Profit surge for gas meter firm Smart Metering Systems

SHARES in Glasgow-based Smart Metering Systems (SMS) surged nearly 10 per cent yesterday after the gas meter specialist posted a near-doubling of underlying profits.

Meters made by the firm, which joined the Alternative Investment Market (Aim) in June, allow commercial and industrial customers to see exactly how much energy they are using, removing the need for estimated bills.

The number of businesses and households using its meters rose to 254,000 at the end of December, up from 227,000 at the initial public offering (IPO).

The firm is now working with 14 power companies, after adding Manchester-based D-Energi and Irish firm Vayu to its roster. SMS said that, between them, its customers account for 80 per cent of the market in the UK.

Energy regulator Ofgem requires some 300,000 industrial and commercial gas customers to switch to smart meters by 2014 – creating a £300 million market, according to SMS.

The firm is conducting trials of its next-generation “ADM” meter, which can give half-hourly readings remotely.

Alan Foy, chief executive of SMS, said: “We have made solid progress since the flotation, with investment in meter assets increasing and with the ADM device continuing to trial very successfully.

“We have also strengthened the senior management team and are confident of further growth during 2012.”

In a trading update ahead of its full-year results in April, the group posted a 97 per cent rise in underlying profits to £5.7m on the back of a 29 per cent increase in revenue to £16m. Recurring revenues from renting out its meters also increased by 29 per cent to £7.6m.

Ian McInally, an analyst at Cenkos Securities, noted that revenues from renting out the meters was continuing to grow ahead of the operating costs.