Strong results for Glasgow's SMS after smart meter roll-out rate accelerates

Glasgow-headquartered Smart Metering Systems (SMS) has hailed strong half-year results after stepping up its meter roll-out programme.

Financial results for the six months to the end of June revealed an 11 per cent hike in index-linked annualised recurring revenue, to £93.1 million. On a statutory basis, group revenue was 21 per cent higher at £62.7m.

Pre-exceptional underlying earnings rose 11 per cent to £29.1m while profit before tax was up 7 per cent to £10.3m.

Since the start of the second quarter, the run rate for smart meter installations has increased to more than 40,000 per month, compared with the 30,000 or so meters that the firm was averaging per month during 2021.

Glasgow-headquartered SMS installs and manages smart meters, energy data, grid-scale battery storage and other carbon reduction assets.

SMS, which installs and manages smart meters, energy data, grid-scale battery storage and other carbon reduction assets, highlighted a strong contracted smart meter order pipeline of around 2.42 million units.

Chief executive Tim Mortlock said: “The strong half year results again demonstrate the resilience of our business model, which is underpinned by our index-linked recurring cash flows from meter and data assets, and reflect the strong performance of our first grid-scale battery storage project.

“We are pleased to see continued acceleration in our meter installation run rates, an increase in our smart meter portfolio and a new contract which adds to our smart meter order pipeline.”

He added: “The global energy market is in a period of extreme turbulence and there is a fundamental need for the carbon reduction assets we originate and own. These assets enable the transition to a low carbon, flexible, secure and, of particular importance at this time to all businesses and consumers, low-cost energy system.

“We remain confident about the future growth prospects for the business.”

The group said 10 per cent growth in dividend to 30.25p per share was intended for the full year.

The board expects that pre-exceptional Ebitda (earnings before interest, taxes, depreciation and amortisation) for the new financial year will be “marginally ahead” of previous expectations and, despite the impact of higher interest rates, underlying profit before tax will be in line with prior forecasts.

Bosses expect the increase in smart meter installation run rates to continue.