Member Info for ShareNicelyNow

Investor Meet Company presentation re de-listing. Can't see an RNS advertising this? But it's back from December.

https://www.youtube.com/watch?v=4guKrDos-sU&t=2s

Ex holder, no longer invested.

Https://www.msn.com/en-gb/money/other/why-britain-is-running-out-of-gas/ar-BB1rf4ip?ocid=msedgdhp&pc=EDGEESS&cvid=2ffb67a26b8146f68a5b57526705b277&ei=49

Detail of decades of poor energy supply in Uk, from failure to replace aging nuclear, over taxing North Sea producers and reliance on importing gas, especially LNG.

"LNG tankers are notorious for changing course in mid-voyage as new buyers outbid the last"

Welcome back, NewGacky. It's nice to have some positive support in fighting the good fight!

And as you allude to, the crux of the matter is the revised forecasts for 2025. If they come out with revenue at or over £1bn and on a higher margin than the 6.5% expected for 2024, say 7% or more, eps will be way up for 2025 - at the £3 mark, based on £70m EBITDA. Then it's how the SP reacts (assuming no bad news / a miss on 2024 numbers).

Quite Sparks. It's a completely bizarre post, impossible to make any rational or sane reply to. Everything has been covered in my previous post. But, he seems to have finally understood that broker numbers 24 months out are not to be taken literally.

DD - you keep referring back to the forecast for 2025. As you know, that is not a proper forecast and it is now 12 months out of date. Both brokers comment as such in the text of their notes. SP Angel comment they are expecting 2025 to be more than £800m and Liberum give a range from roughly £750m - £1.25bn. Both are waiting for revised guidance / forecast from the company with the YE update. They (company & brokers) can't forecast two years out with any degree of accuracy.

Consider broker forecasts at January 2023. The forecast for 2024 was £405m. Come January 2024, this had been revised up to £668m. The forecast of 10% growth is total BS. You are an intelligent enough person to see this.

Further, consider forward booked revenue for 2025 of £417m at June (58% growth on previous year). Six months to go for H2 2024 and on higher prices. Being cautious say £60m bookings a month in H2, maybe £65m and say £70m + for a a full on ramping twit. We can already see that 2025 has booked revenue of around £800m, already way over 'your' forecast of £715m. Still need to add 2025 bookings for 2025 - given past trends and taking pricing into effect, could be any where from plus £200m to plus £500m. Which is why Liberum are saying their forecast for 2025 is anything up to £1.25bn. They have simply done the maths on the numbers which are currently known and released by the company.

No body knows what the company will guide / forecast with the update. But all parties agree it'll be way over the £715m quoted. Leverage in the business model will also increase the margin. Hence, 2025 should be back to a year of growth (and quite a big chunk) on 2024 (flattish). Hence, an uplift in the SP and then some, if the PER also re-rates.

Time to trade long? Even tempted myself!

Https://www.statista.com/statistics/374970/united-kingdom-uk-gas-price-forecast/

Not sure this is spot or forward hedged prices. Any way, pre-covid, prices were in the order of 40p

https://www.marketwatch.com/investing/future/gwm00?countrycode=uk

This lists forward contract prices each month for 2025, average around 110p

Obviously, as new customers / renewals come up, these are the prices that are locked in for contract duration (1-3 years). Likewise, contracts signed in early H1 2024, are locked into the lower rates at that time, until renewed.

2025 will be a mixture of contracts on different rates, as every year is. As contracts are 1 year plus in term, I think there is a one year lag. Peak prices were 2022, meaning 2023 was the exceptional year, where upgrades came through the year, and profits / eps surged. With stable prices, the growth will trend in line with the growing customer base (Liberum are expecting another 50,000 or so customers (2025), ie 50% growth). For 2024, H2 will be definitely on lower prices than H2 2023, so the outcome for the year should be roughly in line with broker guidance (though they will have a margin of safety built in, allowing for a modest beat).

And if you read the text of the SP Angel note, they also refer to the 100,000 meters and say revenue will be over £800m on that. Add that to new meters in 2025 and again £1bn is in sight. So why do they say £715m? Where have they got £715m from, when they say 'over £800m'? How far over £800m do you think revenue will be?

There are no official forecasts for 2025 and 2026 - the company only guides 1 year ahead. They just add on a standard 10% or so as a place filler for those years, until the year starts and the company has done its forecasts. They can't forecast that far in advance with any degree of accuracy.

As for the £100 SP. It's not certain, nor is it complete fantasy or plucked from thin air. If the trends continue and if they get 5-7% share, then revenue will be £2.5bn heading to £3bn. EPS is close to £10 on that, and £100 is a doable 10 times multiple. It's a definite possibility 3-5 years out. It's not ramping if taken in context and read with a rational frame of mind. It's a possible outcome, amongst others.

