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Energy Assets revenue soars in three months

ENERGY Assets has hiked ­revenue by more than 50 per cent in the three months to June 30, as its house broker forecasts the firm will lift profits by more than one-third in its current financial year.

STEP FORWARD: The firm's chief executive Phil Bellamy-Lee said first quarter trading had been very encouraging.
STEP FORWARD: The firm's chief executive Phil Bellamy-Lee said first quarter trading had been very encouraging.

The utility metering specialist said total revenue rose to £8.4 million in the opening quarter, boosted by the £2.3m acquisition of BGlobal Metering in April.

The deal gave Livingston-based Energy Assets instant scale in the I&C (industrial and commercial) electricity metering sector, and was followed last week by a contract to install advanced meters to about 50 per cent of the industrial and commercial (I&C) customers of British Gas across the UK.

Energy Assets told the City that recurring revenue increased by 45 per cent to £5.5 million in the three months from April 1, accounting for 65 per cent of total revenue. It said there had been a 71 per cent increase in revenue at its Siteworks division, which provides gas infrastructure solutions, to £2.9m.

Investors responded to the update by sending shares up 3.5 per cent, closing the day at 445p.

House broker Numis Securities noted the company had been boosted in the opening quarter by the BGlobal deal and from strong trading across all divisions.

It calculated that group ­revenues had increased by 27 per cent on an underlying basis over the period, adding that shares had responded well to the British Gas announcement.

The analyst, which reiterated its buy recommendation for the stock, has pencilled in full- year profits before tax of £9.1m for the current year, more than 35 per cent ahead of last year.

Numis said: "The performance represents a solid start to the year, and combined with the recent British Gas contract win, continues the positive momentum in the equity story.

"We make no change to our earnings estimates, but this update reflects a good start to the year in terms of asset installation and transactional revenue, while the contract win with British Gas for the installation of 50 per cent of its I&C meters in the UK creates a step-change for gas meter installation programme in the UK.

"Combined with the acquisition of BGlobal, and its entry into the electricity metering market, Q1 represents good momentum for the business, in our view."

Energy Assets said its owned and managed meter portfolio has risen by 98 per cent since year end on March 31 to about 323,000 assets. This figure incorporates about 150,000 assets brought on board by the acquisition of BGlobal Metering.

It added that nearly four-fifths (79 per cent) of the assets installed over the period came in the I&C gas sector, with the remaining in the I&C electricity market.

Chief executive Phil Bellamy-Lee said: "First quarter trading has been very encouraging, ­showing a continued pattern of growth across our asset portfolio and Siteworks business.

"The group has made two significant steps towards the achievement of our primary objectives within the period. The strategic agreement with BGB provides opportunity for significant future growth to the Energy Assets long-term recurring revenue portfolio and is a significant step in the consolidation of our position as the ­largest independent metering service provider to the UK I&C gas sector.

"Additionally, the BGlobal Metering Limited acquisition enables Energy Assets to expand its presence into the electricity sector and is a significant step in the delivery of the group's ­strategy to offer services across a multi-utility platform."

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