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SMS Smart Metering Systems 577p new target 868p 02/2017

Discussion in 'General Share Chat (SMS)' started by Groucho, Feb 15, 2017.

  1. Groucho

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    Very positive update from Panmure Gordon today :
    SMART METERING SYSTEMS PLC | SMS | 581.5 26.2(4.5%) | Rating: Buy | Target Price: 868.00
    • Shares could easily double from this level: We show our SMS scenario table below, flexing the two major inputs to SMS’s valuation; the inflation-linked yield on the portfolio and the expected market share in smart domestic. Shaded boxes show how the shares could yet double. Hitherto, we had assumed only 10% yield and 1.5m meters. With management stating that they had “line of sight over 1.5m meters” back at Sep’16, no negative news flow post Brexit on the roll out, no negativity in the autumn statement towards the programme, positive noises from December’s ManpowerGroup Employment Outlook Survey driven by demand for smart metering engineers, and SMS saying this month that it has contracts with suppliers covering 2.5m domestic meters, we at last feel able to relax our, potentially overlyconservative, assumptions. We move to 12% yield (still 3pc points below max) and 2.5m meters (11% market share). Note that 11% market share might yet easily be conservative as there are only three players in this market, and – in theory – SMS already has these in the bag with the eight suppliers they cite in their Feb’17 statement.
    • The ManpowerGroup Employment Outlook Survey (13 Dec’16) noted that over 20,000 new hires are required to bring about smart metering revolution. “In the next two years more than 26 million smart meters will need to be fitted if the government is going to meet its targets. Energy companies will need an army of up to 20,000 skilled engineers and wider support staff to meet this challenge.”
    Full note available from www.research-tree.com
     
    Mini Investor and Makaira88 like this.
  2. Groucho

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    Daily Telegraph 06/05/2017

    Early smart meters can’t cope with switch in supplier
    By Katie Morley
    MILLIONS of smart meters installed under the Government’s flagship scheme may need to be replaced due to an IT blunder.

    For the first time, major energy suppliers have admitted that some of the 8 million “first-generation” smart meters fitted in households are incompatible with a new national communications network, which links their systems to the devices.

    The Government last night denied that the meters would need to be replaced.

    But consumer experts described the smart meter roll-out as a “cock up” while sources at major energy firms admitted the cost was “spiralling” despite customers receiving “sub-par 
experiences”.

    If new meters are necessary, it could add £100 to every UK household’s energy bill, although sources said this was unlikely.

    Meters not connected to the system “go dumb” when consumers switch energy suppliers to get a better deal, meaning they are no better than traditional meters with customers giving readings.

    Under the Government’s £11 billion smart meter programme every household in the UK will have been offered a device by 2020. Energy suppliers which do not comply face heavy fines.

    Until now the Government had presumed that the problem of first-generation meters failing would be fixed as they could easily be connected to the system through simple computer programming.

    But now it has emerged that many are incapable of being adapted to the central system, meaning they will have to be replaced. Many meters may require expensive visits by engineers to be brought on to the system.

    The scheme’s operator is mulling various IT solutions. But a programming overhaul would come at a cost of £500 million, according to a consultation paper seen by The Daily Telegraph.

    A year’s delay in introducing the network, run by the Data Communications Company (DCC), over “technical issues” also means millions more old-style smart meters than planned have been installed, further raising costs.

    Martin Lewis, founder of MoneySavingExpert.com, said: “The rollout of smart meters has been a cock up and a catastrophe. Energy firms are now using it as a soft form of trapping people into poor deals as they can’t switch providers without their meters going dumb.”

    A DCC spokesman said it was “consulting on enabling the first wave of smart meters to access the benefits of the new national network”.

    A Department for Business, Energy and Industrial Strategy spokesman said the early meters “will not need to be replaced. The [DCC] will enrol these meters into their system, so that they can work in smart mode when consumers switch suppliers.”

