Maiden statement

Mortlock sees solid further growth ahead for SMS

Tim Mortlock
Tim Mortlock: well positioned

Tim Mortlock, new CEO at Smart Metering Systems, has used his maiden results announcement to forecast another year of solid growth for the meter installer and manager, despite turbulence in the energy market.

The Glasgow-based company has contracts with energy suppliers to install 2.5 million smart meters and is fitting 30,000 a month. It also has a pipeline of industrial battery investments and is looking at moving into areas including solar panels, electric vehicle chargers and heat pumps.

Underlying profit for the year to the end of December rose 20% to £18.3m from £15.2m and by 58% on a like-for-like basis.

Pre-tax profits slumped to £8.3 million against £195m in the previous year. The company proposes a 10% rise in its dividend to 27.5p from 25p.

Mr Mortlock, who succeeded Alan Foy at the start of the month, said: “Throughout 2021, SMS has demonstrated the strength of its business model, delivering profit ahead of upgraded expectations, growth in index-linked annualised recurring revenue and concluding the year with a strong cash position.

“Given COVID-19 related operational challenges and recent turbulence in the UK energy market, these are impressive results.

“Looking ahead, the year has started well, and we are confident with our previously guided expectations for 2022. Our strong balance sheet and a resilient, growing smart meter and grid-scale battery pipeline make SMS well-positioned for further growth”

In a broker’s note, Cenkos said FY21 results showed a strong performance given the headwinds caused by Covid in H1/21 and the energy market turmoil in H2/21 which has had a negligible impact on the SMS pipeline.

“Although there have been numerous independent energy suppliers exiting the market over recent months as the wholesale energy price has soared, the impact on the SMS installation pipeline has been negligible,” it said.

“Whilst substantial uncertainty within the energy supply market is likely to remain a feature of 2022, we still do not anticipate that it will have any significant impact on SMS given the proportion of the order pipeline with larger, well capitalised energy supplier customers such as Shell Energy and Octopus Energy.”

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