RE: Rubbish week5 Feb 2022 11:42
Re cash - there are many factors which can effect cash and working capital flows in any business and even more so in energy, given seasonality in usage, customer credit and debit balances, and very complex reconciliation calculations re hedging and payments to the wholesale grid (getting these calculations so badly wrong is what crashed Yu group back in 2018). Cash is not an indicator of profit, but quoted in trading updates as a reassurance to liquidity and solvency.
Also note that the Ampower SOLR process comes with various costs, including funding credit balances of retail customers, which will have hit cash, but are recoverable through the industry wide levy system, so these costs will also be on the balance sheet as other recoverable debtors - NOT charged as an expense to the profit and loss account.
"In line with the SOLR process, certain costs incurred by Yü Group will be recovered through the established industry levy."
RNS 08.11.21
As far as profits go, the Ampower business was stated as having over £7.5m revenue per month. At say an 8.5% gross margin, this is almost £8m extra per annum in gross profit, which should fall to the bottom line. The company is clearly now in a decent profit month by month. However, this will not show until the interim accounts for H1 2022.
Long term holders should know all this and therefore not be emotionally triggered by either trolls deliberately posting mis-information (which they know is incorrect) or by posters whose knowledge of investing is seriously wanting.
And just to really spell it out - there are only about 16m shares in issue. £8m profits. I can do the maths on that in my head and get a rough eps figure for 2022. As with many companies like this, long term shareholders have a massive advantage over the market, in that we can continue to add at very low prices before the profits hit the bottom line of the accounts, at which time some new institutions may buy in - before then it is only really retail investors and short term traders who are dictating the SP. And at 250p, the trend is still upwards, but admittedly at the bottom of the rising channel.
Retail energy price cap news will also affect sentiment - but that's sentiment - its not rational as does not apply to Yu. Traders will not be able to afford to keep loss making trades open - hence, why most traders lose money.
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