Yu Energy Share Chat (YU.)

Just goes to show that the weakness in the SP was anxiety over TUs - ie whether we would get one at all, and if that was foretelling bad news. As they had previously put on the website the results in Sept, but no mention of a July TU, to some extent implied no TU was coming! I had money on today, as posters here had contacted the broker saying this week and re-checking past dates, it's always a Tuesday, can't see a Thursday.

When does a SP ever react in this way on the notice of a TU? Woken the traders up anyway, given them a bit more food for a trade. On a stellar update, where's the price gonna land next Tuesday?

Mid 20's for me by the end of next week, SNN. Hoping for H1 EPS of around 130p.

A strong burst above £20 would be most welcome as I feel that is where we should be at this stage and come FY knocking on or above £30

All sensible expectations. Eps around 130p will place full year Eps north of 260p, going on 300p. Maintaining PER of 10, or just under, then gives £30 SP. And then at the 1/3 dividend, we get the £1 dividend I can still recall us on here calling out some 18 months back!

I am not expecting much in the way of a special / buyback at this stage. As the numbers get bigger, they will hold back cash to ensure their monthly working capital flows are safe. I say this to caution anyone who may be setting themselves up for disappointment.

What margin are you using 6,7 or 8% ? As 6-8 was the guidance

'I say this to caution anyone who may be setting themselves up for disappointment.'

I think a few folks may be entitled to feel disappointment if that were to be the case, after stating it in the 2023 annual report, then cancelling an extra £12.28M in a special court approval process, with £110M of cash predicted at year end at this point in time!

We know that £260m was signed last year on 9-10% net EBITDA margin, using 7.5% for what is signed in 2024.

SNN

H1 eps 130, we will see, but id pencilled in 105-115.

There’s a danger this gets technically (RSI) overbought up to the 23rd, then if an inline folks (traders too) will sell. That’s what tends to happen, not saying it will before I get shot down.

DB19 - the results show point 1 as "Working capital requirement" as appropriate for the hedging arrangements. The numbers are getting seriously large. I think it was NG who posted that they are required to hold 1 month's working capital on the B/s as cash as part of the Shell deal - better in Yu's bank earning interest rather than Shells / Smartests. As always, cash includes accrued ROC payments, which will be as good as held in escrow, and should be deducted.

The last RNS states "primary aim to provide flexibility for future distributions by the Company, should they be appropriate." It's open to interpretation, but it's clearly promising nothing, at this stage.

If we get nothing, then even I will be disappointed. I have previously suggested 20p special. And perhaps a modest buyback - say £2 - £4m worth. Given today's price action, they may launch a buyback, but then find they are locked out by the price mechanism. But with a few quid on the price, it's job done!

DD, aren't you going over board on the fundamental research on this, for a trader? You're digging in every corner, lifting every stone, going through reports, asking BBs detailed questions and even doing your own sums now! From the recent lows of 1600 / 1650, you've already missed 2 quid a share.

So, what's your plan of action now? All trades carry risk. SB now or wait till next Tues? It's interesting to compare the two styles. Post up your trade when you do. Fascinated by your thought process. If it's ahead, will you stay in until Sept results?

Thanks for the reply SNN - I can see your reasoning there now. Hopefully, they will clarify next week along those lines (or hopefully better).

Re that other poster - they've missed out on at least a £9 sp to my knowledge and still it goes on looking for any negative possible. They even have multiple personae to argue/support/insult others elsewhere. There really is nowt as strange as folk.

He won’t post that information SNN, this is the man who called a FY profit warning in Jan.

And also as directors sold in April and May bad news looming even though that is insider trading.

Apparently I hold no stock and work for YU as well.

SNN

Why wouldn’t I do detailed research?, I’m not purely a day trader, I buy and hold too. Also shorting requires more research generally. As for YU I’ve made it clear to my fans elsewhere that I’m not likely to buy and hold as dont believer their exceptional growth is sustainable. So I initially traded in its upward momentum, then shorted on a recent dip.

From today its broken SMA50 resistance and the descending channel so may go long up to 23rd if shows strength. Then close EOP 22nd. I’m not too certain they will be blowing the doors off with the TU but confirmation of divi / BB may negate that. Also if the sp continues to rise to the TU there will be profit takers and sell on news irrespective.

I don’t spend hours watching my screen and dipping in for a few points here and there, prefer to try and catch sustainable momentum in either direction.

I see Sparky has posted elsewhere chasing me to answer your post. Now you can answer mine:

- Where did you see a target of 100k smart meter installations

- How do you get to 130p eps

Thanks

Ps to Sparky - are you happy now!. Please don’t chase me daring me to answer peoples postings, I will not respond to you next time. I would have happily answered SNN in my own time as I’ve no issues with SNN

SNN is a shrewd clever man along with NG and IPC

Not like silly old me

Oh dear.

