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2227, Liberum have predicted 171.6p of fully diluted earnings for 2023. In their note last year after the January trading update they were virtually bang on.
Sorry prediction.
Sparky333 what's your pridiction for EPS for 2023. Results in 2 weeks time.
Spot price fluctuations are normal part of energy business, that's why suppliers use hedging. Energy supplies are retailers of energy and there cut will always be there as long as they've hedged properly. If I understand correctly YU hedge all theur energy needs.
Been a bit of mad rise the last couple of weeks up from 56p a therm to knocking on the door of 70p a therm.
Wonder what price for 2024 lib used in there calculations ?
2227 I could agree more, Yu is a little disruptor in a massive SME energy market. If they reach their target of 100,000 meters by the end of this year they will have just 3% of the meters available in this market. The medium term target of 5% or 165,000 meters will probably be hit towards the end of 2025, (maybe in 2026!) They keep beating forecasts and is a great little gem, and a cash machine.
The one thing that really impressed me in the January trading update was not only have they booked £520m of sales in 2024 before it has even begun. But they already have another £300m in the book for 2025!
Two weeks tomorrow! I can't wait!
YU has been beating the broker forecasts with big margins in the past and is likely to do so in the current and coming years too. The share price has gone up a lot over the last few years and it's likely to rise further after the results.2023 EPS likely to be up 5 fold from 2022. You is a very efficient small supplier energy supplier and there's every chance it'll keep on growing it's market share IMO.
Lots of smoke and mirrors and brokers notes have consistently been way out time and time again it like it is done on purpose.
Sparks, I think you have access to Liberum's notes?
Their TP is barely 10 PER. This is not a growth rating, in fact indicates profits will be flat at best, if not falling. Hardly something to buy into as a long term investment. Likewise, looking at the DCF calculation, they do actually show profits and margins to fall significantly, EBITDA to drop back to £30.5m on a 3.2% margin. And they have this level mapped out to 2032. Unfortunately, in the small and micro cap space, IIs rely on the company's brokers - they don't do their own research into these companies, there's simply far too many of them. And the brokers are by nature, are very conservative in forecasts. I can't see this changing.
All the points you list are pretty much known, therefore, in the price. The only unknown is the capital / dividend policy going forwards. If this is set out clearly, including significant distributions, then the sp should lift to reflect a reasonable yield. The Shell deal gives them the freedom now to do this. Looking back to the IM questions on dividends, and the collateral question (see the unedited question on the Q&A tab on IM), they were clearly constrained in what they could say and do, by these issues. Not any more.
With decent dividends, a dividend yield that is sustainable, more IIs should begin to take notice. Once they are aware of the stock, they will be more inclined to do their own research / calculations. If they determine the company is a growth stock, then the PER may then rise. Eventually leading to II demand over the shares in the market, and they will ask BK to place some of his.
This is how I see the roadmap out of the low valuations. As each set of results shows increasing customers and profits, coupled with increased dividends, this should play out. Cash and dividends are king here. We need that £1.20 dividend!
Not many trading days before FY which has to be the most interesting one for the five years I have been invested.
Will we get special dividend ?
Will we get a share buy back ?
How many clients are at ?
Is 100,000 clients on for 2024 ?
How impactful will be She’ll deal be
How much cash have we actually got ?
Coupled with
Record turnover
Record profits
Record clients
Record EPS
Record forward contract book
The list goes on and we are on a 2023 PE of 7
Jeez
It's a usuall pattern and has happend many times before. The results are on the 19th March and trader are likely to start buying again next week . Earnings likely to have increased over 5 fold from the previous year. Being a tight market shares could rise dramatically after the results or even earlier than that IMO. DYOR
With so little shares available i find that hard to believe personally.
Why we always sell off on great news, starting to really grate on me now.
Why is £13 proving such a bloody problem. Arrggg
I take the opposite view. A share split would be the most logical course of action, particularly if YU want to get the institutions on board. But at what ratio ? I'd say somewhere in the region of 1 for 10 .
Best of luck to you good folk.
I agree on it being less risky - no chance of bad debt, poor customers etc. so yes I would prefer it to an acquisition - but do they need to do an acquisition to continue meter growth - October they set out the plan to get to 100k meters by end of 2024 - that's pretty good growth - but none of us have a crystal ball so we will have to wait and see what the BOD decide to do with the £80m cash pile...
I would prefer they bought their own shares back than spent the money buying another company. It is far less risky! At least you know what you're buying.
As I have explained before Sparky, I would love a share buyback. Along side a dividend. The reasons I have spelt out previously. A £20m dividend you get once and that's that. A £20m share buy back would reduce the number of shares in issue forever by one million shares, therefore every year the earnings are spread over 1m less shares. Also, imagine if Liberum needed to buy 1m shares how high that could push the share price up! I am only using £20m share buyback as an example as it roughly equates to 1m shares (so it keeps the figures easy!) I would expect a share buyback to be smaller. However, if I were a betting man I would say that we will get a share buyback, as I don't think Yu Group could find a better purchase elsewhere in the market than their own shares!
I personally don't think that it is likely, Liquidity has improved with Investec coming on board as a MM recently, volumes have been pretty high and share price reasonably stable so reducing the free float doesn't make sense to me.
BK / BOD would like to see a higher share price but they are in no rush. At some point BK will have to release some shares to either a larger institutional investor who makes a credible offer or if they want to list on the main market. YU are in a fantastic position, good growth prospects (through meter acquisition), ability to manage bad debt (through smart meters and hedging) and are now producing significant surplus cash. The share price will respond appropriately in time. In the meantime there are always profit takers out there. Someone sold 100k shares yesterday, which if they bought in under £3 is a tidy £1m profit. What's not to like - they could hold for more but sometimes cash is required for other plans - maybe they are building a house or buying a boat who knows.
Personally have no idea why anyone would sell when YU have shifted from first gear to second gear with a world leading partner in Shell. Cash is just overflowing in the bank and something has to be done to sort this out .
What are people’s thoughts on a share buy back ? I know liquidy is always a concern here but would certainly put a halt to sell off after spectacular news and drive SP appreciation, say 3m allocated to this ?
Plus this from SP Angel in their latest February note:-
'With a cash rich, debt free balance sheet, Yu Group is in a position to consider how
to optimally allocate its capital base. We believe this could include M&A
activity and other growth initiatives, but also cash returns to shareholders. '
2227,
Liberum have 'speculated' both - £20M for a special dividend and £62.5M for growth (M/A's, bolt-ons etc from BK previous quote), so the market should be very happy in theory, lol!
NG - thanks very much for taking the time to respond. I appreciate it. N
Nomally the market prefers growth over dividends. High yielders never trade on high multiples.
50% of normal earnings should be paid as dividends from here onwards and 50% kept for growth IMO.