Member Info for ipcutler66

So being away in the USA at present, meant I didn't see the TU until late morning by which point a hefty sell off had occurred taking the price back down to pre TU announcement. Managed to read Liberums and SP Angel notes as well.

Overall still happy to hold as I am a firm believer that there is still good value to be had - both from an SP uplift and distributions.

TO - my low estimate was £315m so slightly under that but I suspect it will be close come final figures in Sept, but still great growth on prior year. (Well done DD for the 300-310 range)

Bookings - very clearly down on prior as they stated - softening prices and mild spring are the reasons given, I wonder if maybe a shorter AVG contract period may be in there as well….

Brokers have all held margin estimates but I am optimistic that it will be closer to 7% rather than the 6.2% Liberums have. This was an area where the brokers and interims differed last year.

Meters - Really good to see more meters than I had anticipated at nearly 19k new. This does put them close to the 100k meter figure for 2024 full year if they keep up the volume acquisitios.

YU smart seems to be performing well and continues to grow quickly.

ROC payment slightly higher than expected but again in the right ballpark.

Cash is looking good, if they continue on track then circa £100m at year end (albeit with circa £25m of ROC included) still leaves a sizeable cash pile.

The lack of any real comment on distribution is disappointing but we are now back to waiting on this, as they could do this at anytime.

September will be interesting,with Liberum forecasting a FY divi of 48.9p(£8.1m) 16.3p as an interim, we are still no clearer as to what they will do with the remaining £67m or so at year end…. I would be hoping at the very least fro them to distribute £17m or so in this FY.

Anyway let's move on toward the September interims and let's keep the board for sensible discussion and not name calling please.

@DD I am using 16.7m shares and 25% obviously and I said in the region of £25m, would need to be £26.7 PAT to get to the 1.2 EPS. 1.1 or 1.2 EPS is way ahead of current brokers either way and my jottings below are based on continuing 2023's contract numbers, which YU implied were being held back by the Smartest deal due to the need for ever increasing collateral with them. Iam certain that we won't see PBT numbers next week, might get EBITDA if we lucky but definitely H1 TO and hopefully bookings. With those the brokers will reevaluate, publish new guidance and we can all then update our calculations and positions.

@SNN / DD

Definitely in the same ballpark SNN, my lower case estimates - based off continuing last years bookings of £55m new contracts/month (approx £2.6m business / month) gives me H1 TO of £315m and PBT in the region of £25m (Inc interest of £1-2m on cash balances). EPS of 1.2 after tax or so. It doesn't take much to get to EPS for H1 of 1.3.

Now if the Shell deal releases the brakes on new business and YU are booking more like £65m of new business then the numbers get bigger quickly....as do the free cash balances. I am still of the opinion that they will be holding at least £50m plus ROC in the bank so the H1 numbers will be pretty much what they could distribute, remembering that they have already spent £4m buying the share options into treasury this year.

I have pencilled in £30m for August payment.

Good to see that the vacancies have come down, the engineers is one of the reasons I have down for the decrease in EBITDA% this year. I like that YU have been cautious with a 6-7% forecast. I would guess that each engineer fully costed (salary, NI, pension, expenses, vehicles and kit, training etc) would in the region of £100k/year, that's a £20m overhead. Some of which was included last year - how many vacancies were there at start of the year? I recall 120 odd? If it was then it's an increase of £12m for the engineers.

@SNN good fine on the charge to Shell, it will be interesting if any comment is made at all by YU about this, not sure it needs to but I believe it will be one of the reasons that YU maintains a very healthy cash balance. ( I am expecting ROC payment + £50m in the bank as a minimum- very cautious but YU have been since 2018).

@DD - any decrease in revenue / meter could be for a number of reasons and not just falling energy prices which has occurred but not by as much as some forecast. For example different customer types coming onboard. For me now as I have said a few times now, just be patient, the figures will be coming out this month alongside notification on what they are going to do with some of the cash - and then as SNN says we will see broker updates again. GLA

I agree it is, but have been here since 2020 so in no rush, patience is the key here. Next week we will get news of at least what they are going to do with the £12m distributable and hopefully an update on YTD progress. With FY24 TO expected to be £680m+ (FY23 £460m) and EBITDA in the 6-8% should lead to PBT of £40-50m. EBITDA is down on 2023 due to the decreasing market prices but will still deliver good profit growth in my opinion.

Thanks Sparky, I am hoping for 65-70k meters as that will show continuing good growth - which I feel is in line with the vague comments so far this year from YU that the year has started well.

