PAUL Scott Stockopedia comments. YU20 Mar 2024 12:55
From yesterday's results...
Paul’s opinion - fantastic figures, and outlook. It seems obvious to me that these are super-normal profits, caused by short-medium term opportunities provided by the energy crisis. YU management seem to have played a blinder with their hedging, and contracts with customers.
Once energy markets normalise, and people can shop around again for supplies, then it will be interesting to see if profits remain this high? Big Director selling would be a warning sign worth heeding I think, but there's not been anything of significance yet. Note founder/CEO Baljit Kalar owns 51.8% of the company.
Another bull case is that lots of smaller, badly managed energy suppliers went bust during the energy crisis. So as a survivor (which has prospered, not just survived), then maybe YU could have less competition to contend with in future?
There’s also the regulatory framework to consider, which might change if the Govt changes maybe?
I can see why people like these numbers/outlook though, they’re fantastic!
Note that the share price crash in 2018 was caused by accounting problems - overstated profit. Let's hope the accounting is more prudent now.