Smart Metering Systems reports strong orders

Glasgow-based Smart Metering Systems (SMS) on Thursday published a trading update for the six months to June 30 and a full year outlook saying revenue and underlying profit are in line with its earlier expectations.

SMS shares have risen about 20% in the past 12 months to give the firm a current stock market value of around £700 million.

SMS said the disposal of a minority of the group’s meter assets for gross cash proceeds of £291 million was completed in April.

It said a 25p per share dividend for full year 2020 is to be paid in four equal cash instalments, starting in October 2020.

SMS reported a liquidity position of £45 million in net cash and access to a £300 million revolving credit facility.

The firm reported a domestic smart meter portfolio of 1.27 million meters and a contracted order book of a further two million smart meters “with additional metering opportunities from existing customer base.”

Smart Metering Systems CEO Alan Foy said: “Despite the unprecedented circumstances, our financial performance was strong, further demonstrating the resilient nature of our business, the defensive nature of the metering infrastructure asset class and the stable cash flows it generates.

“Our substantial contracted order book and strong liquidity position will allow SMS to roll out millions of smart meters over the next few years, thereby growing our index linked recurring revenues.

“The potential scope of SMS’ CaRe asset pipeline has improved significantly following both the UK Government’s stimulus package aimed at a green recovery from COVID-19 and the renewed ambition to achieve a zero-carbon economy as soon as possible.

“In addition to delivering strong growth, the long-term cash generative nature of our business, coupled with SMS’ strong liquidity, supports the sustainable growth in our dividend, whilst continuing to maintain a prudent capital structure.”