TIDMSMS
RNS Number : 4420O
Smart Metering Systems PLC
19 September 2011
Immediate Release 19 September 2011
Smart Metering Systems plc
("Smart Metering Systems" or the "Company")
Maiden Interim Results for the six months ended 30 June 2011
Smart Metering Systems plc (AIM: SMS), the only independent
provider of gas infrastructure connection and gas meter asset
management services, and a developer of advanced smart metering
technology solutions, to the UK's key gas suppliers, is pleased to
announce its maiden interim results for the six months ended 30
June 2011. These are the first trading results since the Company's
flotation on AIM on 8 July 2011.
Financial Highlights
-- Strong trading performance
-- GBP10m of gross proceeds raised on IPO post period end
-- Revenue increased by 28% to GBP7.4m (H1 2010: GBP5.8m)
-- Gross profit increased by 54% to GBP3.8m (H1 2010:
GBP2.4m)
-- EBITDA increased by 104% to GBP2.4m (H1 2010: GBP1.2m)
-- PBT increased by 118 % to GBP1.5m ( H1 2010: GBP0.7m)
-- Basic earnings per share of 1.78p (H1 2010: 0.60p)
Operational Highlights
-- Gas meter portfolio increased to 227,517 at 30 June 2011
(2010: 181,468)
-- Recurring meter rental income increased by 58% to GBP3.0m
(2010: GBP1.9m)
-- Positive outlook for the remainder of the year
Alan Foy, Chief Executive Officer, commented: "The first six
months of the year demonstrated further growth for the group and a
successful IPO. The board was strengthened by the appointment of
Kevin Lyon as Chairman and Nigel Christie as senior independent
director who will provide valuable experience as we begin the next
phase of our development on the public markets. We are well placed
to continue this growth by maintaining a consistently high quality
service to our customers and on-going investment in meter assets.
We view the remainder of the year with confidence."
For further information, please contact:
Smart Metering Systems
Alan Foy, Chief Executive Officer 0207 466 5000 on 19 September
Glen Murray, Finance Director 0141 249 3850 thereafter
Buchanan
Diane Stewart / Carrie Clement 0131 226 6150
Richard Darby 0207 466 5000
Cenkos Securities, NOMAD
Ken Fleming 0131 220 6939
Jon Fitzpatrick 0207 397 8900
CHAIRMAN'S AND CHIEF EXECUTIVE OFFICER'S STATEMENT
We are delighted to announce Smart Metering Systems' first
interim results following the Company's flotation on AIM in July of
this year.
The results we are reporting today solely reflect our
performance as a private company. During this period, the Company
performed strongly as we prepared for flotation, with revenue up
28% and operating profit up 54%. Our three subsidiaries, UK Gas
Connections ("UKGC"), UK Meter Assets ("UKMA") and UK Data
Management ("UKDM") all made progress as we increased our gas
connections and our portfolio of meter assets under management, and
progressed the development of our ADM smart metering device.
The completion of the IPO was particularly pleasing to us as we
received significant support from blue chip institutional investors
for our business model. We welcome our new shareholders to the
Company.
The net proceeds from the IPO placing will be used to fund
organic growth. This process has already started and, since July
2011, we have invested more than GBP2.0m in new gas meter
assets.
Financial Review
Revenue increased by 28% in the six months to 30 June 2011 to
GBP7.4m (H1 2010: GBP5.8m) with a 54% corresponding increase in
gross profit of GBP1.4m to GBP3.8m (H1 2010: GBP2.4m).
Capital expenditure on new gas meters amounted to GBP3.9m (H1
2010: GBP2.0m). The Company has excellent visibility of earnings as
contracts with gas suppliers provide predictable recurring
revenues. Recurring meter rental income showed good progress in the
period, increasing by 58% to GBP3.0m (2010: GBP1.9m).
The Company showed good operational gearing as it continued to
grow without adding significantly to its overhead cost base.
The cash balance at 30 June was GBP1.3m (2010: GBP0.2m). Post
period end this balance was increased by GBP8.6m, the net proceeds
of the IPO placing.
