24 Mar 2020 07:00
24 March 2020
Smart Metering Systems plc
COVID-19 Update
Smart Metering Systems plc (AIM: SMS, "SMS", "the Group"), which installs and manages smart meters and carbon reduction assets to facilitate effective energy management, is taking mitigating steps to safeguard the welfare of its employees and clients as a result of Covid-19.
With immediate effect, the Group has temporarily stopped all non-essential field work which includes the installation of smart meters until further notice. SMS will continue to provide full emergency field support and related activities and will maintain its extensive IT infrastructure which supports its existing meter and data asset base and the index-linked annual recurring revenues (ILARR) generated by these assets.
The Group has closed all its offices and warehouses, except for activities required to support emergency field activity and IT infrastructure which cannot be conducted remotely, with a majority of the workforce continuing to work and support customers from home.
SMS has also introduced increased protection measures to ensure the health and wellbeing of its staff, supply chain, customers and their consumers. This includes the establishment of COVID-19 Risk Assessment procedures, the distributing of extra Personal Protection Equipment (PPE), and strict social distancing guidelines for all field and office-based employees who continue to work. These measures, combined with the Group's IT infrastructure, ensures it can continue to meet emergency works whilst reducing the risks to an absolute minimum.
On 12 March 2020, the Group announced that it had conditionally sold a minority of the Group's meter assets for a total gross cash consideration of £291 million. On completion, the net cash consideration of £282 million will be applied towards the immediate repayment of amounts outstanding under the Group's existing £420 million debt facility and will result in a positive net cash position.
In addition, following completion of the disposal, the Group will have retained ILARR of £73.2 million as at 29 February 2020, all of which remains unaffected by the temporary measures being taken. The COVID-19 situation is evolving rapidly and whilst the impact on the short-term financial performance of the business cannot be accurately quantified at this time, the combination of the Group's robust balance sheet, high-quality, index-linked recurring revenue streams and a contracted order book of c.2 million smart meters ensures that the longer-term impact on the Group will be minimal. SMS will continue to monitor the situation and provide a further update as appropriate.
Alan Foy, Group CEO commented,
"The welfare of our employees and customers is paramount. We therefore have taken these measures to mitigate the impact of COVID-19 as much as possible.
"These are very difficult circumstances for everyone, but we believe that the fundamental strengths and strategy of our business will deliver success in the medium and long term."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Enquiries:
Smart Metering Systems plc | 0141 249 3850 |
Dilip Kejriwal, Head of Investor Relations |
|
|
|
Cenkos Securities plc (Joint Broker and Nomad) | 0131 220 6939 / 020 7397 8900 |
Neil McDonald / Pete Lynch |
|
|
|
Investec Bank plc (Joint Broker) | 020 7597 5970 |
Christopher Baird / Henry Reast |
|
|
|
Instinctif Partners | 020 7457 2077 |
Adrian Duffield / Kay Larsen / Chantal Woolcock |
|
Notes to Editors
SMS plc (www.sms-plc.com) installs smart meters and data loggers that facilitate effective energy management and a low carbon future. Established in 1995, SMS provides a full end-to-end service for metering financing, installation, management and maintenance, with a highly skilled workforce and deep engineering expertise.
SMS's asset management business had 3.7million meter and data assets under management as of 31 December 2019. SMS's smart meter expertise also enables the Company to provide consultancy services that allow organisations and corporates to enhance long term efficiency and effectiveness in the management of energy.
SMS's energy management and asset installation services also include infrastructure design, installation, consultancy and project management services for new gas, electricity, water and telecoms connections for licensed energy and telecoms suppliers, end consumers and the UK's licensed electricity Distribution Network Owners (DNOs). In addition SMS's FlexiGrid software controls enables installed energy storage systems, renewable energy sources and electric vehicle charging to be fully integrated into the UK's energy systems shaping demand to follow renewable energy supply.
SMS employs in excess of 1,200 people across the UK who support the installation and ongoing management of metering assets.
SMS plc is headquartered in Glasgow with 12 locations across the UK.
SMS's shares are listed on AIM.