Smart Metering Systems reports rise in recurring revenue
Smart Metering Systems
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Smart Metering Systems reported in a trading update on Thursday that its total meter and data assets index-linked annualised recurring revenue (ILARR) was £113.4m at the end of 2023, including an annual retail price index (RPI) adjustment.
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The AIM-traded firm said that represented a significant 16.8% increase compared to the prior year's end, which stood at £97.1m.
In terms of smart meters, SMS installed around 450,000 units during the year, bringing its total smart meter portfolio to around 2.5 million as of the end of 2023.
That marked a notable increase from its previous year-end figure of 2.1 million.
Following Octopus Energy Group's acquisition of Shell Energy Retail (SERL) and the migration of SERL's energy customers to Octopus' systems, SMS said it had received a preliminary indication from SERL about the potential migration of certain gas and electric meter installations under its contract with SMS to Octopus.
SMS said it was evaluating that information, and planned to engage further with SERL and Octopus in the coming months.
The company also expressed its commitment to supporting energy suppliers in meeting their smart meter obligations.
Regarding grid-scale battery storage assets, SMS reported a portfolio of 860MW, with 240MW operational as of 31 December, representing a 100MW increase from the prior year.
The operational portfolio generated an annualised equivalent EBITDA of £46,000 per MW, aligning with market averages.
Despite recent volatility in battery revenues, SMS anticipated a long-term EBITDA contribution ranging from £57,000 to £65,000 per MW.
A 50MW site initially expected to be operational in the fourth quarter of 2023 had been delayed to the second quarter of 2024 due to upstream protection works, with three 2MW per hour sites totaling 90MW expected to become operational in the final three months of 2024.
In the development of carbon reduction (CaRe) assets, the group said it was continuing to make significant progress in building its delivery capabilities, commercial models, and pipelines for providing other developing CaRe assets and data services.
SMS said 2023 pre-exceptional EBITDA and underlying profit before tax were set to be in line with the board's expectations.
As of 31 December, its net debt stood at £171.9m.
At 1454 GMT, shares in Smart Metering Systems were up 5.56% at 950p.
Reporting by Josh White for Sharecast.com.