TIDMSMS
RNS Number : 8194T
Smart Metering Systems PLC
27 July 2022
27 July 2022
Smart Metering Systems plc
Trading update
Smart Metering Systems plc (AIM: "SMS", the "Group"), which
installs and manages smart meters, energy data, grid-scale battery
storage and other carbon reduction ("CaRe") assets, provides a
trading update announcement.
Key points
-- ILARR(1) grew 8% to GBP93.1m at 30 June 2022 (31 December 2021: GBP85.9m)
-- Meter and data assets
-- smart meter portfolio increased to 1.9m at 30 June 2022 (31 December 2021: 1.7m)
-- secured a new smart meter contract win adding c.0.1m meters to the pipeline
-- smart meter order pipeline of c.2.42m(2) at 30 June 2022 (31 December 2021: c.2.55m)
-- continued growth in smart meter installation rates; no impact on meter supply
-- Grid-scale battery pipeline
-- first 50MW performing well ahead of management expectations
-- total pipeline increased to 760MW(3) at 30 June 2022 (31 December 2021: 620MW)
-- Continued progress in other CaRe products and services
including recent strategic investments in EV charging
infrastructure and energy data management
-- Net cash position at 30 June 2022 was GBP38.6m
-- FY 2022 underlying EBITDA and PBT expected to be marginally
ahead of previous expectations; confident in medium term
outlook
-- Expected FY 2022 dividend of 30.25 pence per share, +10%
year-over-year in line with stated policy
Tim Mortlock, CEO of SMS said:
"The global energy market has changed rapidly over the last few
months. The requirement for a low carbon, flexible and secure
energy system has never been greater or more acute.
Our purpose is to facilitate a lower cost, lower carbon energy
future. Our carbon reduction (CaRe) assets, managed by our in-house
technology platform METIS, have helped consumers manage their
energy bills throughout this difficult period.
Our two recent strategic investments in EV charging
infrastructure and energy data are complementary to our existing
end-to-end business model and enhance our ability to accelerate
other CaRe products and services.
The defensive nature of smart meters, combined with our
long-term index-linked cash flows has seen SMS demonstrate strong
financial and operational resilience throughout the pandemic,
energy market volatility and recent geopolitical upheaval. Our
existing pipeline of meter assets and grid-scale battery storage
assets alone is well on track to hit our medium-term growth
expectations, with significant additional opportunities for growth
in our established CaRe asset classes and in developing CaRe
products and services."
(1) Index-linked annualised recurring revenue
(2) c.0.1m contract win offset by meter installs in H1 2022
(3) 760MW pipeline includes the 50MW operational Burwell site
Index-linked annualised recurring revenue
Total meter and data asset ILARR was GBP93.1m at 30 June 2022,
representing growth of 8%, which includes the annual RPI adjustment
(+4.3% applied on 1 April 2022) (31 December 2021: GBP85.9m).
Category % change ILARR Details
Domestic smart meters + 15% GBP57.4m 1.9 million smart meters
--------- --------- -----------------------------
Data assets + 13% GBP15.7m 0.5 million data assets
--------- --------- -----------------------------
I&C meters + 10% GBP5.1m 0.1 million I&C meters
--------- --------- -----------------------------
Traditional domestic - 1% GBP11.6m Traditional meters to be
meters exchanged for smart over
the UK smart meter rollout
programme
--------- --------- -----------------------------
Third party assets - 39% GBP3.3m Industry appointment to
third party owned meters
(traditional). Now excludes
GBP2.2m of pass-through
third-party rental
--------- --------- -----------------------------
Meters
The meter installation run-rate continued to strengthen, in line
with the Group's expectations. 230,000 smart meters were installed
during H1 2022, with Q2 2022 average monthly run-rate at more than
40,000 meters (FY 2021: c.30,000 meters average per month). Our
total smart meter portfolio increased to 1.9m as a result. We have
a resilient diverse supply chain in place and the meter stock
within our UK warehouses to support this continued run-rate. We
expect to install at least 450,000 smart meters during FY 2022.
The smart meter order pipeline was c.2.42m at 30 June 2022 (31
December 2021: c.2.55m), net of smart meter installations during H1
2022 and including a new smart meter contract win of c.0.1m.
Grid-scale batteries
The Group's first site (Burwell, 50MW) commenced trading at the
end January 2022 and accessed all revenue streams from 1 March
2022. Thus far, the majority of the revenues have been generated
from the provision of frequency services, such as Dynamic
Containment. The site's current performance is well ahead of the
Board's expectations, equivalent to an annualised EBITDA
contribution of GBP0.1m/MW.
SMS also has 330MW of fully secured grid-scale battery projects,
of which 190MW is currently in construction including 40MW now
energised and entered commissioning. A further 380MW is under
exclusivity, giving a total pipeline of 760MW at 30 June 2022.
FY 2022 outlook
The FY 2022 underlying profitability is expected to be
marginally ahead of the Board's previous expectations, and we are
confident in the medium term outlook.
SMS expects to publish its first half results on 13 September
2022.
For further information:
Smart Metering Systems plc 0141 249 3850
Tim Mortlock, Chief Executive Officer
Gavin Urwin, Chief Financial Officer
Dilip Kejriwal, Head of Investor Relations
Cenkos Securities plc (Joint Broker 0131 220 6939 / 020 7397
and Nomad) 8900
Neil McDonald / Pete Lynch
Investec Bank plc (Joint Broker) 020 7597 5970
Christopher Baird / Henry Reast
RBC Capital Markets (Joint Broker) 020 7653 4000
Matthew Coakes / Evgeni Jordanov /
Jack Wood
Instinctif Partners sms@instinctif.com
Tim Linacre / Guy Scarborough / Sarah
Hourahane
Notes to Editors
Smart Metering Systems plc ( www.sms-plc.com ) is a 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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