Roll-out of Smart Metering’s (SMS) clever gas meters gathered pace during the second half, driving adjusted cash profit up by almost a third to £11.8m. And although a government initiative to install them in every home and business by 2020 has been delayed until autumn 2015, many suppliers are pressing ahead regardless.
Another four gas companies signed up last year, taking the total to 17, or over 80 per cent of the UK industrial and commercial market. New business with Dong Energy, Opus Gas Supply, Flow Energy, Daligas, and Crown Gas and Power is worth over 22,000 meters, all of which will be delivered by the end of 2014. These are highly lucrative contracts, together worth the equivalent of 300,000 domestic meters, which are much smaller. Crucially, they’ll generate recurring revenue for about 25 years.
After installing 60,000 meters in the first half and another 69,000 in the latter six months of 2013, Smart Metering’s portfolio grew by 38 per cent to 469,000. Moreover, some 16,000 of its advanced ADM devices, which allow remote monitoring every half an hour, have been fitted out of a potential market of 600,000. House broker Cenkos Securities has upgraded EPS forecasts for 2014 by 8 per cent to 11.2p, and by 12 per cent to 15p for 2015 .
SMART METERING (SMS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 330p | MARKET VALUE: | £ 275m | |
| TOUCH: | 326-336p | 12-MONTH HIGH: | 360p | LOW: 221p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 42 | |
| NET ASSET VALUE | 27p | NET DEBT: | 148% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 12.4 | 0.9 | 0.7 | nil |
| 2011 | 16.0 | 3.3 | 2.9 | nil |
| 2012 | 21.0 | 5.2 | 5.2 | 1.65 |
| 2013 | 27.9 | 7.5 | 7.9 | 2.31 |
| % change | +33 | +43 | +52 | +40 |
Ex-div: 23 April Payment: 30 May | ||||
