Member Info for Discodave4561

Sparky

Lots of black and white statements, that aren’t factual but just in your opinion, unless you can support what you’ve said with data / evidence?

‘Downside extremely limited with significant upside potential” - why is that?

“Traders will arrive and if they don’t the mould could have been broken and now buy the news rather than sell the news” - really?, whose been selling since the last TU?, it’s not been traders IMO.

IMO if they do show some signs that a decent amount of their cash is distributable (a sustained / significant BB programme, and / or special dividend,d, and / or a decent acquisition) and income / earnings growth hasn’t stalled then wouldn’t disagree that a sp rebound could occur……but the opposite could also occur IMO.

2227

2227

“Cash up from 32m to 82.

Net assets up from 46m to 135m.

These are predictions fron SP Angel .”

They may well be predictions, but at their interims (the latest in terms of balance sheet), net assets less £49.8m collateral was down to only £3m, likewise net cash less collateral was only up £3m.

You also posted that “Given the history of this company delivering above forecasts”. They also have a very poor history of over accounting their income as well as forecasting a profit of c £5m when they actually made a loss of c £5m.

Yes due to the period of significantly higher wholesale energy pricing they’ve beaten / upgraded forecasts……but more recently they haven’t.

Typo, shoukd have read “why haven’t they”

You dont seem to have an opinion as to most of the questions, just banging on about them doing a £10m buyback and special dividend, well why haven’t they?

Sparky

So why do the deal with Shell ?

1. Shell have a charge

2. You claim Shell take more margin

3. You also claim Shell require a very large cash holding which is in fact y no difference to smartest who paid YU the interest and only wanted it during volatile periods

You miss the point as ever, I’m posting my opinions based on the facts. The facts are they have done sweet fa with £82m cash for a year now, minimal interest and they are not showing any signs IMO that they can distribute any significant portion of their cash.

Why don’t you tell everyone what your thoughts are as to why they have been sitting on £82m cash for at least a year and done fcuk all with it.?.

Why do the deal? - because one has to assume their margin was improved from the buying power of Shell, but that doesn’t mean Shell don’t benefit either. Again why don’t you say why you think they did the deal. Again why would Shell have limited risk mitigation?, SmartestEnergy had the cash at their disposal whereas Shell don’t, so what do you think Shell are doing to mitigate their hedging risks?. ……The liquidity covenant.

You dont seem to have an opinion as to most of the questions, just banging on about them doing a £10m buyback and special dividend, well why have t they?.

Let’s see what they do / state in their finals.

Sparky pal

Why do you think they’ve been sitting on so much cash, £80m - £82m, for the past 12 months and done nothing with it?, you keep ignoring that fact and the fact that a new LIQUIDITY COVENANT came into being 12 months ago too, mmmmm I wonder could that just be a coincidence or what?.

Dividends and the small share purchase in fy24 was funded by their capital recovery if my memory serves me correctly, plus they previously took out av£5m loan to fund smart metering growth (which I queried at the time as they had circa £30m+ in cash I think it was - Rawson was queried about it too and came up with some waffle).

Think on - SmartestEnergy required nearly £50m as upfront collateral to mitigate their hedging risks, YU `s customers are now using 78% more energy that Shell are procuring at some risk to them, why would they do that without taking actions to mitigate their risks, ie a liquidity covenant and potentially taking some additional margin from YU (hence the significant drop in their H2 income - half what was forecast).

Another idiot filtered.

Jeez, and you hold SNG!, should change their ticker to OMG. Pile of dung just like your contribution xx

Sparky pal

They don’t state the number of customers or meters. Would guess though that as their Pat margin is c 12%, doubkevYU for FY24 forecast, that income per meter is higher. Thought I’d read 5.400 services in one of their accounts (read so much for each subsidiary that I couldn’t swear to that or whether I imagined it).

Having read the accounts on Companys House I am surprised YU haven’t issued an RNS, but as I’ve posted perhaps they can’t really know how material or not it could be as they don’t know how many customers will transition to them.

The company’s reporting are: for gas its Economy Gas Ltd, for electricity it’s Sinq Power Ltd, for water it’s Clear Business Water Ltd, then there’s Verastar Ltd.

Having researched a bit more about the Clear Business Group I am surprised YU haven’t issued an RNS - my guess is that they simply do not know how many new customers they will get. Plus why would Clear Business subsidiary’s for gas and electricity want to lose customers when profitable?.

Again from statements I’ve read Clear Business were struggling due to exposure to the volatile wholesale prices and bad debt, so I’m assuming they had no hedging in place and given macro economics customers weren’t paying and / or going out of business due to elevated pricing. They implemented the “outsourcing” partnership in Jan 2025 in order to refuce the aforementioned risks.

