TIDMSMS
RNS Number : 5631Q
Smart Metering Systems PLC
02 September 2014
Smart Metering Systems plc
("SMS" or "the Company")
Interim Results for the six months ended 30 June 2014
Smart Metering Systems plc (AIM: SMS.L), the integrated metering
services company that connects, owns, operates and maintains
current generation and new advanced metering assets and
databases,is pleased to announce its interim results, which show
continued growth for the six months ended 30 June 2014.
Financial highlights
-- Revenue increased by 44% to GBP18.9m (H1 2013: GBP13.2m) -
increase of 24% excluding Utility Partnership Limited ("UPL")
-- Recurring meter rental increased by 43% to GBP8.6m (H1 2013:
GBP6.0m), representing 46% of total revenue
-- Gross profit increased by 52% to GBP12.2m (H1 2013: GBP8.1m)
- increase of 38% excluding UPL
-- Adjusted EBITDA* increased by 59% to GBP8.7m (H1 2013: GBP5.5m)
- increase of 50% excluding UPL
-- Basic earnings per share increased 23% to 4.02p (H1 2013: 3.27p)
-- Interim dividend increased by 34% to 0.94p per ordinary share
-- GBP14m acquisition of Utility Partnership Limited (UPL) on
14 April 2014: addition of c.GBP2m EBITDA annual run rate adding
electricity connections, meters, data and energy services to
SMS's services
-- Net debt of GBP48.6m and a net debt to EBITDA of 2.8x
-- Available cash and unused debt facility of GBP56.4m
*Excluding exceptional items and fair value adjustments
Operational highlights
-- Total meter portfolio increased by 13% to 534,000 (December
2013: 469,000)
-- Increase of 48% in capital investment in meter assets to GBP15.5m
(H1 2013: GBP10.5m)
-- Increase in annualised recurring gas meter rental at 30 June
2014 of 42% to GBP18.8m (H1 2013: GBP13.2m)
-- Contract extensions or additions from a number of major customers,
including British Gas Business (after half year end on 23 July
2014)
-- Acquisition of UPL with an annualised run rate c.GBP2m EBITDA
from electricity market providing connections, meters, data
and energy services
-- ADM(TM) installations increased to over 24,000 units to date
- Received full accreditation for water market in the UK
- International trials continuing
-- Asset installation
- Increase of 32% in asset installation revenue to GBP9.5m
(H1 2013: GBP7.2m), of which gas connections business reduced
by 13% to GBP3.6m (H1 2013: GBP4.1m)
-- Strengthened Board with the appointment of energy sector expert
Willie MacDiarmid as Non-executive Director
Alan Foy, Chief Executive Officer, commented:
"SMS has recorded another six months of strong trading, marked
by further milestones for the Company including an acquisition and
a significant contract win. We are especially excited that we can
now offer our expanded customer base a full gas and electricity
proposition, following SMS's acquisition of Utility Partnership
Limited in the first half of 2014.
SMS has grown in line with expectations and is well positioned
in its markets following the acquisition and integration of Utility
Partnership Limited's complementary electricity business activities
and the announcement of a new contract from British Gas Business
which will have a positive impact over the next three years."
For further information:
Smart Metering Systems plc
Alan Foy, Chief Executive Officer
Glen Murray, Finance Director 0141 249 3850
Cenkos Securities
Neil McDonald
Beth McKiernan 0131 220 6939 / 0207 397 8900
Kreab Gavin Anderson
Natalie Biasin
Matthew Jervois 020 7074 1800
Notes to editors
About Smart Metering Systems
Established in 1995, Smart Metering Systems plc, based in
Glasgow, connects, owns, operates and maintains metering systems
and databases on behalf of major energy companies.
Currently the Company is concentrating its efforts on offering
its unique integrated services to the UK industrial and commercial
gas market in which its customers have an 80% market share.