    Additional reporting by Jillian Ambrose
     
  3. Groucho

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  4. Groucho

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    ENERGY The Daily Telegraph 23/09/17

    Smart meter roll-out a ‘missed opportunity’
    A new report claims the Government’s roll-out of smart meters is ‘plagued with issues’

    By Sam Meadows

    IMG_0132.PNG


    Dr Paul Swift, an energy consultant for the Carbon Trust, has recommended using smart metersCredit: Mark Waugh Manchester Press Phot
    A lack of trust in the Government and energy suppliers is causing Britain’s £11bn smart meter roll-out to falter, an academic study has found.

    Benjamin Sovacool, a professor at Sussex University, is in favour of the technology but condemned its implementation as a failure and “missed opportunity”. He called on the Government to relax the 2020 deadline by which all home owners are supposed to have been offered a smart meter.

    The meters have been installed in just over seven million homes and, in theory, allow consumers to track their energy use in real time using an in-home display. Advocates hope this can lead to energy savings as customers change their behaviour.

    Controversy has grown around the project and Prof Sovacool’s study, published this week, suggests that a lack of consumer engagement and insufficient information has caused the roll-out to fall behind.

    “This was a golden opportunity to make a world-leading programme, and maybe it still could be, but it’s also a missed opportunity,” he said. “The UK is the largest smart meter leader in the world. The US doesn’t even have [a programme], and even other leaders such as Germany are only aiming for 30pc coverage.”

    The roll-out has been plagued with problems. Compatibility issues have caused some consumers to find that their meters “go dumb” when they attempt to switch supplier, while technical glitches have led to some people incorrectly being shown bills for tens of thousands of pounds.

    The Government claims these problems will be fixed when the “DCC” – a nationwide network that uses its own form of data transmission – is fully functional later this year.

    The Department for Business, Energy and Industrial Strategy said the Sussex University report relied on out-of-date information and that the Government remained committed to its deadline.

    The roll-out is being carried out by energy suppliers on behalf of the Government and Prof Sovacool said this had created an issue of trust among consumers.

    “Studies generally show that people don’t trust government messages. The problem is, they don’t trust energy suppliers either, and those are the ones doing the roll-out,” he said.

    Smart Energy GB, the body set up by the Government to promote the roll-out, branded Prof Sovacool’s report “highly inaccurate and misleading”.

    “It is simply not true that consumers are ‘confused or resisting’ the roll-out. Independent and robust evidence is clear – the majority of consumers are aware of smart meters and the benefits that they bring,” a spokesman said.

    “The same independent research shows that more than 20 million people state that they would like to get a smart meter in the next six months. This completely rebuts the University of Sussex’s claims regarding alleged consumer resistance.”

    He added: “We would have been happy to work with the researchers on their report, but despite it being highly unorthodox, they did not make contact with us prior to publication of their research to conduct basic fact checking. We have formally made our views known to the university, and are currently considering what further action would be appropriate.”

    Prof Sovacool also questioned the organisation’s messaging, saying many of its statements were “deceptive and inaccurate”. “They believe there are no reasons people wouldn’t want a smart meter,” he said. “The Government’s own figures show 7pc were dissatisfied, 18pc have never even looked at their in-home display.”

    And despite Smart Energy GB’s insistence that consumers are not confused, Prof Sovacool said discussions with Citizens Advice had painted a different picture. The study expresses concerns about the impact on vulnerable members of society, including the elderly.

    “There was one story of an elderly woman who kept calling her daughter because she saw the changing colours [on her meter’s in-home display] and thought her house was burning down,” said Prof Sovacool.
     
  5. Groucho

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    2FC01EA3-B48D-4913-AE5C-79B9954AFF8C.jpeg
    Daily Mail 19/9/18
     
  6. Groucho

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    18 October 2018

    This includes inside information


    Smart Metering Systems plc


    ("SMS" or "the Company")


    New Domestic smart meter contract win - First Utility Limited


    Smart Metering Systems plc (AIM: SMS.L) ("SMS"), the integrated metering services company that connects, owns, operates and maintains current generation and new advanced metering assets and databases, is pleased to announce that it has signed an exclusive agreement to 31st December 2021 with First Utility Limited ("First Utility") as its fully integrated domestic smart meter installer and Meter Asset Provider.


