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https://www.youtube.com/watch?v=o5lnS4l3HSE

https://youtu.be/j-9H-I-jZPs?t=1217

Just in case any one has over looked these interviews.

No need to panic, Sparks, it's all good. The numbers will be all a bit skewwhiff as they normally contract for 1,2, or 3 years, not 6 months. The forward contracted revenue will be lower than it otherwise could be. The average contract term will also be shorter - it's already fallen from 31 months down to 19. There will be a 'real underlying' figure behind the scenes which will be higher (assuming those now on 6 month contracts renew in April). Forwards visibility will be lower. Broker forecasts will be lower, but will get significantly increased as the year goes on, esp after the spike up in bookings comes on stream after March. It's a DYOR job, and I'm saying we need to be ahead of the curve, as we generally all are on here.

Doesn't take much does it - a handful of buys, no more than 5,000 - 10,000 to keep the spread ticking up 5p each time. But yes, where is the liquidity coming from to feed the buys / who is selling those blocks of 25,000 and 10,000 shares for the MMs to balance their trading books? I mean, who is selling say 20,000 a day / 100,000 a week? ... ... ... ... the MMs are sourcing stock from somewhere! This could get really weird, quite quickly ... ... ...

https://www.yuenergy.co.uk/saving-time-and-energy-for-schools-case-study/

https://www.yuenergy.co.uk/the-energy-bill-relief-scheme/

"For this reason, all non-domestic customers are being encouraged to take out fixed-price contracts for the duration of the scheme, in order to receive the full benefits."

Yu have been very busy getting their off-contract customers to go on, a short contract up to 31/03/23, as the benefits under the relief scheme are greater. Investors need to consider the implications of this in light of the wording in the trading update, esp in regard to monthly bookings and the amount and profile of forward booked revenue - very important at the year end. It will also affect monthly bookings in 2023, we should expect an unusual spike up in March / April next year.

On those figures, full year should be close to 69 / 70m revenue. EBITDA somewhere at 12m / 13m. Not quite sure what to make of it - growth a tad below my hopes. Can't see this trade over 15 times EBITDA, sp therefore about right pending full results. Market today mixed, a lot selling, but somebody is happy to take up all those sales (for now).

Q on Q growth appears flattish at around 1.5m and Solutions growth not yet taken off (Q on Q). Market forecasts are low for 2023 - 78m ish rev and 15m EBITDA. Mind you, original 2022 forecasts were 47m & 8.4m respectively. I need Q on Q growth of at least £2m, which if met will lead to significant 2023 upgrades. Solutions is said to have a decent pipeline, but a long lead time to build - I was expecting it show by now ... ... ... just trying to justify today's market reaction.

Continue to hold for now, but with one eye on taking some profits soon.

Cheers guys. Seems like we are all in the same space now, with our expectations. Re ROCs, it would help S/hrs if they disclosed the figure clearly in the accounts, esp on the balance sheet, as at any time there is an accruing sum owing, which builds month on month. The cash balance always includes the total accrued at any given point.

SMT - yea, very valid point. Depends on their target companies, if a distressed company / loss making then it'll be quite cheap, less than £10m is the ball park I would expect them to be aiming for. As you say, anything bigger will require a capital raise (equity) or debt.

ipc - cheers. Still not sure on your cash projections. Have you added on the increase in EBITDA / profits for 23, over those of 22? Going from 280m to 450m revenue is a massive jump in bottom line, more than twice, getting on for three times?

ipc - generally agree. The 20 days is 20 trading days, so four weeks. Assuming good results, a good outlook statement and a dividend (10 - 20p) I would think that enough to move the sp appropriately! They did say that the dividend would be confirmed in March with the final results (doesn't mean they can't change their mind though).

Re 2023, you are spot on with my own thoughts - a total dividend of around £1, split 1/3 to 2/3 between interims and finals, so 30p ish plus 60p ish. Not sure how you are getting cash balances, but I think it would be more by Sept. How are ROC payments shown in the accounts? Are they in cost of sales? They aren't paid out of profits / EBITDA, so the profit is on top of the cash put aside for the ROCs. This is why loss making suppliers can't pay their ROCs, they use the ROC money to cover their losses! Yu now has profits, plus the accruing ROC monies.