The Company has further applications for gas with its ADM(TM)
device which allows "smart" functions such as remote reading and
half-hourly consumption data to be offered to customers in addition
to the normal metering services.
SMS expanded its services into the electricity market through
the acquisition of Utility Partnership Limited in April 2014. The
Company can now provide a fully integrated service from beginning
to end to cover the installation of a gas/electricity
supply/connection to the procurement, installation and management
of a gas or electricity meter asset to the collection and
management of customer data and ongoing energy management services.
Longer term the Company also has additional applications for water
and LPG.
The Company was admitted to the AIM market in July 2011 and is
now part of the FTSE AIM 50 index. For more information on SMS
please visit the Company's website: www.sms-plc.com.
Chairman's statement
We are pleased to announce further growth across our business
for the first half of 2014. We have continued to expand both our
customer base and our meter portfolio. The first six months are
also notable for our acquisition of Utility Partnership Limited , a
leading manager of electricity meters in the UK and provider of
electricity connections, design, meter installation, data
management and energy management services, resulting in the
addition of a full electricity proposition.
Our business
Our business is based on connecting, owning, operating and
maintaining metering systems and databases on behalf of major
energy companies and energy brokers.
Our core focus is on gas and electricity meters in the UK, where
we aim to:
-- be the market leader in the independent ownership of industrial
and commercial (I & C) meters; and
-- grow our domestic meters business organically and position
the business for the opportunity to gain gas and electricity
smart meter ownership and management services in the UK's
future smart metering rollout plan.
We further aim to build our established international activities
through existing metering, data and energy services and
products.
We will also seek to expand into other markets where "smart"
applications such as remote reading and half-hourly consumption
data are important.
People
We are delighted to welcome 168 new colleagues from UPL, which
more than doubles our staff numbers to over 290.
Our new colleagues also believe that the most important element
of running a business is to ensure that we provide the highest
quality of service to our customers. The strong performance of our
newly combined businesses in the first half of this year is
testament to the dedication and expertise that each member of the
team invests in our business and in the relationships with our
valued customers. We would like to thank all members of staff for
their continued support and hard work.
On 14 April 2014, SMS welcomed Willie MacDiarmid as a
Non-executive Director of the Company. Willie is a valued addition
to our Board. He is a proven senior executive with a background in
the energy sector and he has had involvement at the highest level
with the last two UK governments on a variety of strategic and
operating working groups. As a member of the Scottish Power
executive team, the Company's successful metering business was part
of Willie's portfolio.
During the six months to 30 June 2014, Nigel Christie retired
from the Board as a Non-executive Director, Miriam Greenwood took
over the Chair of the Company's Audit Committee and Willie
MacDiarmid took over the Chair of the Company's Remuneration
Committee.
Dividend
At the time of our admission to AIM, we stated that we intended
to adopt a dividend policy that would reflect the Group's
profitability, underlying growth prospects and availability of cash
and distributable reserves, while maintaining an appropriate level
of dividend cover.
SMS is therefore delighted to announce a proposed interim cash
dividend to shareholders of 0.94p per ordinary share for the half
year ended 30 June 2014, marking a 34% increase. The interim
dividend will be will be paid on 21 November 2014 to those
shareholders on the register (record date) on 17 October 2014 with
an ex-dividend date of 16 October 2014.
Outlook
The first half of 2014 has proved a successful six months for
the business, which include the addition of a full service
electricity offering, increasing long-term recurring meter rental
revenue and a continued strong financial performance. SMS looks
forward with confidence to the opportunities in the UK and
internationally as we drive our vision to be the leading
independent provider of smart metering solutions to suppliers in
the utility sector with the highest levels of customer service.
Chief Executive Officer's statement
During the first half of 2014, the meter portfolio surpassed the
half-million mark with an increase of 65,000. Contracts secured in
2012 with DONG Energy, Opus Gas Supply, Flow Energy, Daligas and
Crown Gas and Power continue to help drive portfolio growth. The
British Gas Business contract secured in July 2014 will further
increase our meter portfolio.
