Member Info for ipcutler66

Annual report has been published on YUs website.

@DD - watch the section on the trade risk management from the CMD - that is why I am happy that they can manage the rising/ falling markets. I am happy that for the first time they have stated in the FY RNS a Full year target range - as you say no-one can predict the future so why not give a sensible range - what's wrong with a conservative 13-17% growth top line for FY25.

@Sparky - the new (2023) head of trading really impressed me with his section. I am happy that YU can now safely manage a rising or decreasing energy price market whilst maintaining profitable margins. yes this wont be at 2023 levels - a GROWTH business with underlying profitability that is scalable over the next 3 years to £900m+ with £140m+ cash - whats not to like. (Best not mention meter growth or market share growth)

Liberum note is out and it contains links to the Capital Market Day videos. They really should share these more widely as it contains some interesting info and background.

Full 2+ hour > https://fast.wistia.net/embed/iframe/qccoqelx1u?web_component=true&seo=true

shorter version > https://fast.wistia.net/embed/iframe/q56eiv3qae?web_component=true&seo=true

FY24 results have shown a slowdown in GROWTH not the underlying performance of the business.

Revenue growth - 40% FY, H2 was slower only 6.3% larger than H124 but 25% growth over H223.

With contracted revenue of £566m for FY25 already they need to book £179m in FY25 new business to hit current Liberum target.

January has been a record month - that means over £55m bookings - the stated target of £730-£760m in the results is the first time they have put a target into the FY RNS.

Margin has held up under decreasing market prices - 7.2% in FY24

Cash is now £80.2m with Liberum forecasts at £101.5m off TO of £745 in FY25, £121.2m off £823m in FY26 and £141m off £902m in FY27

Debt collection has improved again - appointed an experienced Head of Debt in March 24 - clearly having an impact with overdues down to 3 days

Shell deal / in house trading group - scaled, un margined - no cash required to be posted, good access to wholesale market traders. Trading daily to support the profitability of the sales teams being made and secure the profit margins and minimise the risk to the business from the markets. Contracts are covered by tolerances - under or overuse leads to customer paying more.

Strategy is to grow organically - Cost to acquire customer is increasing from circa £0.53m (£14.86m) / meter to £0.72m (£24.885) - only comment in the CMD is the low hanging fruit have been taken, so the costs to work with the TPIs is now managed and a cost of the business. They see this as an investment in the TPI to ensure an ongoing relationship to help both companies grow. Even with higher costs to acquire the margin that is brought in per meter means the company has solid growth opportunities ahead.

YU Smart is a key section of the company to provide easy bottom line margin growth.

HR / Headcount - They now have the headcount to get to £1bn /4-5% market share

Technology / Change management in CMD - Always looking for improving and new tech integrating AI into their systems - machine learning to improve data usage and reduce cost to serve. Introduced a PAYG App based product to the B2B market to help manage credit customers who have payment issues - allows them to target businesses with poor credit with less risk.

Overall the team put in place over the last 2-3 years is the reason the company is going to continue to GROW profitably, albeit at a slower rate than 2022/23 due to the normalisation of the energy markets, meet its targets and deliver SP growth and dividend growth for the shareholders.

Anyway that is my opinion and thoughts on it all, roll on 2025.

It only takes a 0.5% increase in EBITDA to 7% to beat the £44.2 forecast so easy to say that. 7% gives £45.5m

So an interesting TU. Lower TO than I had hoped for, but higher forecasted EBITDA. Meter growth good but not as high as possible. End result will probably be, as stated 3x cover in short to medium term, a dividend in the region of 70p for the year. What this means for the SP is anyones guess but I am looking forward to it either way.

Lets wait and see, the sensible time for a placing is with a move to the main market away from AIM - will it happen no-one knows (excecp BK and the board). If the results are inline then there might be a sell off, but as I have said I am not expecting that given the way energy prices have held up during 2024 and the targets suggested by YU of 100k meter points. Only 1 days trading to go

So its been interesting watching the banter on here over the last few weeks, after the rise at the start of January it stalled and some of the traders moved on but the SP is now positioned well in my opinion for Tuesday. If as I hope (and most of the board) the TU is showing turnover in excess of £700m with EBITDA in line with the 6-7% and profit circa 5.5% then 2024 will be another great year for YU. I am not expecting any hint on the dividend amount but we will be able to work it out once the numbers are out. If they hit the £700m+ then the final dividend based on 3 times cover of EPS would indicate in the region of 70p for the FY. The question is then how will the market take it but more importantly the II's and the capital market day. I am still of the opinion that we wont see significant II investment on AIM unless BK sells a portion of his shares. Looking forward to an interesting week.