The CFO and Director of Retail selling more than 50% of their holdings is not a positive sign and you are assuming too much about the future.

Yes I felt a PW was coming because following their investor day the share price continued to fall at a decent rate plus last year they issued a TU in May. It was an opinion that proved to be wrong but its not etched in stone, the moment has past, I called it wrong (didn’t lose a penny), get over it.

You never post my correct calls.

Waiting for the same quality we see elsewhere.

It won't take very long.

DD - Thanks for the comprehensive reply. I have never used SB etc, so genuinely intrigued by its mechanics and the thought processes behind it.

As for Yu's growth, all is down to opinion. For the next 2-3 years I think the growth is sustainable. The leverage in their business is very significant, and if it pans out (£2.5 - £3bn T/o) I see eps over £10 and a SP over £100. There will eventually be a brick wall limit on the market share it can capture, say 6-8%.

If this rise continues to Tues, then yes I also see the chance of a fall on the day, regardless of the TU. However, if good, as last year, I would expect a long trend up to form until the H1 interims in Sept afterwards.

The 100k target for meter installs in 2025, was verbally given in an analysts meeting. I expect the next round of broker notes to comment on this. Besides, it fits with having 200 engineers - they won't be paid to be idle all day long. I suspect there is a closer working relationship with Shell than meets the eye, to support rapid growth, then perhaps an exit sale to Shell 3-5 years on.

I don't get 130p. That was NG. I commented I am in the same ball park. I am on £750m revenue for 2024 at the moment (£320m for H1) but will revise as we get the update. I have similar margins to last year, but with increased O/s. EBITDA of £30m ish for H1. It's simply my own research, maths and intuition. NG and Ipc also sometimes post their forecasts on here and we all three have been consistently ahead of brokers and very accurate in our estimates long before the brokers producing 'final' estimates in January. We've been here swapping thoughts a good 2-3 years now.

I only post here. I do not wish to be caught in the cross-fire of stuff going on elsewhere. I have my own boundaries and will respond, in my own way, should they be crossed.

SNN

Thanks for your comprehensive reply and being upfront.

I’m more conservative as to their H1 numbers and beyond, but that’s just my opinion, as is everybody else’s, none of us can predict the future. Unfortunately some take it personally, particularly when potential risks / issues are mentioned, but won’t go there.

There is a good chance that if this becomes technically overbought by the 23rd that there’s a pullback on the day - we agree I think!. Will there be sufficient news to maintain upward momentum? Who knows, I will play it as it comes.

@SNN / DD

Definitely in the same ballpark SNN, my lower case estimates - based off continuing last years bookings of £55m new contracts/month (approx £2.6m business / month) gives me H1 TO of £315m and PBT in the region of £25m (Inc interest of £1-2m on cash balances). EPS of 1.2 after tax or so. It doesn't take much to get to EPS for H1 of 1.3.

Now if the Shell deal releases the brakes on new business and YU are booking more like £65m of new business then the numbers get bigger quickly....as do the free cash balances. I am still of the opinion that they will be holding at least £50m plus ROC in the bank so the H1 numbers will be pretty much what they could distribute, remembering that they have already spent £4m buying the share options into treasury this year.

Thanks ipc, I’m still going more conservative, but not by much:

Rev £300m - £310m?

Pbt £24m - £26m

Eps circa 105p to say 115p?

Can I just ask, you say pbt £25m (which I agree) but I don’t get an eps of 120p, it’s c 111p, what tax rate and shares in issue did you use?

Thanks

YU. achieved PBT £31m in the second half last year on revenue of £265m.

With turnover over£300m, PBT might turn out to be higher than £25m even on a lower margin.

The reason I think that H1 revenue of £300-310 or even £315 mentioned is conservative is because H1 2023 they had started 2023 with £247m pre-booked. So minimum of £123.5m from forward sales, and added another £70m in the H1 to get to £194m H1 sales. Yu will go into 2024 with at least (£520m/2) £260m already falling in H1, I would expect them to do more than £70m as the shackles of margin have been released. But even if they only match H1 2023 @ £70m I get £330m. They are geared up staffing wise to increase the £70m H1 additional sales.

We should be using a tax rate of 25% and the number of shares for EPS purposes (deducting the shares in Treasury,) should be 16,784.337 (to be exact!)

2227

Fair point but margins have been quite variable.

Long SB at 1845 this morning just after 9am. Tight stop which I’ll float. Volume is picking up so will see how it goes. Could be close to new 52w high by 22nd (looking at 100 points). If it is then will close and review depending on the TU.