Our business model of building up the annualised recurring gas
meter rental continues. These recurring revenues are as a result of
the long-term nature of our contracts, which provide an
index-linked revenue stream.
Acquisition of UPL
On 14 April 2014, SMS acquired the entire issued share capital
of UPL. With this acquisition we will look to increase the
electricity meter portfolio, further adding to our recurring rental
revenue.
The UPL acquisition is proving successful and will accelerate
the overall strategic vision of SMS's enlarged business in three
key areas:
-- to drive growth opportunities through connections, metering and data
management services to an expanded gas and electricity customer base;
-- to position our business as a dual gas and electricity meter provider
for the UK's future smart meter rollout programme; and
-- to provide further opportunities to expand internationally.
UPL manages over 90,000 electricity meters with core customers
such as Centrica, Opus, SSE and EDF. Other customers include:
Network Rail, Vodafone, Santander, Sainsbury's, O2 UK and Cable
& Wireless. UPL has grown very successfully since its
establishment and for the year ended 31 July 2013 turnover was
GBP11.1m with gross profit of GBP3.7m and EBITDA (after exceptional
items) of GBP2.0m.
The service we offer and culture of our two companies complement
each other well and now as a single enlarged business we are
already seeing positive results at an operational, financial and
personnel level.
Industrial and Commercial meters
In addition to our recent new contract win with British Gas
Business, we have secured extensions from major customers on
existing contracts and we have added UPL's portfolio of over 6,000
industrial and commercial meters.
ADM(TM)
The ADM(TM) device is SMS's advanced metering solution which
allows for remote meter reading on a half-hourly basis and has been
designed in line with our own customer requirements.
SMS has more than tripled the number of ADM(TM) device
installations in the last year to 24,000 and feedback continues to
be positive.
Domestic Meters
SMS's opportunity in the domestic meter market has been
strengthened through our now combined gas and electricity full
service offering which ideally positions the business for the UK's
current domestic gas and electricity smart meter rollout.
Other Markets
Our trials of the ADM(TM) device across Asia, Africa and the UK
are advancing well. SMS also believes there is scope to trial the
device in current UPL customer markets.
Following an extensive accreditation process, we are also
pleased to announce that during the first half of the year the
products SMS developed for the UK water market have passed all
tests and received full accreditation.
Financial Review
Results for the period
During the first half of 2014, the Company increased revenue by
44% to GBP18.9m largely due to increasing recurring revenue,
predominantly meter rental but also data provision. In line with
the Company's strategy, annualised recurring meter rental revenue
grew by 42% to GBP18.8m compared with GBP13.2m as at 30 June 2013
and GBP15.5m as at 31 December 2013.
Asset installation revenue increased to GBP9.5m (H1 2013:
GBP7.2m). The gas connection business reduced slightly to GBP3.6m,
which is in line with the Company's more typical performance of
achieving a full year Gas Connection revenue of between GBP6m and
GBP7m.
Gross profit increased by 52% from GBP8.1m (H1 2013) to GBP12.2m
and adjusted EBITDA grew by 59% from GBP5.5m to GBP8.7m.
From April 2014, SMS has added an annualised run rate of
approximately GBP2m EBITDA from the acquisition of UPL, also adding
electricity connections, meters, data and energy management to
SMS's services.
Cash and borrowings
As at 30 June 2014, the Company had net debt of GBP48.6m
(December 2013: GBP33.3m). The Company's available cash and unused
debt facility stood at GBP56.4m.
In March 2014, SMS signed new long-term debt facilities with its
existing club of lenders, Barclays Bank PLC (lead bank), Clydesdale
Bank PLC and Bank of Scotland PLC. The terms, as before, include a
ten-year repayment profile.
The GBP105m revolving credit facility replaces the GBP45m
facility which was put in place in August 2012. It provides SMS
with significant additional financial flexibility as the Company
continues to accelerate growth and increase investment in its asset
base.