    First Utility, recently acquired by The Shell Petroleum Company Limited, is one of the largest challenger energy suppliers in the UK serving electricity, gas and dual fuel customers.


    Under the terms of the exclusive agreement, SMS will have initial access to up to 1 million meter points to exchange, fund and install domestic smart meters on behalf of First Utility as part of the UK Government programme, overseen by the Department of Business, Energy and Industrial Strategy (BEIS), requiring domestic energy supply companies to provide all of their customers with a smart meter in homes and small businesses across the UK by 2020.



    Colin Crooks, Chief Executive Officer of First Utility, said:

    "The UK's national smart meter programme represents a great opportunity to transform the energy network in this country and build a platform for future innovation and long-term benefits to consumers. This partnership with SMS will extend our ability to deliver on that potential and cost effectively meet our own obligations as part of the roll out."


    Alan Foy, Chief Executive Officer of SMS, commented:

    "We are delighted to be extending our long-term partnership with First Utility on their domestic smart meter rollout programme. First Utility have a strong track record as one of the leading challenger UK energy suppliers, and SMS are well positioned and committed to lead the delivery of benefits that smart meters bring to their significant customer base."
     
  7. Groucho

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    Cenkos Note 19/10/2018 #SMS 560p
    Yesterday, SMS announced that it has extended its relationship with First Utility and signed an exclusive agreement until 31 December 2021 to be its fully integrated domestic smart meter installer and Meter Asset Provider (MAP). This agreement provides SMS with an initial access to up to 1 million meter points, significantly underpinning our forecast of 2.5 meters installed by end 2020. Based on our assumed average supply and install cost (SMETS2 dual fuel), we estimate that SMS will be investing at least another £175m in smart meter assets for First Utility.
    By the end of August 2018 SMS had installed 748,000 smart meters in total, with index linked annualised recurring revenue (ARR) of £71.4m. The 5-year ARR CAGR to end 2017 was 39.5%.
    SMS offers investors exposure to recurring index linked earnings which will grow significantly over the next two to three years as the smart rollout accelerates towards completion.
     Valuation disconnect. We believe that the current share price is diametrically at odds with the fundamentals. The First Utility exclusive contract win demonstrates the market position that SMS has established, as the only fully integrates service provider in the UK market. Whilst SMS has clearly taken on additional costs in relation to its significant scaling up of installation capacity this is in support of accelerating meter installation activity.
     Outlook and valuation. Although we anticipate a brief hiatus in activity as the industry transitions from SMETS1 to SMETS2 meters we expect than from Q1/19 installation activity throughout the whole industry will accelerate substantially. SMS, with its strong market position with independent suppliers (as evidenced again yesterday with the new exclusive agreement with First Utility) is an integral part of this programme. So, whilst increasing capacity slows short term profit growth, the meter asset investment is the prime driver of long term value.
    Our conservative base case DCF valuation analysis implies a share price of 1015p, 83.8% ahead of current levels.
     
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    25 October 2018

    This includes inside information


    Smart Metering Systems plc


    ("SMS" or "the Company")


    New Domestic smart meter contract win - Bristol Energy Limited


    Smart Metering Systems plc (AIM: SMS.L) ("SMS"), the integrated metering services company that connects, owns, operates and maintains current generation and new advanced metering assets and databases, is pleased to announce that it has signed an agreement with Bristol Energy to provide services as an integrated domestic smart meter installer and Meter Asset Provider.


    Under the terms of the agreement, SMS will have initial access to a minimum 100,000 meter points to exchange, fund and install domestic smart meters on behalf of Bristol Energy.


    This forms part of the UK Government programme, overseen by the Department of Business, Energy and Industrial Strategy (BEIS), requiring domestic energy supply companies to provide all of their customers with a smart meter in homes and small businesses across the UK by 2020.


    Alan Foy, Chief Executive Officer of SMS, commented:

    "It gives us great pleasure to have added Bristol Energy to our portfolio of contracted energy suppliers for the smart meter rollout programme. It is fantastic to support Bristol Energy who are a force for social good as well as a challenger energy supplier. SMS are well positioned and committed to lead the delivery of benefits that smart meters bring to their customers."
     