The Company is not declaring a dividend at this stage but,
subject to the Company's financial performance, intends to pay a
maiden interim dividend for the financial year ending 31 December
2012.
Operational Review
Smart Metering Systems benefits by being the UK's only
independent provider of the full range of integrated gas services
from the management of gas connections and operation of gas meter
assets to a comprehensive smart metering solution.
UKGC provides gas connection and metering services to the UK's
major gas suppliers who employ UKGC on a non-exclusive basis to
install meters and provide gas connections for their end consumers.
UKGC saw modest increases in gas connection activity during the
period, although it experienced an unusually high level of
transactions in late June.
UKMA is an OFGEM-accredited meter asset manager engaged in the
ownership, operation and management of domestic and industrial and
commercial gas meter assets. As at 30 June, UKMA's meter assets
portfolio had continued to grow with the main licensed gas
suppliers in the UK, increasing to 227,517 at the period end from
221,000 at the time of the publication of the AIM admission
document.
As at 12 September 2011, this had increased to 240,309 meter
assets representing an increase of 9% since flotation. The
substantially unutilised net proceeds of the IPO placing and the
Company's existing cash resources will provide the Company with the
platform to continue to grow its meter assets portfolio In addition
we are in the process of completing additional bank facilities
which further increases our capital for investment.
The Company's IT system, used to manage these assets, has been
stress tested to 5m meter assets, providing further room to grow
without incurring significant expenditure.
UKDM is our ESTA-approved data management company. It operates
and manages our automatic meter reading services utilising the
Company's patent pending ADM smart metering solution for the gas
and water markets. Trials of the ADM device are complete with
Contract Natural Gas Limited, and indications to commence trials
with the Company's other gas supplier customers, which represent
80% of the I&C market, have been received.
The key feature of the ADM solution is its simple plug and play
design which can utilise existing pulse-enabled gas meters,
reducing installation costs and the need to dispose of them in the
field. A simple key swipe to activate eliminates manual
commissioning onsite and operational manual intervention and
increases data accuracy. The Company's existing IT system and
secure communication infrastructure is used to track and manage the
ADM device and securely deliver half hourly meter reading
information direct to the gas suppliers.
Outlook
Our business continues to show good progress and the Company has
made an encouraging start to its life as a quoted company.
The Company has invested in and developed a strong business
model that is designed to stand up to competitive pressure. It has
an established 'fit-for-purpose' IT system, a strong and robust
contract structure and a patent pending smart metering solution
that is designed to unlock further growth.
Our strategy is to provide a consistently high quality service
to our customers and to deliver organic growth in our gas meter
asset portfolio, securing new gas meters and benefiting from the
replacement of older existing meters in the I&C market.
Trials of our automated meter reading solution, ADM, will
continue throughout the remainder of the year with completion
anticipated by early 2012.
We are confident of the outlook for the remainder of the
year.
In conclusion, we would like to take this opportunity of
thanking all our advisers who helped the Company during the IPO
process, welcoming our new shareholders and other stakeholders, and
thanking our management and staff for their continued and strong
support.
