Smart Metering Systems plc (AIM: SMS, the Group), the UK’s largest integrated installer for independent energy suppliers and manager of smart meters, has published its half year results for the six months ended 30 June 2019.

£’000 H1 2019 H1 2018
Group revenue 54,205 46,741
Pre-exceptional EBITDA1 25,823 23,626
EBITDA 20,616 23,405
(Loss)/profit before taxation (1,725) 10,124
Underlying profit before taxation2 4,644 11,404
Underlying basic EPS (p)3 3.40 8.40
Basic EPS (p) (1.28) 7.45
Dividend per share (p) 2.30 2.00
Net debt 186,592 141,989

1. Pre-exceptional EBITDA is statutory EBITDA excluding exceptional items.

2. Underlying profit before taxation is profit before taxation excluding exceptional items and amortisation of intangibles.

3. 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 reported and underlying performance is detailed in the Financial Review section below.

Key points
  • Long term index-linked annualised recurring revenue (ILARR) growth of 14.1% to £85.9m – ahead of the Board’s expectations
  • Group's domestic smart portfolio now above 1 million – a net increase of 156,000 domestic smart meters installed in H1
  • Industry-wide technical issues slowed installation in H1, signs of expected recovery emerging
  • Significant cash and unutilised debt facility to support rollout of smart meters
  • Financial, technical and human resources in place to support 2 million meter order book as mass SMETS2 rollout commences
  • Revenues and ILARR for the current financial year are anticipated to be ahead of market expectations whilst pre-exceptional EBITDA is expected to be marginally below current market expectations with a consequent impact on underlying profit before tax
  • In discussions about sale of a minority of meter assets. If completed, at an appropriate value, this transaction will provide significant additional liquidity and demonstrate the inherent value of the Group’s metering asset base

We have continued to grow our annualised recurring revenue, our key financial metric, ahead of expectations and now have over 3.46 million metering and data assets under management of which over 1 million are smart.

The widely reported industry-wide installation issues are now substantially addressed and the mass rollout of SMETS2 can now commence - this is expected to result in a pick up in the installation run-rate both in the latter part of 2019 and into 2020.

With over 500 engineers and significant cash and debt facilities, we have the engineering and financial resources to handle our order book of approximately 2 million meter installations with headroom for further growth.

We are in discussions about a sale of a minority of our meter asset portfolio, which, if completed at an appropriate value, would provide significant additional liquidity and demonstrate the inherent value of our substantial asset base.

Alan Foy Chief Executive Officer

Download full results (PDF)

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For further information:

Smart Metering Systems plc
Alan Foy, Chief Executive Officer
David Thompson, Chief Financial Officer
Tim Mortlock, Chief Operating Officer
Dilip Kejriwal, Head of 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

Instinctif Partners
Adrian Duffield/Kay Larsen/Chantal Woolcock
020 7457 2077

Notes to editors

SMS plc (www.sms-plc.com) installs smart meters and data loggers that facilitate effective energy management and a low carbon future. 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 installed 3.46 million meter and data assets as of 30 June 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.