And to date, the feedback on the system has been overwhelmingly positive. And the patronage of this system has far exceeded the expectations of the government. We're continuing to work with the operator to develop further improvements to the functionality of the system as they continue to learn more about the profile of the users that are doing it. In the first quarter of this year, we've had a solid start from a revenue perspective. Our revenue is up from last year and more importantly, at a much better EBIT than we did last year. As Greg mentioned as well, we received a contract for $4.1 million to upgrade the CCTV and passenger information systems on all the trams in Adelaide. The system that we're actually upgrading is an old DTI system that was first installed in 2008. The fact that it's 16 years old is a great testament to our -- the robustness of our equipment, and it's also a show of confidence that the customers come back to DTI to do that upgrade. We've also received a letter of intent from 1 rail -- large rail manufacturer who is going to be providing the first high-speed trains into the U.S.A, and we're going to be providing the crash recording system on that. Until that's actually closed out, we're actually under a confidential agreement to give much more details on that one at the moment. We've exhibited the Australian Bus and Coach Expo and also the Department of Transport's Zero Emission Bus Drive Day in Victoria. Through this, we met with a number of bus operators and have received multiple inquiries for our solution and potentially to either undergo trials or to provide proposals. These showcases are an important way of reaching out to the market. And our participation on them has really strengthened our position as a leader in this market. I also attended InnoTrans, which is the largest rail expo in Europe. And while there, I went and saw a number of the European train manufacturers such as CAF and Alstom and Siemens. On the back of that, DTI has been invited to bid on a number of new opportunities. For example, there are some new trains going to be built in Wellington. There are 3 companies that have been shortlisted to provide proposals for that. We've now got bids with 2 of those 3, so it's a great opportunity there. And as part of our working in the rail industry, we need to stay certified to the international rail standard. It's a quality management standard, and we received -- we undertook a full recertification this year, which was successfully passed. As Greg mentioned, FY '24 was a tough year in terms of volume. Our revenue numbers were significantly down. We were able to maintain our costs during that time, but we have done and you would have seen just from last slide, we have secured some new contracts already. And our revenue forecast for this year is much stronger than last year, and as I talked about, our revenue to date is well ahead of last year's numbers. DTI provides a number of different solutions for our customers. The first one is surveillance. We have a variety of cameras, which not only will capture footage, but will also allow us to do analytics of that footage. So we will do things such as identifying objects in front of a vehicle to look for areas that may need maintenance. So an example in the bus world is where vegetation is encroaching within the bus lane area. We're able to identify that, that is coming -- likely to come into the lane at a certain point in time and putting a work order notice out to the council to go and trim the tree before it damages the vehicle. We also have a patented solution, which looks at the overhead power line on a train and detects where there are [ arcing ] events, such as flushing, which could indicate that there is damage to the line or if there is excessive movement of that overhead line, which could indicate that there is too much slack in the line and that occurred getting tangled on the pantograph arm and damage the vehicle. We also do passenger information which provides realtime information to passengers while they're on the vehicle on where they are in that journey and where they need to get off. It also allows us to play advertising which can be tailored to the location of the vehicle. This can be an important revenue stream for our customers and has seen as a real differentiator to some of our competitors. We also do the emergency intercoms that are operating in both, mainly in the trams and trains. We provide a full managed service. We have staff on the ground in 3 states. We also do remote support as well as reporting for our customers. This is an important revenue stream for us and a business that we are seeking to develop further. In terms of how we -- how our solutions support our customers. From a surveillance point of view, not only are we helping them to meet their duty of care around providing a safe environment both for their staff and for the passengers using the services, we're also able to monitor a range of events such as pending criminal activities or detailing equipment phase such as the pantograph arm. With the passenger side of things, giving people realtime information means that they're able to better understand their journey and plan it out. And not only can we use that through realtime on the vehicle, but we can send our information off the vehicle back to a third-party application to be displayed through our app. Our analytics are an important feature to what we