SMART Metering Systems said it is optimistic about the future after growing first-half profits by around 90% in spite of the uncertain economic outlook.
The Glasgow-based gas meter technology specialist increased underlying profits to £2.9 million in the six months to June, compared with £1.5m in the same period last year, helped by a series of contract wins.
The AIM-listed company has benefited from increased investment in gas meters by suppliers who are preparing for regulatory changes. These will require the mass roll-out of smart meters from 2014 in support of official efforts to cut carbon emissions.
Run by Scottish engineers Steve Timoney and Alan Foy, who netted windfalls totalling £17m when it floated in July last year, the company appears to be enjoying success with a strategy that focuses on the market for Industrial and Commercial (I&C) gas suppliers.
The meters concerned command much higher rentals than those used domestically.
Smart Metering Systems (SMS) won what it described as major contracts with two suppliers in the first half, under which it expects to provide around 16,475 meters over a three-year period.
The company also won contracts with five energy brokers that supply services to groups of customers.
"The importance of this market to SMS is underlined by the fact that, given the greater revenue that is generated from the provision of I&C meters, the equivalent number of domestic meters for these contracts would be in the order of 250,000," said the company.
Smart Metering Systems was also pleased to win a contract with Scottish and Southern Energy in the first half under which it expects to supply 180,000 domestic meters.
The company's total meter portfolio rose 25% in the first half to 283,275, from 227,517 in the same period.
Turnover increased by 25% annually, to £9.3m, from £7.4m.
Mr Foy, who is the company's chief executive, highlighted the fact revenues included the first sales of the ADM automated meter reading technology.
He also noted that Smart Metering Systems secured a new £45m banking facility with Barclays Bank, Clydesdale Bank and Lloyds Banking Group last month.
With an estimated 1.5m industrial and commercial meters in the UK, the company said the market provides a significant opportunity.
Smart Metering Systems won a contract to supply meters with ADM technology to Dong Energy last week.
"The board continues to look to the future with optimism," said Mr Foy.
Directors confirmed plans to pay a maiden interim dividend of 0.5p per share.
Analysts at house broker Cenkos Securities told clients: "We anticipate further progress being made with new gas supplier contracts within the I&C market and remain buyers."
The brokerage forecasts that Smart Metering Systems will increase pre-tax profits to £5.7m in 2012, from £3.3m in 2011.
Shares in Smart Metering Systems fell 0.5p at 204p.
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