Smart Metering Systems trebles dividend in strong update
Smart Metering Systems (SMS) 619p
Gain to date: 31.7%
Original entry point: Buy at 470p, 24 October 2019
AS A RESILIENT investment uncorrelated to the wider economy, smart meter installer Smart Metering Systems (SMS) continues to do well, as its latest statement to the market shows.
The company has more than trebled its full year dividend for 2020 to 25p per share, up from 6.88p for 2019, as its financial performance remains strong despite the coronavirus pandemic.
It comes after SMS said in a trading update for the six months to 30 June that revenue and underlying profit are set to remain in line with pre-coronavirus expectations, with index-linked recurring revenue in the period rising 4.6% to £75.9 million.
It also has a strong liquidity position with £45 million in net cash and access to a £300 million revolving credit facility, while its contracted order book remains promising with a further two million smart meters in the pipeline.
Going forward, SMS expects its smart meter installation run-rate to return to pre-Covid levels by the beginning of next year, while underlying profitability remains in line with previous expectations.
SHARES SAYS: Smart Metering Systems has proved resilient in the face of a big economic downturn. It should continue to do well given its lack of correlation to the wider market and strong financial position.