Kevin Lyon Alan Foy
Chairman Chief Executive Officer
19 September 2011
SMS plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE
2011
6 Months 6 Months
ended ended Year ended
30 June 31 December
2011 30 June 2010 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
REVENUE 7,391 5,757 12,368
Cost of sales (3,625) (3,308) (6,876)
Gross Profit 3,766 2,449 5,492
Administrative expenses (1,906) (1,657) (4,314)
PROFIT FROM OPERATIONS 1,860 792 1,178
Attributable
to:
Operating profit before exceptional
items 1,860 792 2,042
Exceptional
items - - (864)
------------------- ------------------ ------------ -------------- ---------------
Finance costs (326) (88) (321)
PROFIT BEFORE TAXATION 1,534 704 857
Taxation (344) (301) (367)
PROFIT FOR THE YEAR
ATTRIBUTABLE TO EQUITY HOLDERS 1,190 403 490
Other comprehensive
income - - -
Total comprehensive
income 1,190 403 490
============ ============== ===============
Earnings per share - basic
(pence) 1.78 0.60 0.73
Earnings per share - diluted
(pence) 1.69 0.60 0.73
SMS plc
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2011
31
30 June 30 June December
2011 2010 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 1,948 1,801 1,731
Property, plant and equipment 16,463 10,108 12,951
Financial asset investments - 20 -
18,411 11,929 14,682
------------ ---------- ---------
Current assets
Inventories 9 - -
Trade and other receivables 2,679 1,783 1,219
Financial asset investments - 517 180
Cash and cash equivalents 1,269 192 1,835
Other current financial
assets 56 - 99
---------
4,013 2,492 3,333
------------ ---------- ---------
TOTAL ASSETS 22,424 14,421 18,015
------------ ---------- ---------
LIABILITIES
Current liabilities
Trade and other payables 7,146 6,274 6,090
Bank loans and overdrafts 1,174 1,212 1,003
Obligations under hire purchase agreements - 14 7
Other current financial
liabilities 205 - 171
8,525 7,500 7,271
------------ ---------- ---------
Non-current liabilities
Bank loans 10,199 4,121 8,253
Deferred tax liabilities 1,163 860 964
11,362 4,981 9,217
------------ ---------- ---------
TOTAL LIABILITIES 19,887 12,481 16,488
------------ ---------- ---------
NET ASSETS 2,537 1,940 1,527
============ ========== =========
EQUITY
Share capital 667 - -
Other reserves 1 1 1
Retained earnings 1,869 1,939 1,526
TOTAL EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE PARENT COMPANY 2,537 1,940 1,527
============ ========== =========
SMS plc
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
FOR THE PERIOD ENDED 30 JUNE
2011
Share Other Retained
capital reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
Attributable to owners of
the parent
company:
As at 1 July
2010 - 1 1,939 1,940
Profit for period - - 87 87
Transactions with owners in
their
capacity as owners:
Dividends - - (500) (500)
Balance as at 31 December
2010 - 1 1,526 1,527
Profit for period - - 1,190 1,190
Transactions with owners in
their
capacity as owners:
Bonus issue 667 - (667) -
Dividends - - (180) (180)
Balance as at 30 June
2011 667 1 1,869 2,537
========== ======== ========== ========
SMS plc
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30 JUNE
2011
30 June 30 June 31 December
2011 2010 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxation 1,534 704 857
Finance costs 326 88 321
Depreciation 416 265 598
Amortisation 118 118 249
Investment revaluation - - 337
Increase in inventories (9) - -
(Increase)/decrease in trade
and other receivables (1,515) 162 775
Increase in trade and other
payables 1,150 451 448
Loss on disposal of investment - - 5
CASH GENERATED FROM OPERATIONS 2,020 1,788 3,590
Taxation - - 1
NET CASH GENERATED FROM OPERATIONS 2,020 1,788 3,591
---------- ---------- ------------
INVESTING ACTIVITIES
Payments to acquire property,
plant and equipment (3,938) (2,069) (5,246)
Disposal of fixed asset investment - - 15
Payment to acquire intangible
assets (334) (56) (118)
NET CASH USED IN INVESTING
ACTIVITIES (4,272) (2,125) (5,349)
---------- ---------- ------------
FINANCING ACTIVITIES
Net proceeds from new borrowings
less capital repaid 2,128 (278) 4,304
Net outflow from other long
term creditors (3) (364) (554)
Finance costs (248) (88) (250)
Dividends paid (180) - (500)
NET CASH GENERATED FROM (UTILISED
IN)
FINANCING ACTIVITIES 1,697 (730) 3,000
---------- ---------- ------------
Net (decrease)/increase in
cash and cash equivalents (555) (1,067) 1,242
Cash and cash equivalents at
the beginning of the period 1,824 582 582
Cash and cash equivalents at
the end of the period 1,269 (485) 1,824
========== ========== ============
SMS plc
Notes to the accounts
1 Basis of preparation and accounting policies
Basis of preparation
The Group's half yearly financial report consolidates the
results of the company and its subsidiary undertakings made up to
30 June 2011. The company is a limited liability company
incorporated and domiciled in Scotland and whose shares are quoted
on AIM, a market operated by The London Stock Exchange.
