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Its a shame they haven't RNS'd the Utility awards win - backs up the Digital by Design story really well when they are recognized nationally as the Utility Digital transformation of 2022...

I would agree, the day started looking really strong and then a few traders appeared. I am happy to see a steady rise before Christmas.

Good to see the £4 barrier cracked, now a steady rise to £5 and beyond.

@SMT - I agree with you but I suspect it dates back to when they set ROC up and in trying to encourage competition and so by having a system whereby companies could utilize the capital until the following August seemed like a good idea.....until energy prices went through the roof and poorly run companies that had not hedged correctly ran out of cash, couldn't pay and went under.
A shame for them but good news for well run companies that have hedged well like YU...

@SMT / @SNN - on the acquisition front - I agree if they are planning an acquisition then yes that will affect any dividend payment significantly - I think I mentioned that in an earlier post.

In terms of next years growth - yes I had factored in a small rate of growth based on Liberums forecast to be conservative, but if we get to £430-450m then cash increases significantly - to more like £24m after ROC payment in August.

@SNN - I had forgotten the comment in the interim RNS about dividend timing...so that will make it interesting.

In terms of ROC payment and cash - last year's payment was £16.5 m - referenced in the Liberum broker note in September 2022 - so I have used that number and then estimated the Apr 21 - Mar 22 TO that this applied to. This gives the estimate for 22-23 figure. It is accounted for in COGS but is paid for from cash as we know in August.
My estimates of cash are based on cash in 2022 - £15.7m at interim, liberums estimate of £16.3 at year end having paid the £16.5m ROC. So in last 6 months they generated £15.5m cash. Equates to £2.6m/ month ....from that I have estimated the cash position for the year. By year end I estimate that there will be free cash in the region of £15-£20m if they pay no dividends........

Thanks SNN for your thoughts - my thoughts on the dividend timing and amount is based on the following logic, may not be valid but thought I would throw it out there for comment.

1) Board need an average share price of >£5 for the 20 days after the results are published in early -mid march. So waiting till then for a divi announcement is risky - subject to what happens in the next 3 months. The share has a pattern of resistance / trading as it approaches the £ mark so announcing a dividend payment at Trading Update in January gives the +ve momentum time to deliver the required share price for the board. We know the content of the trading update already (I suspect it will be £5m higher and a bit more profit but in reality its known) so there may not be enough for the 30+% rise to get to the £5 mark....

2) On the 10p front - I am estimating a ROC payment in the region of £28m next August (2023) - based off YU getting near to £450m FY23 - YU will want to ensure they have plenty of cash to meet the payment which they have done every year. This would then leave them with an estimated £8-£10m free cash in Sept (less anything they give away in Q1 23 ....... which would then lead to a healthy 30-50p dividend at that time. By the end of FY23 I believe we will see a FY dividend in the region of 60-70p. Unless they decide to embark on an acquisition which changes everything...

Anyway those are my current thoughts and would welcome constructive feedback. (DYOR)

So what are people's thoughts on YUs plans for a progressive Dividend policy?

IMO - they will announce it in January after the 2022 trading update comes out, payable late Jan early Feb. I think they will plan to return genuine free cash to the shareholders.
If they deliver >£6.5m EBITDA which will give about >£4.5 free cash (which I think they will) I would be looking for a. 10p divi. With the remaining cash being used to grow YU smart whilst it gets to profit by YE23 and as a cash reserve.

@SNN and Sparky, both good observations on the SAYE scheme - they will all do very well from it, and the increase in trading volume is a good sign - more liquidity will be a good thing in the medium term.
I think you are right on the TO figures - I was estimating between £260-£280m for 2022 in mid November, so anything above that will be really pleasing. We now just have to sit back and watch the shareholder value appear.

Thanks @SNN for your ideas, some interesting points to digest. I think your assessment is worst case as the potential for £60m annualized lost revenue would only occur if all the company failures occurred in month 1 of the year and had the full year contract to run - but it is always good to look at worst case scenarios. I have a figure fo about £7k / meter but that does not make huge difference.
I am expecting to see about the 30k meters as well by year end based on the statement of continuing record monthly bookings would be great to see it a bit higher but I would be happy at that figure.
Another interesting point I have taken away from the interims is on page 22 - where they opened 2022 with a provision of £6m for bad debt and used £3.1m in the H1 - so maybe helps to give a bit of a steer as to where the FY figure might end up, especially with the support of the EBRS scheme to support companies through Q4. It would be fantastic to see a year end bad debt figure between 5-6% let alone lower.....

