SMS.L Share Chat (SMS)

And will be settled in 14 days, for those thinking of their CGT position it is in this tax year if you accepted on/before it was declared unconditional.

Not sure what happens if you are yet to accept as the settlement will be up to +14 days.

Congrats to all holders

Update today is a 10% increase in acceptances…the RNS referenced below refers to 17% interest being assigned to the bid…..so clearly not all acceptances are registered (unless a lot have gone the other way this week).

I expect this will be declared unconditional v soon.

Thanks PennyChaser

Https://www.lse.co.uk/rns/SMS/statement-re-offer-pu6zqfbzd95fqpp.html

Founders have agreed to the offer

Could you elaborate please PennyC as not sure what you mean. May have missed some significant news.

Now that the founders have agreed to sell are we likely to see the takeover commence? Wonder how much money has changed hands to make that happen

I hope you are right, the price would be lower if the market expected KKR to walk.

Anyway, the good thing is that all this has given me the needed push to bin dross for the losses to offset against SMS anticipated gains

Still could be a surprise in store, bid lapses or another (unlikely) bidder creates a party

14 March just crept over 30%…..some delicate discussions should be underway to determine what has to be offered to get to 50%. I suspect £10 is about the maximum KKR has in mind….but that may still be light.

29.79% acceptance - seems like KKR will have to increase their offering to get this deal accepted

Any thoughts or insight into why the acceptance level has seemingly dropped from 38.72% to 30.84% on the most recent update?

I have accepted, but I dont think I get paid unless the deal is declared unconditional…..if they raise the price before then they have to honour the higher price for all.

No certainties here, but the prospect of lower interest rates should mean KKR can raise its offer and still make money.

If certainty is needed, then sell in the market…..the price indicates there is confidence a deal can still be done.

Looks like Primestone , the former directors and the arbs are holding firm. There must be a worthwhile story that has resulted in expectations of an increased offer and led to acceptances being withdrawn

Although the dissenters can take the long view, I would have thought that the hedge funds are looking at shorter timescales to make and take their profits

hopefully KKR don't walk !!

And the % of acceptances seems to have fallen to 30% (unless there was an error in last weeks update).

Looks like KKR may need to sweeten the deal.

Only 38% on the first count. At the moment no shares acquired.

There must be plenty seeking an uplift in the offer which the rules do allow for - with take over panel approval (not sure why it would be refused?). Another 5 weeks before the final deadline for declaring the bid unconditional. This is where the advisors have to earn their money by assessing whether raising the bid will get it over the line - plenty of hedge funds who just want an extra few %.

It's a yes from me.

IS This sudden plunge is indicating the deal is in trouble?

Quite relaxed Jatw and not that bothered if KKR decide to walk away. Bought yonks ago at under 200p so happy to wait for someone else to come along. Likely sooner rather than later now that BoD have indicated that they are willing to recommend an offer considered underwhelming by some.

What does the softening share price indicate?

Take your pick from:

The deal is not getting done at this price.

The deal is getting better by the day and will succeed.

Will there be a revised offer on Monday?

HL has set a date of 16 Jan to vote on the current proposal…….will be waiting to see what happens over this weekend…..not that PI votes will count for much…..

Jatw

You'll be fine. I sold a few on 22/08/22 at 956p so the bid of 955p is underwhelming. A result of higher borrowing costs impacting the borrow cheap, install meters, enjoy the income stream model that pushed the price to 1000p around that time.

My view is that the dissenters should be able to gain support to over 25%. if that happens the offer could be sweetened and another of the various possibilities is that KKR walk.

if that happens another suitor will arrive on the doorstep sooner rather than later

Best of luck

Furry - have you bought more in the hope of an increased offer?

I thought 959 was a good market price given the bid and sold 50%…..now thinking of buying it back…..it is a case of 963 if the current deal goes ahead 1000 or more if the price is raised or back to 700 (until the next bid).

Well i've voted against it as it's too low an offer in my opinion and should be nearer 1100.

See what happens but hopefully we get more for the business.

Is it enough to derail the bid? Judging by the Sp reaction I think so. I would buy more on any fall.

Or is it all over……17% shareholders are disappointed with the offer - they will have a price.

I wonder how much they will settle for….