  10. Groucho

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    23 November 2018

    Smart Metering Systems plc

    ("SMS" or "the Company")

    Issue of Equity

    Smart Metering Systems plc (AIM: SMS.L), confirms that it has issued a total of 1,200 ordinary shares of 1p each (the "New Ordinary Shares") pursuant to the exercise of employee share options under the Approved and Unapproved Company Share Option Plan. The New Ordinary Shares have been admitted to trading on AIM under the block listing facility announced on 27 May 2015.

    The Company has 112,548,050 ordinary shares in issue. SMS does not currently hold any shares in treasury. Accordingly, this figure of 112,548,050 ordinary shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.
     
  11. Groucho

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    21 December 2018

    This includes inside information

    Smart Metering Systems plc

    ("SMS" or "the Company")


    New Banking Arrangements & Trading Update


    New Banking Arrangements

    Smart Metering Systems plc (AIM: SMS.L) ("SMS"), the integrated metering services company that installs, owns, operates and maintains UK metering assets, is pleased to announce that it has signed a new revolving credit facility with a syndicate of existing and new UK and international banks enabling drawings of up to £420m over the next 5 years.

    This new facility, which replaces the existing £280m revolving credit facility, enables SMS to continue to deliver growth and fund long-term returns from domestic smart metering assets through the index-linked long-term recurring revenue generated by the metering portfolio under its' ownership.

    The facility has been raised on similar commercial terms to the existing facility reflecting the established credit profile of SMS.

    David Thompson, CFO of SMS, said: "We are delighted to have completed the refinancing of our credit facility. This refinancing will allow SMS to have significant additional financial capacity to take advantage of opportunities in the UK domestic smart meter roll-out to grow our recurring revenues."


    Trading Update

    As detailed in the Company's interim results, 2018 has seen an increase in capital investment in metering assets and growth in annual recurring revenues and trading performance. SMS is on track to close 2018 with results that are in line with full year market expectations.

    We previously highlighted that the industry is currently progressing through a transition from the SMETs1 to SMETs2 protocol for smart meters and that the Board expects this transition to bring some operational challenges in the first half of 2019. SMS has a planned investment in its end-to-end customer delivery model, especially in line with recent exclusive contract awards, where we are mobilising additional staff and investing further in meter inventory in H1 2019.

    The Company has made significant strategic investments in meter installation capacity over the last two years, and this will continue into 2019 as our market share continues to grow. SMS is now one of the largest installers of meter assets throughout the UK with a significant opportunity to continue our growth, delivering incremental index-linked long-term recurring revenue streams.


    The Company anticipate providing a further trading update in February 2019.
     
  12. Groucho

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    17 January 2019


    This announcement contains inside information


    Smart Metering Systems plc


    ("SMS"or"the Company")


    New Domestic smart meter contract win - Octopus Energy Limited


    Smart Metering Systems plc (AIM: SMS.L) ("SMS"), the integrated metering services company that connects (installs), owns, operates and maintains UK metering assets, is pleased to announce that it has signed a meter rental agreement with Octopus Energy Limited ("Octopus Energy") tosupply a minimum of 200,000 new SMETS2 meters.


    This forms part of the UK Government programme, overseen by the Department of Business, Energy and Industrial Strategy (BEIS), requiring domestic energy supply companies to provide all of their customers with a smart meter in homes and small businesses across the UK by 2020.


    SMETS 2 meters are the next generation of smart meters and will deliver a wide range of improvements, including: interoperability - these devices enable seamless switching between energy suppliers by connecting with the Data Communications Company (DCC); maintain and extend the highest standard of security for householder data and will facilitate the connection of all types of home renewable and microgeneration technology onto the grid, supporting a cleaner, greener UK.


    Alan Foy, Chief Executive Officer, commented:

    "We are delighted to be working with Octopus Energy, a supplier of 100% green electricity. Octopus Energy is backed by the Octopus Group, which is a large investor in renewable generation internationally and the United Kingdom's largest investor in solar power. SMS, like Octopus Energy, are committed to leading the smart energy revolution and SMS looks forward to bringing the benefits of smart meters to Octopus Energy's customers".

