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Decided to re-invest most of my dividend ... ... Well actually, I'm trying my hand at 'trading' them! Will pull it back out after H1 update or perhaps leave it till H1 results. It'll be a bit like having got a bigger dividend, assuming the trade goes my way!

Brokers are now at the £400m revenue mark for 2023. Further upgrades will be significant. Though the last TU lacked any real numbers, we know that bookings are at record levels, and this has continued on till at least the end of May. This is far, far more than their own customers renewing contracts which expired in Q1. They are also picking up very significant new business from other suppliers (presumably they also had a lot of customers on short contracts up for renewal in the early part of the year). This rate of bookings is enough to double revenue over the course of the year, into 2024, off the 2022 base. BK did say in the last Vox interview he sees revenue doubling / tripling 2 to 3 years out, and the vibe from the level of bookings points this is happening. It means that £500m for 2023 is back in play as possible, and that brokers are way, way too low for 2024 and 2025.

With this sort of growth, I don't think they will do an acquisition of another supplier - they don't need to. Past acquisitions were to gain scale to critical mass, which is now in the rear view mirror. Also, as happened last year, they bring in a lot of sub standard customers, which either leave or end in a bad debt - an ugly and now unnecessary cost. Any acquisition will be a related business, such as the metering business bought last year.

Just my thoughts, so may be completely wrong!

If no major acquisition, then 2023 dividends will be increased very substantially. As a minimum, 30-40% of adjusted eps. And allowing for more upgrades, total 2023 eps should be north of 100p.

Just to be clear and remove ambiguity - there is the usual H1 trading update due in late July. Actual H1 interim results are expected in September.

Re the numbers etc - I expect they will be well above people are expecting. The last TU was strangely worded, kind of coy about just how well things are going.

Speak of the Devil - GW just popped up on Vox Markets, video, Yu mentioned.

Different sort of traders I guess.

We've been in a pretty wide 'trading range' for a good number of months now, say from 450 to 650p at the widest extremes. Looking at the chart, exponential MAs (20,50,200 day) looks like we are breaking above the 650 and the MAs are lining up all the right way to start a period of a sustained uptrend. This will bring in other types of trader - momentum traders who sit on the trend, until the MAs switch against them.

"With clarity and expectations now re-affirmed, the share price should resume a general uptrend through to September, not with standing dips and panic sell offs along the way. 600p resistance / support needs to go first."

And finally, 650p top of trading range needs to go.

Https://www.sharesmagazine.co.uk/article/the-utilities-supplier-enjoying-significant-share-price-gains

https://www.sharepickers.com/yu-group-yu-liberum-31-05-23/

Video also on Vox Markets.

His target price is similar to brokers. Looks like it's based on a multiple of 7 EBITDA and about 15 PER. It's also a 2025 target!

Both brokers are not adding back the 'loss' on derivatives, which is simply reversing the unrealised gain on hedging which was marked to market in the 2021 accounts and increased in the interim 2022 accounts. It's not real, and should be added back, which the company does in how it presents adjusted eps. PER of 15 is way too low as well. I would suggest 20 PER is about right for a utility with growth (15 without), but others may argue for a higher PER as the growth rate is above average - fair point, but I don't think we'll get it!

Broker forecasts are way off for 2024 and 2025. The company's current run rate of growth is revenue growth at over £150m pa, and increasing - as hinted at in the trading update. 2025 revenue should be over £800m at current growth rates. The trend is increasing, so if continues, 2025 at not too much of a stretch could be closer to £900m. (2023 revenue at £420-450m, 2024 at circa £600m and 2025 circa £800m)

A further and significant upgrade will accompany the interim accounts in September (especially if the gross margin exceeds the brokers' 16% - it was 18% in H2 2022, and margins are said to be growing).

Finally got the delayed AGM trading update! Sensible broker figures, more in line with my doodlings.

