Gender Pay Gap

The SMS Group welcomes and supports gender pay gap reporting (introduced to increase pay transparency) and is committed to equal opportunities, diversity and inclusion throughout the business.

All companies with 250 or more employees are required to publish their gender pay gap under legislation that came into force from 5 April 2017. Employers must publish the gap in pay between men and women on both a median basis (pay per hour based on the person ‘in the middle’ of the distribution of pay) and a mean basis (average hourly pay). In addition, employers are required to disclose the distribution of gender by pay quartile – in other words splitting the workforce into four groups based on their pay and showing the proportion of men and women in each group. Employers are also required to disclose percentages of staff receiving bonuses by gender and the gender gap on bonuses.

SMS Energy Ltd (‘SMS’), previously known as Smart Metering Systems Plc and its wider group, operate within both the domestic and industrial & commercial, gas and electricity markets. Within SMS group, CH4 Gas Utility and Maintenance Services Limited (‘CH4’) and SMS Energy Services are the only two companies which fall within the remit of the Regulations and therefore require statutory disclosure.  Our gender pay analysis for both companies are included within this document. We have also voluntarily elected to provide a consolidated gender pay gap analysis for the entire SMS group. In addition, the figures for the previous year (2023) are referenced for comparison purposes.

Providing a complete energy service, SMS (including its subsidiaries) funds, installs, operates, and manages smart meters and carbon reduction (“CaRe”) assets, including electric vehicle chargers and battery storage systems, which together facilitate a smarter, greener, and more flexible energy system. Accordingly, a vast number of our employees are gas and electric engineers (and male).

The SMS Group has also included a ‘Positive Action Taken’ section, setting out the actions we have taken and will continue to support, to address the gender pay gap set out in this Report.

Reporting Requirements
There are 6 reporting requirements that require to be published;

• Mean gender pay gap in hourly pay
• Median gender pay gap in hourly pay
• Mean bonus gender pay gap
• Median bonus gender pay gap
• Proportion of males and females receiving a bonus payment and
• Proportion of males and females in each pay quartile

Equal pay

Equal pay is when men and women are paid the same for like work.

UK law has, since the 1970s, prohibited paying different amounts to men and women who are doing ‘like work’, ‘work of equal value’ or ‘work rates as equivalent’ unless there is a ‘genuine material factor’ for the difference.

The Gender Pay Gap

The gender pay gap is the difference between the hourly rate of pay of male employees and female employees (as set out in the regulations), expressed as a percentage of the hourly pay rate of the male employees. The gender pay gap is reported on both a mean (average) and median (mid-point on a distribution) basis. See Table 2.

Gender pay gap is a collective figure which does not compare individuals or groups in comparable jobs and most employers will find that they do have a gender pay gap.

Mean vs. Median

The Gender Pay Gap reporting regulations specifically require both the median and mean to be reported. These metrics are complementary and illustrate different aspects of the distribution of pay across an organisation. The median is a statistic commonly used in analysing both internal pay tendency and external market norms, because it looks at the central tendency of the market or sample, showing the middle-most salary of a sample. Calculating the median involves taking all salaries in a sample, lining them up in order from lowest to highest, and picking the middle-most salary. The mean is the overall average of the whole sample and thus can be subject to the influences of any extremely high or low salaries at the top or bottom of the sample. In other words, the mean is much more subject to skewing by a small number of outliers.  See Table 2.

National Average

From the Office of National Statistics (ONS) in 2024, the gap among full-time employees decreased to 7%, from 7.5% in 2023. Among all employees, the gender pay gap decreased to 13.1% in April 2024, down from 14.2% in April 2023. For part-time employees, the gender pay gap was negative 3.0% in April 2024. This was an increase from April 2023, where it was negative 2.5%.

Nationally, one of the main reasons for the gender pay gap is more men are likely to hold senior positions.  Other factors can include, however are not limited to;

• Occupational segregation – the distribution of men and women employed in different sectors or at different levels in the labour market;
• Women are more likely to work part-time, which can mean a lower rate of pay;
• Women are under-represented in senior roles;
• More women work in lower paid jobs/sectors;
• Industry sectors may vary and have their own nuisances (including SMS with a vast number of roles being engineers and the majority of these being held by males).

Specifically, within the SMS Group
As of 5 April 2024 there were 1415 employees within SMS, compared to 1409 in 2023. An increase of 6 employees, with the majority of these being female. Overall, there 3% more women in total (2024 verse 2023):

• There are more men than women within the engineering industry, from which we source most of our employees and therefore there are more male than female engineers within SMS;
• There are more men than women in senior roles;
• There are more women in part-time roles and;
• There are more women in lower paying roles.

Most of these issues are however prevalent throughout the UK and on a wider global level, therefore are not unique to SMS. As can be seen via ‘Engineering UK’ (published online via Women’s Engineering Society) who provide workforce statistics, in June 2025;

• The number of women working in engineering and tech has increased from 15.7% in 2023, to 16.9% in 2024, which is a positive step forward.