Out of interest DD - did you read the links you shared..... It appears to be a consultation on new regulations coming in...not as you put it

"Info on the new regs that came into force in Oct (hence I guess this explains YU not taking on any additional energy brokers):"

The Secret Level WH40k episode is based off the Space Marine 2 and so I suspect is off the video game licence - this is altogether a different kettle of fish - films and TV series set in the WH40k universe (and hopefully the WHF as well last on). Its going to be interesting when they provide guidance - could be for the FY26.

Its a funny old world, we are now in the last month of what I suspect will be a great year for YU but patience has run out and some sell, but thats everyones choice.

We might see a TU (I would prefer one) but as I said earlier they didn't last year when they exceeded market expectations by 8%+ which would now be £53m taking TO to £720+. Let's just wait and see but the company is still growing TO / cash / EBIT fast so what's not to like

If it had been a Sell the price would have dropped like a stone, I suspect it was a worked order over the last few days, picking up the sellers from the last week or so.

Thanks for sharing the link @SNN - interesting comment on the SEEL page.. wonder what capital light means.

SEEL’s structure is “capital light” for Yü Energy, allowing cash that was previously held on the

balance sheet to be invested in initiatives which could further accelerate growth or performance.

Need to spend some more time digging through the H1 report to see what I make of the overall cash position but overall very happy with H1 performance and now waiting for the next TU - probably January knowing the way YU work...

Posted before finishing - given 60% revenue growth H1 24 in lowering energy prices, with energy prices increased from H1 I would expect at least 50% on H2 23 - more like £395-400m for H2 2024.

My typo on £460, thanks.

I still think that a 40% revenue growth on H2 23 is too low.

@DD - thanks for the comments.

In response I would say that FY23 broker forecast was £425m in Sept 23, no TU until January when YU delivered £480 - 13% over broker expectations - so I would not be surprised at all if H2s growth is more than 30% up on 2023 H2 needed to beat the current £670m forecast especially given the rise in energy prices we have seen over q2/3. Would not be surprised if we don't see an TU from YU until late November or even not all given past behaviour.

In terms of the management target of 7% it is just that, there goal. I don't see this until medium term probably 4-5 years but hey they have to have longer term goals. What's key for me is the rate of growth that jas picked up significantly in the last 12-18 months.

With regards to cash on the books, the actual level of free cash is not that great - as a few have posted YU have to hold a significant (maybe £50m) on the books for the Shell deal - at least it earns YU interest - at YE there will be about £33m in ROC payments accrued less the the £9m prepayment leaves £24m. £9.25m for the forecasted FY dividend.

This leaves about £5m of free cash based on Liberums latest forecast assuming nothing else happens. So that is why if there is anything happening it will be small and in this ballpark in my opinion.

@SNN thanks for that, just read it through, much more professional than the old format.

Interested to see that the same wording regarding a £4m buyback is still in there, even through the £4m cash spent earlier in the year is already accounted for in the H1 cash balance.... Can't believe it's a typo.

I wonder whether the new format is to prepare for something...

@SNN - it was the wording change from Julys Liberum note that caught my eye. In July they said due to £4m buyback. Now it's assume. Also the buyback cash position is now in the H1 report and doesn't need to be assumed....

So have had time to read these through whilst on holiday in Utah so a bit behind everyone else. Overall as expected and reported in July. Nie to see the dividend 10% higher than Brokers July update so with a strong H2 still optimistic of a FY dividend above their estimates of 57p. With H1 EPS of 88p YU would have to go some in H2 to get to 200p + but you never know.

Anyway 3 things initially interested me and wondered what others might think.

1) BKs comments about lack of institutional support. I get the feeling that as they have now run 3 or is 4 institution days after results he was expecting some interest... It would be very interesting if this was the initial signal of a possible move to the main market...

2) Liberums note on FY24 year end cash made an interesting comment. "We reduce our FY 24 net cash (exc. leases) estimate from £100m to £85m.

We continue to assume a £4m buyback, £4m higher cash tax and a £33.2m

ROC payment in August." - have they been given a hint that there is another £4m buyback on the way...

3) Very interested to see YU pre purchasing ROC certificates for payment in August 25. They must have had a fantastic deal on them as that is free cash tied up. Any thoughts?

@SNN - a few days ago you implied that YU would have to hold a large sum on the balance sheet for the Shell deal. Can't remember where this came from, would you be so kind as to remind me.

Anyway got a couple more weeks over here before I get home to blighty so could be interesting to see what happens given the trader sale occured before results - wonder if they got spooked by that crazy 40k sell at £15.50😂😂