Just a case of waiting a couple more weeks now for the news and then see what happens, but if we are in the correct ball park then we should see another significant upgrade from the brokers and then with either a share buyback or special dividend a good uplift in the share price.

So chances are that we will now see a TU after July 3rd and the court signing off on the share premium account cancellation. As we haven't had any new since the finals I now expect them to confirm the share premium cancellation and then hopefully a TU and confirm a special dividend.

I am not expecting any more shares to be bought back as they have already spent £4m this year.

I would hope to see the £12m premium account distributed as a one off special dividend - circa 70p.

Mid year TO of £360m would be my stretch target for them, as the 2nd half is historically stronger than the first.

EBITDA in the region of 7-8% would be my target but I am hoping for a bit higher as Energy prices have held up so far.

What are others hoping for...

FY23 dividend was 40p - 3p paid at interim and the 37p just declared.

FY24 could be substantial more -we have a large cash pile. A declared policy as follows

"Board confirms the intent to progressively increase dividend distribution, in a sustainable manner, as earnings grow whilst maintaining at least 3x cover on EPS in the short to medium term."

Should lead to a significant increase this year, I am hoping for £1+

On top of this there may well be a special dividend of up to circa 70p/share when the court approves the cancellation of the share premium account on July 2nd(hopefully).

All in all it is looking like a very good year for YU and we will start getting confirmation when the next TU drops, as @SNN says possibly next Tuesday or sometime early June at the latest.

@SNN / Sparky - The more I think about the options the more I am happy with what how they have handled the option sale. The options are vested to reward results and share price growth - these were vested if my memory serves me correctly for hitting about £6 in 2023 - do correct me if I am wrong.

With the SP north of £17 it has certainly been a good few years for share holders and I think that if the directors want some good returns then I have no issue with that. The purchase by the treasury is again a useful exercise - as you say covers the next batch of share options as and when they are exercised.

Hopefully this week we will get shareholder approval for the cancellation of the share premium account and can then move on to get court approval in time for early July - will be really interesting to see what they then do.

What I think is interesting, and hopefully confirms the 31/05 as a TU date, is the RNS came out on the 17th - exactly 14 days before a Trading update.....

HI Sparky,, I tend to agree with you but I also think the management team are focused on the longer term and bigger picture - I fully expect to see a TU update at the end of the month and in line with the comments in the Finals in March I expect it to be very positive again. The management are delivering the business, the market (mainly some PI's) are not patient enough to wait for the rewards. They have been trying to bring on board more II's but with the lack of any TR1's suggest that this is proving difficult due to the low liquidity to get any significant holding - will BK consider selling some - I don't think so not for a couple of years when the price is where he believes its value is. Whatever happens this is a cracking company, delivering amazing results and room for significant growth from here even for new investors - they just need to be patient like we have all been.

The price of the other trades at the time. Sells were 1858, buys at 1872. This is almost certainly a worked order by one of the market makers on behalf of a client.

Yep whoever is buying up is still doing it. There will be a TR1 at some point and we will find out who it is.

Whether they go down the route of share buy back or special dividend or a combination of the two we will wait to see (assuming we as share holders approve it :-) )

Yes it is it gives permission to the BoD to buy back up to 10% of the current share capital.

@NG - some really interesting points raised - the key numbers are above my current forecasts but I can see how you come to them. As you say the key is that 100k meter target and I can see how that then leads to the others.

I would be amazing if they hit their 2024 target as you are right that then leads straight into their longer term ambition of 5%- and I agree if they hit 100k in 24 then there is no reason why they cant get to the 165k in 2025...

I suspect that you are correct in your view on the old supply agreement - it got to the point where it was constraining growth - we should find this out in the next 4-5 weeks when the next TU comes out.

This is one of the best BB's for genuine discussion and ideas that I am a party to, so again thanks to all who help maintain the quality.

They are not - they are valued by the market and at present the markets very happy with the company's results and as I said I suspect that an II or HNWI is taking a stake as we have now had 5 days of large after market transactions posted accounting for over 300k shares. Will need to get to about 500k for a TR1 though

@lucian, doesn't bother me at all, cash position after return of collateral of £82m. EBITDA for 2023 of £42m, the company is now profitable with good margins - expected 6-8% for 2024.

What are you reasons for asking?

There is pretty much zero chance of a takeover as CEO owns 53% and has his sights on a mountain Ch bigger business - 5% market share is the stated aim, up from 1.4% now.