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All 'wealth' type taxes are in the firing line. Pension reliefs, CGT, IHT. There is even talk of taxing ISAs over say £100,000 of savings! Further hikes to dividend tax.

Estimates are that 5-10% of the Aim market is IHT based.

https://www.youtube.com/watch?v=cwm8VghoLKs

Because it's not surplus cash - it includes accruing ROC payments and as said, they are required to keep cash per the hedging agreement. They have been clear - the dividend policy is 3 times cover, ie 1/3 payout ratio - in the short / medium term, meaning this may rise in the future.

I'm guessing you are referring to slide 14 of the last presentation. Specials / buybacks are point no. 5. No year is indicated! Point no. 1 is "Maintain commodity hedging arrangements".

Having said this, don't get me wrong - I am annoyed at no buyback. It would not take very much in cash terms to give the SP significant support or even a boost up. Given the low price one would make sense. I do share your frustrations / anger. Also, as I have often alluded to - why is the company courting institutions to invest when the only way is for BK to do a secondary placing, and that won't happen until the SP reflects a sensible valuation? A buyback would help this end. Or as Sparks says, is the end game for Shell to buy the company? It feels like being a minority shareholder in a private company, given BK has over 50%. He could in theory take it private almost for free - the cash on the balance sheet being used to buy out what he doesn't own!

I think they (Yu) and postings on here have covered the dividend issue. The policy is one third payout, and likely to be skewed to the final dividend. Substantial cash is required to be held on balance sheet per the hedging agreement. I don't think there will be any special or buyback this year - not ruling it out for 2025.

What matters is the profit margins. We know revenue. I would be surprised if the gross margin has fallen to the extent of broker numbers. Hence, there is hope of a beat on eps and therefore on the full year numbers. A beat on eps will also allow for a bigger dividend. We need eps for H1 to be over 100p for a decent upgrade for year. So, say if it's 110p, full year will be comfortably over 220p. Interim dividend will be less than 30%, say 20-25%, so hopefully 25p based on that eps.

Again, as before, disappointment will drop the SP. But as above, I find it almost incomprehensible that margins could have dropped to the lows of broker notes.

And way over spread. They've had weeks to get in £2 quid cheaper. So, why now and why prepared to pay way over the ask? Rhetorical question.

Https://www.youtube.com/shorts/yL5Y_awXyuI

Sparks - re broker notes. I am looking on Research Tree, and cannot see Liberum's reports at all, not even listed as 'locked' for institutions. Seems like they've pulled the lot. Really odd, sorry have no explanation. Maybe changing broker?

Https://www.mitonukmicrocaptrust.com/

July video update on Micro Investment Trust. GW points to the TU drop, as 'volatility'. But plenty of opportunity to keep growing its customer base. From just after 3.00mins. Makes me wonder if there has been some reassurances / discussions between them and the company.

Having promised not to comment on the Shell deal further, new evidence has come to light. Smartest also had legal charges over the main subsidiary trading companies and covenants in place, very similar to Shell. This type of security is normal business practice in the utilities sector, given the sums involved in the monthly credit line.

"The Group entered an arrangement with a commodity trading counterparty, SmartestEnergy Ltd, in December 2019. As part of the arrangement, there is a requirement to meet certain covenants and a fixed and floating charge over the main trading subsidiaries of the Group, Yü Energy Holding Limited and Yü Energy Retail Limited.

Yü Group PLC provides parent company guarantees on behalf of its wholly owned subsidiaries to a small number of industry counterparties as is commonplace for the utilities sector." Note 23 of 2022 AR

Let's see whether the board have re-considered a buyback given the drop. Depends on if they have the cash over hedging requirements, and their view on proper stewardship of shareholder funds. Say a target of 1%, up to £3m would be a realistic start. Something like 5,000 shares a day?

Ipc - Yu had forward revenue at Dec 2023 of £306m for 2025 already (2yr + contracts signed in 2023). So you need to add that on to your figures! So, call it forward revenue of £900m at end of 2024. Which ties in with 100,000 meters target.

As I further think through the TU, the business model and medium term outlook for Yu is fully intact. The drop in monthly bookings is down to a drop off in pricing. They are set to almost double the meter count / double market share this year. Still looks like 2025 revenue will be over £1bn. Leverage will bring the net margin back up. This year is a year if investment to scale up. And if other competitors are as bad as Opus, even better for Yu.

Figures from the sale of Opus to Drax. Last accounts for Opus were to March 2016. I think the sale completed early 2017, so need to add a bit on -

Revenue at £573m Gross profit of £107m, which is a 19% gross margin

EBITDA of £34m (6% margin) Meter points 265,000 staff numbers 693

Sold for 10 times EBITDA for £340m.

Source - https://www.drax.com/wp-content/uploads/2017/01/Proposed-acquisition-by-Drax-Group-plc-of-Opus-Energy-Group-Limited-and-Notice-of-General-Meeting.pdf

https://www.drax.com/investors/proposed-acquisition-opus-energy-group-limited/#:~:text=Drax%20Developments%20Limited%2C%20a%20member,cash%20on%20completion(3).

Makes interesting comparison to todays numbers. Only 90,000 meters. Also, look at average revenue per meter. Hopefully, Yu have the sense to avoid going down-market to the really small fry, it's too price competitive and not profitable for the supplier. Also, very high bad debts as the very small SMEs go bust, as not profitable themselves.

