Member Info for Discodave4561

In a word yes, but invariably the actual spread isn’t as wide.

BK could move YU off AIM to the FTSE SmallCap index, he could also sell some of his shares to improve liquidity but on both counts he prefers to just moan rather than do anything about the lack of interest in the shares. It might just be that folks see better returns elsewhere.

Ps a buyback should in theory increase the share price, in reality it would as well simply due to market sentiment improving.

Grumpy

That’s for the board to make the decision, it’s not rocket science to work out the impact on eps by buying back shares on the market. The internal rate of return would need to be calculated to ensure that the investment return is more favourable than the circa 4.1% they are getting from interest on their cash.

The overall message though to the market is that the shares are not undervalued and/or they are better off sitting on the cash, either way it’s giving out negativity IMO.

Grumpy

Yes but how?, it’s all predicated on wholesale energy prices.

They’ve so far shown no signs of investing some cash into the business via a share buyback, so that tells the market the board don’t think there’s value in that, even a £10m buyback at today’s price would increase eps by 4%, so growth would go from 10.2% to 14.2%. Higher than FY24 and that should increase the share price value and rating, a win win. But the big question is why haven’t they?.

Sailor meant to add a caveat - wholesale prices reduce so buy and sell for less but is there parity with the contract with Shell?, or would Shell sell to YU for a higher price to maintain their margin?.

IMO YU have had their moment in the sun, fair play, but I don’t see a sustainable business model.

Grumpy

“At the end of the day the company can only keep increasing profitability and the market will decide.”

They aren’t increasing the growth rate of earnings, it was +547% in FY23 thanks to the throughput of the massive spike in wholesale energy prices, then it fell to +13.6% in FY24, forecasts for this FY is for +10.2% and next year even lower at +6.5%. As energy pricing falls as it’s clearly demonstrated by decline in earnings growth then if wholesale returns to pre Ukraine / energy crisis levels where will he growth, if any, look like then?.

Their monthly bookings was down 12%, revenue growth is forecast to be only 10% whilst consensus for this year was nearly 15%.

As for Sparkys views on BK I completely agree.

That’s about the only thing I would agree upon. As for the rest of Sparkys comments - cut out the personal insults and grow up ffs.

Sailor

Yes they will pay less for the energy they purchase and sell for less profit to customers, so their margin will return to being paper thin, but their Opex costs will erode margins further as they’ve grown, so their profitability is purely dependent upon the price of energy. Prior to the energy crisis they couldn’t make a profit, growth going forwards has drastically reduced and if energy fully normalises IMO they will struggle, all IMO. But fully agree with what Grumpy has posted and what Paul Scott thinks - this business simply buys and sells energy, yes it has smart meters but they are a very small fish in a big pond on that front.

Value

I stand by what I posted , he is responsible for cultivating and promoting relationships with all stakeholders.

Listen to his apology in the H1 presentation he did about 2 years ago (from memory it was 2 years ago) when he apologised for the company’s poor comms to the market / investors and he promised to put things right - has he? IMO no he hasn’t and now he just moans but hasn’t delivered on his promise.

“He is paid to maximise shareholder value”

Yep, by making decisions to achieve just that!, not just moaning.

On BK’s moaning - so if he feels that the business is undervalued why aren’t they buying their own shares? - institutional investors are clearly of the view that it’s not undervalued IMO.

Finance income on their cash is about 4.1% going on last years numbers, eps growth here is forecast at 10% and 6.5% next year, so again why aren’t they investing in the business, buying shares to enhance the earnings growth rate? - BK’s moans are becoming very embarrassing IMO.

IPC]

Agree, when is BK going to stop moaning and do what he is paid to do , sort out his perceived issues with investors - move to the FTSE Smallcap (too expensive, more regulation), sell some of his shares to improve liquidity, (greed?), vastly improve their PR and comms with the market / investors.

That said there is still sustained redemptions / outflows from UK equity funds but from Junes data is may be slowing , no doubt thanks to Mr T and our 10% tariff. Overall not much BK can do regarding macro’s but he’s done nothing but moan which IMO doesn’t exactly look good or do much to help the situation.

IPC

H1 Rev growth was 9%, believe you posted that Lib have a forecast growth of 10% for the year but consensus was closer to 15%, so income will be below forecasts.

How are monthly income bookings down 12% being offset by increased meter points?, they have t said that, unless I missed it. They said bookings were down due to guess what, lower energy prices, nothing to do with meter points IMO.

“maintaining profitability” doesn’t mean maintaining growth in profits, which they clearly aren’t now energy has started (IMO) to normalise. I’ve stated numerous times that I do believe when prices fully normalise that YU’s profits will cease to grow and could disappear completely, that’s my longer term okay here.

