By Nicholas Earl
Yu Group shares are soaring on the London Stock Exchange in today’s trading, after the energy firm announced it expects to be “substantially ahead of current market expectations” at its half-year results in July later this year.
This follows the firm ramping up bookings for new customers, which has raised revenues, margins and cashflow.
The independent supplier of gas and electricity to UK businesses is up 26 per cent on the FTSE AIM All-Share this afternoon, trading at 580p per share, after revealing its previous forecasts were too conservative.
Yu Group has confirmed strong trading momentum, with performance indicators of revenue, profitability and cash generation all showing very strong growth.
The run rate growth of average monthly bookings achieved in the fourth quarter of last year has continued into 2023.
Pent-up demand from softening commodity markets has seen an increase in customers contracting with Yu Group – boosting its long-term revenue streams.
Meanwhile, its investment in Yu Group’s ‘digital by default’ strategy coupled with the smart metering roll-out has provided a platform for scale, alongside an ability to secure significant cost-cutting benefits.
In particular, it has had a material benefit in reducing levels of bad debt and driving strong cash collection from the group’s customers.
Bobby Kalar, chief executive of the company, said: “I’m delighted to report a further increase in our expectation of revenue, profit and cash, and I’m looking forward to present a ninth consecutive half year improvement in our interim results. I look forward to updating shareholders as the group continues to deliver and set new records.”
Earlier this year, Kalar told City A.M. that Big Six energy are “asleep” and should be worried about challengers scooping up their customers.
He argued that Yu Group was thriving by “picking contracts from the Big Six” who were complacent with their offerings to customers.
“They should be worried about challengers coming and taking their customers and growing – with the controls, guidelines and governance that comes with a very disciplined and a mature challenger brand,” Kalar said.
Yu Group’s full year results for 2022 revealed a record pre-tax profit of £5.8m – up from £3.4m 12 months prior.
Revenue rose to £278.6m from £155.4m a year in 2021, while the board has reinstated a progressive dividend policy with a final dividend of three pence per share.
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