@SNN - I had factored in the lost customer revenue already on an ongoing basis - what YU have managed to do well - and demonstrated it this year already is to maintain growth through there strategy - digital by design etc, is to mitigate this issue really well. In the H122 interims they used £3.1m on bad debt/trade receivables but still managed to grow TO by 96% on prior year figures.
What are your thoughts on the number of meter points potentially lost at a worst case?

@SNN - some good thoughts and obviously you have some clear ideas on this area.
My calcs base on the 7.4% bad debt provision suggest circa 2,400 meter points being lost as a result of bad debt at that level (if meter point growth has continued strongly as they indicate) - exactly how many customers that is would be guess work - as you say customers may have many meter points and I cant find any indication of customer numbers at all. I think you are definitely in the right ball park for months of lost revenue - 3-4 months.
The reality of the bad debt provision will be told in January....

For me the key is that YU made a "prudent decision" (their words in the interim report) to make the provision at that level - they can always reverse the provision at a later stage if it is not needed - and they also comment that the EBRS and other activities are expected to drive this down. It was interesting that both brokers reduced it slightly after the Nov update.
BK and the board have started the PR work needed to attract new ii's on board (the recent co-ordinated RNS, broker updates and interviews show this) if they want to get full vesting next year then the share price must be above £5 for 20 consecutive days after the release of FY22 figures in March - they cant wait until the AGM in May - its too late.

What I am looking forward to is the delivery of £16m+ cash, profit at record levels and a substantial dividend during 2023 - hopefully in 2 parts - 1 in March and 1 in Sept.......

@sparky - I agree with you that the market should be looking 6-12 months out but this share is not following that logic. in my opinion.
Where I see the bad debt figure working in our favor is that is currently forecasted at 7.72% by SP Angel and 7.2% by Liberum - circa £21m in SPangels broker note...... I don't believe it will be that high and for every 1% lower than the forecast it will deliver circa £2.6m to the bottom line profit..... This I think will be Yu's "white rabbit from the hat" in January to smash the current (Nov 22) forecasts and to provide for a larger dividend than forecasted (3p). I think it will be more like 10p+ a share off the FY22 results and then a larger dividend at H123 time (Sept 23) after they have paid the 2023 ROC payment as this will be in the region of £30m this year. (£16.5m last off £155m TO - Liberums broker note confirms that value). If they deliver that then the value for current shareholders will be immense....as per the 2022 interims and Bobbys statement "As we continue to enjoy the fruits of our hard work, I look forward to delivering significant shareholder value in the near future".......
IMO, DYOR

Again a great post SNN, I think Liberums comments on bad debt are interesting, as they assume bad debt is going to increase to 7.2% FY22 - but make the comment that this
could be a source of further upside - hinting at a lower number and better margin….
I think FY 22 will finish between £265-270 max and i also agree that hopefully will consolidate over the next few weeks to the £4 area and then onwards from there in January.

After smashing market expectations for 2022, If YU deliver close to their target of £500m TO with 4% EBITDA in 2023(page 15 of their investor presentation), there will be £20m profit before tax… that would support a share price north of £10… so the potential is huge here for share growth and real dividends.

A really big trading day, with a lot of selling this afternoon bringing us back down a bit, but the trading update was great and a month earlier than expected and hopefully will now see a slow steady rise towards Xmas. The final trading update in January will really push the share on.

Liberum have increased target price to 712p and SP Angel released their broker note as well and increased TP to 635p. Both are only forecasting TO for 2023 in the range of £325-£330m - which I think is very low as YU have a target of £500m for 2023. There is still a long way to go until YU is valued appropriately.

Really pleased to see the early Trading update and very positive - really like that "Overdue Customer Receivables remaining stable and proportionate to the growth of the business" - hopefully means bad debt will be much lower than the 7.1% they provided for so freeing up more cash.... Should see an update on the brokers notes soon as well.

I expect the trading update to be earlish in January, they will have a very good idea now of where the numbers will be by YE and with the board wanting to ensure a share price of £5 by the date of the YE figures coming out in March to get the maximum share options they will want to ensure that there is enough time for the markets to digest the trading update and drive the share price towards what it should be.

Yep, great post SNN, I hope that they deliver numbers in the region you are expecting, but I would be very happy with £280m this year and £450M+ for 2023. Both of which would provide a valuation many times higher than today.