Capital investment in meter assets was GBP15.0m compared to
GBP10.5m in the first half of 2013.
Treasury policies
The Company uses interest rate swaps to manage it exposure to
movements in interest rates.
GBP28.2m of borrowings as at 30 June 2014 (December 2013:
GBP28.2m) were subject to a fixed rate.
Consolidated statement of comprehensive income
For the period ended 30 June 2014
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------------------------- ---------- ------------
Revenue 18,934 13,188 27,916
Cost of sales (6,697) (5,115) (10,101)
---------------------------------------------- ------- ---------- ------------
Gross profit 12,237 8,073 17,815
Administrative expenses (6,827) (4,230) (9,248)
---------------------------------------------- ------- ---------- ------------
Profit from operations 5,410 3,843 8,567
---------------------------------------------- ------- ---------- ------------
Attributable to:
Operating profit before exceptional items 6,300 4,156 8,834
Exceptional items and fair value adjustments (890) (313) (267)
---------------------------------------------- ------- ---------- ------------
Finance costs (779) (545) (1,122)
Finance income 8 24 26
---------------------------------------------- ------- ---------- ------------
Profit before taxation 4,639 3,322 7,471
Taxation (1,243) (594) (896)
---------------------------------------------- ------- ---------- ------------
Profit for the period
Attributable to equity holders 3,396 2,728 6,575
Other comprehensive income - - -
---------------------------------------------- ------- ---------- ------------
Total comprehensive income 3,396 2,728 6,575
---------------------------------------------- ------- ---------- ------------
Earnings per share - basic (pence) - Note 4 4.02 3.27 7.86
Earnings per share - diluted (pence) - Note 4 3.85 3.12 7.43
---------------------------------------------- ------- ---------- ------------
Consolidated statement of financial position
As at 30 June 2014
30 June 30 June 31 December
2014 2013 2013
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
-------------------------------------------------------------------------- ---------- -----------
Assets
Non-current assets
Intangible assets 10,393 1,920 2,018
Property, plant and equipment 73,908 45,721 57,382
----------------------------------------------------------------- ------- ---------- -----------
84,301 47,641 59,400
-------------------------------------------------------------------------- ---------- -----------
Current assets
Inventories 2,710 692 2,504
Trade and other receivables 11,168 3,585 6,099
Cash and cash equivalents 4,672 6,507 2,073
Other current financial assets 235 36 207
----------------------------------------------------------------- ------- ---------- -----------
18,785 10,820 10,883
-------------------------------------------------------------------------- ---------- -----------
Total assets 103,086 58,461 70,283
----------------------------------------------------------------- ------- ---------- -----------
Liabilities
Current liabilities
Trade and other payables 16,642 10,095 8,879
Bank loans and overdrafts 6,965 2,834 3,933
Obligations under hire purchase agreements 53 4 3
Other current financial liabilities - - -
----------------------------------------------------------------- ------- ---------- -----------
23,660 12,933 12,815
-------------------------------------------------------------------------- ---------- -----------
Non-current liabilities
Bank loans 46,281 23,215 31,475
Obligations under hire purchase agreements 50 7 6
Deferred tax liabilities 2,287 3,098 3,395
----------------------------------------------------------------- ------- ---------- -----------
48,618 26,320 34,876
-------------------------------------------------------------------------- ---------- -----------
Total liabilities 72,278 39,253 47,691
----------------------------------------------------------------- ------- ---------- -----------
Net assets 30,808 19,208 22,592
----------------------------------------------------------------- ------- ---------- -----------
Equity
Share capital 851 838 838
Share premium 8,971 8,971 8,971
Other reserves 4,258 1 1
Retained earnings 16,728 9,398 12,782
----------------------------------------------------------------- ------- ---------- -----------
Total equity attributable to equity holders of the parent company 30,808 19,208 22,592
