AIM:SMS

Stock Analysis Report

Smart Metering Systems

Executive Summary

Smart Metering Systems plc, through its subsidiaries, connects, owns, operates, and maintains metering systems and databases on behalf of energy companies in the United Kingdom.


Snowflake Analysis

Reasonable growth potential and slightly overvalued.

Share Price & News

How has Smart Metering Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SMS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-5.4%

SMS

-5.2%

GB Electronic

-5.4%

GB Market


1 Year Return

-20.9%

SMS

13.8%

GB Electronic

2.0%

GB Market

Return vs Industry: SMS underperformed the UK Electronic industry which returned 13.8% over the past year.

Return vs Market: SMS underperformed the UK Market which returned 2% over the past year.


Shareholder returns

SMSIndustryMarket
7 Day-5.4%-5.2%-5.4%
30 Day-5.5%-3.4%-4.2%
90 Day-5.9%-2.9%-2.6%
1 Year-19.8%-20.9%15.6%13.8%7.6%2.0%
3 Year-15.6%-18.0%50.6%43.7%11.4%-2.7%
5 Year60.7%53.7%105.3%88.0%29.0%-0.6%

Price Volatility Vs. Market

How volatile is Smart Metering Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Smart Metering Systems undervalued compared to its fair value and its price relative to the market?

49.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SMS (£4.99) is trading below our estimate of fair value (£9.87)

Significantly Below Fair Value: SMS is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SMS is unprofitable, so we can't compare its PE Ratio to the Electronic industry average.

PE vs Market: SMS is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate SMS's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: SMS is overvalued based on its PB Ratio (2.5x) compared to the GB Electronic industry average (2.3x).


Next Steps

Future Growth

How is Smart Metering Systems forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

43.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SMS is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.5%).

Earnings vs Market: SMS is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: SMS's is expected to become profitable in the next 3 years.

Revenue vs Market: SMS's revenue (8.2% per year) is forecast to grow faster than the UK market (3.8% per year).

High Growth Revenue: SMS's revenue (8.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SMS's Return on Equity is forecast to be low in 3 years time (14.9%).


Next Steps

Past Performance

How has Smart Metering Systems performed over the past 5 years?

-9.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SMS is currently unprofitable.

Growing Profit Margin: SMS is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: SMS is unprofitable, and losses have increased over the past 5 years at a rate of -9.6% per year.

Accelerating Growth: Unable to compare SMS's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: SMS is unprofitable, making it difficult to compare its past year earnings growth to the Electronic industry (-13.1%).


Return on Equity

High ROE: SMS has a negative Return on Equity (-2.42%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Smart Metering Systems's financial position?


Financial Position Analysis

Short Term Liabilities: SMS's short term assets (£107.1M) exceed its short term liabilities (£41.8M).

Long Term Liabilities: SMS's short term assets (£107.1M) do not cover its long term liabilities (£249.6M).


Debt to Equity History and Analysis

Debt Level: SMS's debt to equity ratio (106.8%) is considered high.

Reducing Debt: SMS's debt to equity ratio has reduced from 172.8% to 106.8% over the past 5 years.


Balance Sheet

Inventory Level: SMS has a high level of physical assets or inventory.

Debt Coverage by Assets: SMS's debt is not covered by short term assets (assets are 0.5x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: SMS has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: SMS has been profitable on average in the past, therefore cash runway is not a concern.


Next Steps

Dividend

What is Smart Metering Systems's current dividend yield, its reliability and sustainability?

1.20%

Current Dividend Yield


Dividend Yield vs Market

company1.2%marketbottom25%1.9%markettop25%5.4%industryaverage1.5%forecastin3Years1.7%

Current dividend yield vs market & industry

Notable Dividend: SMS's dividend (1.2%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.92%).

High Dividend: SMS's dividend (1.2%) is low compared to the top 25% of dividend payers in the UK market (5.37%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, SMS has been paying a dividend for less than 10 years.

Growing Dividend: SMS's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: SMS is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: SMS's dividends in 3 years are forecast to be well covered by earnings (47.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.3yrs

Average management tenure


CEO

Alan Foy (52yo)

13.1yrs

Tenure

UK£663,381

Compensation

Mr. Alan Henry Foy has been the Chief Executive Officer at Smart Metering Systems Plc since 2007 and served as its Group Managing Director. Mr. Foy has responsibility for business distribution, client mana ...


CEO Compensation Analysis

Compensation vs Market: Alan's total compensation ($USD857.44K) is about average for companies of similar size in the UK market ($USD1.19M).

Compensation vs Earnings: Alan's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Alan Foy
CEO & Executive Director13.1yrsUK£663.38k3.98% £22.4m
David Thompson
CFO & Executive Director2.4yrsUK£411.14k0.0012% £6.7k
Timothy Mortlock
COO & Director0.4yrsno datano data
Dilip Kejriwal
Head of Investor Relations & Corporate Finance0yrsno datano data
Andy Ritchie
Head of Business Risk and Compliance0yrsno datano data
Craig McGinn
General Counsel & Group Company Secretary0yrsno datano data
Stan Chaloner
Group Sales Director8.1yrsno datano data
Bill Turner
Managing Director of UK Data Management0yrsno datano data
Claire Corrins
Head of Gas Business0yrsno datano data
Rhys Wynne
Head of Electricity Business0yrsno datano data

5.3yrs

Average Tenure

42yo

Average Age

Experienced Management: SMS's management team is seasoned and experienced (5.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Alan Foy
CEO & Executive Director13.1yrsUK£663.38k3.98% £22.4m
David Thompson
CFO & Executive Director2.4yrsUK£411.14k0.0012% £6.7k
Timothy Mortlock
COO & Director0.4yrsno datano data
Miriam Greenwood
Senior Independent Non-Executive Director3.7yrsUK£45.00k0.015% £83.2k
Graeme Bissett
Independent Non-Executive Director3.7yrsUK£45.00kno data
Donald MacDiarmid
Non-Executive Chairman3.8yrsUK£90.00kno data
Ruth Leak
Independent Non-Executive Director0.8yrsno datano data

3.7yrs

Average Tenure

52yo

Average Age

Experienced Board: SMS's board of directors are considered experienced (3.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 10%.


Top Shareholders

Company Information

Smart Metering Systems plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Smart Metering Systems plc
  • Ticker: SMS
  • Exchange: AIM
  • Founded: 1995
  • Industry: Electronic Equipment and Instruments
  • Sector: Tech
  • Market Cap: UK£562.265m
  • Shares outstanding: 112.63m
  • Website: https://www.sms-plc.com

Number of Employees


Location

  • Smart Metering Systems plc
  • 48 St. Vincent Street
  • 2nd Floor
  • Glasgow
  • Lanarkshire
  • G2 5TS
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SMSAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPJul 2011
SMCDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2011

Biography

Smart Metering Systems plc, through its subsidiaries, connects, owns, operates, and maintains metering systems and databases on behalf of energy companies in the United Kingdom. It operates through three segments: Asset Management, Asset Installation, and Energy Management. The company engages in the regulated management of gas meters, electric meters, and ADM devices. It also installs domestic, industrial, and commercial gas meters and electricity meters, as well as provides energy consultancy services. In addition, the company provides data management, meter installation, electricity and gas utility management, and electricity and gas meter rental services. The company was formerly known as UK Smart Metering Group Limited and changed its name to Smart Metering Systems plc in June 2011. Smart Metering Systems plc was founded in 1995 and is headquartered in Glasgow, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 21:55
End of Day Share Price2020/02/26 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.