First Day of Dealings on AIM

RNS Number : 0013K

Smart Metering Systems PLC

08 July 2011

 



NOT FOR DISTRIBUTION IN THE UNITED STATES, CANADA, JAPAN, AUSTRALIA OR THE REPUBLIC OF IRELAND OR IN ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW

For Immediate Release

8 July  2011

Smart Metering Systems plc

("Smart Metering Systems" or the "Group")

FIRST DAY OF DEALINGS ON AIM

Smart Metering Systems, the only independent provider of the full range of gas infrastructure connection services, gas meter asset management services, and developer of smart metering technology solutions to the UK's key gas suppliers, is pleased to confirm its flotation on AIM today.  Dealings in the Group's shares will commence at 8am this morning.  The Group's ticker symbol will be SMS.L.

Highlights

·      Smart Metering Systems raised £10.0 million (gross) of new investment from a broad range of institutional and other investors by way of a substantially oversubscribed placing of new ordinary shares at a price of 60 pence per share.

·      The net proceeds of the placing will be used to fund the organic growth of the business through investment in gas meter assets and the Group's patent pending ADM smart metering device.

·      On Admission to AIM, the market capitalisation of the Group at the placing price will be £50 million.      

·      Established in 1995, Smart Metering Systems has expanded organically through diversifying its offering to meet the needs of its gas supplier clients as the market deregulated and competitive choice was introduced.

·      Through its 3 subsidiaries; UK Gas Connection ("UKGC"), UK Meter Assets ("UKMA") and UK Data Management ("UKDM"), the Group delivers an integrated range of services from the management of gas connections and operation of gas meter assets to a comprehensive patent pending smart metering solution.

·      UKGC - A facilitator of gas connection and metering services to the UK's gas suppliers.  Five major gas suppliers employ UKGC on a non exclusive basis to install meters and provide gas connections for their end consumers.

·      UKMA - An OFGEM accredited meter asset manager currently engaged in the ownership, operation and management of over 221,000 domestic and industrial and commercial ("I&C") gas meter assets, utilising the Group's comprehensive IT system to track, manage and bill for these assets. This bespoke, industry compliant system is highly scalable and currently operating at only 5% of capacity.

·      UKDM - An ESTA approved data management company whose business is the operation and management of automatic meter reading services utilising the Group's patent pending ADM smart metering solution for the gas and water markets.  The ADM solution fully utilises the Group's IT system to track and manage the ADM device and to securely deliver half hourly meter reading information direct to the suppliers.

·      The Group has excellent visibility of earnings.  Contracts with gas suppliers provide predictable recurring revenues.

·      The Group's clients are globally recognised international energy brands which are the hub of the gas meter market and will be responsible for the roll out of smart metering.  These clients have strong market share and supply gas to over 30% of the UK's residential consumers and over 80% of the UK's industrial and commercial consumers.

·      Powerful government and regulatory initiatives in smart metering and pressure for consumers to cut  carbon emissions are creating significant levels of demand for a competitive smart metering solution in the I&C market. The Group is meeting that demand by providing pulse enabled gas meters through UKMA together with a highly competitive ADM smart meter solution through UKDM.

·      ADM is a patent pending smart meter device for the I&C market with application in gas and water both in the UK and internationally.  ADM is currently undergoing commercial trials.  Based on trial volumes, the Directors have concluded that ADM is significantly less expensive than any other product currently on the market and is an effective replacement for the equivalent manual meter reading service.  ADM features simple plug and play functionality with zero commissioning and can be deployed quickly using unskilled labour.  ADM provides half hourly meter reading data direct to suppliers through secure information gateways.    

·      In 2009, OFGEM introduced a new licence condition for gas suppliers to ensure an acceptable deployment of smart meter technology in the I&C market.  OFGEM is currently considering mandation of all meters in the industrial and commercial and domestic markets with the objective for all meters in the UK to be made 'smart' by the end of 2019. 

·       A large proportion of an estimated 1.678m I&C gas meters and 21.28m domestic gas meters in the UK will need to be exchanged by 2019 to facilitate smart metering.

·      Smart Metering Systems has a strong financial track record delivering a substantial CAGR over the last three years

·      Revenues	16.6%
·      EBITDA	96.3%
·      Net Assets	198.8%

·      For the year ended 31 December 2010 Smart Metering Systems reported revenue of £12.4m and EBIT of £2.2m.

·      To facilitate liquidity in the shares post admission to AIM, £17.0 million of Existing Ordinary Shares have been placed at the Placing Price on behalf of the Selling Shareholders.

·      The Group plans to have a progressive dividend policy.

·      Cenkos Securities plc is acting as Nominated Adviser and Broker to the Group.

On the AIM Admission, Alan Foy, Chief Executive Officer said: "Our flotation on AIM today marks a new chapter for our business.  We have a strong business model which investors have shown their support for during the IPO process and now look forward to building shareholder value as a listed company."

For further information, please contact:

Buchanan
Diane Stewart / Carrie Clement Richard Darby	0131 226 6150  0207 466 5000
Cenkos Securities
Ken Fleming Jon Fitzpatrick	0131 220 6939 0207 397 8900

Cenkos Securities plc, a member of the London Stock Exchange, authorised and regulated by the Financial Services Authority, is acting for Smart Metering Systems PLC only and will not be responsible to any other persons for providing the protections afforded to clients of Cenkos Securities plc or for advising such person on the matters referred to in this announcement. Cenkos Securities plc has not approved the contents of, or any part of, this announcement.

 

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