----------------------------------------------------------------- ------- ---------- -----------
Consolidated statement of changes in shareholders' equity
For the period ended 30 June 2014
Share Share Other Retained
capital premium reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- -------- -------- --------- --------
Attributable to owners of the parent company:
As at 1 July 2013 838 8,971 1 9,398 19,208
Profit for period - - - 3,847 3,847
Transactions with owners in their capacity as owners:
Dividends - - - (588) (588)
Share options - - - 125 125
------------------------------- ---- -------- -------- --------- --------
Balance as at 31 December 2013 838 8,971 1 12,782 22,592
Profit for period - - - 3,396 3,396
Transactions with owners in their capacity as owners:
Shares issued 13 - 4,257 - 4,270
Dividends - - - (1,370) (1,370)
Deferred tax asset - - - 1,824 1,824
Share options - - - 96 96
------------------------------- ---- -------- -------- --------- --------
Balance as at 30 June 2014 851 8,971 4,258 16,728 30,808
------------------------------- ---- -------- -------- --------- --------
Consolidated cash flow statement
For the period ended 30 June 2014
Six months ended
30 June Six months ended 30 June Year ended 31 December
2014 2013 2013
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------------------------------------- ------------------------ ----------------------
Cash flow from operating activities
Profit before taxation 4,639 3,322 7,471
Finance costs 779 545 1,122
Finance income (8) (24) (26)
Fair value movements on derivatives (28) (206) (377)
Depreciation 2,066 1,194 2,754
Amortisation 298 118 262
Share-based payment expense 96 519 644
Increase in inventories 138 (319) (2,131)
Increase in trade and other receivables (118) (494) (2,961)
Increase in trade and other payables 4,272 1,890 826
--------------------------------------------------------- -------- ------------------------ ----------------------
Cash generated from operations 12,134 6,545 7,584
Taxation 76 (2) (206)
--------------------------------------------------------- -------- ------------------------ ----------------------
Net cash generated from operations 12,210 6,543 7,378
--------------------------------------------------------- -------- ------------------------ ----------------------
Investing activities
Payments to acquire property, plant and equipment (16,056) (10,811) (24,595)
Disposal of fixed asset investment - - 563
Payment to acquire intangible assets (164) (122) (364)
Acquisition of subsidiary (9,802) - -
Cash acquired with subsidiary 620 - -
Finance income 8 24 26
--------------------------------------------------------- -------- ------------------------ ----------------------
Net cash used in investing activities (25,394) (10,909) (24,370)
--------------------------------------------------------- -------- ------------------------ ----------------------
Financing activities
New borrowings 20,592 6,839 17,830
Capital repaid (2,754) (1,239) (2,875)
Net outflow from other long-term creditors 94 (2) -
Finance costs (779) (545) (1,122)
Net proceeds from share issue - 323 323
Dividends paid (1,370) (958) (1,546)
--------------------------------------------------------- -------- ------------------------ ----------------------
Net cash generated from financing activities 15,783 4,418 12,610
--------------------------------------------------------- -------- ------------------------ ----------------------
Net increase/(decrease) in cash and cash equivalents 2,599 52 (4,382)
Cash and cash equivalents at the beginning of the period 2,073 6,455 6,455
--------------------------------------------------------- -------- ------------------------ ----------------------
Cash and cash equivalents at the end of the period 4,672 6,507 2,073
--------------------------------------------------------- -------- ------------------------ ----------------------
Change in net debt
Cash and cash equivalents 4,672 6,507 2,073
Bank loans due within one year (6,965) (2,834) (3,933)
Bank loans due after one year (46,281) (23,215) (31,475)
Net cash generated from financing activities (48,574) (19,542) (33,335)
--------------------------------------------- -------- -------- --------
Notes to the interim report
For the period ended 30 June 2014
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 2014. 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 2013.
The financial information for the six months ended 30 June 2014
is unaudited.
