TIDMSMS
RNS Number : 9076Z
Smart Metering Systems PLC
28 January 2022
28 January 2022
Smart Metering Systems plc
Trading update
Smart Metering Systems plc (AIM: "SMS", the "Group"), a fully
integrated energy infrastructure company owning and managing meter
assets, energy data, grid-scale battery storage and other carbon
reduction ("CaRe") assets is pleased to provide a trading update
for the year ended 31 December 2021 ("FY 2021").
The Group will announce its audited results for FY 2021 on 15
March 2022.
Highlights
-- Index-linked annual recurring revenue ("ILARR") grew 11.6% to
GBP85.9m (31 December 2020: GBP77.0m)
-- Total meter and data assets increased to 4.2m (31 December 2020: 3.8m)
o Domestic smart meter portfolio increased to 1.7m (31 December
2020: 1.3m)
o Smart meter order pipeline increased to c.2.55m(1) (31
December 2020: c.2.0m), net of smart meter installations in
2021
-- Grid-scale battery pipeline increased to 620MW (31 December 2020: 267MW(2) )
o Fully secured pipeline of 290MW (31 December 2020: 117MW)
o First 50MW site is now operational
-- FY 2021 underlying PBT is expected to be marginally ahead of
consensus, after being upgraded in September 2021
-- Strong net cash position of GBP118m as at 31 December 2021
reflects internal cash generation and the net proceeds of the
Group's GBP175m equity placing to finance future growth
-- Board remains confident of the consensus expectations for the
current financial year ("FY 2022")
-- Expected FY 2022 dividend of 30.25 pence per share, +10%
y-o-y and in line with stated policy
Index-linked annual recurring revenue
Total meter and data asset ILARR growth of 11.6% to GBP85.9m
driven by:
Category % change ILARR Details
Domestic smart meters +17.6% GBP50.1m 1.7 million smart meters
--------- --------- --------------------------------
Data assets +18.8% GBP13.9m Includes GBP2.0m data service
contracts acquired as part
of I&C Half Hourly (HH)
meter portfolio acquisition
--------- --------- --------------------------------
I&C meters +53.3% GBP4.6m Includes GBP1.1m from I&C
HH meter portfolio acquisition
--------- --------- --------------------------------
Traditional domestic -11.3% GBP11.8m Traditional meters to be
meters exchanged for smart over
the UK smart meter rollout
programme
--------- --------- --------------------------------
Third party assets -14.1% GBP5.5m Industry appointment to
third party owned meters
--------- --------- --------------------------------
Smart meter pipeline and installation run rate
With energy prices at record highs, the UK energy market has
been experiencing considerable turbulence since the final quarter
of 2021. This has resulted in the failure of a number of energy
suppliers and the implementation of both the UK's Supplier of Last
Resort ("SoLR") mechanism and Special Administration regime.
While the failure of some energy suppliers has resulted in
movement in our customers' metering portfolios the net impact on
the Group's pipeline has been negligible. We have also benefitted
from a strengthening in our customer base as some portfolios have
consolidated into larger SMS customers through the SoLR process.
The Board remains comfortable with the level of previously guided
contracted smart meter order pipeline, which as at 31 December 2021
stood at c.2.55m(1) (31 December 2020: c.2.0m).
In December 2021 the Group also announced a four-year extension
to its exclusivity agreement and partnership with Shell Energy
Retail Limited for the installation and funding of smart meters.
The extended agreement runs until December 2025 and covers the UK's
mandated smart meter rollout period.
The Group's installation run rate has averaged c.30,000 meters
per month since June 2021; a strong recovery following the
disruption caused by COVID-19. The Group expects continued
progressive improvement in this run rate in FY 2022 and
thereafter.
Strong progress in establishing grid-scale battery storage
pipeline
During 2021, SMS made considerable progress in further
developing its pipeline of grid-scale battery storage assets. The
total pipeline increased to 620MW as at 31 December 2021 compared
to 267MW(2) at 31 December 2020. Of the total 620MW pipeline, 290MW
has been fully secured with the remaining 330MW under
exclusivity.
The Group is also pleased to report that the first 50MW battery
site is now operational. Of the remaining 240MW secured pipeline,
140MW is currently under construction.
FY 2021 underlying PBT marginally ahead of consensus
expectations
FY 2021 underlying PBT is expected to be marginally ahead of
consensus, after being upgraded in September 2021. The Group's
year-end cash position of GBP118m reflects internal cash generation
and the net proceeds of the GBP175m equity placing to finance
future growth.
Alan Foy, CEO, SMS commented:
"2021 was a year of substantial progress for SMS and we ended
the year strongly, despite the broader turbulence in the UK energy
market.
We delivered profit marginally ahead of upgraded expectations,
saw good growth in our index-linked annualised recurring revenue
and ended the year with a strong cash position.
Our contracted smart meter order pipeline has proved resilient
despite the market turbulence in the final quarter of the year, and
we remain comfortable with the level of previously guided
contracted order pipeline. We were also pleased to extend our
exclusivity agreement with Shell Energy Retail.
We have continued to make encouraging progress in the
development of our grid-scale battery storage assets and pipeline,
with our first 50MW battery site now operational.
On the ESG front we are pleased with the progress made towards
our 2030 net-zero carbon roadmap, our committee engagement and
employee wellbeing programmes and have retained our strong focus on
ensuring solid corporate governance.
As we look at 2022, we remain confident with previously guided
expectations for the year. We have a strong balance sheet thanks to
our recent equity raise and organically-generated cash, and a
growing smart meter and grid-scale battery pipeline."
(1) 0.9m increase offset by installations in 2021
(2) 267MW battery pipeline was increased to 470MW in March 2021
and then to 620MW in November 2021
For further information:
Smart Metering Systems plc 0141 249 3850
Alan Foy, Chief Executive Officer
Dilip Kejriwal, Investor Relations
Cenkos Securities plc (Joint Broker 0131 220 6939 / 020
and Nomad) 7397 8900
Neil McDonald / Pete Lynch
Investec Bank plc (Joint Broker)
Christopher Baird / Henry Reast
020 7597 5970
RBC Capital Markets (Joint Broker)
Matthew Coakes / Evgeni Jordanov /
Jack Wood 020 7653 4000
Instinctif Partners sms@instinctif.com
Tim Linacre / Guy Scarborough / Sarah
Hourahane 07917 178 920
Notes to Editors
Smart Metering Systems plc (www.sms-plc.com) is the fully
integrated energy infrastructure company owning and managing meter
assets, energy data, grid-scale batteries and other carbon
reduction (CaRe) assets. The Group manages and optimises these
assets through its in-house technology and data analytical platform
"METIS".
Established in 1995, SMS provides a full end-to-end service,
from funding and installation to management and maintenance, with a
highly skilled workforce, deep engineering expertise and
well-established industrial partnerships.
SMS is leading the low carbon, smart energy revolution in the UK
and is committed to reducing its own carbon emissions to net zero
by 2030. SMS has been recognised with the London Stock Exchange's
Green Economy Mark every year since it was introduced in 2019.
SMS plc is headquartered in Glasgow with a national presence
across twelve UK locations.
SMS's shares are listed on AIM.
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END
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