Clear Business Group to end April 2023 had income of c £172m for their Utility services which included £13.5m for gas (pat £2.9m), £78.8m for electricity (pat £8.5m) with water income making up the rest (£79m Rev, pat £9.7m, but for FY24 although income was up circa £2m, pat was only £2.9m due mainly to a massive increase in Admin costs for some reason).

So energy supply total Rev FY23 was circa £92m (pat c £12.6m). But as previous posting they clearly were / are struggling with bad debt and I assume from statements they’ve made have no wholesale hedging in place (not that I can find anyway). Also the group could have been struggling to maintain their liquidity and EBITDA covenants and took a £280m Senior Facilities Agreement (which is now increased to £350m (don’t know why so much of a loan).

Their water customers are in Scotland, and their energy is predominantly focused on renewables.

If anyone (I doubt it) knows why such a large loan / contingent liability of £350m @ Sonia interest until Oct 2027 then would be good to know! :)

Can understand now their desire to try and mitigate their risks by basically passing it on to YU if that’s what their energy customers want.

Sparky

Thanks for the link.

…..and no way of knowing what the income was from energy alone.

Key points for me are (which you omitted to post up!):

“If you’re currently in a fixed term contract, there’s no change to the rates you’re paying”

So could be at a lower rate than what YU would usually charge, could be more, who knows. Then the following clearly says they can basically go elsewhere if they want..

MY CONTRACT IS COMING UP FOR RENEWAL, WHAT WILL HAPPEN?

Around 60 days before your contract is due to end, Clear Business will send you a renewal letter, which includes important information such as what happens at the end of your contract, the price you’ll pay once your contract ends, and what you need to do if you want to transfer your services to another provider.”

No RNS says it all, it’s not material to the business and would affect the share price. Guess this was in progress for some time and pre the last TU.

Sparky pal

You need to post up the source of your opinions.

You also need to correct your postings, the £171m income was for all their utility services not just energy and they have 135k customers in total with zero indication of how many are energy or what the income for energy is.

As for moving energy contracts over to YU, I think you need to get the full detail on that as can’t see how any customers would be forced to go to YU particularly if they charge more.

The crux of this partnership is it’s not material to the business otherwise YU would have to inform the market (I can’t even see reference to it on their website - again where’s the source)?

Sparky

Re partnership with ClearBusuness

The business is a £42m loss making pile of crap plus the £171m you quote is not just energy it’s utility services combined, plus it’s just a partnership - IMO you pass us trade and we will do likewise.

Doesn’t obviously need an RNS ergo it’s not material to the business.

Calm down pal :)

Sparky pal

British Gas Small business FY24 operating profit was up 12%, SP Angel forecast for YU is only 10.5% despite higher customer growth rates.

CNA FY24 PE 7.5x

YU FY24e PE 7.5x

Seems fair value to me and they haven’t as yet delivered on their FY24 forecasts. But their operating profit growth isn’t forecast to be as high as British Gas. And CNA still have their massive buyback to improve future earnings (they have £2bn BB). Whilst YU sit on £87m of cash earning sweet fa. Even a £10m BB would only increase eps by 3% max.

Sparky last reply as we will never agree, plus I don’t normally keep debating with someone that resorts to personal insults.

You posted: “Also I wouldn’t say 140p to 115p is tanking when this time last year it was 55p”

When I posted Gas tanking it had fallen from its high of 143 to 113, a 21% drop in about 5 days, that in my book is tanking.

As for the BoD, I personally wouldn’t trust them, constantly make false promises - we will make a profit in FY19 with brokers forecasting from memory circa £5m net profit, truth was a net loss of £4.9m. Then Bobby two years ago in their H1 presentation promising to improve their comms to the market and apologising for how poor they’ve been, we’ll still waiting Bobby.

Then just months before the accounting issues in 2018 they issued a placing and raised £12m, then bump the accounts were found to be falsely recording income. The only reason the FCA didn’t fine them was because after their investigation Covid had started to appear so they let them off for fear of breaking the company. So there’s a history there and not too glowing either in terms of reputation, have all the other companies you keep harping on about had such a chequered background?.

Then we have the energy crisis and a double win, energy goes through the roof and a lot of suppliers go out of business, with Ofgem handing customers to YU as SOLR, hence the impetus to market share growth. So basically if the energy crisis hadn’t happened YU would still be loss making……yes IMO. But let’s see how the future pans out for them.

Nope 2019 ouch!

But hey you love the boost to your ego don’t you :)

Anyway, TEP have only reported their H1 for FY25 and yes revenue fell because of lower retail energy prices but they stated clearly their profits are in line for the year.

As for CNA yes H1 total group Rev was down 35% but they maintained their operating profit forecasts for the year.

