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ipc / Sparks - quite. Ridiculous. But that's traders. Trade the trend, trade the chart. A few others will be panicked into selling as the sp fall tests their nerves / confidence. It's the price of a very, very small free float, now significantly less with Bayford in. Great opportunity to pick up the shares sold though!

May not be any news till AGM. A long wait in the markets! But Q1 EBITDA will be close to the full year 2022 figure. (100m at 18% gp, even bad debt at 7%, and 5m o/hs = 6m) - vertically back up again. It's both mad and maddening from a holder's viewpoint.

This was because businesses typically purchased energy on long-term contracts and the effect of fallen gas prices on the market would not be felt until later in the year.

He (BK) said: “Remember, customers who signed up in third and fourth quarters last year will still be paying these very high wholesale prices into the second half 2023. I think the government should look at that. I think they should continue to offer much needed much appreciated support to businesses in terms of the EBR scheme – however long we can extend that out would absolutely receive my vote.”

BK making the same point about the large drop in wholesale prices.
https://www.cityam.com/big-six-energy-firms-asleep-and-should-be-worried-yu-group-chief-warns-after-record-profits/

ipc - yes, having checked earlier. Still feel uneasy though having them as a holder / gut feeling, seems a bit predatory, they are a sizable private concern.

There's about 71% of the shares listed on the website holders page, now 74% including Bayford. Estimates are a good 10 pis with around 1% holdings, plus another 20 or so with half of 1% holdings. Leaves barely 5 - 6% of shares left. Knock off other firm pi's, and it's just traders trading against each other in a zero sum game, taking the sp on wild swings, detached from a real valuation. All pretty mad, dysfunctional really. There's no way any II can buy in here, and no II's with large enough holdings to sell part down to another II to let them in.

We need news, and good news re the rest of the year. The first Q should be in the bag, given the revenue was forward booked and comments in the results about a strong start. £100m revenue, in one Q with only 1Q's overheads will be very profitable. However, gas prices have halved since December, so new bookings will be at half the rate (which is good re bad debts). Customers who have recently signed say a one year contract though are in a tough spot, stuck with a relative high rate for 12 months. There are bookings through into 2024, so a sizable proportion of customers affected. This seriously worries me, for them and for YU, should these customers terminate early.

SP and chart looking dreadful, can't see anyone buying in to stop the fall without news, good news! Tin hat job! It affects the confidence of holders, the nature of the beast. Any confirmation from the company that Q2 trend is as Q1 and it will all flip the other way! Big time.

ipc - Bayford is not an ii, they are a direct competitor to Yu, and own 'E' gas and electricity and Raw Charging. They have previously been shareholders and sold out, now back in. I do not consider this a good development.
https://bayford.co.uk/energy/

ipc - thanks. Interesting and intriguing. I wonder if they are waiting till the end of the quarter to update, once Q1 revenue is known? If Q1 pans out as per the forward bookings at £100m mark, they will be obliged to update, as it becomes apparent the brokers' forecasts are way too low. Like you, some sort of update in April would be welcome to guide for 2023, and also knock some sense back into the share price.

Totally agree. It's the PIs who have run out the door, especially traders who were looking for the sp to go up, not down, forced sales as they need the cash back any way, or to trade out, to buy into their next target company's trading / results day in their sights. It will be investors with more sense (IIs) buying on the other side of the net trades sold by PI traders.

Normally, the next update is the AGM, when very little is given. Then it's July, and H1 update, with a revenue number - hopefully around the £200m mark, which should bring reality back to our valuation. We may or may not get something in between - depends on broker forecasts. As yet SP Angel have not updated - figures are as of January, pending guidance from company. Has Liberum updated? or are they still on January's numbers as well?

ipc - see results centre page
https://www.yugroupplc.com/results-centre/

https://www.yugroupplc.com/wp-content/uploads/2023/03/13.03.23_YUG_AR22_webcopy.pdf

Gross margins - if you take the full year numbers and subtract H1, you get H2 numbers. Thus - Revenue of 150m, cost of sales 123m and gp of 27m. This is a gross profit margin of 18% for H2.

