Liberum raises Smart Metering Systems to 'buy'

Liberum said Smart Metering's trading update guided to smart meter installations at more than 80% of pre-Covid levels as the group's CaRe asset pipeline continued to develop, with the analysts taking "an increasingly optimistic view" of the programme, and added that the layering of battery storage assets would create "significant value" for the business.

The analysts also said that there were "encouraging developments" on SMS' Behind the Meter smart solar and storage assets, with the firm's ADM devices being trialled with water companies in Australia.

As a result, Liberum bumped Smart Metering up from 'hold' and increased its 2020 full-year underlying fully diluted earnings per share by 5% due to marginal gains across the board and also increased its net cash estimates from £10.0m to £30.0m due to a better than expected performance.

"We believe there is now enough positive news on the CaRe assets to assume that these will be a significant growth driver for SMS going forward and, whilst we have not included these assets in numbers yet, we believe the market should begin to price this in," said Liberum.