Wow British companies are dropping like flies, what a mess this market has become, well done holders here

Didn’t get below 600 which was my buy target! lol!

Looks like at last someone has valued this ‘property’ correctly. One min it looked expensive next was cheap!

Perhaps that accounted for the up and down sp!

Still another bites the dust!

Usual caveats

Trek

I've had this stock since 2017 and missed two peaks at around 900p I sold out finally in February at 913p. My concern is the dividend will be cut after 2024 as its not well covered. What does everyone else think?

Hi Craig,

Not at the moment. I have traded this one and won every time! Atm I am out but would only look to buy if I had a pot free which coincided with an end to the downtrend here.

I thought the interims were good but they haven’t really done enough to justify the high pe of 51 which makes this expensive imo. The battery side is pretty small and the meter growth hasn’t really blown the doors off like I thought it would.

If in profit I would sell as may get back cheaper or at least sell half and feed back in lower. The yield here at 4.86% even with 10% yoy growth isn’t brilliant there’s better elsewhere.

The inflation increases are however an attraction.

The 5 year chart has this going below 600. I reckon you can get 590-570 with patience. Then sell again from there hopefully 650. But not one to chase. If you get mid high 500’s suddenly the yield becomes more attractive.

Good luck

Usual caveats

Trek

@trek you still in here?

Half year report tomorrow.

Let's hope for good progress.

Have enjoyed the divis which I always recycled back in so was happy to hold. However this is a decent offer and I have done well over the years so happy to look for the next project.

Broker rating at downgraded to 660, liontrust still offloading?

I am adding more when I can, plenty of director buys at over 700.

Not looking great here, the SP has took a battering.

Could we see under £6?

16-Jun-23 16-Jun-23 Buy Gail Blain 735.50 GBX 2,717 2,717

15-Jun-23 15-Jun-23 Buy Tim Mortlock 733.13 GBX 6,820 58,194

06-Apr-23 06-Apr-23 Buy Miriam Greenwood 751.00 GBX 2,728 32,049

29-Mar-23 28-Mar-23 Buy Tim Mortlock 744.70 GBX 16,114 51,374

21-Mar-23 17-Mar-23 Buy Miriam Greenwood 801.80 GBX 92 29,32

25/07 Expecting a decent update,

Tim, Miriam and Jamie all done well in last few weeks!
I should have added more ... doh

https://presentations.investormeetcompany.com/investor-meet-company/SMART-METERING-SYSTEMS-PLC-Investor-Presentation?bmid=5230ae9510c2
ask them directly?

Been reading in the press that connection to the grid is an issue for these battery farms…..maybe some scarcity value will prolong decent margins in the short to medium term.

Agreed, lithium-ion batteries are needed but their current revenue stack comes almost exclusively from helping deliver second by second responses (frequency services). They're not great at storing renewables, as consistent full charges and discharges (cycling) of these batteries damages their state of health and requires significant replacement of cells. Lithium-ion does have a roll to play in enabling a green grid but this comes predominantly from frequency services which have a *limited demand*. I do fear SMS have arrived late to the party and could face disappointing returns from these investments.

https://www.pv-magazine.com/2022/11/02/uk-battery-energy-storage-acquisitions-heating-up/
BESST - you are right to say there has been huge expansion of BESSs. The above article suggests a relatively low installed base of 1.6Gw, pipeline up to 30Gw in various stages of planning/development. The article does suggest 50Gw maybe needed in the long run…..my guess is more renewables will mean more capacity will be needed and advances in battery design will drive down costs.
SMS is a small operator…which is a risk in itself….with the current cost pressures….we will all need to keep our positions under review.

The update as usual is pretty upbeat….the battery business seems to be doing well….and when all current build is installed will be generating £45m EBITDA…..although quite a bit of DA I would expect….
Dividend +10% for 2023
One concerning note is the cash position…..not unexpected that they need to invest in the business infrastructure….but it looks like they have burnt through £100m in 2022….the assets they have built are valuable so they can always securitise future cash flows or sell them if needed….will read the FY Results and cash flows with interest….
Broker price targets still well ahead of current price….but shares are vulnerable to a cash raise.