SMS are part of the historically male dominated engineering industry; therefore, it is no surprise that such a wide gender split exists between men and women (weighted more towards men), and that a gender pay gap exists.

Overall, the SMS Group has a 31% female and a 69% male workforce. The percentage of female employees has decreased in the top pay quartile by 1% (4 females) with the lower middle pay quartile of the organisation remaining the same and there are still significantly more male employees (in senior roles) in the upper middle pay grade quartile, which contributes to a gender pay gap. Please refer to Table 1.

Table 1 sets out the gender profile by pay quartile. The fact that there are significantly less females in the upper pay quartiles and more females in the lower quartile, is a driver towards the gender pay gap overall (shown in Table 2).  As per reporting legislation, the quartiles are calculated using employees on full pay (i.e. whose pay for the survey period was not affected by absence).  However, the bonus calculation uses total number of employees who received a bonus regardless of if they are on reduced pay (shown in Table 3).

Table 1. SMS Consolidated Group Pay Quartile Gender Split

*Any increases for females within the Upper Middle and Upper pay quartiles is a positive, however any increases of females within the Lower Middle and Lower pay quartiles is negative (unless they have moved from lower to lower middle).

For the Group, the most significant movement is within the Lower Middle Pay Grade whereby the % of females has decreased by 3% and thus increasing by the same % of males.

There has not been any movement in the Lower Pay Grade. This is the category with the most even gender split.

Table 1A. CH4 Gas Utility and Maintenance Services Limited Pay Quartile Gender Split

*Any increases for females within the Upper Middle and Upper pay quartiles is a positive, however any increases of females within the Lower Middle and Lower pay quartiles is negative (unless they have moved from lower to lower middle).

The percentage of females in the lower pay grade has increased by 1% compared to 2023, with the upper pay grade decreasing by 1%. The percentage of females in the upper middle has remained the same. The lower middle has decreased by 10% which is mainly driven by labour turnover, with the replacements generally being male.  Our female engineer population reduced from six to five for 2024.

Table 1B. SMS Energy Services Pay Quartile Gender Split

*Any increases for females within the Upper Middle and Upper pay quartiles is a positive, however any increases of females within the Lower Middle and Lower pay quartiles is negative (unless they have moved from lower to lower middle). 

Compared to 2023, there are 2% less females within the upper pay grade and 3% less in the lower middle pay grade, however there are 11% more females within the upper middle pay grade, which is a positive. There are 8% less females within the lower pay grade and 9% more males.

We collected our data on 5th April 2024, when our total workforce for the consolidated group was 1415 and consisted of 452 women and 963 men. The figures below show the mean gender pay gap and median gender pay gap for the SMS Consolidated Group, CH4, and SMS Energy Services. The figures are entirely reflective of the demographic of our organisation and the gap is due to the compilation of our workforce from historically what has been a male dominated environment (engineering).

The table below sets out the mean and median gender pay gaps expressed as a percentage:

The gender pay gap is the difference between the hourly rate of pay of male employees and female employees, expressed as a percentage of the hourly pay rate of the male employees. The gender pay gap is reported on both a mean (average) and median (mid-point on a distribution) basis.

From 2024 V 2023 for the SMS Consolidated Group, the mean hourly pay gap has increased by 6.9% and the median hourly gap has increased by 3.9%.

Within CH4 Gas Utility and Maintenance Services Limited, the median hourly pay gap has decreased by1.5%, and the mean hourly pay gap has decreased by 7.9%, both positive improvements.

Within SMS Energy Services, the mean hourly pay gap has increased by 10.3% and the median hourly pay gap has also increased by 6.7%. Both are a negative increase due to females making up a higher % of lower and lower middle pay grades. See table below.

Table 3. Year on Year (YOY) Data

SMS Consolidated Group: 93.1% of females received a bonus in 2024, which is a positive increase of 0.9% compared to 2023. 94.8% of males received a bonus in 2024 compared to 91.8% in 2023.

CH4 Gas Utility and Maintenance Services Limited: 90.7% of females and 94.8% of males received a bonus, compared with 93.7% of females in 2023 and 90.8% of males.

SMS Energy Services: 94.1% of females received a bonus in 2024 which is a positive increase of 0.8% compared to 2023. 95.1% of males received a bonus in 2024 compared to 94% in 2023.

The median bonus gender pay gap is the difference between the median bonus pay of male employees and female employees, expressed as a percentage of the median bonus pay of the male employees.

The mean bonus gender pay gap is the difference between the mean bonus pay of male employees and female employees, expressed as a percentage of the mean bonus pay of the male employees.

The gender bonus pay gap is reported on both a mean (average) and median (mid-point on a distribution) basis.

Table 3. Gender Bonus

The figures are entirely reflective of the demographic of our organisation and the gap is due to the compilation of our workforce from historically what has been a male dominated environment. However, similar to 2023, all employees received a discretionary bonus payment in 2024.

As per reporting legislation, the bonus calculation uses total number of employees who received a bonus, regardless of if they are on reduced pay for any reason, however the quartiles (shown in Table 1), are calculated using employees on full pay (i.e. whose pay for the survey period was not affected by absence).

