ENERGY Assets said it could make further acquisitions after the £13.5 million takeover of Gazprom's UK metering business helped the company grow profits 34% in the latest year.
The Livingston-based firm, which specialises in managing sophisticated meters used by industrial and commercial firms, achieved £3.9m profit, before tax and exceptionals, in the year to March compared with £2.9m in the preceding year.
In annual results announcement, the company hailed the "transformational" effect of the Gazprom Global Energy Solutions (GGES) deal under which it won exclusive rights to instal meters for new customers of the Russian firm for five years.
Gazprom is a leading provider to UK industrial and commercial customers
Energy Assets said it had more than doubled the number of meters from which it collected information on consumption to around 52,500 in the year to March, from 21,000 the previous year, largely due to the Gazprom deal.
The company expects the deal to help power rapid growth in the number of meters it provides to the customers of energy firms that use its services.
The number of meters owned and installed by Energy Assets increased 28% in the latest year, to around 81,000 at 31 March, from 63,000 at the preceding year end.
In a note in which they described Energy Assets as an under-valued growth stock, analysts at Cannacord Genuity told clients: "While the focus of growth remains organic, we sense that the technology acquired with GGES, which has application across meters in the water, electricity, and PV (photo voltaic) sectors, is leading management to contemplate other value-enhancing acquisitions, which could further stimulate the short to medium-term growth."
Asked about the brokerage's comment, Energy Assets's chief executive Phil Bellamy-Lee said the company did not have any more acquisitions under consideration at the moment.
However, he added: "We believe the acquisition was a great success. We would consider further acquisitions of that type."
He noted that the company might be able to use acquisitions to add to its service offering.
But directors are confident Energy Assets will be able to deliver strong organic growth.
The company believes it is well placed to grow its share of a market that is expected to expand significantly as a result of regulatory changes.
All industrial and commercial customers will need to adopt advanced meters by 2019.
Mr Bellamy-Lee said Energy Assets also expected demand for its automated meter reading (AMR) services to increase as customers were seeking more information about their gas consumption patterns.
The company's chairman Chris Masters said: "The new financial year has started strongly with management's target to grow the meter and AMR portfolio on track."
Energy Assets's expected growth could be good news for Livingston, where the company increased employee numbers by about 20 in the latest financial year, to 90.
Mr Bellamy-Lee praised the quality of the workforce available in the area.
Joint house broker Numis Securities forecasts Energy Assets will make £6.6m pre-tax profit on sales of £24.7m in the current year.
The company increased total revenue by 42% in the year to March, to £18m from £12.7m.
Energy Assets listed on the main market of the London Stock Exchange in March last year.
Shares in the company closed down 4.5p at 231.5p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article