Revenue clearly at the £400m mark, with scope of some further upgrades as the year progresses, as further bookings will drop into the back end year months (though increasingly limited as the rest of the year pans out). Safe in my mind to lift revenue to £420m. Overheads consistent and bad debt % likewise with my figures.

Last year, the H2 gross margin was 18%. If the gross margin is maintained at this (or even continues the trend upwards) then a real big surprise is waiting down the line for investors (2% plus on £400m is another £8m in EBITDA to add to broker numbers). However, some hedging losses will hit the margin when, as expected, customers on contracts from last Q3/4 cease to trade on very high rates (the excess power bought (on hedge) will be sold back at much lower spot prices). This last point is my biggest concern here, not just the bad debt but hedging losses on excess power Yu will have contracted for. But so far, it all seems lost in the overall mix of things.

Looking at the SP Angel note, I don't think they have added back the derivative write-off in adjusted eps, so this needs increasing - about 76p by my reckoning.

The market is still having problems believing the forward numbers here. July update usually gives a revenue figure, which will provide some proof, but it will likely take until the interim accounts (Sept) before the share price properly reflects 2023 expectations. By this, I mean a PER of around 20, so upwards of £14. Still barely on 20 times 2022 numbers!

With clarity and expectations now re-affirmed, the share price should resume a general uptrend through to September, not with standing dips and panic sell offs along the way. 600p resistance / support needs to go first.

OB - a very effective analysis! Most useful.

Well, I was wondering where the liquidity / higher trading volumes had disappeared to of late. It's there as soon as the sp decides to move, one way or another. Hopefully, it's just nerves, or stop losses set at 600p. The alternative is a leak of bad news over something.

To restate the obvious from both my last post and Sparks - many customers signed short contracts to expire at the end of March. If they had signed one year contracts (or longer) the forward bookings at end of December 2022 would have been very much higher. The distribution of forward revenue is roughly £100m in Q1, and then £50m for each of Q2 to Q4.

Implies - (1) profit in Q1, with £100m revenue, and only 1 Q's overheads is very significant, almost as high as all of 2022 combined. (2) it implies that £400m is possible for the full year, and that roughly half of their customers are up for renewal in Q1. Bookings in Q1 are therefore going to be at record levels, should be over £50m for Q1, but will perhaps average a little lower, as they will give a figure which includes April as well, which will be a slower month. If confirmed, then revenue for 2023 is already at £400m (forward contract basis) and more bookings for the rest of the year will add to this, as will the off-contract customers.

Rising number of meter points means they are bringing in more new customers than they are losing to people choosing to renew with a different supplier, plus customers lost as bad debt (ie they have ceased to trade). This is an indication that bad debt has reduced somewhat (high bad debt implies lost meters). Bad debts are costly, not just because of the bad debt charge, but also it's a lost customer going forwards which reduces revenue going forwards.

Black swans aside, the update should be very positive. But, I think think the market will react more to broker comments - upgrade or no upgrade! It's only a matter of time though, before the current year forecasts get into the sp - ie a valuation based on forward numbers, rather than remaining on a multiple based on 2022.

With those figures, they are on course for around £45m in H1, and should go over £90m for the full year.

However, the most significant point is the comment on gross margins. This is up, and by quite some, on all market estimates. 3% on nearly £100m revenue - easy maths - an addition to profits of £3m is large in comparison to forecasts.

I'm still sticking with £95m revenue for the year, and EBITDA will be at the top of range guess of 19-21m.

But, re valuation, as we are now genuinely profitable, and producing a proper eps number, I think the market will switch to a normal PER rather than a multiple of EBITDA. On this basis, the valuation is lower and so I can't see 100p until the H1 update, or perhaps not till H1 results. My valuation is now around 120p (based on 20 times eps). It will be next year, 2024, when this really takes off. If Europe comes good, a clear multi-bagger 2 to 5 years out.

Https://www.lse.co.uk/rns/YU./agm-trading-update-lq9i6h18yvr3403.html

Link to last year's update - limited information.

