Profits on track at Glasgow’s Smart Metering Systems despite Covid-19

Glasgow-based Smart Metering Systems (SMS) has said its profits remain on track reflecting the “resilience” of its business model.

SMS has been at the forefront of the rollout of new smart meters to replace older non-connected devices, above, though the government-backed programme has faced some delays.

The company has been at the forefront of the rollout of new smart meters to replace older non-connected devices though the government-backed programme has faced delays.

At the end of May, SMS outlined plans for a “phased and progressive” resumption of all non-essential field work after a Covid-related hiatus.

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In its latest trading update, the group said that despite the impact of the coronavirus crisis, it expected underlying profitability for the year to 31 December 2020 to be in line with the board’s earlier expectations. As of 31 May, total index linked annualised recurring revenue totalled £75.9 million.

As a result of lower installations since March, the group’s capital expenditure on smart meters has been lower than expected. Liquidity remains strong, with a net cash position of £48m and £300m of banking facilities as of the end of May. SMS, which is led by chief executive Alan Foy, said it was fully funded to install its two million smart meter order book as well as “additional meter opportunities”.

The group intends to increase dividends at least in line with retail price inflation every year until the end of the 2024 financial period.

SMS told investors: “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 per cent.

“These changes are in line with SMS’s planning expectations,” it added.

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