As for GOOD yes their revenue tanked but they have been bought out at a substantial premium to where the sp was.

As for YU, you are wrong, H1 revenue was up 60% but clearly H2 revenue will be half the growth that they originally forecasted and they will miss revenue forecasts for FY24. The Jan TU was very ambiguous - “approaching” £650m was not aligned with their 40% growth, which is £644m. No way IMO is £644m approaching £650m. One thing the market hates is ambiguous statements but worse when they don’t tell it as it is, why did H2 income crash?, why the miss for the year?, what will Rev be. £644m or £649m?, and no update on bottom line pbt.

But hey they have a history of very bad forecasting and failing to deliver on their promises!.

Sparky you don’t get it, never will.

Look at the YU chart v say CNA, then look at the profitability since Ukraine war, then think which is more likely to fall all the way back down when / if profits disappear.

CNA report tomorrow and the media have already said profits will be lower. Yes YU are not likely to say that for FY24, possibly not FY25, but I’m here for when they do, and they will IMO. All this utter nonsense here about £100 a share is complete fantasy.

I don’t give a target price but this isn’t worth £21, where it will be when it’s profits fall and disappear who knows, the chart says a lot lower than where it is now.

I’ve posted all my reasons and views on YU so your questions have all been answered time and time again.

Anyway, why do you post on YU and nowhere else?, you don’t even hold here you sold up ages ago, didn’t you?!!!!!

Down 23% from the last TU on 21st Jan.

So Mr Putin caused an energy crisis and YU made decent profits for the very first time, now with the prospect of Tango man bringing peace in Ukraine where do folks think energy prices will go?, and more to the point what do folks think will happen to the profitability here?.

Not to mention that company insolvencies are at a 16 year high.

Ps thought I’d posted this earlier today but post didn’t show up. Apologies if it does materialise as a repeat post, but guess my fans here won’t mind too much given I’m allegedly filtered.

Just checked the UK gas price for 2024.

The H2 monthly average price was some 34% higher than H1, but YU’s income growth for H2 v H1 was the complete opposite, it was 33% less than H1.

Something seriously impacted the H2 revenue. Hence the miss on forecasts and the market reaction IMO.

The average UK gas price for 2024 was actually 14% lower than FY24 (it was 17% by Nov). So energy supplied up 78%, wholesale price down 14% but Rev was only up 40%, clearly lower margin / income contracts feeding through during FY24, and / or Shell taking some margin. Either way the hit IMO was during H2.

Be interesting to see how Q1 FY25 has gone.

Why the question mark!

It was / will happen sooner or later, the war wasn’t going to last forever….likewise the higher energy prices.

Sparky

Where do you think the energy supplied to YU’s customers cones from?. Bearing in mind that in 2023 (can’t get the data for 2024, yet!) over half the UK’s electricity was generated from zero carbon sources.

From the YU website:

“We secure 100% renewable energy for our green electricity products. We’ve worked with our sourcing partners to create 100% green electricity to supply to our customers.

As evidence that the energy you consume is green, we purchase a certificate called a Renewable Energy Guarantee of Origin (REGO). Our standard products are sourced using the residual energy mix on the UK electricity grid.”

Even their standard plan will have some proportion of the energy supplied to customers from renewable sources.

Sparky

You’ve made some claims that there are a few reasons why gas and MWH costs will never go back to 2028/19 levels. That’s some bold unsubstantiated statement. But if I may:

- Renewable / green energy will reduce gas prices because it will lesson the reliance and demand for natural gas.

https://freepricecompare.com/home-energy/guides/renewable-energy-reducing-gas-prices/

- You say there will be no new North Sea oil, the Government has issued a licence for Rosebank oil field and whilst there’s a technical delay Equinor are pushing ahead with the project:

https://www.reuters.com/business/energy/equinor-push-ahead-with-rosebank-oil-gas-project-britain-2025-02-12/

- No gas storage, the UK has nine gas storage sites. The current capacity which when full (yes it’s low now but that’s normal during the winter period) can supply the whole of the UK for a week during peak winter demand. Storage is there to provide a buffer nothing more.

- Nuclear. You state it’s decades away. There are nine operational nuclear power stations in the UK. There are two reactors being constructed and three new reactors are being planned. I assume you may have meant small modular reactors?, in which the first is planned to be in operation by the earky 2030’s (so about 7-8 years away).

- Unstable World. It always has been and probably always will be.

As posted before as well, just over 47% of the UK’s energy came from Green sources in 2023. The largest contributor was from wind power which equated to over 29% of total electricity generation. In 2023 over half the UK’s electricity was generated from zero carbon sources.

Do think when you make such statements that it should be supported by some evidence or state it’s all in your opinion only.

Thanks