Taking the bookings number (2022) of £13m per month - so 13 times 3 = £39m annualised for Jan to Apr, Q1. Roughly 9 months of this would fall into 2022 numbers, so £29m. Adding this to brought forward contracted revenue at December 2021 of £157m, gives a figure for 2022 revenues of £186m. This is an 'at least' figure for estimating 2022 revenue, with information available to end of Q1. No broker upgrades were made to the then estimates of £215m.

A similar calculation should be possible when we get the numbers next week. We know that Q1 bookings are significantly above £24.5m. March should have been even higher to tie in with the changes to energy support. If this calculation gives a total, which is an at least number as further bookings will accrue for 2023, is more than broker estimates (£335 - £350m) then an upgrade is possible. If it's less, then we won't get an upgrade (as in 2022).

My guess is, that this rough calculation will give a revenue figure of £350 - £380m. However, I reckon they will wait until the July update to upgrade. Those who are astute with the numbers can do the maths for themselves, in terms of eps. The downside is ... ... if 'the market' is expecting an upgrade and we don't get one, the share price may fall! But that's the insanity of markets. Sorry folks, I'm just being realistic! (aka, Sod's law)

In summary, the update will be very positive, but light on detail. The bookings will point to 2023 revenue at or around the £400m mark. I hope for a broker upgrade, but the realist in me thinks they will wait until July.

https://www.growthcompany.co.uk/
Might help if I wasn't logged in!

Looking at last year's AGM, we didn't get much - just confirmation that on target with market / broker expectations, plus the bookings number. No broker upgrades! Hoping we'll get more this year. Bookings should be huge in Q1, as a lot of customers signed short contracts to expire end of March to tie in with the end of gov energy support, as indicated by the forwards bookings distribution which is heavily skewed to Q1. Should therefore give better visibility for Q2 to Q4 with a revenue upgrade. But they may play it cautiously and wait until the July H1 update. I'm saying, don't bank on an upgrade, however, the bookings figure will clearly point the way ... ... ...

"There are several stocks listed that we have not covered recently but might be worth a look. Yu has been mentioned to us by a subscriber as interesting and is a stock we should revisit."

Snippet from Growth Company Investor, May 2023 - came up on a stock screen list, companies with high forecast growth, but on low ratings. But sounds like a subscriber had already tipped it to them. Hope they do start to cover the stock again. Actually a really professional publication, far, far better than SCSW.
https://www.growthcompany.co.uk/latest-copies

The shares have only risen 13% since we tipped them in February 2022 at 77p. This is largely due to a difficult stock market backdrop for growth companies because Equals has made great strides during last year which saw several upgrades. Revenue grew 58% and this momentum has continued with the first quarter running 54% ahead of the prior year and 13% up on the fourth quarter.

The Solutions Platform is attracting larger corporates by offering own-name IBAN account(s), allowing clients to collect payments in multiple currencies, while paying their bills locally and exercising central control over the process via API connection. The onboarding process can take six months for these big customers but they ought to be sticky. With a healthy pipeline of quality clients, growth should be sustainable and medium term prospects are underpinned by the proposed Oonex acquisition. This will bring licences and banking relationships in Europe, more than doubling the addressable market.

As a platform business Equals is seeing increasing returns to scale with its ebitda margin rising from 15.1% to 17.4% last year. Forecasts have it improving to 20.3% for 2023 followed by 20.9%. Cash is expected to grow from £18m at the end
of 2022 to £66m over the next two years, which is equivalent to 36p per share. Very attractive on a p/e of 12.4x.

From Growth Company Investor / David Thornton
Recommendation - buy

https://podcasters.spotify.com/pod/show/london-south-east/episodes/The-London-South-East--Investing-Matters-Podcast--Episode-34--Andy-Brough--Head-of-Pan-European-Small-and-Mid-Cap-Team--Schroders-e1unf4l

TRMR discussed from 37.11 (top one, 15.02.23). Some very odd comments from Andy Brough, sounds like he wanted out at the £7 - 8 price, but couldn't sell all he wanted. Also, seems like the top three holders are co-ordinating together to realise value, next year, after the managements' incentives come to an end. Reading between the lines, they are pushing for a sale and expect further consolidation as their way out.

