Bglobal wins £12m contract but warns on profits

SMART Metering firm Bglobal has agreed a £12m deal to supply British Gas’ business arm.

But the company has warned the investment required to complete the job will affect gross margins and profits for the year to March will be below expectations.

In a trading update Blackburn-based Bglobal said its programme of meter installations had also been hampered by poor weather during the winter. Nonetheless it is trading “broadly” in line with current market revenue expectations for the year.

The British Gas agreement guarantees the delivery of a fixed programme of meter installations by the end of 2010. BG said 50,000 smart meters were being used by its business customers and it hopes to add another 100,000 during the year.

Bglobal has been working with British Gas since 2006. Under the terms of the contract it will also provide data services, which should pull in extra revenue of around £1m a year.
 
Smart meters collect data to allow users to tailor consumption to the most efficient times. The technology also means energy companies do not need to employ meter readers to visit customers.

Bglobal has also signed a deal to install and service meters for a new energy supplier Dual Energy Direct. The company said it had also established relationships with five field services companies who install for the company alongside its own staff.

Chief executive Tony Barnes said: “We have seen a rapid bounce back in the daily installation rate following the disruption brought to our installation operations by the big freeze in December and early January.

“Looking forward, our new contracts and the move to a fixed programme of meter installations in the year ahead with British Gas Business underpins our forward order book for the year to March 31, 2011, which is currently more than 75% covered. The contract also signals British Gas Business’ clear intent to bring on the smart energy revolution and accelerate the benefits of smart metering for UK businesses.

“Until now we have been asked to deliver on broad framework agreements where exact monthly customer requirements have sometimes been difficult to forecast. By signing a fixed delivery agreement under our long-term framework we can set better expectations with our customer and plan ahead with more certainty.”