By Ian McConnell
SMART Metering Systems yesterday unveiled plans to raise around £175 million from institutional investors through a share placing, laying out its intention to “target continuing strong future growth”.
The company said that, following recent wins, it now had a contracted order pipeline of around 2.75 million smart meters. It also flagged its pipeline of 470 megawatts of grid-scale battery projects.
Smart Metering noted these pipelines had “a combined £690m capital expenditure requirement over the next five years”, flagging its recent securing of a £120m increase in its debt facility to £420m. This revised debt facility is with six lenders, the company noted.
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Glasgow-based Smart Metering said the investment in these smart meter and battery project pipelines was “expected to deliver an estimated £75m increase in group annual EBITDA (earnings before interest, tax, depreciation and amortisation) when fully operational”.
Miriam Greenwood, non-executive chairman of Smart Metering, said: “Our contracted smart meter order pipeline and pipeline of grid-scale battery projects represent significant growth opportunities for SMS, as the group continues to enable the UK’s transition to a low carbon energy economy. This next stage of SMS’s growth is expected to deliver attractive returns to our shareholders.
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“Our recently increased £420m debt facility demonstrates the significant support for our business model and, together with internally generated cash and this proposed fundraising, will enable SMS to invest in the substantial identified growth opportunities ahead and drive long-term shareholder value.”
Smart Metering yesterday reported that its underlying pre-tax profit in the six months to June 30 was up by five per cent on its previous first half at £9.6m.
First-half revenues were down by 5% at £51.7m.
Smart Metering flagged the impact of the coronavirus pandemic on first-half trading.
Commenting on recent trading, chief executive Alan Foy said: “In the light of recent trading and assuming no further pandemic-related restrictions, the board expects FY (full-year) 2021 underlying PBT (profit before tax) to be marginally ahead of its previous expectations.”
Smart Metering said it expected to pay a full-year dividend of 27.5p-a-share in respect of 2021. It noted this would be a 10% year-on-year rise.
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