    Stuart Jackson, Chief Financial Officer of Octopus Energy, said:"The size of this partnership is a result of Octopus Energy's tremendous growth and ambition. Our success is driven by our unique technology and commitment to customer service, as demonstrated by Octopus being the only energy supplier recommended by Which?"
     
  13. Groucho

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    08 February 2019

    Smart Metering Systems plc

    ("SMS" or "the Company")


    New Domestic smart meter contract win and Post-Close Trading Update


    New Domestic smart meter contract win


    Smart Metering Systems plc (AIM: SMS.L) ("SMS"), the integrated metering services company that connects (installs), owns, operates and maintains UK metering assets, is pleased to announce that it has signed an agreement with Co-operative Energy Limited ("Co-Operative Energy") to provide services as an integrated domestic smart meter installer and Meter Asset Provider.

    Under the terms of the agreement, SMS has been appointed as the preferred supplier to fund and install domestic smart meters on behalf of Co-operative Energy in certain defined geographic areas. Co-operative Energy currently has around 326,000 meter points within the areas in which SMS has been appointed as preferred supplier.

    This forms part of the UK Government programme, overseen by the Department of Business, Energy and Industrial Strategy (BEIS), requiring domestic energy supply companies to provide all of their customers with a smart meter in homes and small businesses across the UK by 2020.


    Post Close Trading Update

    The Company's continued investment throughout the year saw the total number of metering and data assets under management increase by approximately 54% to 3.13m by 31 December 2018 (2.03m at 31 December 2017). This figure includes a portfolio of 846,000 domestic smart meters representing a 100% increase year on year (423,000 domestic smart meters at 31 December 2017).


    Total annualised recurring revenue increased by 32% to £75.3m as at 31 December 2018. In the Gas division, meter recurring revenue grew by 19% to £42.9m, while data recurring revenue increased 6% to £3.1m. In the Electricity division, meter recurring revenue nearly doubled to £20.3m and data recurring revenue grew 34% to £9.0m.

    Based on unaudited management accounts for the period, SMS expects that its results for the year to 31 December 2018 will be in line with current market expectations and these will be published mid-March 2019.


    Alan Foy, Chief Executive Officer, commented:

    "2018 has seen continued growth and we are delighted with another strong period of trading allowing us to deliver for our customers in the fast-growing domestic smart meter market.

    "We are delighted to be working with Co-operative Energy, a sustainable long-term business which is owned by its members and aims to provide 100% green electricity to all of its customers. Co-Operative Energy is, like SMS, committed to leading the smart energy revolution and we look forward to bringing the benefits of smart meters to its customers."
     
  14. Groucho

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    18 March 2019


    Smart Metering Systems plc


    ("SMS" or "the Company")


    New industrial and commercial smart meter contract win - SSE Energy Supply Limited


    Smart Metering Systems plc (AIM: SMS.L) ("SMS"), the integrated metering services company that connects (installs), owns, operates and maintains UK metering assets, is pleased to announce that it has signed an agreement with SSE Energy Supply Limited ("SSE") pursuant to which SSE has appointed SMS as the preferred national supplier to provide services as an integrated smart meter installer and Meter Asset Provider to its small business customers. The agreement provides SMS with the opportunity to supply and install up to 200,000 SMETS2 non-domestic meters (which are equivalent in specification to domestic smart meters).


    This forms part of the UK Government programme, overseen by Ofgem and the Department of Business, Energy and Industrial Strategy (BEIS), requiring energy supply companies to provide all of their domestic and small business customers across the UK with a smart meter by 2020.


    SMETS 2 meters are the next generation of smart meters and will deliver a wide range of improvements, including: interoperability - these devices enable seamless switching between energy suppliers by connecting with the Data Communications Company (DCC); maintain and extend the highest standard of security for householder data and will facilitate the connection of all types of home renewable and microgeneration technology onto the grid, supporting a cleaner, greener UK.


