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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?
I just had my meter changed today as I have solar and a battery and want to go on the Octopus tariff for such. It was done by a much smaller company called Smart Metering Systems LTD, not PLC, as ours is. They do a lot of work for Octopus, but don't cover the whole country so it looks like Octopus are using more than one independent rather than going in house - and they are growing fast.
That's fair yes
For SMS I doubt it changes the installed meter base at all, but they are contracted to install new meters by the suppliers….hence the contracts could be diverted to in-house teams and away from independents such as SMS.
The switch to Care may be a long term change for the company….more construction risk due to the large scale of the projects.
Surely it’s zero sum though - ie suppliers change but household supply is same?
All this chat about distributor failures is worrisome and seems to be escalating to only a few will survive….the fund raise to reorientate the company towards CaRE assets seems timely if meter growth may falter.
Hortic
Previous mcap (114m x 10.30) = 1,174m
Add cash 175m
New mcap 1349m
Total shares = 133m
Theoretical sp £10.06
Theroretically now a bargain
It wouldn't seem overvalued if you had any shares ;-)
I'm not sure the price correction is enough. 15% more shares raised at 900 should equate to an sp of 765. The stock seems overvalued.
Wouldn't worry too much Jatw re: quality of contracts. Having worked for Scottish based companies, I'd be surprised if the contracts are not watertight, very surprised.
Hope so !
The market seems to have overreacted.
The results were as expected….but are reported as plunging 97% because of a huge asset trading gain last year. There is no hint of a profit warning.
The fall in n MV today wipes out the cash to be received which is barking mad….the theoretical price is higher, more like £10 if treated like a rights issue.
UKI 2.0 you should be in profit by 4 October.
Meter operators don’t seem to have suffered from failing distributors…but I get the point that new contracts may be harder to come by and existing instal contracts may terminate.
This fund raise appears to be to finance he Care business and presumably large construction costs.
The risks may be shifting from managing millions of small fees for meters to managing a few large battery build and operate contracts…..the former is more predictable, the latter riskier so let’s hope they have got good contracts in place rather than shouldering a lot of risk on behalf of grid managers.
Nice friendly move by SMS, I really wanted to lose 150p off the share price.
I'm sure most will agree that averaging down by giving discounted shares to wealthy mates should be illegal. It is no more than theft. The discount probably 'earned' by a few free lunches, again paid by us.
2 new suppliers with 500k customers have just gone bust. The rest are sure to follow which will only leave the big players who have their own metering businesses (and do not need to use SMS) - can see a short squeeze on SMS coming!
got my avg to 896 with some further purchases
Post not apprearing, maybe this will nudge it into life....
I've come back in at an average so far of £9.10. Looks a decent entry point hopefully although surprised it's dropped quite so much. Also I am aware of the bed and b rules and keeping this into next year (I have sold most other holdings) would allow me to use my capital gains allowance, albeit that's still quite a while away.
Directors taking advantage of a strong share price to raise new money.
£175m will underpin additional debt to finance the large grid scale battery installations.
I expect the shares will trade higher than the 900 issue price….we await progress updates on projects, their financing and how they perform against budget….let’s hope they have flexibility to recover increasing build and transportation costs.
Quite a chunky fund raise of 15% of mcap to institutional shareholders
Wonder what the price will be set at? 950? 900?
Thanks, no I don’t think it necessarily needs a big pull back. It is v well placed I agree and should compound nicely. It’s just the sort of investor I am , I try to go for relatively short term big moves. Normally stuff keeps doing well when I sell.
It’s nice that this has been good to both of us despite our different approaches (and I have a lot of respect for your knowledge).
I don’t blame you for exiting….at an all time high….
All Aim stocks are risky, but I feel this one is supported by some solid assets and a favourable public policy agenda…..its main risk is the new market of grid scale batteries…it is very small in the grid scale projects compared to the grid and power distribution cos….and if the projects overrun build costs there may be little margin left….I guess that is your buy back scenario with 25% off after a profit warning.
Anyway the future is still looking positive I will run this a little further.
All lookoing good yeah. I decided to cash in at 985 having held in varioius guises since £6 in May 2020, but I can see it going higher in time (and maybe I will return)
My install of electric and gas smart meters went well this week. Good customer service.
Trustpilot reviews are 1 or 5* depending on communication, attendance and outcome of the install.