Smart Metering Systems plc (AIM: "SMS", "the Group"), which installs and manages smart meters and carbon reduction assets ("CaRe(1)") to facilitate effective energy management, has its AGM later today and provides the following update regarding the Group's trading and FY20 outlook, financial position and dividend policy.
Trading and FY20 outlook
At 31 May 2020, the Group's total Index Linked Annualised Recurring Revenue ("ILARR") was £75.9 million. Despite the temporary cessation of meter installations caused by Covid-19, the Group currently expects underlying profitability for the year to 31 December 2020 to be in line with the Board's earlier expectations, reflecting the resilience of the SMS business model.
As previously announced on 1 June 2020, SMS has commenced a phased and progressive resumption of all field work following a temporary suspension of non-essential activities, including smart meter installations, on 24 March 2020.
As a result of lower installations since March 2020, the Group's capex on smart meters has been lower than expected. Liquidity remains strong, with a net cash position of £48m and £300m of banking facilities at 31 May 2020.
SMS is fully funded to install its 2 million smart meter order book as well as additional meter opportunities.
As announced on 17 March 2020, the partnership with Columbia Threadneedle European Sustainable Infrastructure Fund ("ESIF") will fund SMS's pipeline of opportunities in CaRe assets.
The Group will implement its revised dividend policy, as published on 17 March 2020:
- SMS will pay 25p per share for the year to 31 December 2020 in four equal cash increments of 6.25 pence per share, starting in October 2020.
- The Group intends to increase dividends at least in line with RPI every year until the end of FY2024. SMS's ILARR are also linked to RPI and subject to "upwards-only" revision. This provides downside protection to dividends against a deflationary environment.
- The dividends are well covered by existing long-term and recurring cash flow generation.
Government roll out deadline
The UK Government has extended the smart meter rollout deadline by six months to 1 July 2025, taking into account delays as a result of COVID-19. It has also introduced new annual installation targets for individual energy suppliers, subject to an annual tolerance level, rather than a single coverage target of 85%. These changes are in line with SMS's planning expectations and have no material impact on Group's forecasts for its roll out programme of smart meters.
As previously announced, Miriam Greenwood will succeed Willie MacDiarmid as Chairman after the AGM being held this morning. SMS will publish results of the voting on the resolutions put to the AGM later today.
(1) All carbon reducing assets including energy efficiency systems, metering, lighting, battery storage, distributed generation, EV charging, data and control, etc.
For further information:
Smart Metering Systems plc
Alan Foy, Chief Executive Officer
Dilip Kejriwal, Investor Relations
0141 249 3850
Cenkos Securities plc (Joint Broker and Nomad)
Neil McDonald / Pete Lynch
0131 220 6939 / 020 7397 8900
Investec Bank plc (Joint Broker)
Christopher Baird / Henry Reast
020 7597 5970
RBC Capital Markets (Joint Broker)
Matthew Coakes / Evgeni Jordanov
020 7653 4000
Adrian Duffield / Kay Larsen / Chantal Woolcock
020 7457 2077
Notes to editors
SMS plc (www.sms-plc.com) installs and manages smart meters and carbon reduction assets ("CaRe") to facilitate effective energy management. Established in 1995, SMS provides a full end-to-end service for metering financing, installation, management and maintenance, with a highly skilled workforce and deep engineering expertise.
SMS had 3.73 million meter and data assets under management as of 31 December 2019. SMS's smart meter expertise also enables the Company to provide consultancy services that allow organisations and corporates to enhance long term efficiency and effectiveness in the management of energy.
SMS's energy management and asset installation services also include infrastructure design, installation, consultancy and project management services for new gas, electricity, water and telecoms connections for licensed energy and telecoms suppliers, end consumers and the UK's licensed electricity Distribution Network Owners (DNOs).
SMS employs in excess of 1,200 people across the UK who support the installation and ongoing management of metering assets.
SMS plc is headquartered in Glasgow with 12 locations across the UK.
SMS's shares are listed on AIM.