Smart Metering Systems Rises on U.K. Energy Savings PlanJessica Morris
Smart Metering Systems Plc’s profit rose 24 percent as it benefited from the U.K. government promoting devices to help households and businesses monitor use of electricity and gas and encourage savings.
First-half net income climbed to 3.4 million pounds ($5.6 million) as sales advanced 44 percent to 18.9 million pounds, the Glasgow, Scotland-based company said in a statement today. It increased its interim dividend 34 percent to 0.94 pence a share. The stock rose as much as 5.3 percent.
The company installs smart meters and rents them to customers on behalf of energy companies such as Centrica Plc, GDF Suez SA and SSE Plc. Growth was helped by the acquisition of meter design, installation and management company Utility Partnership Ltd. in April and new contracts, including a deal with British Gas Business.
Government plans to roll-out smart meters to all homes and businesses in the U.K. by 2020 represents a “staggering change for our business,” Chief Executive Officer Alan Foy said in a telephone interview. It’s a huge market and “a tiny market share in it will make a substantial difference,” he said.
Smart meters can send readings to energy companies and onto an in-home display system. This makes it easier for customers to monitor their energy consumption and removes the need for estimates for billing.
The stock rose 5.3 percent to 400 pence at 3:12 p.m. in London, taking the advance to 32 percent this year and giving the company a market value of 340.5 million pounds.
“The British Gas contract is for around 60,000 meters over three years,” Foy said. It will generate about 50 million pounds of recurring rental revenue over that time, he said.
Annualized recurring gas meter rental revenue increased by 42 percent to 18.8 million pounds in the first half. Smart Metering increased its meter portfolio by 13 percent to 534,000 during the period.