    Alan Foy, Chief Executive Officer, commented:

    "We are delighted to have built on our longstanding relationship with SSE to sign this new agreement in our well established commercial sector. We look forward to helping SSE bring the benefits of smart metering technology to SSE's small business customer base".
     
  15. Groucho

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    04 April 2019

    Smart Metering Systems plc

    ("SMS" or "the Company" or "the Group")



    Final results for the year ended 31 December 2018


    Smart Metering Systems plc (AIM: SMS.L) is pleased to announce its final results for the 12 months to 31 December 2018, which show continued underlying business growth.


    Financial highlights

    • Revenue increased by 24% to £98.5m (2017: £79.6m)

    • Total annualised recurring revenue1 increased by 32% to £75.3m (2017: £57.0m)

    • Gas: meter recurring revenue increased by 19% to £42.9m (2017: £36.1m) and data recurring revenue increased by 6% to £3.13m (2017: £2.96m)

    • Electricity: meter recurring revenue increased by 81% to £20.3m (2017: £11.2m) and data recurring revenue grew 34% to £9.0m (2017: £6.7m)

    • Pre-exceptional EBITDA1 increased by 28% to £51.6m (2017: £40.3m)

    • Underlying PBT1 increased by 13% to £25.1m (2017: £22.2m)

    • Gross profit increased by 3% to £41.5m (2017: £40.4m), with gross margin decreasing by 9% to 42% (2017: 51%)

    • Exceptional items of £17.1m (2017: £2.0m), reflecting the reduced carrying value of meter assets, predominantly in the Group's traditional meter portfolio

    • Statutory EBITDA decreased by 9% to £35.5m (2017: £38.8m), with statutory EBITDA margin decreasing by 13% to 36% (2017: 49%)

    • Statutory Profit before tax decreased by 70% to £5.4m (2017: £18.0m)

    • Underlying earnings per share1 decreased to 18.46p (2017: 19.93p) and statutory earnings per share decreased to 3.97p (2017: 16.17p)

    • Final dividend proposed of 3.98p per ordinary share totalling 5.98p for the full year (2017: 5.20p), an increase of 15%

    • Net debt at 31 December 2018 was £142.0m (2017: £36.5m), with access to cash and undrawn facilities at 31 December 2018 of £138.0m (2017: £243.5m), increasing to £277.0m on 3 January 2019

    1 Refer to the Financial Review for definitions and details on the Group's alternative performance measures, which includes annualised recurring revenue, pre-exceptional EBITDA, underlying PBT and underlying earnings per share.



    Operational highlights

    • Total gas and electricity metering and data assets increased by 1.1m to 3.13 million under management at 31 December 2018 (2017: 2.03 million)

    • Total gas meter portfolio, including third-party management assets, increased by 65% to 2,106,000 (2017: 1,273,000), with industrial and commercial (I&C) meters increasing by 6% to 173,000 (2017: 163,000). Gas data portfolio increased by 4% to 131,000 (2017: 126,000)

    • Total electricity meter portfolio increased by 78% to 552,000 (2017: 309,000). Electricity data portfolio increased by 7% to 345,000 (2017: 323,000)

    • ADM™ installations up 2% to 105,000 units (2017: 103,000) with international trials continuing

    • Capital expenditure on revenue-generating assets was £128.2m (2017: £122.5m)

    • Over 30,000 hours of engineer training delivered in 2018

    • First dedicated smart metering training facility in the UK established and the facilitation of a test lab to assist with DCC SMETS2 readiness

    • Employed 964 people at 31 December 2018 and reached the milestone of becoming a living wage employer

    • Recognised by the Office of Low Emission Vehicles (OLEV) as an accredited installer of electric vehicle charging points for the government's Workplace Charging Scheme (WCS)


    Alan Foy, Chief Executive Officer, commented:

    "2018 has been a year of continued investment and growth, and I am especially pleased with the way in which we have brought our end to end solutions to the UK's energy suppliers shown by the significant contract wins announced in the last 6 months. Building long term partnerships with our customers is key to our success. We enter 2019 with a strong order book and are well positioned to continue making progress in our core markets."
     
