gamesinvestor
24 Apr 2017
Re: Inventory bulge Jim, It illustrates the business model better yes.But can you explain what the benefits are, that are tangible and measurable, in terms of how it makes the customer and the suppliers life easier, and how it saves money for both parties.If there is questionable economic benefit, it could be that stretched energy suppliers decide not to continue supporting these payments. The government is already threatening the big 6 with caps that have caused share prices to fall markedly today.I'm obviously missing something and I'm open to understand this better, but to me - what is the point to the customer of having a meter that shows a bar chart of energy usage and tells you when you have your lights and kettle on? Is there any evidence that it reduces energy consumption to a significant degree, I mean other than fuzzy marketing spin?From the suppliers perspective there is a big cost (Hive for example is deeply unprofitable at British Gas -- Centrica itself is a poorly run company) and how is this cost absorbed -- by the customer, or the supplier in an attempt to appear current in the eyes of the customer in the face of competition from the 5 other energy suppliers?Games - I guess it's a question of - what is the benefit, show me the money as they say!!
jim b-r
20 Apr 2017
Re: Inventory bulge SMS owns the meters, but rents them out to the big utilities on long term contracts that comfortably exceed the pay-back period for the original installation. In this sense its money for old rope. Meantime its a land grab for installation work to meet goverment targets that the utils are obliged to meet. SMS has bought in house the installation teams that used to service them - so even more money for old rope. The government sees this as part of their green programme. Hope that answers some of your questions. J
gamesinvestor
19 Apr 2017
Re: SSE Smart meter issue over the weekend IOM -- Not an officianoado on SMS and smart meters in general, apart from their design is pretty straight forward, having worked at Texas Instruments in the past. Can you list the top 5 essential reasons why Smart Meters exist -- I'm not fully aware of them, other than the companies do heavy promotions to get their punters to install them.Irrespective of the reliability and accuracy issues mentioned in the recent posts, does this obviate the need for a chappy to come out and read the meters?I look at Hive (more on the control side) etc which is a big loss maker for British Gas and wonder if this is a short term trend while everyone gets stuffed up with one of these things that ultimately gets parked in a drawer when the battery runs out or the customer gets sick of dusting around them.I mean how useful is it to switch on your kettle and watch the bar chart jump to the right telling you, you are using more lecky?I mean what's the alternative he ponders, cold tea?Games -- Playing devil's advocate of course, as someone is going to come back to me with an irrefutable benefit no doubt? -- well they are, aren't they? Eh?
IOMINVESTCOM
06 Mar 2017
SSE Smart meter issue over the weekend Quite a bit of negative news on BBC & Twitter from home owners Smart meter readings, thousands of pounds of use in just one day. Investigation started by SSE into the possible software update error which may have caused this to effect a small number of home owners.Do not know whether SMS equipment, software update was involved but it is the type of negative news that puts doubts in people's mind.Wonder whether there might be a brief share price re-action for SMS during the course of today until the situation becomes clearer. Could be over re-action so be aware of over sold conditions. Might be good to get RNS comment from SMS early to either distance themselves from this weekends error or put more meat on the bone information to what happened.atb
IOMINVESTCOM
16 Feb 2017
Panmure upgrade from 6.50 to 8.68!! 15 Feb 17 Panmure Gordon Buy 605.25 650.00 868.00 Reiterates03 Feb 17 Panmure Gordon Buy 605.25 650.00 650.00 Reiterates03 Feb 17 Peel Hunt Buy 605.25 740.00 740.00 Reiterates24 Jan 17 Peel Hunt Buy 605.25 419.00 740.00 Reiterates04 Jan 17 Macquarie Outperform 605.25 892.00 892.00 Reiterates
II Editor
07 Feb 2017
NEW ARTICLE: Stockwatch: A rare growth play "Projected to make nearly £25 million pre-tax profit in 2017, this £500 million AIM-listed business enjoys a tasty operating margin of over 36%. Installing and operating smart meters on behalf of energy companies, LSE:SMS:Smart Metering Systems' ..."[link]
IOMINVESTCOM
03 Feb 2017
Trading Update - Sound steady progress nm
IOMINVESTCOM
16 Nov 2016
SMS Related The largest holding in the fund at 5.1% is AIM-listed Smart Metering Systems (SMS) + , which Lawson said would continue to benefit from the push towards water meters. ‘You had a nice recurring revenue stream from industrial and commercial markets and it is starting to move into residential,’ he said.‘A company like that with a big recurring revenue stream and a very strong revenue pipeline means there are lots of attractive characteristics. The revenue visibility is good and there is great growth but it is trading at relatively low multiples.’[link]
IOMINVESTCOM
27 Oct 2016
Re: Concern Share price declining - I am watching areas of support on how the price re-acts at 5.13 next with 4.85 afterwards.
