The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Do not get me wrong some companies will goto the wall, the badly run ones, YU has very strict credit control and risk processes before signing up and during the contract.
This was perfectly demonstrated during the energy crisis as the sector crumbled and the well run companies thrive.
This SP decline is grossly unfair when they haven’t put a foot wrong since 2018
Yes and everyone should remember the fake fuel shortages led by the media that created panic buying etc etc, I'm just waiting for the next crisis to be revealed by the media if say dog food shortages will be imminent and watch everyone buying it and clearing the shelves in hours even if they don't own a dog so they can sell it at a profit on ebay.
Totally agree, with media led frenzy, most business leaders have been through these situation before and cut costs initially via staff get more out of less.
Wages are the biggest outlay of a company followed by energy this may have switched now so companies will reduce energy consumption like I am doing at home.
The media in this country create chaos where is doesn’t currently exists.
Sparky,
yes it is a media led correction. Every day I hear one story after another from Hospitality, Pubs, Restaurants etc all clearly saying how they struggle if their energy costs increase as predicted go up by 3x or 4x their current costs. Add to that many had to up staff wages due to lack of available staff willing to work unsociable hours post pandemic and then add to that increased costs for everything they buy and sell and then factor in that many people (their customers) won't have the free money they had before to eat or drink out, stay overnight etc and you get the perfect storm post covid which kicked the guts out of many SMEs with falling demand and massively rising overheads they are really going to be a tough time financially and many will just have to consider closing or cutting costs wherever they can. A recession is looming, people will spend less and less. Businesses will struggle. Suppliers will suffer as a result of either reduced demand or bad debts piling up.
Anyone would think YU have issued a profits warning and going to market for cash.
Incredible really
Always darkest before the dawn
Can't wait to get out of this even if just at break even.. share performance is just a joke!
Yep YU have reached the tipping point on turnover where every £100 produces far more profit and this is where cash and profit start to go into orbit.
This is what frustrates me the most because after this year is when the real acceleration kicks in I was forecasting 90 to 100m in H1 this year and they smash hell out of so we are already track 2023/24 number
Which are turnover £257m
Eps 29p and cash at £12m
Now they could even hit 2024/25 number this year which is
Turnover £294m
EPS 43p
Cash 26m
I actually think it will sit between the two.
I seem to recall that in SP Angel's last broker note, they were forecasting cash to be in excess of £20m in 2-3 years time, & the market cap is now £27m. Makes no sense.
We are an illiquid stock which is blessing and a curse.
We have fallen 50p since trading up high of the day on a little over 200k shares of which say worse case 125k are sells
That is less than 200k in cash and it has knock around £8m of the market cap, it is PIs bored, worried, need cash etc and no buyers around at all to soak it up.
It is reaching a point of pure silliness as the market does tend to swing to far the upside and the downside but eventually it will swing back and very aggressively if volume is present.
I have seen YU go up 300% in a matter of weeks, done it before and will do it again 100p to 380p. This time we are approaching that valuation and the business is 3 times the size and profitable and not 1p of debt
Sparky, I totally agree with your comments & there is no doubt that bad debts are currently under control, However, some investors must be concerned about future bad debts, otherwise I cannot explain why the share price is so undervalued.
I would also add this is the 4th world crisis in the last 2 years.
1. Covid 19 - managed it very well
2. Energy crisis - 30 companies folded YU managed it well and took over the books of 4 rivals from OFGEm
3. War - YU are risk averse and fully back to back hedged
4. Now a recession and inflation - not stopping the business this far and actually thriving so why does anyone think they cannot manage this one and potential bad debt.
Far to many people jumping to silly conclusions as no eveidence at all bad debt is rampant and also bare in mind YU have a very diverse client portfolio
Bad debt is a real threat to domestic as the costs that are being forecast or just terrible for families and low income house holds and pensioners.
Business is a different beast, they do not pay they get cut off no protection like domestic. They get cut off business fails, it’s the last thing a business will not pay
What is it with bad debt and YU specifically they announced not 3 weeks ago business is booming and FY will be the same, they know full well the bad debt risk and account accordingly.
It if starts to worsen and has an impact on the companies forecasts they have to profit warn. So in 3 weeks do you think the company is now swamped with bad debt but others in the sector are not ?
I believe that the cash position is known & improving. The problem is sentiment due to possible bad debts. But surely they must have some form of credit insurance.
Well market cap is now 26m and falling.
PE ratio is 6 cash forecast to go up to £9m year end from 7 and I expect this will be higher as turnover is way ahead of expectations.
Any material change in the business has to be reported to the market ergo no material change therefore no informaing the market.
This is so like the covid 19 days, lockdown no one using energy YU will be bankrupt etc.
Polar opposite business is never better so sell all you want at these ridiculos levels because the tide will change and when it does it will be to late as she will move very fast
"someone has reported wrong info"
That someone is the newly appointed nominated advisor according to the post.
I'm as baffled as everyone else why the SP keeps dropping, but uncertainty over the cash position can't be helping.
Someone dumped £10k this morning, SP now at year low.
This has been discussed to death someone has reported wrong info YU have never paid anywhere like that previously and figures have been provided. Yes as turnover increases payment size goes up but not several fold.
Cash year end is forecast to be up over 40% to to 9m and no doubt will be a lot higher. Next summer will be over 20 to 25m it’s all about timing of cash moving in and out
If cash at end of June was £15.7m, won't that be all but wiped out by the £15.5m ROC payment in August?
All this talk of massive bad debts is premature especially for business as the first thing business will do is reduce staff. Labour market is strong when that starts to reduce then companies are starting to feel pain.
Last thing they will do is not pay for energy because they get cut off they are not protected as well as domestic so people selling on bad debt nerves at this level are nuts in my mind
Yep only CFO and OFGEM will know the figure until either annual report or ROC report in 2023.
It is actually irrelevant to be honest because it is already accounted for and year cash will be £3m or more higher than last year we have already been told as much.
So no matter how you cut it cash will rise by 40% or more.
The reason I say more is because turnover will be far higher than current estimates of 215m more like 275 ish is my estimate. Therefore cash will be way above the forecast.
No it hasn't but this isn't normally communicated beforehand anyway. PIs can confirm in annual reports independently. Generally speaking, this is an illiquid stock with a wide spread so not ideal for day trading. SP moves largely on small volumes compared with others
Has the ROC payment amount been confirmed yet? Or could the confusion over that be the problem?
Also YU PR is truly aweful 3 BOD targets on PR in the annual report and yet they have gone radio silent.
This is why liberum brought in coupled with talachan so I will give them one more chance to set this right. As BK has so much skin in the game it makes no sense and also 2023 share options are very much at risk now because even if we come out will Stella H1 numbers and FY we are along way from the 250p target 50% tranche never mind the 100% at 650p SP.
Huge own goal especially as the sentiment is terrible against the sector as people have no idea how the energy market works.
Difficult time and MC at £28m is just insane and less than pre Covid and an 18 month low and not many buyers being tempted either.
Really depressing actually
Nice Post , but why specific to YU ? Domestic is a far bigger concern but CNA , TEP at multi year highs and good energy holding firm.
This is YU specific and we are now far below the Covid low when people concerned about YU selling no energy, you just can’t win here regardless.
Good well run company and treated like this by investors when not a sniff of bad news