Resilient performance in an exceptional year with strong execution, delivering against key strategic pillars

Smart Metering Systems plc (AIM: SMS, "SMS", “the Group”), which installs and manages smart meters and carbon reduction (“CaRe”) assets to facilitate effective energy management, has published its full year results for the year ended 31 December 2020.

2020 financial performance

£’000 20201 2019
Alternative performance measures    
Index-linked annualised recurring revenue (ILARR)2 76,982 72,553
Pre-exceptional EBITDA3 49,894 58,897
Underlying profit before taxation4 15,246 15,577
Underlying basic EPS (p)5 9.56 11.30
Statutory performance measures    
Group revenue 102,982 114,281
Profit before taxation 194,964 5,462
Basic EPS 231,632 50,369
Dividend per share (p) 25.0 6.88
Net cash/(debt) 40,236 (219,168)

1 2020 measures only include the financial performance of the disposed I&C portfolio up to the date of sale on 22 April 2020.
2 ILARR is the revenue generated from meter rental and data contracts at a point in time. Includes revenue from third-party managed meters. 2019 ILARR is presented on a pro-forma basis for comparative purposes, excluding a net contribution of £17.6m from disposed I&C meter assets.
3 Pre-exceptional EBITDA is statutory EBITDA excluding exceptional items.
4 Underlying profit before taxation is profit before taxation excluding exceptional items and amortisation of certain intangibles.
5 Underlying basic EPS is underlying profit after taxation divided by the weighted average number of ordinary shares for the purpose of basic EPS.
A reconciliation between statutory and underlying performance is detailed in the Financial review section.



  • ILARR at 31 December 2020 up 6% to £77.0m (2019: £72.6m, pro-forma)
  • Pre-exceptional EBITDA down £9.0m, or 15%, year-on-year to £49.9m (2019: £58.9m), reflecting the effect of minority asset disposal
  • Underlying profit before taxation down £0.4m, or c.2%, year-on-year to £15.2m (2019: £15.6m), reflecting the effect of minority asset disposal
  • Excluding the effect of the minority asset disposal there has been underlying growth in profitability on a like-for-like basis
  • Net cash at 31 December 2020 of £40.2m (2019: net debt of £219.2m)

Minority asset disposal – completed 22 April 2020

  • c.187,000 Industrial & Commercial (‘I&C’) meter assets disposed of with a weighted average age of 4.7 years
  • £290.6m gross cash proceeds received from minority asset disposal
  • £194.7m net gain on disposal reported in the year


  • 25p per share dividend proposed in respect of FY 2020, paid in four instalments starting October 2020
  • Intention to increase by 10% per annum until FY 2024
  • 27.5p per share dividend in respect of FY 2021 targeted
  • Covered by long-term index-linked cash flows from existing metering and data asset base


  • Continued growth on a like-for-like basis during exceptionally challenging period demonstrates resilience and strength of the business model
  • Supporting measures provided to ensure safety of engineers, staff and end consumers
  • Emergency works maintained throughout the period, helping keep UK’s energy infrastructure operating securely
  • No reliance placed on UK Government support during FY 2020

Smart meters

  • Despite ongoing national lockdown, meter installation run rate sustained at c.80% of pre-COVID-19 rate in Q4 2020
  • Domestic smart meter contract wins post year-end increase contracted smart meter order pipeline to c.2.5 million (from c.2.0 million) that will add c.£50m of ILARR

CaRe assets

  • Well positioned to capitalise on decarbonisation trends and policy initiatives
  • 90MW of grid-scale battery projects acquired and currently under construction, with rights to acquire a further 100MW obtained post year-end
  • In exclusivity to acquire a further 280MW, giving a total pipeline of 470MW which in total will generate c.£20m EBITDA once completed
  • Establishing other CaRe assets pipeline, including through its existing partner Columbia Threadneedle European Sustainable Infrastructure Fund (ESIF)

Post year-end acquisition

  • Concluded an agreement to acquire an I&C large power electricity meter portfolio and Half Hourly (‘HH’) data service contracts from a large energy supplier
  • The portfolio will initially generate additional c.£3.1m of ILARR
  • Reinforces strength of SMS end-to-end industry platform

Environmental, Social and Governance (‘ESG’) 

  • Dedicated Health, Safety and Sustainability Board Committee headed by the Group’s Chairman
  • Committed to target of ‘net-zero’ carbon emissions by 2030
  • Established strong ESG credentials: rated ‘A’ by Morgan Stanley Capital International (MSCI) and ‘B’ by Carbon Disclosure Project (CDP)

Board changes  

  • Willie MacDiarmid stepped down from the Board and as Non-executive Chairman on 23 June 2020
  • Miriam Greenwood, formerly Senior Independent Non-executive Director, appointed Non-executive Chairman
  • Jamie Richards appointed Independent Non-executive Director and chair of the Remuneration Committee
  • Gavin Urwin joined as CFO-Designate on 8 February 2021; David Thompson, current CFO, to depart 31 March 2021. 

“2020 has been a transformational year for SMS, from which we have emerged a stronger, leaner organisation with a reinforced commitment to our customers, the environment and our people. We have delivered financial results ahead of market expectations in an unprecedented year, demonstrating the strength of our business model.

“Since the end of the year we have won new meter contracts, secured rights to an additional 100MW of grid-scale battery storage projects and purchased an I&C portfolio that will benefit from our end-to-end industry systems. These achievements are testament to SMS’s ability to leverage its well-established platform and infrastructure, and to support continuing growth, with significant additional opportunities in CaRe assets.

“The COVID-19 pandemic has accelerated the urgency to decarbonise, decentralise and digitalise the UK’s energy systems. For over 25 years SMS has played a pivotal role in UK energy and is now well positioned to transform the economy towards net zero. SMS itself has committed to achieving ‘net-zero’ carbon emissions by 2030, two decades ahead of the UK’s own ‘net-zero’ target.

“I am exceptionally proud of the way all our staff have responded to the challenges presented by the pandemic in 2020. We maintain our focus on safely serving our customers and are well placed to drive forward our strategy of delivering smart energy solutions to realise a greener, more sustainable future.”

There will be an analyst webcast at 9.00am today - please contact sms@instinctif.com for details.

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For further information:

Smart Metering Systems plc
0141 249 3850
Alan Foy, Chief Executive Officer
Dilip Kejriwal, Head of Investor Relations

Cenkos Securities plc (Nomad and Joint Broker)
0131 220 6939 / 020 7397 8900
Neil McDonald
Peter 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

020 7457 2020
Kay Larsen / Sarah Hourahane / Hannah Campbell

Notes to editors

SMS (www.sms-plc.com) installs and manages smart meters, data and carbon reduction (“CaRe”) assets to facilitate effective energy management. The Group manages and optimises these assets through its in-house technology and data analytical platform. As at 31 December 2020 SMS had 3.81 million meter and data assets under management.

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. In 2019, SMS was awarded the London Stock Exchange Green Economy Mark.

SMS is headquartered in Glasgow with a national presence across twelve UK locations.

SMS's shares are listed on AIM.