The Group's statutory accounts for the year ended 31 December
2013 have been delivered to the Registrar of Companies. The report
of the auditor on these accounts was unqualified and did not
contain a statement under section 498 of the Companies Act
2006.
The interim financial information has been prepared on a going
concern basis which the Directors believe is appropriate for the
following reason:
The Directors have prepared cash flow forecasts which show the
Group expects to meet its liabilities as they fall due for a period
in excess of twelve months from the date of this interim financial
information. Our forecasts show continued capital investment which
is funded from retained profits and external finance. At 30 June
2014, the Group had cash of GBP4.7m and available facilities of
GBP51.8m and continued to be cash generative through trading
operations.
Significant accounting policies
The accounting policies used in the preparation of the financial
information for the six months ended 30 June 2014 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 2014.
2 Business Combinations
Acquisition of Utility Partnership Limited
On 14 April 2014, Smart Metering Systems acquired 100% of the
issued share capital of Utility Partnership Limited (UPL). UPL is a
manager of electricity meters in the UK and provider of electricity
connections, design, meter installations, data management and
energy management services.
The acquisition has been accounted for using the acquisition
method. The provisional fair value of the identifiable assets and
liabilities of UPL as at the date of acquisition was:
Fair value recognised on acquisition (unaudited) Previous carrying value (unaudited)
GBP'000 GBP'000
------------------------------------------------------------------- ------------------------------------
Property, plant and equipment 2,536 2,536
Software 2,574 -
Customer contracts 1,706 -
Other financial assets 84 84
Inventories 344 344
Trade and other receivables 4,998 4,998
Cash and cash equivalents 620 620
--------------------------------------------------------- -------- ------------------------------------
Total assets 12,862 8,582
--------------------------------------------------------- -------- ------------------------------------
Trade and other payables (879) (879)
Accruals and deferred income (1,950) (1,950)
Obligations under hire purchase agreements (106) (106)
--------------------------------------------------------- -------- ------------------------------------
Total liabilities (2,935) (2,935)
--------------------------------------------------------- -------- ------------------------------------
Total identifiable net assets at provisional fair value 9,927
Goodwill arising on acquisition 4,145
--------------------------------------------------------- --------
Total acquisition cost 14,072
--------------------------------------------------------- --------
The interim consolidated statements include the results of UPL
for the period from 14 April to 30 June 2014 during which time it
contributed GBP2,597k to revenue and GBP309k to group profit for
the period.
SMS and UPL are highly complementary and the acquisition will
enable significant growth opportunities by offering a full
end-to-end dual fuel service, incorporating connections, meter
assets installation, ownership and management, as well as data
management services, to the respective gas and electricity
customers of SMS and UPL.
In addition to the above synergies, the acquisition adds energy
management services to the Group's activities.
The goodwill recognised above is attributed to the expected
benefits of combining gas and electricity offerings.
The primary components of this residual goodwill comprise:
-- revenue synergies from dual fuel;
-- the workforce; and
-- new opportunities available to UPL as part of the larger AIM listed group.
The identifiable intangible assets will be amortised as
follow:
-- software - 20%
-- customer contracts 20%
Transaction costs of GBP485k incurred on the acquisition have
been included within exceptional items in the consolidated
statement of comprehensive income.
3 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, electric meters and ADM(TM) units within the UK.
The installation of meters comprises the installation of
domestic and industrial and commercial gas and electricity 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 2014, six
months ended 30 June 2013 and the year ended 31 December 2013.