Trading update likely next week.
I wonder what inflation is doing to their business? In theory the meters business is index linked so should be increasing billings significantly and matching increasing labour and equipment costs….i expect there will be cost increases to the battery storage business at some point but power security still seems to be an issue sp maybe pricing power is with SMS…..

JPM short here 17-11-22

https://www.shorttracker.co.uk/company/GB00B4X1RC86/

Only 0.53%

Probably expecting a brief pull back below 800 as it’s defied gravity! Lol!

Usual caveats

Trek

I have been expecting a rise here on the back of Octopus offering reduced off peak energy costs for those that have smart meters. But nothing in the media. Shares keep rising.

I actually think it’s the energy storage proposition that’s most attractive but again zilch!

Oh well!

Usual caveats

Trek

From under 700 to 800p in a month!

Timing is everything!

Trek

Sorry I mean 700p! Lol!

Trek

Unbelievable w weeks ago these were under 600p. Still rising now! What an opportunity.

Didn’t anyone grab any??

Trek

Well and truly on the turn now. What an opportunity that was!

Hope a few other PI’s took advantage!

Usual caveats

Trek

Yah! Blue finish for me having added more sub 7!

If it goes back there will add again.

Can only conjecture what the drop was for. Seems to coincide with LDI as it’s bounced in unison with insurers today. If that’s the case then it’s technical selling which means one for the bargain hunters.

The last update was sooo good.

If they do raise it will be accretive so not bothered will buy any dip here. A little gem imo!

Usual caveats

Trek

Or could be pension fund dumping liquid stock ahead of covering LDI margins?

Trek

EU proposal for windfall tax on renewables as well as other energy this morning, possible fear that UK will follow suit, even though Truss seemed to rule it out? Some weakness in Hydrogen companies this morning as well.

But sold heavily after apparently excellent H1 results and a positive statement by the Board.
Crazy..given the inflationary protection of the meter business and the increasing prospects for batteries and other Carbon reduction products.

in the mail
https://www.dailymail.co.uk/money/investing/article-11199625/MIDAS-SHARE-TIPS-meter-installer-Smart-Metering-Systems.html

I left here at around 900p. Should have held but added to PAY which has made up for missing the extra gains.

Keeping an eye here though as it’s an inflationary hedge. I actually don’t mind starting again in an investment at a higher level if the outlook/macro changes. Some peeps don’t get that!

Amazed this one is not mentioned by the pundits for its inflationary benefits! Lol!

Usual caveats

Trek

For me the new piece of info was that the grid scale battery is generating cash and EBITDA of around 5m pa.
The question remains how this translates into profit, what it cost to build for I, and critically what the DA is. As these develop as projects the realistic returns can be estimated ore accurately. Expect some broker updates as the pipeline matures….hopefully upwards. RBC increased by 10p….

Hopeful this will be a reliable source of income.

Key points



· ILARR(1) grew 8% to £93.1m at 30 June 2022 (31 December 2021: £85.9m)

· Meter and data assets

· smart meter portfolio increased to 1.9m at 30 June 2022 (31 December 2021: 1.7m)

· secured a new smart meter contract win adding c.0.1m meters to the pipeline

· smart meter order pipeline of c.2.42m(2) at 30 June 2022 (31 December 2021: c.2.55m)

· continued growth in smart meter installation rates; no impact on meter supply

· Grid-scale battery pipeline

· first 50MW performing well ahead of management expectations

· total pipeline increased to 760MW(3) at 30 June 2022 (31 December 2021: 620MW)

· Continued progress in other CaRe products and services including recent strategic investments in EV charging infrastructure and energy data management

· Net cash position at 30 June 2022 was £38.6m

· FY 2022 underlying EBITDA and PBT expected to be marginally ahead of previous expectations; confident in medium term outlook

· Expected FY 2022 dividend of 30.25 pence per share, +10% year-over-year in line with stated policy

Must have been a leak a couple of days ago!

Picked up my holding at £8.48, and now one of the few showing good gains.

Definitely a stock for the current times

The INdex linked contracts will generate a lot more cash than previously expected….should bode well for creasing dividends.

Todays software investments, one a full acquisition and the other a staged buy are positive for the future. Enabling better fee earning services and expanding development capacity.

Trading update on 27 July is one to look forward to.