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    City AM 5/4/19
     
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    Investors Chronicle 12/4/19
     
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    Daily Mail 31/5/19
     
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    New fix for smart meters still riddled with issues
    Households have waited years for next-generation devices to solve past problems. But fresh flaws are now coming to light, writes Sam Meadows

    Around one in five second-generation smart meters, designed to fix their predecessors’ flaw of “going dumb” when a user switches energy supplier, has had problems displaying energy usage or connecting to the new national data network, Telegraph Money has discovered.

    This means that households 
could be unable to track their 
energy use and their supplier may not be receiving reliable meter readings – the two main benefits 
of the devices.

    The majority of the 14 million smart meters now in use are first-generation models, known as “Smets 1”, many of which risk losing their digital functions if a consumer switches supplier.

    The new version, “Smets 2”, has been installed widely this year. These meters are supposed to connect to a national data network, allowing households to switch seamlessly. But the long-awaited roll-out has not been going entirely to plan.

    In May, one medium-sized energy firm, Bulb, said that of 24,000 Smets 2 meters it had installed, roughly 7,000 were not working as they should.

    Another energy supplier told Telegraph Money that of 25,000 it had installed recently, 5,000 had required another visit from an engineer to rectify problems.

    This newspaper has previously reported on problems with the communications network in the North, which effectively cut users off from switchable smart meters. This has yet to be fully resolved.

    Most concerning is an issue known in the industry as “bricking”, which is when a device shuts down due to a perceived security flaw and needs to be replaced. An executive at one supplier said the meters were hypersensitive to tampering and hacking and that manufacturer testing appeared to trigger a security measure that risked shutting down a small number of meters. The executive said this was often not noticed until they had been installed, meaning, in some cases, that a replacement was necessary. The cost of replacing a meter is around £200, likely to be passed on to consumers through energy bills.

    The £11bn smart meter programme has fallen behind schedule and tens of millions more installations are needed within 18 months to meet the deadline. More than two million meters are operating in “dumb” mode, usually caused by a switch of supplier.

    One energy insider said: “This is a major infrastructure project, but it has been rushed. The introduction of Wi-Fi had a lot of these same issues, but that equipment spent 10 years going from the lab to commercial use. With smart meters they have just gone ahead and a lot of the problems are coming to light only when they are in people’s homes.”

    Alan Whitehead, the shadow minister for energy and climate change, said smart meters represented a vital upgrade, but the roll-out had been mishandled.

    “The Government’s handling of this has been quite catastrophic,” he said. “It’s time for a bit of honesty about the failure of targets and the technological problems being faced. A new approach is needed to roll out this essential technology.”

    The Data Communications Company, responsible for the national data network, said almost 1.5 million meters were now connected and installation rates in the North were seven times higher than at the start of the year.

    A spokesman for the Department for Business, Energy & Industrial Strategy said: “More than 14 million smart meters are operating across the country, including more than 1.5 million second-generation devices. Millions of consumers and businesses are already reaping the benefits as we move to a cheaper, more efficient and reliable energy system.”

    Daily Telegraph 20/07/19 - #CYAN #SMS
     
  20. Groucho

    Groucho Member

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    31 July 2019


    Smart Metering Systems plc


    Half year trading update


    Smart Metering Systems plc (AIM: SMS, "SMS", "the Group"), the UK's largest integrated installer and manager of smart meters, provides a half year trading update for the six months to 30 June 2019 ("H1 2019" or "the period") and the current view of the outlook for the year to 31 December 2019 ("FY 2019").


    Highlights

    · H1 2019 revenues in line with the Board's expectations

    · Annualised recurring revenue ("ARR") continued to grow strongly and increased by 14.1% during the period to £85.9m at 30 June 2019, ahead of expectations

    · 156,000 domestic smart meters installed in H1 2019 taking the Group's domestic smart portfolio alone through the 1 million meter milestone

    o The Group is well-positioned for an increase in installation run-rate in H2 2019 and beyond

    · The Board expects a material H2 weighting to the year's trading performance as increases in industry-wide smart meter installation rates will provide greater utilisation of the Group's engineering workforce

    · Currently exploring options to monetise the value of a minority of the Group's meter assets

    · The Group has significant liquid resources: c.£50 million cash in hand, undrawn banking facilities of £183 million and future internal cash generation.


