Trading update and FY 2021 outlook

RNS Number : 6580G

Smart Metering Systems PLC

28 July 2021

 

28 July 2021

Smart Metering Systems plc

Trading update and FY 2021 outlook

Smart Metering Systems plc (AIM: "SMS", the "Group"), the fully integrated energy infrastructure company owning and managing meter assets, energy data, grid-scale batteries and other carbon reduction ("CaRe") assets, provides a trading update for the six months to 30 June 2021 ("H1 2021") and full year ("FY 2021") outlook.

Highlights

· Revenue and underlying profit in line with the Board's expectations

· ILARR⁽¹⁾ grew 9.3% to £84.2m (31 December 2020: £77.0m)

· Total meter and data assets increased to 4.0m (31 December 2020: 3.8m)

o  domestic smart meter portfolio increased by 146,000 to 1.5m

o  net increase in contracted smart meter order pipeline to c.2.35m⁽²⁾ (31 December 2020: c2.0m)

· Strong recovery in smart meter installation rates

o  over 30,000 meters installed in June

o  c.20% increase on pre-COVID-19 run rate

· 470MW grid scale battery pipeline:

o  additional 100MW acquired taking the total to 190MW (31 December 2020: 90MW)

o  of which 90MW are under construction and 100MW to begin construction by Q4 2021

o  remaining 280MW under exclusivity

· Continued focus on sustainability, our corporate social responsibility and strong governance

Outlook

· FY 2021 underlying profitability remains in line with the Board's expectations

· Smart meter installation run rates expected to continue to strengthen

· Expected FY 2021 dividend of 27.5 pence per share, +10% y-o-y and in line with stated policy

· Continue to make progress in expanding the contracted smart meter order pipeline, grid-scale battery pipeline and development of wider CaRe products and services

· Grid-scale battery projects continue to be built in line with the Group's cost and construction programme expectations

ESG update

· During H1 2021, the Group continued to make strong progress in all aspects of Environmental, Social and Governance

· We have published an update alongside this trading statement, which is available here: https://www.sms-plc.com/corporate/investors/regulatory-news/ .

Index Linked Annual Recurring Revenue

Total meter and data assets ILARR grew 9.3% to £84.2 million (31 December 2020: £77.0 million).

Detailed breakdown below:

Category	% change	ILARR
Domestic smart meters	+9.6%	£46.6m	1.5 million smart meters
Data assets	+21.5%	£14.3m	Includes £2.0 million data service contracts acquired as part of I&C Half Hourly meter portfolio acquisition
I&C meters	+51.1%	£4.5m	Includes £1.1 million from I&C HH meter portfolio acquisition
Traditional domestic meters	-4.0%	£12.8m	Traditional meters to be exchanged for smart over the rollout programme
3rd party assets	-5.9%	£6.0m	Driven by traditional meter exchanges

H1 2021 results

· SMS expects to publish its first half results on 14 September 2021.

Capital Markets Day ("CMD")

·   We held our inaugural CMD in June and were delighted with the number of attendees and pleased with the feedback we have received

· All documents and recordings of the CMD can be found on our website at https://www.sms-plc.com/corporate/investors/capital-markets-event/  

(1)  Index Linked Annual Recurring Revenues

(2)  0.5m increase offset by installations over the same period

Alan Foy, Chief Executive Officer, commented:

"The Group's performance remains strong, further demonstrating the resilience of our business, the defensive nature of the metering infrastructure asset class and the index linked sustainable cash flows it generates.

Our fully integrated and scalable technology platform "METIS" is at the heart of digitally enabling and integrating our CaRe assets and energy data solutions and provides us with a great platform for growth. 

Once installed, we estimate our existing meter and battery pipelines will add a combined £70m to the Group's £50m of EBITDA in FY 2020. Our metering, data and battery CaRe products allow us to access an addressable market opportunity of c.£1.2bn EBITDA, alongside the significant additional potential provided by our developing CaRe products.

We remain committed to our people, customers and the communities we serve and are proud of the role SMS plays in helping to deliver a net zero economy."

For further information:

Smart Metering Systems plc	0141 249 3850
Alan Foy, Chief Executive Officer
Dilip Kejriwal, Investor Relations
Cenkos Securities plc (Joint Broker and Nomad)	0131 220 6939 / 020 7397 8900
Neil McDonald / Pete Lynch Investec Bank plc (Joint Broker) Christopher Baird / Henry Reast RBC Capital Markets (Joint Broker) Matthew Coakes / Evgeni Jordanov / Jack Wood	020 7597 5970   020 7653 4000
Instinctif Partners	[e-mail]
Tim Linacre / Guy Scarborough / Sarah Hourahane

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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