Once the incentives end (SBCs), the top three S/hs won't vote for any more SBC, so there will be no incentive for the management to continue, which is the catalyst to force a sale.

https://www.sanford-deland.com/6/the-funds/the-buffettology-fund/fund-performance

Hope the link works. Click on March factsheet. (Unable to link directly or to copy the relevant text.) If these guys are out, a very serious re-think is required.

ipc - re any potential trading update ... ... ... on further consideration, I am now in the mind set that it is unlikely there will be anything before the AGM. It will be into the third week in April at the earliest before they will have crunched / reconciled their numbers anyway (March's bills won't be out to customers until at least a week into April, and as normal practice, most will be estimated). It's perhaps, still, too early in the year for them to make the call, with certainty, that £350m revenue will be exceeded.

They have never given quarterly numbers in the past. Likewise, the AGM update is very thin on numbers and detail - just wordy saying that the year is trending over expectations. Though this should suffice to show that broker numbers will be beaten and should therefore fix a floor to the valuation / market price. Most sellers who want out will be out by now. But as ever, drip sales will continue, but with no new buying interest coming in without news. Unfortunately, I think we are stuck with this sort of sp until mid May - given lack of liquidity it could go either way, a slow downward drift as is typical with Yu or get stuck in a horizontal trading range. I'd feel more comfortable with a sp closer to 600 than 500p.

Not that any of this really matters. I've gone over past updates, looking at figures for bookings and how these turn out in the final numbers. Suffice to say, 2023 numbers will be well, well up on last year, and on a bigger margin. There's no worries on that score. However, what is much easier said than done is ... we all perhaps need to emotionally detach from the sp. Difficult, given the drop from the high, and the screaming undervaluation. And tbf, we are not the only share on AIM priced in a similar manner.

Well, very cheap here now, on a forward eps multiple. In fact, about the same as this time last year on the same relative metrics!

2022 - sp about 250p, forward eps came out at 30p, so about 8 times!
2023 - sp at 500p, forward eps in the 'market' around 60p, so strangely both figures double!
(Though the final eps should be much more than 60p, so really valued cheaper now than this time last year.)

The difference for this year is the leverage now in the P&L account, as the overheads are covered and Yu is past break-even profit. What I mean is, that as trading updates and broker upgrades come out, the uplift in profit and eps will be very significant (more so than in 2022), hence, there will be bigger, sharper steps up in the share price. And as confidence returns to the 'market' the rating will trend back towards a 20 times multiple.

So, roll on next update.

Watching this one, as an ex holder. They seem to have addressed most of my points in last posts.

Q1 is well up, will be about £21.5m by close of month. Solutions has flipped into gear and is up around 50% even on Q4 of 2022, hence, the underlaying pipeline of new business here is 'hidden' and likely much more to come.

Gp% also edging up by around 1%. My expectations for the year are now revenue of £95m (excluding the acquisitions), and EBITDA in the region of 19 - 21m. Valuation depends on the multiple applied, which I guess is somewhat personal / arbitrary, but clearly well above the current sp.

Good to see clear out of travel cash - just too much stuff in here, gives a better focus. They haven't splashed a lot of cash to buy a substantial EU business, but acquired a small start up (loss making) to get the regulatory licences, which seems on balance a reasonable way into EU expansion - they are free to launch their platform in the EU without the complexities and costs of buying another substantial / established business to convert over to their own platforms.

Pleased with Q1, and with a clearer forward plan. Looking to get back in as a LTH, when my finances allow it!
GLA in here.

https://www.msn.com/en-gb/money/other/370-000-small-businesses-at-risk-of-downsizing-and-closures-next-month-warns-industry-group/ar-AA191dKm?ocid=msedgdhp&pc=U531&cvid=d48512be9df24c21b5b45b44afb03c41&ei=46