do. We capture a lot of information both through video as well as the telematics that we interface to. And through that, we're able to provide insights back to the operators on how their system is being utilized and whether they are running efficiently. From a growth point of view, we've got a 4-tiered strategy. The first one is really looking at our existing customer base and seeking to upsell to that. In the bus world, the passenger information side of things is a fairly new phenomenon. Most of the buses that are operating today will have only the external display, saying the route that is on and no internal displays. We're undertaking a trial with one of the large operators in Australia to install internal displays to give next stop information. We also -- a majority of our fleets operating our systems are still operating analog cameras. Some of our systems running around on buses today are up to 20 years old and are end of life. So there is a number of opportunities coming into the market, where those operators are seeking to upgrade their solutions to fully digital ones as they are extending the life that they are -- of the buses that they are operating. So typically, a bus could operate a maximum of 20 years. In a number of states, that's already moved up to 25, which means that they're having to do life extension work and refreshes. We're also looking to expand into new territories. Examples are India and the U.S.A. The way we're going to do that is via partners. We are not going to set up offices around the globe. We're going to focus our direct selling here in Australia and work with the right partners in other jurisdictions. We're also going to look at new verticals. Our solutions are to be used on any transport or road vehicle. And so what we're doing is taking the resource recovery truck solution. We're focusing on developing that market. And then from there, we're looking at other markets such as logistics trucks, and we're also talking to some people in the military as well about potential opportunities there. Our integrators, they've probably had a tougher time than us in some respects in Europe. They have come slow out of the pandemic in terms of government spending. We are starting to see the first signs that, that is starting to release, and we expect to see their work profile increase over the next 6 to 12 months. During this time, we're also spending some time with our key integrator in Europe, ensuring that they have the latest understanding of the solutions that we've been developing and that they know best how to market them for their customers. We've also undertaken a number of trials or undergoing a number of trials with our pantograph overhead line monitoring solution. We've installed this on over 300 chains throughout Europe. And as these come -- trials come to a conclusion, our expectation is that these will be rolled out to moved extensively across the fleets that they're on. Our priorities for the rest of this financial year. As I mentioned, we are on Panel 4. There are also a number of tenders that are coming out that we're aware of, where the operators are seeking to do upgrades to analog solutions. We will be responding to all of those. We're also having meetings regularly with the operators in New South Wales. And so our target is to continue to grow our customer base in the Australian bus market. We're also looking at further penetration into the truck market. We have a great reference customer. They are a Tier 1 waste collection customer, and we'll be using them as a reference point to grow that market share. Our solution for the back end, underwent a fair amount of development to meet the requirements of this market. And based on their feedback, they believe we have a market-leading solution in this area. Our pantograph trials, they're underway in a number of different countries. The focus is really to finish those trials and to start the actual deployment into the rest of the fleets. The first one that was likely to come through in there is in the U.K. And that trial is coming towards the end of its time. We're also looking to enter into new agreements with partners in the U.S.A., India and Asia. At the moment, we have a very good opportunity up in Singapore, and we're just working through a trial agreement at the moment. Once that has come through, we'll be doing an announcement to the market. The other thing will be making sure we deliver contracts we've already won this year. So as we mentioned earlier, the Torrens Connect Adelaide Trams project is going to deliver $4.1 million over the next 2 years. So we need to make sure that we deliver it as per the plan. So there is a large amount of focus on the development of the passenger information system at the moment. So we're integrating through to that timetabling making sure we have the announcements all set up and that they are in the right format for the branding of the customer. So that work is underway now with deliveries expected to commence in Q3 of this financial year. That concludes my presentation. And I think we'll open it now to questions.

[indiscernible] should anyone have some -- If we have no questions on that, thank you, Matt, for doing that presentation, I gave a good overview of DTI through the financial year and where we're going into the future. And again, I'd like to thank everyone for attending, and we'll close the meeting. Thank you. Harry?

Thanks, Greg.

Thanks, all.