I think that covers about every angle between us. Looking forward to next company news.

Though they are able to pay ad hoc dividends, very few companies do so - GAW does so, as it sees fit with no regular payment dates. However, most companies stick to the traditional dividend dates of after final & interim results. It's a remote possibility imo, but I don't expect a dividend until sometime after the March results (wouldn't mind one Jan / Feb though).

Given the company is capital light, then yes I'm with you - company will return surplus cash, with a high payout ratio, 70 - 80% of eps in time. They are expecting in excess of 16m cash at 31.12.22, so 10p looks too low to me. 20p is a 4% yield at the 500p option price - that's by best idea on the subject (but nothing more than a worthless guess)!

https://youtu.be/5lZ1z8dekNo?t=523
Saying 450p short term as well (though can't say I agree with his methodology here - fundamentals are driving this now, not past patterns in the tea-leaves).

Totally agree Sparks re the employees. Those who have taken it up will do very nicely from it. Easily 1bn revenue by the option dates.

Large increase in volumes and number of daily trades - ie an increase in liquidity. May increase daily / in day volatility. All very good signs, on a lot more people's radars now, so the 'market' has got bigger, which will allow for a more considered market opinion as to where to price this. I suspect short term they will go off brokers figures, so say 30p ish eps and perhaps 15 PER (450p by mid January). A beat on revenue and margins will then push sp higher.

In the Vox interview BK does say they are more than confident of achieving in excess of £260m and 6.4m EBITDA. They are giving themselves decent headroom for a significant beat - a good 10% I would think on revenue, so the figures below based on 285m revenue are not unreasonable.

Just for reference - details of sale of Opus to Drax. Sold for 10 times EBITDA, £34m sold for £340m
https://www.drax.com/investors/proposed-acquisition-opus-energy-group-limited/

Revenue was 573m, gp of 107m - 19%, meter number 265,000 - makes some comparison to Yu and where gp% is trending to. About £2,000 average revenue per meter.

ipc - I meant the 60m would accrue evenly though the year, as will the lost meters. But, as both agree it's the year end number that matters most.

Overall, sounds like you're forecasting something along these lines -

Revenue at 285m, gp% at 15.5, so gross profit of 44m, overheads of 15m and bad debt at say 6.5% (18.5m) = EBITDA of 10.65. Excluding any hedging gain, and after tax, then eps is almost 50p. (At 5.5% bad debt, eps would be over 60p.) A comfortable beat, and I would be very happy with that, I think we all would.

Hence, plenty of scope for decent sp appreciation leading to / pending final results. Given the rapid rise back to nearly 400p, Yu is clearly now in more people's cross hairs.

And all is well again, perfect up trend.

ipc - I clearly don't have enough detail to fill in the gaps. However, with the health warning that this is 'guess' work -

If lost revenue is 4 months, then the 20m bad debt charge is 60m annualised lost revenue. At £10,000 per meter, 6,000 meters are lost to bad debt. They are bringing in about £15m annualised per month. I reckon on half that being renewals, half new customers. So, the new customers total is 90m, so 9,000 meters.

They had 32k meters last December, but 8,000 were Ampower, and they say in the AR they managed to retain about half of them. So, that's 28,000 meters equivalent. They had 26,000 at June - a 2k decrease on the 6 months. They also say some bad debt is from the Solrs. So, it may be more than 6,000, lost to bad debts. Too difficult to judge. No. of meters at this year end will clarify. Hopefully circa 30,000. But it really shows the rate of underlying growth now coming through, ex bad debt. But, any way you cut it, bad debt is high, and once the weakest customers are gone, it should fall off. The lack of any real growth H1 to H2 this year likewise shows the effect of this.

Slide 8 of the presentation suggests 37,500 meters owned by Yu by end of 2023 - so some serious growth forecast by the company for next year. Make of it as you will. But overall, I think the consensus is growing that the company is one of quality, with a very bright future ahead. Just imagine if bad debt was half, say 4%, what the 2022 profit would be!

ipc - cheers for the reply. One point I have been missing until the last few days has been that once a customer is lost, as a bad debt, the customer is gone forever, hence, no revenue for the rest of the year, or the next, or next. This has led me to over estimate growth / future years' revenues - now corrected for!