    Alan Foy, Chief Executive Officer, commented:

    "We have now installed over 1 million smart meters. Although installation rates in H1 have been impacted by the transition to SMETS2 meters, we have continued to build our recurring revenue base, ahead of our expectations.

    "Momentum in the installation rate is now building across the industry. Throughout H1, and in line with our longer term strategy, we are retaining the financial, technical and people resources necessary to support a substantial increase in activity in H2 and beyond. We are well prepared to increase significantly our installation run-rate in H2 compared to H1, as industry-wide activity picks up.

    "We also continue to experience strong demand as societal, regulatory and environmental factors drive the requirement for smart energy management.

    "The Group has a strong portfolio of meter and data assets which generates index-linked, long-term recurring revenues. We are looking at options to monetise the value of a minority of our meter asset portfolio to support our future growth."


    Current trading

    H1 2019 revenues are in line with the Board's expectations. ARR from the Group's portfolio of meter and data assets, its primary financial KPI, continued to grow strongly and increased by c.14.1% to £85.9 million at 30 June 2019 (31 December 2018: £75.3 million), of which £19.6 million was domestic traditional which the Group expects to be materially exchanged with smart meters. Of the remainder, the industrial and commercial ("I&C") meters ARR grew c.10.6% to £21.0 million, domestic smart meters ARR grew 19.6% to £32.4 million and data assets ARR grew 5.7% to £12.9 million.

    The Group continued to invest in its high-quality asset base, installing c.156,000 domestic smart meters and taking the total number of domestic smart meter installations to over one million during June 2019.

    The Group's total number of metering and data assets now under management increased by c.10.5% to 3.46 million (31 December 2018: 3.13 million) with its domestic smart meter portfolio increasing by c.18.4% to 1,002,000 (31 December 2018: 846,000).


    FY2019 outlook

    The Group expects ARR to grow further, primarily driven by an increase in the domestic smart meter installation run-rate. This is underpinned by SMS's strong order book and the UK Government's commitment to the smart meter programme which requires all UK households and small businesses to be offered a smart meter by 2020.

    As SMS has stated, the overall installation profile of domestic smart meters has been impacted by industry-wide issues associated with the slower-than-anticipated transition from SMETS 1 and the roll out of the new SMETS 2 meters. However, the Board expects that, with technical issues experienced by the whole industry in certain geographical areas and energy supplier readiness for SMETS 2 now being addressed, industry-wide installations rates should now build.

    In particular, the Board expects to see a marked pick-up in installation activity from September 2019 onwards and believes that SMS is well-positioned and has capacity to increase significantly installation run-rates through the remainder of FY2019.

    In the event that installation run-rates do not increase as anticipated, the Group's strategy is to continue to maintain the investment in its engineering capacity in order to maximise strategically the overall installed portfolio of smart meters in the longer term, even at the expense of short-term profitability. The Board will continue to review the position and any impact on the full year outlook for FY 2019 and will update the market when the Group announces its interim results for H1 2019 on 17 September 2019.


    Position and opportunities

    The Group has a market leading position in terms of meter asset installation, asset management and energy management, but its comprehensive service offering developed over the last 24 years makes it unique in its industry. The Group currently have contracts with 12 independent energy suppliers underpinning a strong order book with an additional c.4 million opportunity with these contracted suppliers. SMS also continue to engage with all other energy suppliers in the market. Recently the Group secured a framework agreement with both British Gas and Opus Energy to install smart meters across their I&C customer base.

    Beyond the UK domestic smart market opportunity, SMS intends to ensure it has the capabilities to deliver integrated energy solutions to its customers, with data at the centre of everything it does. SMS will continue to develop its capabilities to deliver innovative and integrated energy solutions to its customers, leveraging the foundations established in smart meters to grow its service proposition, and establish a business at the centre of the energy system as the economy transitions to a more sustainable and low-carbon future.
     

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