Shareholders in Smart Metering Systems (SMS) will be pleased with the group's half-year figures. Continued operational progress is reflected in increased capacity, a step-up in recurring revenues and the fact that the group now manages more than one million utility metering and data assets for energy suppliers. Its accelerating installation programme is reflected in a 30 per cent hike in gross profits.
The group's commercial activities are underpinned by the government's domestic smart meter programme. A nationwide rollout of efficient, digitalised energy meters is targeted for completion by 2020. SMS has boosted its installation and maintenance capacity in the period through the acquisition of CH4 and Trojan. The deals resulted in a near-doubling of staff numbers and form part of a strategic shift away from the group's previous reliance on subcontractors, in favour of an in-house integrated service. Management notes that prior to acquisition by SMS, the two businesses had installed nearly 20 per cent of all domestic smart meters in the UK.
Cenkos anticipates pre-tax profits of £18.6m for the year to December, giving adjusted EPS of 19.2p (from £17.5m and 19.2p in 2015).
| SMART METERING SYSTEMS (SMS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 539p | MARKET VALUE: | £482m | |
| TOUCH: | 539-541p | 12-MONTH HIGH: | 564p | LOW: 305p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 65p* | NET DEBT: | 139% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 25.8 | 7.4 | 6.9 | 1.10 |
| 2016 | 32.3 | 9.1 | 8.5 | 1.37 |
| % change | +25 | +23 | +22 | +25 |
Ex-div: 20 Oct Payment: 25 Nov *Includes intangible assets of £15m, or 17p a share | ||||