The financial information contained in this half-yearly
financial report does not constitute statutory accounts as defined
in section 434 of the Companies Act 2006. It does not therefore
include all the information and disclosures required in the annual
financial statements and should be read in conjunction with the
Group's annual financial statements as at 31 December 2010.
The financial information for the 6 months ended 30 June 2011 is
also unaudited.
The Group's statutory accounts for the year ended 31 December
2010 have been delivered to the Registrar of Companies. The report
of the auditors on these accounts was unqualified and did not
contain a statement under Section 498 of the Companies Act 2006.
The financial statements have been prepared on a going concern
basis which the directors believe is appropriate for the following
reason:
The directors have prepared cashflow forecasts which show the
Group expects to meet its liabilities as they fall due for a period
in excess of 12 months from the date of these financial
statements.
Significant accounting policies
The accounting policies used in the preparation of the financial
information for the six months ended 30 June 2011 are in accordance
with the recognition and measurement criteria of International
Financial Reporting Standards ('IFRS') as adopted by the European
Union and are consistent with those which will be adopted in the
annual statutory financial statements for the year ended 31
December 2011.
2 Segmental Reporting
For management purposes, the Group is organised into two core
divisions, management of assets and installation of meters, which
form the basis of the Group's reportable operating segments.
Operating segments within those divisions are combined on the basis
of their similar long term economic characteristics and similar
nature of their products and services, as follows:
The management of assets comprises regulated management of gas
meters within the UK and the management of ADM, our automatic meter
reading device.
The installation of meters comprises the installation of
domestic and industrial & commercial gas meters throughout the
UK.
Management monitors the operating results of its divisions
separately for the purpose of making decisions about resource
allocation and performance assessment. The operating segments
disclosed in the financial statements are the same as reported to
the Board. Segment performance is evaluated based on gross profit
or loss excluding operating costs not reported by segment,
depreciation, amortisation of intangible assets and exceptional
items.
The following tables present information regarding the Group's
reportable segments for the six months ended 30 June 2011, six
months ended 30 June 2010 and the year ended 31 December 2010.
SMS plc
Notes to the accounts (cont.)
2 Segmental Reporting (cont.) Asset Asset Total
management installation operations
30 June 2011 GBP000's GBP000's GBP000's
Segment revenue 3,018 4,373 7,391
Operating costs (1,011) (2,614) (3,625)
----------- ------------- -----------
Segment profit - group gross
profit 2,007 1,759 3,766
Items not reported by segment
Other operating
costs (1,372)
Depreciation (416)
Amortisation (118)
Group operating profit after
amortisation and
exceptional items 1,860
Net finance costs (326)
Profit before
tax 1,534
Tax expense (344)
Profit for year 1,190
===========
Asset Asset Total
management installation operations
30 June 2010 GBP000's GBP000's GBP000's
Segment revenue 1,911 3,846 5,757
Operating costs (816) (2,492) (3,308)
----------- ------------- -----------
Segment profit - group gross
profit 1,095 1,354 2,449
Items not reported by segment
Other operating
costs (1,274)
Depreciation (265)
Amortisation (118)
Group operating profit after
amortisation and
exceptional items 792
Net finance costs (88)
Profit before
tax 704
Tax expense (301)
Profit for year 403
===========
SMS plc
Notes to the accounts (cont.)
Segmental Reporting
2 (cont.) Asset Asset Total
management installation operations
31 December 2010 GBP000's GBP000's GBP000's
Segment revenue 4,372 7,996 12,368
Operating costs (2,045) (4,831) (6,876)
----------- ------------- -----------
Segment profit - group gross
profit 2,327 3,165 5,492
Items not reported by
segment
Other operating
costs (2,603)
Depreciation (598)
Amortisation (249)
Exceptional items (864)
Group operating profit
after amortisation and
exceptional items 1,178
Net finance costs (321)
Profit before
tax 857
Tax expense (367)
Profit for year 490
===========
All revenues and operations are based and
generated in the UK.