You have not been alone in arguing the recent success is higher energy prices. Paul Scott took this view, as did the guy on the video below. They were trading sub-scale before Covid, and have grown customers from below 20k to 100k. Growth in customer numbers is not down to higher prices. Once prices stabilize, growth will return to trend in line with growth in customers - as you point out, at a lower rate than of late. It's the combination of more customers, but on lower prices (plus costs of Yu Smart) which has led to flattish profits this year. For profits to fall, Yu would need to lose customers (like the big 6) or be hit with high bad debts (and I do expect bad debts to rise again).

Further, as you are a trader, your mind is wired differently to an investor. You reach different conclusions on different time horizons to me and others. I don't think the board is unbalanced overall. It's more a clash of different egos. For some LTHs a journey and a learning curve. We shall see what transpires in the new year - uplifted forecasts and a CMD setting out longer term ambitions. Isn't a CMD just the company ramping itself anyway? Why they never seem to work in moving the SP!

Liberum's note:

They have a clear ambition to increase market share based on addressable business meter points from 1.8% in H1 24 to >2% at FY 24 and 7% in 3-5 years. Given the high visibility in the business, we assume that our FY 24 revenue estimate equates to 2%. Assuming no market growth, this implies that management believes they can increase the baseline of revenue by 3.5x in 3-5 years. We show a fan chart for those outcomes compared against our estimates.

The chart shows Liberum's analysis ranging from current estimate of about £750m, up to about £1.25bn, with £1bn revenue as the mid point for 2025. They will upgrade to a formal estimate once the company has issued guidance. Liberum are already forecasting a rough estimate of £1bn turnover. But I am assuming that the rules & regulations force them to formally publish the company's edict (until upgraded).

For someone who obsesses over broker numbers, and in particular the house broker and regards their forecasts as gospel, you are now saying the house broker is wrong?

Liberum also reiterate the margin guidance of 6-8%, but this will trend to the upper limit with leverage. They have done the maths, as we have. Try 7% of £1bn. You can work out the tax and after tax eps for yourself. Then try say 6.5% of £950m or 8% on £1.25bn. The effect on eps is huge and the range wide. But even at the lower end, a very significant uplift. And it's that range, the sensitivity to margins with a low share count (17m), that makes eps forecasts increasingly difficult. Hence, why everybody pitches at the bottom end, until guided otherwise. (And the company also has a record of guiding low. In fact, this is the first year when guidance has not increased throughout the year.)

You are welcome to your humble opinion. Opinions, like forecasts, change in the light of new information. Mine included.

Https://www.youtube.com/live/uPlHCLbRTjU?si=_xCBIIhzJ5JXjwTx&t=4805

Sparks, nothing to add really. Last year's CMD had little effect. There is only one main II, Miton, who are having to reduce to pay redemptions, so I think there will be the continued poor interest from institutions.

From the LTHs / PI side, I think the YE update will confirm meters at or near to 100,000, hence, brokers will formally be guided by the company to upgrade 2025 numbers, to £1bn or more, with a significant uplift to eps (from current forecast). The CMD will focus on future growth and profit ambitions, from numbers released in the TU. Without BK selling down, I can't see other IIs buying in. And as said before, this won't happen until the price is in an acceptable strike range.

There is a clear difference in opinion between the company and the market over valuation. But with an uplift in forecasts, and maintaining the current rating, we should hopefully see the SP adjust come the end of January. This though only serves to maintain the valuation anomaly. CMDs never seem to work in closing these gaps, when market opinion is entrenched.

Quiet on here now. Article on absurd costs of green energy - wind farms are switched off when it's too windy because power surges can't be used by the grid!

https://www.msn.com/en-gb/money/other/cost-of-switching-off-uk-wind-farms-soars-to-absurd-1bn/ar-AA1v7H7l?ocid=msedgdhp&pc=EDGEESS&cvid=c4f436af4df7482b8a4166a839f47909&ei=29

£6bn by 2030 - I estimate that's £200 per household (say about 30m households in UK).

The two large trades are clearly inter-connected, given they were at the same time - one a sale and one a buy. Trades between institutions in illiquid stocks are normally agreed by talking to each other, yes some people still do use the telephone! Price is agreed then put through the market. May even be PM selling, but another institution has picked them up and happy to do so without demanding a discount to the current market price. Confidence from institutions finally beginning to show?

More sales to come from PM. As previously mention by DD and me, the micro cap investment trust is in difficulty. 40% voted for redemptions - I expected this to result in the trust being fully wound up. They have decided to keep going and redeem the 40%. They say this will take time, many months to sell down some quite illiquid stakes. Can't see this trust surviving long term, it's become far too small. Est. they'll need to sell 70-80k shares here.

I also suggested the income trust was increasing its holding. This was based on previous info. from Miton. Looking at their AR, the Diverse Income Trust, Yu was in the top 15 holdings, a sizable stake (2.2% of fund at £5.1m).

https://corporate-premiermiton.huguenots.co.uk/srp/lit/NRGWVl/Annual-report-accounts_The-Diverse-Income-Trust-plc_31-05-2024.pdf

It's now dropped off, and that trust has also had redemptions since their YE. Hence, implies they've sold some, but not conclusive, looking at Mcap (rising since November last year) and relative share prices of their other main holdings.

