Smart Metering Systems has sold a chunk of its meters to Equitix for £291m. SMS said the disposal represents a minority of its assets and it will still manage the assets for a fee of £0.8m a year.
The transaction, which includes I&C meters, had provided some £18.4m in index-linked annual recurring revenue (IIARR) for SMS.
Following the deal, the company’s recurring revenue will fall from £90.9m to £73.2m.
However SMS said the proceeds will help fund an order pipeline of some 2m smart meters to 2024, which it calculates will result in around £40m IIAR, resulting in net annual income growth of some £21.4m.
The cash will also fund a bigger shareholder dividend.
According to latest government data, some 16.5m smart or advanced meters had been installed across the UK as of December 2019. That leaves around 37m to install over the next four years.