RE: Institutions11 Dec 2018 08:14
Full report from Artemis: Our largest contributor in the period was Yu Group. As a new entrant in the provision of energy supply to small businesses, we had been impressed by the revenue growth being reported with the company seeming to go from strength to strength. We were not alone and the shares performed well rising 47% in the year as a whole, with the share price peaking higher still. That said, as we outlined in the 2018 interim report, we did sell down almost three-quarters of our holding as the valuation rose and we felt the risk / reward had altered. With hindsight we wish we had sold more. This October the company announced that an accounting review by the new finance director had revealed a number of overstatements. Rather than showing a £5 million profit as previously forecast, the company now expects to be significantly loss-making in the current financial year. The company still has a strong cash balance but it will take time to resolve the issues and rebuild credibility. Whilst hugely disappointing it is, nevertheless, a useful reminder of why we take profits from our investments on a regular basis.