Yes apologies. ROC will be c £45m this FY up c £10m.

And not all of that cash is distributable due to their liquidity covenant with Shell. IMO it could be in excess of 50% given what they had to give to SmartestEnergy.

Then as IPC has posted, £54m for ROC, not to

mention their working capital requirements.

They keep saying inorganic value opportunities but nothing so far, and no hint of any share buyback, not even a token gesture £10m, so why not?.

Average monthly bookings at £41.4m, down 12% on H124 (H124: £46.9m, FY24: £42.6m) reflecting the wholesale commodity market normalising, as expected.

Down 12% and sales growth below forecast. Note the word "normalising" that someone just constantly ignores.

All that cash and they still aren't doing anything with it, I wonder why? - liquidity covenant!.Why no buyback or special dividend?.

Bobby having his usual moan, but once again has done nothing about it - comms still as bad.

No surprises, let's see if Mr Market liked it.

Thanks Magic

Forgot what they’d said in their finals outlook for FY25.

So Rev £730m to £760m, say mid is +15%, are they saying 120k plus meter points for FY25, if so that’s +36%. Again it seems to show that meter points growth and income growth are not correlated. That said prices down 9% and income up 15% it’s quite decent.

However, consensus eps forecast is for growth of 10%, so clearly margins are reducing which is what I’ve said for some time. They are discounting to maintain growth in market share and gross margins are reducing. That said the forecasts do suggest the wash through by FY26 as Rev growth is closer to eps growth forecasts.

Agree about sticking to the subject matter but unfortunately some folks can’t accept a different view about the business…….and I won’t shy away from defending myself.

Magic

You say the price is -9% this year, sorry but where did you get that from?.

Personally I can’t see how you can determine annual income based on meter points. There’s too many variables - from market share data they increased meters more than customers so some customers added more meters but that doesn’t always mean more energy used - they could install meters for auditing purposes within their assets / properties to determine usage trends for a particular site. Then there’s forward hedging prices, variable margins for Shell, customer usage could vary considerably too. Too many variables / unknowns for those outside the business to try and forecast their income. So that’s why I said what I did. Good luck in trying too but personally their house broker forecast is all we have to go on. they are given the numbers by YU. All I see is growth (profit) is predicated predominantly by the price of energy, as it falls thus proportionally more energy needs to be sold just to stand still.

At last - “so it’s clearly not all distributable”. Try telling Sparky that!.

Ps perhaps FY24 in terms of meter number growth (+64%) and income (+40%) was not the norm, looking at FY25 forecasts, if they hit 100k meters (+13.6%) it nearly matches the forecasts for Rev growth (+14.4%)

Magic

Thanks for that.

Magic

Thanks for that.

However, whilst I’d agree that an increase in meters correlates to an increase in volume of energy supplied their growth in terms of usage per meter doesn’t correlate, FY24 energy supplied increased 78% but meters only increased 64%. You could argue based on this that energy usage per new meter increased, but it could just mean that existing meters for whatever reason used more energy?, we just don’t know.

Plus revenue only increased 40% despite the 78% increase in energy supplied. As ever and stating the obvious, income for FY24 was impacted due to lower energy prices, income growth was nearly half that of the increased volume of energy supplied. And their bottom line earnings only increased 11% despite their 78% increase in energy sold / supplied. Revenue is vanity, profit is sanity.

Taking meter points IMO as a measure of forecasted income is completely flawed, it’s how much energy are they supplying and at what cost. And clearly going on last year margins were hit significantly given eps only grew 11%, all down to how much they buy the energy and how much they sold it for - again sorry but that’s the underlying mode; for this business in terms of profitability, and as energy prices fall they will need to grow a lot faster in order to be profitable (IMO).

So I don’t follow that revenue this year will far exceed expectations, based on your assumptions around meter points / order book. The forecast for FY25 is revenue £738m (up 14%) which is pretty damn good, and margins are likely to stabilise with eps growth more in line at 10% according to the forecasts. That said perhaps FY24 growth metrics in terms of meter points, energy supplied, income and earnings were skewed due to contract lag as you mention, let’s see what they say on the 22nd.

Taking out net current assets to determine the PE seems odd to me, most would take out their cash which is higher, but as I’ve posted IMO not all of theur cash is distributable due to their liquidity covenant . I do think a buyback would be valid and also provide some guide as to the level of liquidity that they need to maintain?.

So after 3 years and who knows at what cost to the tax payer, muppet Miliband has decided to abandon zonal pricing.

https://www.theguardian.com/money/2025/jul/10/uk-government-abandons-energy-zonal-pricing-plan

No problem Srb

It’s on their website:

https://www.yugroupplc.com/financial-calendar/