We are committed to ensure our bonus and pay structures are fair and equitable.

From 2024 V 2023 for the SMS Consolidated Group, the median bonus pay gap has remained the same, and the mean bonus pay gap has increased by 10.5%. For CH4, the median bonus pay gap has remained the same and the mean bonus pay gap has decreased by 2.7% which is a positive. Within SMS Energy Services, the median bonus pay gap has increased by 17.6% with the mean bonus pay gap widening by 25.7%.

SMS supports and encourages a culture of gender diversity amongst its workforce.  It is through the contribution of ‘Our People’ from of all backgrounds that ensures our business is successful, as only a diverse, inclusive, and engaged workforce will produce the solutions we need to tackle the varying challenges faced by our business, and industry leading thinking will transition the energy market.

We are prioritising the following areas for action: Diversity & Inclusion will remain a strategic driver, utilising external parties for support, additionally utilising internal tools including the SMS EDI voluntary monitoring form (with a focus on increasing completion rates), and continuing to use our group pay and reward framework. This will help ensure there is no bias towards either gender from the point of recruitment, through to salary conversations and progression opportunities, and we continue to actively promote gender balance within the SMS Group and explore how we can continue to attract women into our organisation especially within our engineer population, which is the largest group of employees, to create a more even gender balance.  

Positive Action taken in 2024 includes:

• The promotion of 15 female employees into senior positions internally which include Area Performance Manager, Assistant Fleet Manager, Contracts Team Manager, Finance Analyst, Fleet Maintenance Lead, Head of Employee Engagement, Head of Payroll, Key Account Directo, Key Accounts Executive, MBNL Programme Manager, Reverse Asset Team Leader, Senior Fleet Administrators, Senior HRBP and Stock Control Team Leader.
• The external appointment of 7 females into management positions which include Business, Development Manager, Delivery Project Manager, Financial Controller, Senior Internal Auditor, Senior L&D Business Partner and Site Acquisition Managers.
• We continued our focus on completion of our EDI monitoring form, updating the form to include socio - economic questions. Our completion rate is currently over 55%.
• We proudly achieved Menopause Friendly Accreditation via Menopause Friendly; by launching several initiatives to support employees during menopause and evidencing the positive impact this support has had on our employees. We also proudly raised awareness for World Menopause Day, encouraging employees to speak openly about menopause and breakdown the taboo.
• We launched a Carer’s policy, in support of carers week, giving eligible employees up to 5 days paid leave for caring responsibilities. This enhancement ensures our employees are supported during the challenging times outside of work.
• We are proud to achieve Disability Confident Leader (level 3) for the second continuous time. In continuing our Disability Confident journey over the past four years and working through levels one to three, we are ensuring that disabled people can fulfil their potential/realise their aspirations. This is a continued focus for us in 2025.
• We proudly ‘celebrated our differences’ (one of our behaviours underpinning our core SMS value ‘Pride’), again with Pride Month 2024 in June. To celebrate our differences for Pride this year, we had a range of activities and resources in store for colleagues to get involved in, including sharing educational resources focusing on the importance of completing the SMS EDI monitoring form and encouraging all employees to join our LGBTQ Community Group, a safe and inclusive environment.
• Neurodiversity has always been with us, but it is only in recent years we have started to really understand and celebrate it. We celebrated ‘Neurodiversity Awareness Week’ by signposting employees to external resources and an SMS managers toolkit, which holds a wealth of information on different neurodiverse conditions, their strengths, and their challenges, and how you can support colleagues who are neurodivergent. We also launched a Neurodiversity Employee Community Group to encourage networking and knowledge sharing.
• We celebrated International Woman’s Day (IWD), a day to celebrate, showcase, and recognise the achievements of women, and also to bring attention to the everyday issues facing females, including gender inequality in the workplace. 3 of our female leaders at SMS (Service Delivery Director, Product Director and Service Delivery Operations Manager) kindly agreed to share their stories in the energy sector and the challenges they have faced as women. These stories were well received, and inspiration was felt by many.    
• We also held a lunch and learn online covering Nutritional Approach to Women’s Wellbeing, hosted by external experts ‘Wellbeing Partners’, in addition to several other lunch and learn sessions covering topics such as Menopause, Improving Mental Health, Financial Wellbeing, and Diversity & Inclusion. The response to the lunch and learn sessions is positive and encourages networking, as well as an opportunity to learn and develop new skills. Lunch and learns are a continued focus in 2025.   
  Our efforts related to this issue are particularly significant given that within the energy and engineering industries where we operate, gender balance continues to be heavily weighted towards men. This is a dynamic we are determined to help change.
• We continue to be proud signatories of the Race at Work Charter, Menopause Friendly and Social Mobility. Our work continues during 2025 in working with these Companies closely to continue to improve the diversity of our workforce.

Declaration

I confirm that our data has been calculated according to the requirements of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.

Tim Mortlock

Chief Executive Officer