Yu Energy Share Chat (YU.)

Well Dodger you wait for your 12-13 and then make the most of it...Unfortunately it ain't going to happen:-)

Ipc

Thanks, got the revenue fairly accurate but not eps according to the broker it’s 85p apparently (Sparky posted). Given their organic Rev growth was 60% and they have confirmed in line for the year, that must I guess mean H2 Rev growth will be less than H2 (as they’ve said +50% for the year) and / or margins lower to hit EBITDA forecast? may have missed something been a long day!.

Thought also their margin target was 6% to 8% so broker is going for the lower target.

Agree meters 100k looks achievable, but once again. the glass half empty in me says it means relatively nothing in terms of income growth because they never mention the actual volume of energy supplied, which in my opinion is the primary service they provide plus no KPI’s which seems ridiculous to me.

You stated: “Cash is looking good, if they continue on track then circa £100m at year end (albeit with circa £25m of ROC included) still leaves a sizeable cash pile”.

Why £25m ROC included?, next month they will pat £43m, then surely as sales increase it will be in excess of this for FY25? (apologies again if misinterpreted what you are saying). As for cash it may be as you say but how much will they need to keep on the books in order to not breach their liquidity covenant associated with the Shell desk. Plus as posted previously I can’t imagine Shell are hedging for zero charge / commission and only entered the deal on the off chance YU default and they acquire assets. Neither brokers to my knowledge are mentioning an additional cost associated with the deal which I find very odd, I may be barking up the wrong tree but you tell me what’s in this deal for them if not a profit and potential asset/s (which according to the YU BoD isn’t likely to happen - them defaulting on profit, liquidity etc).

Yep agree completely, no need for folks to get personal.

SP fall not a surprise, given the update (obviously not what I was expecting pre update). Gross margins looking to be down quite significantly - "strong market positioning and leading customer offer" = reducing prices to scale up market share, and so reduces gross margins. Net margins should tick back up as scale increases into 2025 / 26.

Revenue in-line with my thoughts, meters also fully on track for 100k ish by year end. Expectations / hopes not met in no upgrade, and no buyback or special, maybe reduced monthly bookings too. Brokers have 'downgraded' on margins, cash balance and state no buyback or special is now anticipated. The cash balance is my biggest concern. It was £82m (including collateral) at December and it's only up £5m. There's £20m EBITDA, plus £10m ROCs to end of March (due Aug) plus another £10m ish ROCs to end of June. Less dividends, buyback, tax, some increase in WC. It should be up more? Any thoughts NG / IPC?

Last year at July they upgraded from £392m to £405m, then to £424m in Sept. - final figure was £460m. The July upgrade was minimal. Given the number of meters, bookings etc there is considerable scope for £50m plus upgrade later on. I have previously posted £750m revenue as my forecast and stand by this (for now). So, no upgrade now needs to be put in this perspective. Downside risk is any further drop in gross margin.

A lot of uncertainty and anxiety now in the SP. Can't see a recovery until after Sept. There isn't dividend yield support either - so yes, it may well fall another few pounds.

Only ramping comments allowed sausages ?

I thought my comments was pretty fair, well run company but think the share price is currently to high.

If you only listen to one side I’m sure you must have significant losses

Good luck, sounds like you need it.

So being away in the USA at present, meant I didn't see the TU until late morning by which point a hefty sell off had occurred taking the price back down to pre TU announcement. Managed to read Liberums and SP Angel notes as well.

Overall still happy to hold as I am a firm believer that there is still good value to be had - both from an SP uplift and distributions.

TO - my low estimate was £315m so slightly under that but I suspect it will be close come final figures in Sept, but still great growth on prior year. (Well done DD for the 300-310 range)

Bookings - very clearly down on prior as they stated - softening prices and mild spring are the reasons given, I wonder if maybe a shorter AVG contract period may be in there as well….

Brokers have all held margin estimates but I am optimistic that it will be closer to 7% rather than the 6.2% Liberums have. This was an area where the brokers and interims differed last year.

Meters - Really good to see more meters than I had anticipated at nearly 19k new. This does put them close to the 100k meter figure for 2024 full year if they keep up the volume acquisitios.

YU smart seems to be performing well and continues to grow quickly.

ROC payment slightly higher than expected but again in the right ballpark.

Cash is looking good, if they continue on track then circa £100m at year end (albeit with circa £25m of ROC included) still leaves a sizeable cash pile.

The lack of any real comment on distribution is disappointing but we are now back to waiting on this, as they could do this at anytime.

