Yu Energy Share Chat (YU.)

Recovery gaining traction...

100% agree, things are starting to heat up

If it had been a Sell the price would have dropped like a stone, I suspect it was a worked order over the last few days, picking up the sellers from the last week or so.

Sparky - I really hope it was a buy. I just can't be sure. Maybe the buyer was able to haggle a special price, given the volume. GLA

Https://ukinvestormagazine.co.uk/eight-aim-shares-ripe-for-a-rally-as-budget-concerns-subside/?mc_cid=c772a143e3&mc_eid=e7300750b9

Do you really think a 150k sell would go through at mid price when we have not been at this level for a few weeks ? Sometimes can’t even sell 2.5k at the sell price

£2m trade this morning but think it was a sell (??)

Must be buys SP hasn’t been at this level for weeks, no way sells at mid price, must be worked buys

Nice got any further details ? As I do not subscribe to them

Regency Research have just released a 'buy' recommendation for YG, saying it is "well-positioned" for the future with "attractive" metrics.

Hopefully, cheap as chips compared to peers especially as we are the fastest growing and the only one to increase turnover so far in 2024

Nice recovery, but does it have legs?

Gas at a year high with lots to come with winter not even started and the Middle East on the brink

Thanks for sharing the link @SNN - interesting comment on the SEEL page.. wonder what capital light means.

SEEL’s structure is “capital light” for Yü Energy, allowing cash that was previously held on the

balance sheet to be invested in initiatives which could further accelerate growth or performance.

Need to spend some more time digging through the H1 report to see what I make of the overall cash position but overall very happy with H1 performance and now waiting for the next TU - probably January knowing the way YU work...

Https://www.yugroupplc.com/wp-content/uploads/2024/09/Yu-Group-Interim-Results-Presentation-2024-23.09-Final-Web.pdf

Will look as ridiculous as ever once the H2 numbers come out with enhanced final above brokers.

Q2/3 rise in energy prices - what rise in energy prices?, not when you refer to YU’s evolution of gas price chart in their AR

lol so now you think people foresaw the growing crisis in the Middle East ? Fact energy prices are up over 50% since the spring , yes current contracts are locked in but new contracts will be at far higher rates.

We all know your long SB is closed so now all Mr anything negative , so transparent.

Ipc, you did say +30% H2 now your saying +50%!. How about we take your mid of 40%?.

“so I would not be surprised at all if H2s growth is more than 30% up on 2023 H2 needed to beat the current £670m forecast especially given the rise in energy prices we have seen over q2/3”

Q2/3 rise in energy prices - what rise in energy prices?, not when you refer to YU’s evolution of gas price chart in their AR. Plus Q2 impact has been reported and Q3 would be in their outlook - okay there’s contractual lag. The spot price of UK gas that’s constantly “ramped” is irrelevant, it’s the margin between what Shell charge YU and customers contracted charge that’s key is it not?. Looking at their reported cost of gas that is trending down not up. Besides which even the UK spot price hasn’t even reached what the average price was for 2023.

Posted before finishing - given 60% revenue growth H1 24 in lowering energy prices, with energy prices increased from H1 I would expect at least 50% on H2 23 - more like £395-400m for H2 2024.

My typo on £460, thanks.

I still think that a 40% revenue growth on H2 23 is too low.

Thanks ipc for your response, and fair points made. Just a correction though, revenue FY23 was £460m not £480m, but yes an 8% beat compared to forecasts in place Sept 2023 of £425m. Things are a lot different now, gas price isn’t anywhere near as high plus it’s an unknown with regards to Shells margin and how much they charge.

You mention that you wouldn’t be surprised if H2 is 30% up on FY23, surely they’ve confirmed it will be +40% (they’ve stated Rev in line at +50% for FY24, with H1 at +60% then unless I’m wrong that’s +40% for H2).

Who knows what their free cash will be, it’s obvious though that the liquidity covenant has significantly constrained their distributable cash. Their cash inflow for H1 was also a lot lower than H1 when you net off the windfall cash collateral return.

Agree they have to have targets with respect to market share, but IMO it has to be realistic and 7% in 3-5 years is definitely not realistic, not going on the fact it’s taken 10 years to gain 1.8% during the optimum period of the growth cycle, growth / order book is slowing (25 to 30 years would be more realistic!).

@DD - thanks for the comments.

In response I would say that FY23 broker forecast was £425m in Sept 23, no TU until January when YU delivered £480 - 13% over broker expectations - so I would not be surprised at all if H2s growth is more than 30% up on 2023 H2 needed to beat the current £670m forecast especially given the rise in energy prices we have seen over q2/3. Would not be surprised if we don't see an TU from YU until late November or even not all given past behaviour.

In terms of the management target of 7% it is just that, there goal. I don't see this until medium term probably 4-5 years but hey they have to have longer term goals. What's key for me is the rate of growth that jas picked up significantly in the last 12-18 months.

With regards to cash on the books, the actual level of free cash is not that great - as a few have posted YU have to hold a significant (maybe £50m) on the books for the Shell deal - at least it earns YU interest - at YE there will be about £33m in ROC payments accrued less the the £9m prepayment leaves £24m. £9.25m for the forecasted FY dividend.

This leaves about £5m of free cash based on Liberums latest forecast assuming nothing else happens. So that is why if there is anything happening it will be small and in this ballpark in my opinion.

“Suggests H2 revenue could be therefore significantly more than current guidance.”

You mean growth H2 will be more than 40% when last years growth was 78%. IMO they would have informed the market if their revenue was forecast to be ahead of their previous forecast, and on two occasions they’ve declined and their broker isn’t disagreeing. I’m sure BK would have taken every opportunity to get the share price higher before he offloads some via a secondary placing before his tax bill becomes even higher following the budget.

As for their 7% target, it’s simply PR, after 10 years only 1.8%, do the maths it’s completely unrealistic but gains punters attention.

Then there’s all that cash on the books, but a large chunk is non-distributable IMO due to Shells liquidity covenants. No other reason for not putting this cash to work and / or initiating a decent BB, £4m is hardly going to move the dial in terms of enhancing eps and would the market be impressed?. Nice dividend increase but still a fairly small cash outlay versus their cash pile.

Makes me laugh, YU haven’t put a foot wrong in nearly 6 years and grown the company so well and now on the verge of a major acceleration yet we are prices like a lumbering giant with 1-2% growth per annum. Fascinating really

Investors just cannot see beyond the end of the week never mind 1-2 years. It’s like selling a car for Xx knowing in 2 years it is going to be worth xx + 300%