focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Tomorrow morning at 7am the FY23 results will be published and almost certainly the capital allocation policy will be included. As discussed below their house broker has suggested a £20m dividend distribution will be put in place. That I think will be quite an epic RNS
The results are known but the capital Allocation policy is not. We can only speculate what it might contain based on the massive cash pile and the last Liberum note - "We speculate that a £20m
special could be paid. At 31 Dec 2023 the net cash plus collateral was £4.90
per share."
If this is announced tomorrow then I see a completely new group of investors arriving and who knows what they will do to the SP.
@Sparky - my guestimate of free cash of £40m as of year end is based on the approx £80m less £20m for ROC (a further £5m or so will be due on monies from Jan-Mar but that is not included in FY23 figures), £20m reserve.... leaving approx £40m free cash as of now. ( will be higher due to Jan- mar profit but that should not be taken into account for now in my opinion but assessed come September and interim / mid year figures.
@bodrunchie - what do you think YU will do with the circa £40m+ free cash if they only distribute £4.5m as divis?
@SNN I agree that the market has currently priced in known news, but until YU declare their capital allocation policy there is only speculation. If it does contain a fixed divi policy (based on EPS) AND a distribution of free cash then for me that changes the game from where we are and so that is why I think it will be the catalyst for the next set of investors to come on board and with such a low free float an increase in MC and PE.
So we are now 1 trading day away from YU's FY23 results and a possible special dividend.
Liberum (the house broker) in the update on 23/02 suggested a possible £20m special dividend alongside a 17p FY dividend as well as hopefully confirming the Capital Allocation policy. Hopefully this will confirm that genuine free cash will be distributed as special dividends and FY dividends will be paid at 10% of EPS.
If this is the case then YU is looking like a great buy for INCOME investors - both Private and institutions . Why do I think this? If we get a FY23 17p divi and then they distribute £20m (this equates to circa £1.20 per share as near as dammit) then the total dividend for FY23 will come in at £1.40 (inc. the 3p paid at interim).
This is a yield of 10.61%. (£1.40/£13.40 - Fridays closing price)
Add to this great looking growth prospects for FY24 and it will be an easy option for income investors to take a look at and then hopefully come on board.
With a small free float this could be the time for a proper rerate. At twice Fridays close of £26.40 Yu would be paying a 4.55% yield - which is still pretty good for an AIM listed utility with great growth prospects and the PE would still only be in the upper teens.
Anyway I am looking forward to Tuesday and am hopeful that a decent special dividend is paid this time.
DYOR and good luck to all LTH
Sorry not 1305 posts :-) just 54 but a member since 2020...
Really a novis sharholder with 1305 posts..... maybe as sparky says - or it might be nothing to do with a fund - could be an investor moving stocks between brokers... loads of possible reasons but we can only speculate.
They look like a set of managed matching trades, sells and buys totalling 25k shares over 6 trades - possibly a fund manager buying and selling in and out of different funds?
I agree on it being less risky - no chance of bad debt, poor customers etc. so yes I would prefer it to an acquisition - but do they need to do an acquisition to continue meter growth - October they set out the plan to get to 100k meters by end of 2024 - that's pretty good growth - but none of us have a crystal ball so we will have to wait and see what the BOD decide to do with the £80m cash pile...
I personally don't think that it is likely, Liquidity has improved with Investec coming on board as a MM recently, volumes have been pretty high and share price reasonably stable so reducing the free float doesn't make sense to me.
BK / BOD would like to see a higher share price but they are in no rush. At some point BK will have to release some shares to either a larger institutional investor who makes a credible offer or if they want to list on the main market. YU are in a fantastic position, good growth prospects (through meter acquisition), ability to manage bad debt (through smart meters and hedging) and are now producing significant surplus cash. The share price will respond appropriately in time. In the meantime there are always profit takers out there. Someone sold 100k shares yesterday, which if they bought in under £3 is a tidy £1m profit. What's not to like - they could hold for more but sometimes cash is required for other plans - maybe they are building a house or buying a boat who knows.
I wonder, in line with Liberums thinking, that we may get a better capital allocation policy stated. Perhaps along the lines of the intention to deliver a dividend fixed at 10% of EPS with remaining free capital to be distributed to shareholders as special dividends when available. Provides some clarity moving forward.
Another late 25k sale - some serious profit taking done today, but unlike previous times, the good news is holding the share price steady and will head upwards in the next few weeks into the FY23 and hopefully special Dividend RNS (s).... onwards and upwards.
Just profit taking I suspect - we have seen this before with YU. traders taking profits when good news is out. When the next RNS drops (no later than March 19th) with news of FY23 figures and if Liberum are correct, a £20m special dividend (£1.19/share) we will see some significant buying again. What is interesting today is historically we have seen the share price drop on this level of selling but today the market has absorbed some very big sells - 40k and 32k at 1345p and not really react. I suspect this means that the news is beginning to get out and more investors are seeing the growth and income potential here.
I remember it well, we have had some great discussions on here about YU and its future potential and its nice to see that 15 months on as we approach FY23 RNS some of the ideas we threw around are looking like becoming reality. The Shell deal I agree is going to provide the "lift" that the YU needs to push on a continue to grow the business. The key now is maintaining customer satisfaction - helps bring in the new business, and grow the Smart meter business. If they hit the 100k meters this year then we will be looking at £2-3 dividends for FY24....
That would be my take on it, no point in being a market maker if they are not going to make a market and buy and sell so they can make money. It could also be that they have a client who is looking to obtain a holding and they can use their MM status to trade the shares and build the holding.... who knows it was just an interesting piece I noticed.
Nice Summary @SNN - another interesting point I picked up today is that YU now has 7 market makers - Investec have come on board.
Investec Bank Plc, Joh. Berenberg, Gossler & Co. KG, Liberum Capital Limited, Peel Hunt LLP, Shore Capital Stockbrokers Limited, Singer Capital Markets Securities Limited and Winterflood Securities Ltd
Sparky - I am not concerned, just a bit bemused. The SP will respond appropriately at the right time, the big news today is the £82m YU is now sitting on and what they are going to do with it as well as the long term solution for hedging nailed down.
The next RNS will be massive. Liberum have kept the FY23 final dividend at 17p (10% of Earnings - good call SNN which I think they will stick too moving forward whilst making special dividend payments to distribute spare cash) whilst making a huge hint at a £20m special dividend. Liberum have not been wrong before with their predictions this close to FY numbers coming out in a couple of weeks.
I am not expecting Shell to be interested int he business, just as a customer for the commodities. Its frustrating that it has got back to year highs but really struggles to break this £13+ barrier. Lets hope for another RNS soon with a special dividend in line with Liberums comments....
Ok, so I take back zero chance :-) but if an offer of £30+ came in then he might sell out and I suspect we would all be very happy too