The Group has one major customer that generated turnover within
each segment as listed below:
6 Months 6 Months
ended ended Year ended
30 June 30 June 31 December
2011 2010 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Asset management 2,034 1,313 2,893
Asset installation 1,053 534 1,987
3,087 1,847 4,880
========== ========== ============
SMS plc
Notes to the accounts
(cont.)
2 Segmental Reporting (cont.)
No segmentation is presented for the majority of Group assets
and liabilities as these are managed centrally, independently
of operating segments.
Those assets and liabilities that are managed and reported
on a segmental basis are detailed below.
Asset Asset Total
management installation operations
30 June 2011 GBP000's GBP000's GBP000's
Assets reported by segment
Intangible assets 1,948 - 1,948
Plant and machinery 16,463 - 16,463
----------- ------------- -----------
18,411 - 18,411
Assets not reported by segment 4,013
Total assets 22,424
===========
Liabilities reported by segment
Obligations under hire purchase
agreements - - -
----------- ------------- -----------
- - -
Liabilities not reported by
segment 19,887
19,887
===========
Asset Asset Total
management installation operations
30 June 2010 GBP000's GBP000's GBP000's
Assets reported by segment
Intangible assets 1,801 - 1,801
Plant and machinery 10,094 - 10,094
----------- ------------- -----------
11,895 - 11,895
Assets not reported by segment 2,526
Total assets 14,421
===========
Liabilities reported by segment
Obligations under hire purchase
agreements 14 - 14
----------- ------------- -----------
14 - 14
Liabilities not reported by
segment 12,467
12,481
===========
SMS plc
Notes to the accounts
(cont.)
Segmental Reporting
2 (continued)
Asset Asset Total
management installation operations
31 December 2010 GBP000's GBP000's GBP000's
Assets reported by
segment
Intangible assets 1,731 - 1,731
Plant and machinery 12,875 - 12,875
----------- ------------- ------------
14,606 - 14,606
Assets not reported
by segment 3,409
Total assets 18,015
============
Liabilities reported
by segment
Obligations under hire
purchase agreements 7 - 7
----------- ------------- ------------
7 - 7
Liabilities not reported
by segment 16,481
Total liabilities 16,488
============
6 Months 6 Months
3 Earnings per share to to Year to
30 June 30 June 31 December
2011 2010 2010
GBP000's GBP000's GBP000's
Profit for the period attributable
to equity shareholders (basic
and diluted) 1,190 403 490
Basic earnings
per share (p) 1.78 0.60 0.73
Diluted earnings
per share (p) 1.69 0.60 0.73
The weighted average number of ordinary shares
used in the calculation of basic and diluted
earnings per share for each period were calculated
as follows:
Issued ordinary 1p
shares at start of
period 300 300 300
Effects of sub division
of GBP1 shares into
100 GBP0.01 shares 29,700 29,700 29,700
Effect of bonus issue
of 4,980,000 shares 4,980,000 4,980,000 4,980,000
Effect of bonus issue
of 61,663,080 shares 61,663,080 61,663,080 61,663,08
Number of ordinary
shares for the period
- for basic
----------- ------------- ------------
earnings per share 66,673,080 66,673,080 66,673,08
Effect of share options
in issue 3,800,833 - -
----------- ------------- ------------
Number of ordinary
shares for the period
- for diluted
earnings per share 70,473,913 66,673,080 66,673,08
=========== ============= ============
SMS plc
Notes to the accounts (cont.)
4 Events after the Reporting Period
On 8 July 2011 Smart Metering Systems plc completed admission to
AIM and the successful placing of 16,666,667 shares raising GBP10m
(GBP8.65m net of expenses).
The listing has resulted in 46% of the shares being held by
directors and 54% by external shareholders.
5 The half yearly financial report was approved by the Board of
Directors on 19 September 2011.
6 A copy of this half yearly financial report is available from
the Company's Registered Office or by visiting our website at
www.sms-plc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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