Also, note the gross margin of 19%. Yu, having got its margin up to 18%, shouldn't be throwing it away back to 14.5% (liberum) or 16% (SP Angel). They need sustainable and viable margins. Brokers are wildly different. What do we believe?

Putting on the hat of a businessman, rather than an investor or trader.

The management are scaling for growth / market share. Prices have fallen - so what, expected. They have dropped gross margin to win business and o/hs are up for Yu Smart. On target to double meters / market share this year, and trending for plus 50,000 meters a year forwards. Net margins will pick back up. Textbook business practice. As long as the new customers are similar in size then no problem. Average revenue per meter will be consistent (subject to weather and unusual market prices).

Consider the sums -

Meters closed at 72,300, opened at 53,400 - average was 62,850. Revenue of 310, so 4,932 average for 6 months, call it 10,000 annualised. They go into H2 with 72,300, so say 72,300 times 5,000 = H2 revenue = 362, so £672m for the year. This is based on no new meters in H2, and no uplift for seasonality. On the face of it, the forecasts are in the bag, and should be clearly beaten. Bottom line will likewise be over current expectations.

Longer term view, at plus 50k meters a year, 150-200k is doable, with £2bn revenue. In terms of growing the business, they have totally hit the targets they needed to hit. On this basis, it's difficult to fault the TU. As we know, markets and investors are short term. Arguably panic, bordering trauma! If the SP continues to fall, a buyback is bound to be up for consideration. Surely they could afford £3-5m. RNS to drop any day?????

IPC - Re margins, yes I agree there is some scope here for actuals to be over the brokers. SP angel are on 16% and Liberum on 14.5% (gross). Some difference there, given they are both briefed by the company. As the revenue numbers get bigger, 1% in margins is huge on eps, with only 17m shares in issue. It is highly sensitive and highly leveraged. This makes for difficult forecasting and hence both the company and brokers are duly very cautious in their numbers.

SP fall not a surprise, given the update (obviously not what I was expecting pre update). Gross margins looking to be down quite significantly - "strong market positioning and leading customer offer" = reducing prices to scale up market share, and so reduces gross margins. Net margins should tick back up as scale increases into 2025 / 26.

Revenue in-line with my thoughts, meters also fully on track for 100k ish by year end. Expectations / hopes not met in no upgrade, and no buyback or special, maybe reduced monthly bookings too. Brokers have 'downgraded' on margins, cash balance and state no buyback or special is now anticipated. 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?

Last year at July they upgraded from £392m to £405m, then to £424m in Sept. - final figure was £460m. The July upgrade was minimal. Given the number of meters, bookings etc there is considerable scope for £50m plus upgrade later on. I have previously posted £750m revenue as my forecast and stand by this (for now). So, no upgrade now needs to be put in this perspective. Downside risk is any further drop in gross margin.

A lot of uncertainty and anxiety now in the SP. Can't see a recovery until after Sept. There isn't dividend yield support either - so yes, it may well fall another few pounds.

Fully disclosed at note 25 in the AR. I have no more to say on this matter.

Well, working capital is a vague term, with more than one meaning. Is it gross W/c - ie one month of cost of sales, or net - ie one month trade debtors, less the trade creditors? In which case W/c is negative. Yu paid Smartest after Yu received payments from its customers. It could mean effectively one month of gross profit. Does it include or exclude the accrued ROC payments? Frankly, it's pointless worrying over this, as a holder. It's clear to me it's in Shell's interest to help Yu scale quickly - to boost Shell's income. Shell are willing to finance the working capital to this end. If there is extended credit given to Yu, this may be to help Yu gain more blue chip customers, who will be themselves on extended credit from Yu. There's no way in my mind that Shell deal has any 'negatives' in it, for the company.

Chart - https://www.google.com/finance/quote/YU:LON?sa=X&ved=2ahUKEwjroYD7krCHAxWKWUEAHQSkA4cQ3ecFegQIORAf&window=5D

Click 5 day.

Correction - right the first time. Yu Energy Holding then owns the supply company (Yu Energy Retail).

It's Yu Energy Holding Limited, which is the Gas shipping / pipeline subsidiary company (and also a holding co itself) which is named in the charge. Details at note 14 in the AR. So not as drastic as my last post!

DD - yes, but only roughly scanned it. As I said in the original post, it looks like the group holding company (Yu Group plc) has pledged 100% of the shares in the main subsidiary trading company as security. ie if Yu defaults, Shell basically gets the entire business! It also seems a standard template document, with their names filled in in the right places! The chance of default is remote, in my view, Yu's own customers would have to default en-mass to trigger it.

There is also a cryptic line in the original RNS about Shell deal " £52.25m of cash previously lodged under the Old Facility has now flowed back to Yü Group, with further material cash benefits to be realised over the next month". I suggested at the time that the extra cash benefit to come in a month may be Shell giving Yu one month longer credit terms than Smartest did (just a suggestion). Shell could easily fund that credit itself / get it from its own suppliers. And this may be the one month's W/C Yu has to hold? If the cash figure in the TU is way up on expectations, then I'll have my answer.

Cheers, DD.

The five day chart looks to be indicating a flat channel forming between 1850 and 1900. Who knows? May remain in this range until the TU now.