Asset Asset Total
management installation Unallocated operations
30 June 2014 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------------------- ----------- ------------- ----------- -----------
Segment revenue 9,432 9,502 - 18,934
Cost of sales (1,542) (5,155) - (6,697)
---------------------------------------------------------------- ----------- ------------- ----------- -----------
Segment profit - Group gross profit 7,890 4,347 - 12,237
Other operating costs - - (3,888) (3,888)
Depreciation (1,758) - (173) (1,931)
Amortisation (118) - - (118)
Exceptional items - - (890) (890)
---------------------------------------------------------------- ----------- ------------- ----------- -----------
Group operating profit after amortisation and exceptional items 6,014 4,347 (4,951) 5,410
Net finance costs (771) - - (771)
---------------------------------------------------------------- ----------- ------------- ----------- -----------
Profit before tax 5,243 4,347 (4,951) 4,639
Tax expense (1,243)
--------------------------------------------------------------------------------------------------------- -----------
Profit for period 3,396
--------------------------------------------------------------------------------------------------------- -----------
Asset Asset Total
management installation Unallocated operations
30 June 2013 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------------------- ----------- ------------- ----------- -----------
Segment revenue 6,023 7,165 - 13,188
Cost of sales (1,134) (3,981) - (5,115)
---------------------------------------------------------------- ----------- ------------- ----------- -----------
Segment profit - Group gross profit 4,889 3,184 - 8,073
Other operating costs - - (2,605) (2,605)
Depreciation (1,122) - (72) (1,194)
Amortisation (118) - - (118)
Exceptional items - - (313) (313)
---------------------------------------------------------------- ----------- ------------- ----------- -----------
Group operating profit after amortisation and exceptional items 3,649 3,184 (2,990) 3,843
Net finance costs (521) - - (521)
---------------------------------------------------------------- ----------- ------------- ----------- -----------
Profit before tax 3,128 3,184 (2,990) 3,322
Tax expense (594)
---------------------------------------------------------------- ----------------------------------------------------
Profit for period 2,728
---------------------------------------------------------------- ----------------------------------------------------
Asset Asset Total
management installation Unallocated operations
31 December 2013 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------- ----------- ------------- ----------- -----------
Segment revenue 13,803 14,113 - 27,916
Cost of sales (2,575) (7,526) - (10,101)
--------------------------------------------- ----------- ------------- ----------- -----------
Segment profit - Group gross profit 11,228 6,587 - 17,815
Items not reported by segment
Other operating costs - - (5,965) (5,965)
Depreciation (2,654) - (100) (2,754)
Amortisation (262) - - (262)
Exceptional items and fair value adjustments - - (267) (267)
--------------------------------------------- ----------- ------------- ----------- -----------
Profit before interest and tax 8,312 6,587 (6,332) 8,567
Net finance costs (1,096) - - (1,096)
--------------------------------------------- ----------- ------------- ----------- -----------
Profit before tax 7,216 6,587 (6,332) 7,471
Tax expense (896)
--------------------------------------------- ----------------------------------------------------
Profit for year 6,575
--------------------------------------------- ----------------------------------------------------
Substantially all revenues and operations are generated and
based in the UK.
