Smart Metering Systems plc (AIM: SMS, the Group), the UK’s largest integrated installer for independent energy suppliers and manager of smart meters, has published its half year results for the six months ended 30 June 2019.
£’000 | H1 2019 | H1 2018 |
Group revenue | 54,205 | 46,741 |
Pre-exceptional EBITDA1 | 25,823 | 23,626 |
EBITDA | 20,616 | 23,405 |
(Loss)/profit before taxation | (1,725) | 10,124 |
Underlying profit before taxation2 | 4,644 | 11,404 |
Underlying basic EPS (p)3 | 3.40 | 8.40 |
Basic EPS (p) | (1.28) | 7.45 |
Dividend per share (p) | 2.30 | 2.00 |
Net debt | 186,592 | 141,989 |
1 Pre-exceptional EBITDA is statutory EBITDA excluding exceptional items.
2 Underlying profit before taxation is profit before taxation excluding exceptional items and amortisation of intangibles.
3 Underlying basic EPS is underlying profit after taxation divided by the weighted average number of ordinary shares for the purpose of basic EPS.
A reconciliation between reported and underlying performance is detailed in the Financial Review section below.
Key points
· Long term index-linked annualised recurring revenue (ILARR) growth of 14.1% to £85.9m – ahead of the Board’s expectations
· Group’s domestic smart portfolio now above 1 million – a net increase of 156,000 domestic smart meters installed in H1
· Industry-wide technical issues slowed installation in H1, signs of expected recovery emerging
· Significant cash and unutilised debt facility to support rollout of smart meters
· Financial, technical and human resources in place to support 2 million meter order book as mass SMETS2 rollout commences
· Revenues and ILARR for the current financial year are anticipated to be ahead of market expectations whilst pre-exceptional EBITDA is expected to be marginally below current market expectations with a consequent impact on underlying profit before tax
· In discussions about sale of a minority of meter assets. If completed, at an appropriate value, this transaction will provide significant additional liquidity and demonstrate the inherent value of the Group’s metering asset base
Alan Foy, Chief Executive Officer, commented:
“We have continued to grow our annualised recurring revenue, our key financial metric, ahead of expectations and now have over 3.46 million metering and data assets under management of which over 1 million are smart.
“The widely reported industry-wide installation issues are now substantially addressed and the mass rollout of SMETS2 can now commence – this is expected to result in a pick up in the installation run-rate both in the latter part of 2019 and into 2020.
“With over 500 engineers and significant cash and debt facilities, we have the engineering and financial resources to handle our order book of approximately 2 million meter installations with headroom for further growth.
“We are in discussions about a sale of a minority of our meter asset portfolio, which, if completed at an appropriate value, would provide significant additional liquidity and demonstrate the inherent value of our substantial asset base.”
smart-metering