It is perhaps better to take this as a base margin for 2023, which may even edge up slightly. That's another 1% on to the perhaps 400m revenue, and another uplift in eps. SP is massively oversold. Once the market cottons on, uplift in sp will come. All in good time.

Crikey, some sp fall! Hope it wasn't my last post!

I read the AR which is up on their website (very early with this this year). There is a graph plotting the distribution of the forward bookings. Roughly - 100m in Q1 (2023), and then 50m each in quarters 2 to 4, totalling the (rounded) 250m.

Interpretation - revenue for Q1 may exceed £100m, once you add in off contract customers, plus new customers who signed in January. Confirms that they have had a strong start, to put it mildly!!!!

It also means that by the end of March, half of their customers' contracts end and are up for renewal. As we know, many signed short contracts tied in the the energy relief scheme ending in March. These will be renewing throughout the first quarter in advance of April. Basically, £200m annualised revenue is possible to be booked in three months (Jan to Mar), ie £67m average in monthly bookings - again ties in with comments in results, but no figures were given. Obviously, only £150m of these bookings would flow into 2023 (Apr to Dec).

On the face of it, revenue in excess of £400m for 2023 is on the cards. But of course, there will be new customers, but balanced by those who renew elsewhere, and customers who cease to trade (bad debts) and then their revenue is lost for the rest of the year. New bookings are also perhaps at lower prices than in H2 last year, hence, tbf, forward visibility is actually pretty difficult. However, it's clear there will be significant revenue growth. £500m though has no chance. Might get lucky and end with £420 - 450m. (eps would be comfortably over 100p, even with bad debt remaining high)

The sell off is down to missed expectations by PIs. Most trading is by pis in my opinion, trading a very small number of shares available. Panic, forced selling at a loss etc and not looking through the figures to 12 months out. Some herd mentality going on. The bad debts has clearly been a shock to all, and will take time to recover credibility.

Well that's been a lesson in how not to manage market expectations! Massive sell off deserved, frankly. The interims clearly state bad debt expected to be lower for the full year and the SCSW article also indicated a figure below the brokers. I had 6.5% in my 'model'. The market was expecting the brokers' numbers to be beaten, they always are, but this time ... ... no! I feel lied to and misled by management - anyone else? Mind you, I wasn't so naïve to be expecting bad debt to down at 3 - 4% !!! Hence, the big sell off by PIs. But, the 1% in margin is nearly £3m in profits, a big hit to eps and therefore the sp.

Excluding this, my 'model' is spot on throughout the p&l account. Also, dividend is 10% of eps, so right there, though I was expecting eps of close to 50p and a 5p dividend!!

Other area of concern is Yu Smart. Only about 1,000 meters installed (plan was 7,000 per interims). For 2023 they are saying several thousand - what does that mean? 4,000? compared to 40,000 nearly per the interim plan. They are focusing on their own customers. But, there is the odd comment on using debt to roll this out on a bigger scale. However, Smart Metering Systems (AIM SMS) is way ahead, doing 40,000 a month (yes a month, no typo), market cap, over £1bn. The promise of Yu Smart looks dead. Is Yu Smart too much to take on? They can't seriously try and be SMS, as well as an energy supplier.

Bad debt is real, the loss of meter points shows the loss of net customers. Add in new customers, and the number of lost customers is higher, most lost due to cessation to trade, leaving bad debt. There have been a few energy suppliers exiting the business market, this last year - bad debt making it less viable.

They no longer show £500m as a target for 2023 in the presentation, just a medium term aim.

The good points (and there are some) ... ... cash is really £2m higher (they received £2m in early January from Gov re the energy relief scheme). The forward bookings excludes off-contract customers, which are considerable, pushing the underlying total to the £300m mark. Also, as previously commented, many customers are on short contracts of less than one year which further supresses the total. Given the bookings are well up so far, revenue growth looks to be substantial for 2023. However, much of this will be down to higher prices still trending at at least twice the pre crisis levels ... I can't see energy prices going back to where they were, if ever. Clearly, this is a risk for bad debt going forwards, and also meter point numbers. Lost customers through the year will hit contracted revenue numbers too.