The Group has one major customer that generated turnover within
each segment as listed below:
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2014 2013 2013
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------- ---------- ------------
Asset management 4,742 3,499 7,677
Asset installation 2,531 2,993 4,901
------------------ ----- ---------- ------------
7,273 6,492 12,578
------------------------- ---------- ------------
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 2014 GBP'000 GBP'000 GBP'000
------------------------------------------ ----------- ------------- -----------
Assets reported by segment
Intangible assets 2,064 - 2,064
Property, plant and equipment 71,075 - 71,075
Inventories 2,710 - 2,710
------------------------------------------ ----------- ------------- -----------
75,849 - 75,849
Assets not reported by segment 27,237
------------------------------------------ ---------------------------------------
Total assets 103,086
------------------------------------------ ---------------------------------------
Liabilities reported by segment
Bank loans 53,246 - 53,246
Obligations under hire purchase agreements 103 - 103
------------------------------------------ ----------- ------------- -----------
53,349 - 53,349
Liabilities not reported by segment 18,929
------------------------------------------ ---------------------------------------
Total liabilities 72,278
------------------------------------------ ---------------------------------------
Asset Asset Total
management installation operations
30 June 2013 GBP'000 GBP'000 GBP'000
------------------------------------------ ----------- ------------- -----------
Assets reported by segment
Intangible assets 1,920 - 1,920
Property, plant and equipment 45,373 - 45,373
Inventories 692 - 692
------------------------------------------ ----------- ------------- -----------
47,985 - 47,985
Assets not reported by segment 10,476
------------------------------------------ ---------------------------------------
Total assets 58,461
------------------------------------------ ---------------------------------------
Liabilities reported by segment
Bank loans 26,049 - 26,049
Obligations under hire purchase agreements 11 - 11
------------------------------------------ ----------- ------------- -----------
26,060 - 26,060
Liabilities not reported by segment 13,193
------------------------------------------ ---------------------------------------
Total liabilities 39,253
------------------------------------------ ---------------------------------------
Asset Asset Total
management installation operations
31 December 2013 GBP'000 GBP'000 GBP'000
------------------------------------------ ----------- ------------- -----------
Assets reported by segment
Intangible assets 2,018 - 2,018
Property, plant and equipment 57,041 - 57,041
Inventories 2,504 - 2,504
------------------------------------------ ----------- ------------- -----------
61,563 61,563
Assets not reported by segment 8,720
------------------------------------------ ---------------------------------------
Total assets 70,283
------------------------------------------ ---------------------------------------
Liabilities reported by segment
Bank loans 35,408 - 35,408
Obligations under hire purchase agreements 9 - 9
------------------------------------------ ----------- ------------- -----------
35,417 35,417
Liabilities not reported by segment 12,274
------------------------------------------ ---------------------------------------
Total liabilities 47,691
------------------------------------------ ---------------------------------------
4 Earnings per share
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2014 2013 2013
GBP'000 GBP'000 GBP'000
----------------------------------------------------------------------- ---------- ------------
Profit for period used for calculation of basic EPS 3,396 2,728 6,575
Amortisation of intangible assets 298 118 262
Exceptional costs 890 313 267
Tax effect of adjustments (279) (101) (127)
----------------------------------------------------------- ---------- ---------- ------------
Earnings for the purpose of adjusted EPS 4,305 3,058 6,977
----------------------------------------------------------- ---------- ---------- ------------
Number of shares
Weighted average number of shares for the purpose
of calculating basic EPS 84,421,914 83,348,666 83,606,102
Effect of potentially dilutive ordinary shares:
- share options 3,704,051 3,947,294 3,440,742
----------------------------------------------------------- ---------- ---------- ------------
Weighted average number of ordinary shares for the purpose
of diluted EPS 88,125,965 87,295,960 87,046,844
----------------------------------------------------------- ---------- ---------- ------------
Earnings per share:
- basic (pence) 4.02 3.27 7.86
- diluted (pence) 3.85 3.12 7.55
Adjusted earnings per share:
- basic (pence) 5.10 3.67 8.35
- diluted (pence) 4.89 3.50 8.02
----------------------------------------------------------- ---------- ---------- ------------
The Directors consider that the adjusted earnings per share
calculation gives a better understanding of the Group's earnings
per share.
5 Dividend
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2014 2013 2013
GBP'000 GBP'000 GBP'000
----------------------------------------------------- ---------- ------------
Dividend on equity shares 1,370 958 1,546
--------------------------------------------- ------ ---------- ------------
After 30 June the Directors have approved an interim dividend of
0.94p per share for 2014, which has not been accrued as a liability
as at 30 June 2014 in accordance with IAS 8. The dividend will be
paid on 21 November 2014 with an ex-dividend date of 16 October
2014 and a record date of 17 October 2014.
6 The half-yearly financial report was approved by the Board of
Directors on 1 September 2014.
7 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.
Smart Metering Systems plc
2nd floor
48 St. Vincent Street
Glasgow G2 5TS
www.sms-plc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DMGGLVMNGDZM
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