September will be interesting,with Liberum forecasting a FY divi of 48.9p(£8.1m) 16.3p as an interim, we are still no clearer as to what they will do with the remaining £67m or so at year end…. I would be hoping at the very least fro them to distribute £17m or so in this FY.

Anyway let's move on toward the September interims and let's keep the board for sensible discussion and not name calling please.

It’s an excellent well run company and a management that’s building a quality business but the share price had obviously got ahead of itself.

A more realistic price would be for it to consolidate around the 1250/1350 mark which I think it will drift down too in the next month or so.

Was trying not to respond but you can’t compare tonTEP, different business model and besides which they actually report a they beat profit forecasts despite the reduced income when compared to their previous FY. Despite that the sp now is lower than the day of their results, so given the rise up to today here, and so far over one year, with an in line what exactly did you expect?. Even when others here including myself gave our predictions you seem amazed, shocked and angry at the market response, unbelievable IMO.

You are probably absolutely right .

It s all down to perception..

the market needs excitement and optimism..

there was no news about any return of capital too .

We have been so used to amazing trading updates … this one fell short …

Very good compared to TEP turnover declined 17% CNA report Thursday, any lower and we are lowest rated in the sector, bizzare really when you put it in perspective with the increases in turnover , clients etc they are gaining markets share by the bucket full heading to 2% market share from 1.4%

What a bland trading update…

I am not surprised to see the share going south , but I suspect that the price will recover in due time as time goes by.

Closed my trade earlier (200 pips in the bank), don’t really give a monkeys if folks believe that or not!.

Just wanted to post the following up as SNN and NG were kind enough to discuss / debate the terms of then shell deal, which wasn’t quite as thought. For reference it’s from the last AR Page 85 and it looks like the covenants include profitability, net worth and liquidity, which by the sounds of it any breaches determine which or all of YU assets Shell acquire.

From the AR:-

“As part of the Trading Agreement, Shell provides exclusive access to commodity products and holds security over the main trading assets of the Group which could, ultimately and in extreme and limited circumstances, lead to a claim on some or all of the assets of the Group. In return, Shell provides market access without the need to post cash collateral in the normal course of operation. The new arrangement with Shell provides significant advantages to the Group's arrangements in effect at 31 December 2023. The significant benefits of transacting with a major energy company such as Shell includes support to Group cash liquidity through the release of the £49.8m of collateral which was prepaid under legacy arrangements.

The Board carefully modelled in detail, and continues to monitor, certain covenants related to profitability, net worth and liquidity associated with the new Trading Agreement to assess the likelihood of any breach of such agreement and the impact any such breach would likely have. Such scenarios include reduced gross margin and increased bad debt, and the impact this would have on the ability to maintain compliance with covenants.

After a detailed review, the Board has concluded that there are no liquidity issues likely to arise in relation to the hedging arrangements and current market context, and the new Trading Agreement should materially improve Group cash liquidity and prospects for the future.”

Year 23 Yu fitted 13.7 meters in the second half of the year with 50 engineers they now have 101 if they fit the meters at the same rate that would be 27.6 plus 72.3 they have now which is 99.7 by the end of the year.

£190k buy at 1242. That's significant

I don't think we'll have 60% increase in the second half. H2 may be very similar to the last years H2 IMO.

Maybe it is time to put things into perspective. Even after this morning's kicking the SP is still over 100p higher than a month agi.

Lets see where it goes now but lths need not panic.

8 is the P/E based on last year's numbers. We are trading to a 50% increase this year to date, or 60% to be accurate. So a forward P/E of 5?

This website says our P/E ratio is 8.8.

Pretty low.

SP1

As posted earlier, not lowering myself by getting into arguments on a personal level.

See you possibly around August leading to the interims, which will be very interesting!.

PMSL

Posted more than once the market reaction to just an in line, the rise to today and sell on news - so will leave it to you to guess what my trade was this morning. Believe it or not I don’t really care.

More retrospective trading from disco. Now run along sunshine.

87m in the bank, business still growing, yea im really worried…..

Just topped up on the 10% drop

SP1

Not getting into that here. Read back the comments on both threads there since I first went long around mid October last year.

Prefer you stick to discussing YU.

States the following

'Trading on a p/e relative of 67 to the UK market, we continue to rate the stock as Buy.'

I thought we're trading on a much lower p/e ratio compared to peers hence the expectation for further uplift in sp? Any insight from knowledgeable posters would be greatly appreciated

Compare with TEP where revenue actually fell about 17% due to lower commodity prices. Shows you how superbly Yu have performed.