Re the dividend & options - the dividend will be declared (proposed) in March with the results announcement, so it will be in time to affect the sp / giving some dividend yield support (but will be paid later, normally after the AGM agrees to it). But yes you are right, I am expecting a final 2022 dividend, then normal interim plus final dividends going forwards for 2023 etc. The company is capital light, so the pay-out ratio will, in time, become quite high. Short term they need capital for Yu Charge & Smart.

Thanks again, genuinely helped.

ipc - some good discussion here & pleasing people are thinking more deeply / carefully re implications. On that debt level, what % of their customers do you estimate it to be? I would think that once a customer goes under, they will take 3 - 4 months worth of charges down with them (one month just billed, current month unbilled but accrued, plus at least one past month overdue). And if most customers have more than 1 meter, this is a very high % of the customer base. (I will keep the sums and my answer to myself here.) But, at face value, it seems too high - but the company must have its reasons for its own H1 provision and stated that current trends will continue into 2023. (I take that to include trends of bad debt.)

Overall, I suspect forecasts will be beaten one way or another, either by more revenue, a higher gp% or lower bad debt provision. And at the eps level, quite significantly, plus 10p bracket. For 2023, even with a high debt provision, with decent bookings coming in, 2023 will be a very large increase in profits.

I am also expectant of a bigger dividend. It will not be paid until after the AGM, by which time H1 2023 profits will be in the bank. They can easily afford something decent by then. And of course, declaring a decent dividend will help the sp, by giving dividend yield support - needed to hit the options target! The chance of hitting their target must be above 50/50 now.

Well, another wired trading today, my opinion I suppose. Then again, I think last week was a bit odd too (maybe news leaking of update).

Broker's note is now showing gp% for full year of 16%. Given H1 was 14%, H2 must be 18% to make the average fit. If they can hold 18%, or maybe more going forward, bodes well for 2023 onwards. However, they upped bad debts to almost 8%. Mind you, H2 at 18 - 8 = 8% margin after bad debt, verses H1 of 7% on the same metric.

Bad debt is uncomfortably high. It's over £1 in eps terms! Sorry, but this will put off many professional investors. They will wait until it starts to fall, like waiting on peak inflation. Uncertainty over gov support won't help this. And every customer lost as bad debt is a lost customer from the next year's revenue, reducing growth - need another new customer just to stand still. Let's be honest here, as BK said, it's a tumultuous place to be in, "Let's not sugar-coat that."

However, listening to interviews etc, BK is confident and his past confidence has proved correct. Bookings are at a record (previous record 25m in Q4 LY), so customers signing contracts, with perhaps fewer remaining off contract. Also note the average size of a Yu customer - at 260m revenue and 26,000 meters, that's £10,000 per meter - hardly small in terms of SMEs. I would have thought customers that size would be more resilient to recession. (Opus had average revenue per meter of £2,000, on its takeover by Drax).

Overall, a lot for the market to digest / make its mind up on, hence sp swing. We need the market on board, not small time PI traders. But moving consistently, steadily and surely in the right direction. Hopefully settle for a few weeks now in 350 - 400 range and let the moving averages catch up with the sp. 450? by the time of the Jan update? I now doubt full year figure will be much (if any) over 300m, due to lost revenue from those lost to bad debt.

On Vox - Premier Miton interview. Yu discussed first company on list! Recorded yesterday after Trading update.

Says as the business becomes more successful, more investors will want to be involved, driving sp higher. But that's the thing with investors - they will wait until the numbers come through in results. iis hopefully will start to show interest.

On Vox also is the same podcast already linked on Audio Boom, plus editorial comment article.

Don't take the revenue figure as final. At 260m, it is only twice H1. How can H2 be the same as H1? Given increased customers, seasonality more usage, increased prices. Learn to read corporate speak, market expectations and guided broker figures. This is just a revised upgrade ... ... ...

People now buying at 400p aren't buying because they think revenue is 260m - they understand the message that revenue will be significantly more than 260m. Otherwise what's the point of buying at 400p, it would all be in the price otherwise!

Resistance at 400p - psychologically round number! Won't take long to break.