H1 financial and operational performance highlights business resilience, underpinned by balance sheet strength

Smart Metering Systems plc (AIM: SMS, the Group), which installs and manages smart meters and carbon reduction assets (CaRe) to facilitate effective energy management, has published its half year results for the six months ended 30 June 2020.

£’000 (unless stated otherwise) H1 2020 H1 2019
Index-linked annualised recurring revenue (ILARR)1 75,905 68,320
Group revenue 54,151 54,205
Pre-exceptional EBITDA2 27,811 25,823
Underlying profit before taxation3 9,144 4,644
Underlying basic EPS (p)4 5.02 3.40
EBITDA 214,121 20,616
Profit/(loss) before taxation 194,475 (1,725)
Basic EPS (p) 171.07 (1.28)
Net cash/(debt) 44,493 (186,592)

1 ILARR is the revenue generated from meter rental and data contracts at a point in time. Includes revenue from third-party managed meters. H1 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
2 Pre-exceptional EBITDA is statutory EBITDA excluding exceptional items.
3 Underlying profit before taxation is profit before taxation excluding exceptional items and amortisation of intangibles.
4 Underlying basic EPS is underlying profit after taxation divided by the weighted average number of ordinary shares for the purpose of basic EPS.
5 The contracted smart meter order pipeline is comprised of a combination of guaranteed minimum volume commitments, exclusivity arrangements and other contracts with customers.
A reconciliation between reported and underlying performance is detailed in the Financial Review section below



  • ILARR at 30 June 2020 up 11% to £75.9m (30 June 2019: £68.3m, pro-forma)
  • Pre-exceptional EBITDA up 8% to £27.8m (H1 2019: £25.8m)
  • Underlying profit before taxation up 98% to £9.1m (H1 2019: £4.6m)
  • Net cash at 30 June 2020 of £44.5m (30 June 2019: net debt of £186.6m)
  • No debt outstanding as at 15 September 2020 and committed facilities available of £300m
  • FY 2020 outlook unchanged

Asset disposal – completed 22 April 2020

  • c.187,000 I&C meter assets disposed of with a weighted average age of 4.7 years
  • £290.6m gross cash proceeds received from asset disposal
  • £194.7m gross gain on disposal reported in the period


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


  • Continued growth during challenging period demonstrates the resilience and strength of the business model
  • Phased and progressive resumption of all non-essential field work progressing well
  • Emergency works maintained throughout the period, helping to keep the UK’s energy infrastructure operating securely

Smart meters

  • Meter installations are beginning to return to a pre-COVID-19 level. This is expected to be achieved in Q4, albeit ongoing local lockdowns continue to be monitored.
  • c.2 million contracted smart meter order pipeline5 expected to add c.£40m ILARR over the rollout period

CaRe assets

  • Good progress in the origination of CaRe assets pipeline
  • Partnership agreement with Columbia Threadneedle European Sustainable Infrastructure Fund (ESIF) announced in March 2020 provides funding options
  • Initial portfolio identified in grid-scale battery storage

Continued ESG enhancements

  • Establishment of a Health, Safety & Sustainability Board Committee
  • Strong net positive environmental impact
  • Active participation in Smart Metering Remobilisation Working Group established by BEIS
  • Proactive engagement with staff during COVID-19, with a focus on employee wellbeing

Board changes

  • On 23 June 2020, Willie MacDiarmid stepped down from the Board and as Non-executive Chairman
  • Miriam Greenwood, formerly the Senior Independent Non-executive Director, appointed as Non-executive Chairman
  • Jamie Richards appointed as Non-executive Director

“We have delivered a robust financial performance in the face of a highly challenging operating environment in the first half of 2020, with increases in index-linked annualised recurring revenue (ILARR) and underlying profitability.

“The completion of a disposal of a minority of our I&C meter asset portfolio in April has further underscored the attractive nature of the meter asset class, provided balance sheet strength and enabled us to substantially increase the FY 2020 dividend. We have announced today an intended annual increase of 10% over the coming four years.

“Our pipeline of CaRe asset opportunities is making strong progress across a range of asset classes following our agreement with Columbia Threadneedle European Sustainable Infrastructure Fund announced in March, with an initial portfolio identified in grid-scale battery storage.

“The entire team at SMS has demonstrated outstanding resilience and commitment in the face of the challenges presented by COVID-19. We are well positioned, both financially and operationally, to deliver on our sizeable contracted smart meter order pipeline and move forward with the development of CaRe assets. Together, these will support the next phase of our evolution as a business at the heart of smart energy management.”

Alan Foy Chief Executive Officer

Download full results (PDF)

Download presentation (PDF)

View webcast

For further information:

Smart Metering Systems plc
Alan Foy, Chief Executive 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

RBC Capital Markets (Joint Broker)
Matthew Coakes / Evgeni Jordanov
020 7653 4000

Instinctif Partners (PR Adviser)
Adrian Duffield / Kay Larsen / Chantal Woolcock
020 7457 2077