Sparks, read the RNS from Miton in full. Last year just under 20% was redeemed, by selling all holdings pro-rata. This may explain last year's sp fall during October. They can't sell down 40%. The trust is in discussions with its institutional holders over the trust's future - a euphemism for saying it'll likely be closed and liquidated in full. It'll join the growing list of micro cap trusts which have closed, eg Downing. However, the trust is about 8% in Yu, and the trust is about £34m cap, so something like 170,000 shares in Yu here. Remember, Miton also have a similar fund, which is a unit trust (which may also be suffering from redemptions), and also the income trust, which appears to be increasing its holding in Yu.

If the trust is liquidated in full, it'll be a 6-12 month timescale. With 170,000 shares to sell, it should not be much of a problem. The company may even buy some / all of them. But a further sign in the decline of AIM and low valuations, leading to the exit of investors, which puts further downward pressure on the AIM market. Yu's forward dividend yield will give Yu some support (to a point) and the dividend for 2025 should be well over 100p, even more if they raise the payout ratio.

Https://www.youtube.com/watch?v=MnKXrATo1Lc

More from GW, though now sounding repetitive. From 6.25.

Https://www.yugroupplc.com/wp-content/uploads/2024/09/Yu-Group-Interim-Results-Presentation-2024-23.09-Final-Web.pdf

New super long Liberum note out. Management now targeting 7% market share in 3-5 years. Would equate to over £3bn revenue. Liberum also show margins recovering to 8% as revenue goes over £1bn, which is expected in 2025, if growth in meters goes to plan. The £3bn equates to eps just over £10 per share. Basically hinting their official forecasts for 2025/26 will be revised upwards in due course.

Liberum also point to accrued revenue at June (ie June's bills, issued first week of July) of £41,839 (2023 - £17,410). More than double. They say the bookings, new meters and contract start dates were heavily skewed into Q2. Suggests H2 revenue could be therefore significantly more than current guidance.

List of shareholdings given, now includes Schroders at 1.3% (not on previous lists).

Don't think he did speak to the DM. They are just quoting the RNS. Typical lazy journalists of today - just search the web and cut and paste stuff for articles. Probably working from home. Looked at Yu's website and lifted stuff from the last SP Angel note!

IPC - re cash. Investor presentation slide, point 1, as below. Also, small print in the accounts referring to covenants re the Shell deal. Also, the poster on here, NG, who attended the investor day and analysts' presentations.

I also said this at the TU "The cash balance is my biggest concern. It was £82m (including collateral) at December and it's only up £5m. There's £20m EBITDA, plus £10m ROCs to end of March (due Aug) plus another £10m ish ROCs to end of June. Less dividends, buyback, tax, some increase in WC. It should be up more? Any thoughts NG / IPC?"

There is missing about £10m cash! It took some doing to reconcile the cash flows, but this cash is in note 13, in "prepayments and pre-contract costs". These balances have increased significantly from June last year, through to Dec and again to June 2024, both at current assets level and non-current (ie more than 12 months out). In fact it's up by £10m since Dec. I have been struggling to work out what they are pre-paying - would normally be things like annual subscriptions or rent in advance for the year. My best guess is this is 'sales investments for growth'. Translation into English - pre-paying commissions to brokers in full at the start of contracts (rather than paying them say monthly or quarterly as the contract progresses over the 1 - 3 year period). Hence, a further drain on cash flows, could now be over £20m a year, but it will drift back 'in' over the contract term. Done to encourage brokers to use Yu and/or to get a lower commission rate. To repeat, this is my guess to what this is (retired accountant). Hence, reduced dividends than otherwise may be payable. But helps the meter growth numbers.

ROCs now being paid over - and why not. It's not really their money anyway, a bit like collecting VAT and paying it over to HMRC. All they'll do with ROC cash is put it on deposit till Aug. They can't spend it on themselves or dividends or else they would default on the ROC payment come Aug. The discount received must be more than the interest from cash at the bank. Expect more of this.

Re Liberum - no hint of a buyback. The £4m referred to is the £4m re-purchase of the directors' shares earlier in the year (obviously no institutional interest at that time, or else they would have been placed). Do not expect any more buyback or specials this year - the disappointment is a factor in the sell off of the shares.

They are doing as they said - managing cash for hedging and growth, and increasing dividends in an appropriate way. Clearly on target for 100,000 meters and will therefore clear £1bn revenue in 2025 by some margin. Expect 30 / 40% dividend in 2025, on a massive increase in Eps (overheads for Yu Smart will stabilise, stop increasing).

I would pencil in a final dividend of around 50p for 2024, ie about 70p in total.

Https://www.thisismoney.co.uk/money/markets/article-13885657/Many-AIM-companies-questioning-markets-future-warns-energy-supplier-boss.html

No one complaining that the website has not uploaded the SP Angel note or a copy of the presentation slides! Obviously, they want the numbers to 'talk' and have shut down all investor communications?