Note how on the last two trading days the MM has knocked this down at the open. It then recovers through the day.

If one intends to add worth looking at the opening price imo.

Usual caveats

Trek

Love this share. Been in it before, sold up with a good profit. Back again and another good profit on the way.

Flying now!

Just goes to show that you don’t have to buy micro caps to make huge returns and underpinned by quarterly divi!

Mr market has given some awesome opportunities of late!

Usual caveats

Trek

Yep chart taking us to +900p. Really strong momentum.

I don’t get directors buying now when they had an opportunity at a lower SP. Must be results.

My average is 705p ish. I bought for the quarterly divi with cover + growth and couldn’t believe the TA opportunity for a recovery.

That’s all played out now exceptionally well.

Question is do I sit on my divi or sell at 900p?

A tough one this. I see a pull back at some point but with a good sp cushion do I trade it or switch off.

I normally trade some and hold some. Not Doug anything yet though until the chart establishes some resistance!

Usual caveats

Trek

The latest of 3 directors buying since results….and looking at the chart there is strong momentum.
Looks like a buy to me…follow the directors money.

One to hold tightly in times of uncertainty.

Buying for the first time to hold for a long time. Impressed by the business and the results. This is a very resilient and defensive play cash cow. To hold for a long time as a passive income and especially as energy storage/renewables play with demand to be going exponentially in the next few years.
I would add that Expansion in Australia and elsewhere (New Zealand next) will boost turnover and cash flow. -------------------------------------------------------------------------------------------------------------------- ADM™ – The Intelligent Metering Solution: - - - Smart Metering Systems Pty Ltd provide a fully-managed metering and data service to the Australian residential, commercial and industrial markets. Exemplifying our end-to-end metering and data solutions we have introduced ADM™, an intelligent Advanced Meter Infrastructure (AMI) and Automated Meter Reading (AMR) solution, which boasts a network of 165,000 assets and counting. ADM™ is beautifully simple – designed and built using proven, robust technology. Effortlessly activated in a matter of minutes, it fits to all pulse output water, gas, LPG and electric meter types.

Well all pretty much bang on guidance.

620MW was a nice lift and slightly ahead on meter instals.

CaRe looks promising but lacks concrete data imo.

Worth averaging in for an inflation busting divi increase.

Usual caveats

Trek

Sp has stood up well recently probably because already pulled back following trading update.

Shouldn’t see much change. Slightly ahead of guidance at 85.9m in the bag already.

Getting grid scale batteries in is the one to watch esp given the ‘low wind’ period.

Smart meter delivery and upgrade is finite. Plenty of work atm but it’s batteries we want!

Could also do with a main market listing as some insti’s won’t touch AIM.

Good quarterly divi here with a 10% hike recently albeit whilst the revs are predictable the growth outlook has tapered.

I think a safe buy/hold, my average is under 7 but am a buyer sub 750 if market holds as this one now has good defensive qualities. Akin to GLO but their numbers and geo is better.

Usual caveats

Trek

https://www.sms-plc.com/insights/blogs-news/sms-energises-50mw-battery-energy-storage-site-in-cambridgeshire/

Meters will need to be 4G or 5G enabled from 2033.
My meter has a 10y battery life so that means they need to upgrade new installations soon to avoid a crunch in 10 yrs time.

Should not be a risk…more of an opportunity to refresh meters in the future..

The market seems to like today’s news.
Meters are clearly a large part of what the company currently does…..if they start losing contracts because of consolidation of suppliers then breaking up the company and selling the meter business becomes a viable way forward.
In the meantime t was good to get 50MW of batteries into testing in line with cost expectations.
Managing construction of the next set of batteries will bring cost challenges but increases in construction may well be offset by falls in battery costs…..technology gets cheaper and more powerful every year and I have no doubt that will be the same for batteries.

I expect SMS to build its businesses to diversify away from meters in the next few years….the political climate favours them…financing should be no problem, winning the bidding for contracts will be more interesting but against the backdrop of a rapidly developing market there should be plenty to go round….
I remain positive on the outlook.

Meters continuing at run rate……
Grid scale batteries going from strength to strength….this new business line will become much more significant for the company…..
There will be further green opportunities…….smart heat pump services anyone?