Scooby Doo It
13 Jul 2016
Concern I have been watching for a while and have some concernsSMS HY is 30/06, last year they reported on 16/09. On 8/7/16 the CFO exercised and sold 500,000 shares 60p / 405p, retaining no holding and the COO sold 500,000 at 405p retaining 417,508 so selling down over 50%. I’m sure there are many reasons why they would sell down (no explanation given) but so close to end of HY (but not in closed period), 2 key members of the leadership team concerns me, I’m viewing this as very negative.They have signed up a number of energy companies over the last 6 months for around 300,000 meters within 18 months and increased their revolving credit from £105m to £150m (£84.7 at Year end) so I’m expecting an increase in debt with not much revenue increase.Any thoughts ?
mcescher
30 Mar 2016
Dividend payer but questionable financial position and growth prospects. Summary of this report on Smart Metering Systems [link]
Willow67
15 Jun 2015
Re: Smart Meter roll out Although I am not actually that convinced what economies of scale exist. A merged entity could t roll meters out any quicker than the separate entities do. The fu ding cost might go down a touch but not much. The site-works/projects business when integrates might be able to take on bigger projects I guess and maybe here is some technology to share. So not sure it's a slam dunk. No sign of it anyway for now!!!
dave297
15 Jun 2015
Smart Meter roll out Both companies should benefit substantially if the Govt remain committed to rolling out Smart Meters in every home.Wonder how we would do as a merged entity with the additional economies of scale?
Willow67
10 Jun 2015
SMS vs EAS (again) Since I have been recently comparing the valuation of EAS (where I am a holder) and SMS (where I am not), I thought I would spend a bit of time on comparing their business models and accounts. I did this for myself but thought I would post it on both iii boards for general interest.MetersEAS's gas and electricity meters are all in the I&C market. They now have 365k meters across gas and electricity, 191k they own and rent out (£14.1m revenue) and 174k they just collect data on (£9.2m). Owning and renting is understandably more profitable. SMS have primarily been in the domestic meter market but they are growing their I&C portfolio now. Across gas and electricity, they now have 619k meters, of which 542k are domestic gas and 77k are I&C gas and electricity (not sure of the owned & rented vs data collection split). I&C meters are a lot more valuable than domestic, which is why the companies generated about the same in revenue terms from their meter portfolios (EAS £23.3m vs SMS £26.2m) when SMS have twice as many (EAS 365k, SMS 619k). SMS spent £35m in the last year on growing their meter portfolio, EAS £22m. SMS added 145k, of which 100k were domestic and 45k I&C. EAS added 47k I&C (ignoring those they bought with BGM in April 2014). EAS are clearly focusing on the I&C market Other ServicesAway from meters, EAS generated £12.9m from its Siteworks services/advisory business, SMS £16.2m, although there is very little mention of this business in SMS's recent results even though profits were up 68%. Financials1) Comparing their recent accounts, EAS had a 36% net operating margin, SMS 31% as a result of SMS having much higher admin expenses (I think from the cost of using sub-contractors to install the domestic meters)2) SMS had financing costs of £2m vs £3.8m for EAS. At the y/e EAS had borrowings of £65m, SMS had £54m. I don’t see why the financing costs won't converge given the similarity of the businesses3) EAS paid the expected ~20% tax charge but SMS's was cut to almost zero by a one-off £2.3m credit related to share options4) In cash terms (more important than accounting p&l), SMS generated £25m from operations (60% of sales), EAS £19.5m (54%). The main difference was the extra £1.8m EAS paid in financing and the extra £1.5m EAS charged in depreciation (on a similar asset base)5) If you add back the one off tax credit SMS received this year and also charge SMS the same depreciation that EAS did, both companies generated about £7-7.5m in PAT but EAS generated it at a margin of 21%, SMA at 17%SummaryThe businesses are clearly pretty similar, but I think EAS is a better operation and a better investment proposition1) Its focus on the more lucrative I&C market means it has a higher true net operating margin (21% vs 17%)2) It has a greater ability to reduce its financing costs going forwards3) SMS spent £13m more on meters last year than SMS, entirely due to its rollout in the domestic market. Although EAS currently has £11m more in long-term debt, and therefore trades on a worse net debt/EBITDA multiple, I think this will change over time if SMS continues to grow its domestic meter business as it is4) Despite the recent strong out-performance of EAS's share price, it still trades at a much more attractive valuation than SMS. EAS trades on x17.8 current earnings vs 27.5 for SMS
Willow67
20 May 2015
SMS vs EAS I said on 31/7/14 that I thought SMS holders were in the wrong share and the company was seriously over-valued vs their competitor EAS. Since then SMS has fallen 15% and EAS has risen 50%.SMS then had a PER of 36 (falling to 32 & 24 , according to consensus forecasts) and a PEG of 1.3 whereas EAS had a PER of 17.5 (falling 16.5 & 14) and a PEG of 0.2. SMS is now on a PER of 27 and a PEG of 0.4 and EAS is on a PER of 17.5 and PEG of 0.6. I am not that sure of forward guidance so haven’t quoted it. For me SMS still trades at a pretty challenging multiple and I would rather hold EAS (as I do), but my sense is there is probably upside now in holding both over the coming years given the strong structural trend they are both tapping into. I might buy some SMS if I am lucky to see 320 area again.Best of luck to holders of both
