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, provides an update on the Group's operational and financial performance.
- Smart meter installations at >80% of pre-Covid run rate despite local lockdowns
- Continued development in CaRe pipeline, having secured rights to 117.5MW of grid scale batteries with an additional 150MW under exclusivity
- FY2020 underlying PBT marginally ahead of Board's expectations, with forecast year-end net cash position of c.£30m
- Board remain confident of the current FY2021 consensus expectations
- SMS to become net zero carbon emissions by 2030
Meter installation run rate improving steadily despite local lockdowns
SMS has continued to see a progressive recovery in the installation run-rates since the first national lockdowns, despite continued local restrictions. SMS is currently operating at >80% of the pre-Covid run-rate and is positively geared for the continued increase in installation activity to deliver the mandated smart meter roll-out and the contracted order pipeline.
The Group continues to provide all supporting control measures to ensure the safety of our engineers, support staff and end consumers.
Continued development in CaRe assets, strong pipeline in grid scale batteries
In addition to the focus on the UK smart meter market, the Group's strategy also includes the development of CaRe assets as the economy transitions towards net zero carbon. SMS continued to make strong progress in developing its pipeline of CaRe assets across several verticals, including grid scale battery storage, Behind the Meter smart solar and storage (BTM), ADMTM(2) Australia, EV charging infrastructure and heat networks and meters.
SMS is pleased to announce that it has secured an initial pipeline of 117.5MW of grid scale battery storage projects. These projects are under construction and expected to be energised by Q4 2021. The Group is also under exclusivity to acquire an additional 150MW which, if successful, will start construction in 2021 and be energised by mid-2022.
The Group continued to make good progress on BTM, with trials with four local authorities underway. The Group intends to launch the fully funded BTM products early next year. SMS's proposition is to provide turnkey smart solar and storage assets and services to local authorities and housing associations backed by long term secured revenues. SMS's BTM proposition will significantly reduce tenants' energy costs (up to 25%) and decarbonise housing stocks (up to 90% of electricity supply).
The Group is also in early stage discussions with certain Australian water utilities to undertake trials of its ADMTM devices, and sees potential, over time, for significant water metering opportunities in Australia. SMS's proprietary ADMTM devices are a proven reliable data logger solution, through which water utilities and customers are able to access water consumption data via its cloud-based utility analytics software.
SMS continues to evaluate the funding options for these opportunities, including through its existing partner, ESIF(3), and other potential funding sources.
FY2020 underlying PBT marginally ahead of expectations
In the light of recent trading, the Board expects FY2020 underlying PBT to be marginally ahead of its expectations, with forecast year-end net cash position of c.£30m.
The Board acknowledges that the current macroeconomic uncertainties make forecasting challenging but remains confident of achieving the current FY2021 consensus expectations.
The Group's trading performance highlights the resilience of the Group's business model and its infrastructure asset classes, which generates long-term, predictable and index-linked revenue streams. The existing recurring cash flows support an annual 10% increase in dividends, from 25p per share in FY2020 until 2024.
2030 Net zero target
ESG and sustainability remain at the heart of SMS's operations and culture. Earlier this year the Group announced the establishment of a dedicated Health, Safety & Sustainability Board Committee headed by the Group's Chair. The Group is now pleased to announce a net zero carbon emissions target by 2030 which will see SMS's scope 1 and 2 emissions reduced to zero through actions taken across both its fleet and buildings. The Group will provide further details in due course.
"We have demonstrated strong resilience throughout 2020 and our performance is testimony to the commitment and dedication of the entire SMS team.
"Our meter installation run rate continues to show steady improvement despite local lockdowns. We also continue to make tangible progress in developing a strong pipeline of Carbon Reduction assets.
"I'm delighted to unveil today our ambition to achieve net zero carbon emissions by 2030. Our CaRe assets and technology solutions are at the heart of the low-carbon, smart energy revolution that is pivotal to realising a greener, more sustainable world."Chief Executive Officer
SMS intends to release its full year results for FY2020 in the week commencing 15 March 2021.
(1) All carbon reducing assets including energy efficiency systems, metering, lighting, battery storage, distributed generation, EV charging, data and control, etc.
(2) The ADM™ is a cost effective and reliable data collection and smart metering solution developed by SMS. The ADM™ is a 'plug and play' device which could be fitted on the existing metering assets making the assets smart and enabling transmission of half hourly consumption data to the water utilities.
(3) ESIF: Columbia Threadneedle European Sustainable Infrastructure Fund
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
Adrian Duffield / Kay Larsen / Chantal Woolcock
Notes to editors
SMS plc (www.sms-plc.com) installs and manages smart meters, data and carbon reduction assets ("CaRe") to facilitate effective energy management. The Group manages and optimises these assets through its in-house technology and data analytical platform. As at 30 June 2020 SMS had 3.74 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 smart energy revolution and the assets deployed remain at the heart of delivering and accelerating the UK government's net zero carbon ambition. In 2019, SMS was awarded the London Stock Exchange Green Economy Mark.
SMS plc is headquartered in Glasgow with a national presence across twelve UK locations.
SMS's shares are listed on AIM.