Stab at 2023 numbers - Revenue at £400m, gp 17%, bad debt at 6.5% and overheads of £20m, is giving EBITDA of £22m. Leads to eps of 100p with a tax provision. So, some hope the sp will recover later in the year. But we need stable energy markets / pricing.

Two thoughts -

Official info in the market / public domain is the brokers' numbers of eps of 30p ish. On this basis, at 750p, we are on 25 times PER. The market is already pricing us at a premium to 20 PER, as it is clear the growth is at pace, above normal. It's therefore possible, should we get real eps of 45p or more on Tuesday, plus confirmation of very high growth for 2023, we will at least maintain a PER of 25, and maybe more - say 30????? !!!!! Who knows? We shall see!

Funny, it's not all that long ago, the sp was below 300p, and discussion on here was, how could the company get the sp to 500p before the results in March 2023, to trigger the share bonus options for the top team! No worries on that score now, eh?

Gacky - star man. More than helpful. Ties in what BK said in last Vox interview re opening up the shareholder base for dividend seeking funds. Such things take time, but (my take) the road map is to sound out ii interest in investing, by secondary placing, at what sort of price range and what sort of capital allocation policy (ie dividends vs any debt finance for Yu Smart). Suggests results are good and that there is clear visibility forwards for 2023 / 24 revenue and profit growth (substantial growth).

Any one got access to Liberum? I've picked up some confusion over these planned meetings - some saying they are for HNWIs, and others saying institutions. Please anyone confirm either way?

Cheers, IPC.

Yes, very excited to see how the real numbers will come out. All we 'know' for certain is that they will be more than broker's notes. Should be big upgrades to their 2023 and 2024 forecasts. Looking forward, as we all are, to news on Yu Smart rollout, how this will be financed, future dividend policy, current trading monthly bookings and the number of meter points (a figure strangely missing in the January update). Also, any comments on growth / acquisition plans.

Plus any comments on widening the shareholder base. Can't see this happening without some form of secondary placing in due time. I've said before, there are a fair few PIs with over 100k holdings (which is getting on for 1% each) and must be another 20 (maybe more) with holdings averaging around half of 1%. Over 90% of the shares are in firm hands.

Will be a very significant & important results announcement.

Well, some run up to results in play here. Possible leak of very good news?

Playing with numbers, just for fun -
Revenue of £280m. GP% 15.5%, so gross profit of 43.4m. Overheads of 15m. Bad debts at 6.5% of 18.2m, equals EBITDA of 10.2m. Tax at estimate of 23%, profit of 7.9m, and an eps of 47p (16.7m share count). The SCSW note says bad debt is below brokers estimates, but says no more, it does not suggest bad debts are down at 3-4%. The important thing is, the brokers still have a very high bad debt figure for 2023 / 24. Their new notes for 2023, will have lower provisions and higher revenue figures, so their upgrades for 2023 will be very, very substantial.

Back to 2022 - if bad debts are 6%, eps models at 54p, and eps is 60p at 5.5%. GP% may come in a tad up as well, another half a percent and eps is up another 6p.

All for fun! A bit pointless arguably. We will have to wait. In all fairness, as said before, I'm hoping for eps of 45p plus, and a 900p share price. In theory, could even touch over 60p / 1200 sp!!!

As for the dividend ... .... .... It's best to remind ourselves that the cash balance is not all the company's. It includes the ROC monies collected from customers from April, through to end of December. Our cash will be sub 10m, from which a dividend can be paid. They also need 2.5 - 3.0m a quarter for Yu Smart investment. I am hoping that they will choose to finance this by debt / overdraft type going forwards, to free up the profits for dividends in 2023 and beyond. The modest dividend will be what it says on the tin, say 10% - 20% max, of the eps figure. So at 50p eps, IPC's guess at 5p, no more than 10p, has my vote.

The interim and final dividends for 2023 will be in a different ball park. I don't mean to make a prediction, but sp is possible to go over £10, next week, even before results are out. Everything is just so sensitive - a small difference in margins is a big change in profits, and then this big change is on a small share count. The range of outcomes is too wide to call. The brokers and even BK has admitted to underestimating expectations (last Vox interview).

