The first results as a public company for gas meter ‘soup to nuts’ asset management firm, Smart Metering Systems (SMS – see Smart Meter smartness?), reflected its final period as a private company, and as such they seem to be making the ‘right connections’. Revenues for the 6 months to 30th June rose by 28% yoy to £7.4m, gross margins rose from 43% to 51% with operating margins almost doubling to 25.2%. EPS almost trebled to 1.69p.
All this, as I say, pre-float (8th July). Almost half the equity (46%) is still owned by its directors, and so far SMS’ shares have traded comfortably above the 60p IPO price, closing at 84p last Friday. Management intends to pay an interim div at the end of the year.
As I said previously, SMS is not the only kid on the gas metering block, but the ‘soup to nuts’ propostion does look rather interesting. I rather warmed to its proprietary smart metering solution, ADM, which SMS claims can work with existing ‘pulse enabled’ meters. This, I assume, is a far more cost efficient approach than a ‘rip out and replace’ affair.
Anyway, life under the scrutiny of the public eye is so very different from that in private cloisters. It is now time for management to duly embrace the reality that they are no longer a ‘company’ – they are now a ‘stock’ – with all the responsibilities to, and influences by external shareholders that this implies.