Overall, doubts! A lack of direction, lack of clarity and forward vision as to where this is going. What is the target market / customer they are aiming at? Not sure they have built a platform that has a purpose. As fdh said - a man without a plan?

One I am very closely watching. I suspect they still may be holding a good hand, but the cards are held close to their chest. Solutions needs to win sizable enterprises as clients, and a good many of them. The intriguing pull is what is in beta testing.

Purvis - thanks for the post and your thoughts. Partly, my decision was personal - I needed funds for something else which was a pure no brainer, already more than double, and likely to double or more again in 6 to 9 months time. Also, my holding was large and not in my ISA, the CGT bill is uncomfortable! (But can use the annual allowance and a big chunk of losses from a few years back.)

The valuation here seems wrong. However, looking at Argentex and Alpha, not particularly out of line (roughly 20 times PER or 13 times EBITDA). In part the valuation is being held back by wider market issues / recession concerns etc. I can't see this getting any lower, therefore, as this year goes on, the sp should rise as this year's profits growth comes through in trading updates, and if the company has guided correctly, the market expectations will prove conservative. As a minimum then, the value is 17m EBITDA (plus?) times 13 (more in better market conditions) which is £220m, say about 135p per share. From a price of 90p to 135p is a 50% gain over the next 12 months. If I had funds, I would buy back a smaller position inside my ISA. Not many shares appear with that upside in one year.

My doubts are about growth. The company seems a bit of a dog's breakfast of different products not really integrated. The previous strong quarter on quarter, consistent growth, appears to have stalled in H2 2022. Solutions is not where I was hoping it would be (more revenue by now). IST did address this in interviews (other major shareholders may have raised the same question). He said the trend continues upwards and he feels it unjust to measure progress monthly, or even quarterly. He is limited to what he can say, but suggested there is stuff happening 'under the hood'. He certainly intimated further positive developments.

They did previously suggest dividends were a possibility. Now, no. They are keeping cash for acquisitions, and likely to be over seas expansion. Not sure I like that idea, sounds like a sizeable acquisition, given their growing cash pile. If their tec is top notch, paying for expansion doesn't make sense to me - buying customers to put through their tec?

A lot of growth is in the white label offering. They say Solutions can be white labelled for IFAs, estate agents and removal firms! Again, seems to be a lack of growth / demand for their products in their own name, directly. Seems a lack of direction and a lack of demand for the platforms they have built? I have doubts! Should be an open goal for winning business from the banks. Perhaps, like a lot of things, customers are sticky and change resistant.

Solutions seems to be an integrated offering and growth is not where I would want it to be. However, they did say they have four sizeable 'clients' in beta testing mode, so the lead time is clearly long. If this proves successful and these four fully on board, other similar large enterprises will do so too.

Re main market - I've posted on this before, so yes. But I do not think it will be this year. Not sure about main listing rules, but as a public company on the main market, what are the rules about the maximum % a shareholder can hold? Could they list if BK has over 50%? I've no idea! But if the company grows towards £1bn turnover, I think it is inevitable and institutions will be knocking hard on BK's door to sell his holding down to whatever the regulatory limits are.

Don't even think we need that. £450m would do it. Forecast eps for 2023 of at least 100p will shift this well clear of £10.

The meetings set up are very significant. With Liberum holding them, you would wish to believe that they will put out realistic forecasts for 2023. They will need to, to get a decent lift in the sp. Also, for BK to place a small part of his holding with institutions, the sp will have to be at a level he is willing to sell down at. Can't read his mind, but if I were him, I'd give up the first 500,000 for £12 to £15 a share - giving the institutions a good upside for 2023, with eps likely to be well over 100p and a 20 times multiple.

SP target still remains though as before (expecting the usual conservative forecasts, with upgrades as the first half progresses). SP target for the AGM update is 1200p, and say 1500p by the July update, when we'll get a revenue figure for H1 and decent visibility for the full year. This is a sensible time frame in which new institutions can come in. Will be interesting to see at what points the current two institutions begin to take profits.

Gacky, would you mind re-checking your figures? 6% on £500m is £30m EBITDA. Knocking off tax is down to say £23m, which is around eps of 140p?

A mistake some where. Is it yours or mine?