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Cheers Ipc. Makes more sense than SP Angel. So, they have a drop in margins to 15% (gp). Difficult to know how much the brokers are briefed and how much is their own view. Odd how they both have T/o at £668m, but disagree on margins.

Ipc - spot on in English. But what are the 2024 forecast numbers to compare? (given SP Angels layout is bonkers)?

Many thanks again.

A relief we went up. Some pretty mixed figures in TU, some of which make little sense. Massive cash outflow (short term) in hedging costs - explains the cautious interim dividend, but at odds with PR's comments in the IM presentation in response to a direct question on that very issue. But looking at cash figures, I get EBITDA for 2023 roughly £40m. Hence, on £450 - £455m revenue margins up (GP% up a tad, bad debts % down).

As contracts are 1 - 2 years, I think those margins are locked in for 2024 - prices fixed and hedged, so not sure margins will fall back until 2025. Bookings into 2025 look like at the £300m mark, which means this is all two year plus contracts. I can't reconcile this with the £519m for 2024, 2025 is too high, or 2024 is too low!

With a much bigger proportion of two year contracts, renewals in 2024 will be lower, leading to a fall in average monthly bookings, exacerbated by the falling prices. The turbulence in w/s markets and shifting renewal patterns is making this very difficult to forecast. SP Angel say their forecasts are conservative at £665m revenue. I am unable to justify a higher figure at this stage now.

SP Angels note is just plain weird - not separating out the bad debs, what's the £8m non-recurring costs?

Any one with the Liberum note - could you post up the 2024 forecasts in plain English - revenue, gp%, bad debt %, general overheads? A 1,000 thanks.

Got the 170p eps though by the looks of it / Brokers notes. Can't judge where the market will now rate us now. It's provided clarity that this is the profit and it's sustainable, though growth in customers will be mooted by falling prices going forwards. So not a growth rating, but one of confidence in decent profits and margins - the market will decide!

Once the collateral reverses out, and normalises, looking like sensible dividends will be paid - once confirmed, should also help the market price. Hopefully trend upwards now, slowly, not expecting a 'break-out'.

Https://www.yugroupplc.com/wp-content/uploads/2024/01/YUG_23012024.pdf

Wish list - revenue at £470m, meters at 55,000, forward bookings at 580m, some comment on increased dividend, cash at 60m. A remote chance they may declare a second interim dividend (3p) now that full year position is known to make up for very prudent divi so far.

Need decent broker notes to guide for 2023 EBITDA and eps to be over previous expectations (£33.5m and 145p). Perhaps more importantly, broker forecasts for 2024 revenue at £750m with eps at 250p.

Figures are at the bottom end of bullish estimates / wishful thinking. SP is in a parallel universe - it never reacted properly to the interims (adj eps of 64p) and following the recent sharp drop the chart trends are ripped to shreds. It'll either drop to below 900p (we're jinxed) or snap back to over 1300p to reclaim the recent uptrend. I think we'll struggle to get a rating over 10 times without a reasonable dividend (20 - 30% payout leaves a comfortable cushion for balance sheet strength).

Https://www.youtube.com/live/3hmK-yerWxw?si=Pk5IePWFmHWGXJ5a&t=4289

Looking forward to update. Don't expect any surprises tbf.

TU will be accompanied with revised broker notes, including first decent figures for 2024. Given the hint forward bookings to be at £550m plus (IM presentation), then brokers will probably go for £700 - £800m revenue - gives eps in rough range of 240 - 290p. There's got to be a limit on how long this valuation insanity can go on for! Or so we all hope!!!

Well, well, well ... ... to re-cap from the trader's mouth

He concludes - "This is purely a breakout trade on momentum, and I won’t be sticking around if the price goes south. I hold a small position, with a view to increasing should the stock break the highs of 1,260p. My stop is below the recent lows of 1,190p."

Playing the traders at their own game?

Hi Sparks, I can live with the lack of updates, knowing that if they have their heads down working then very strong progress is being made. My only bugbear is the dividends. Year end cash will be at the 70m mark in my mind. It will be well over £100m come the end of June H1 2024 point - which is when the final dividend is paid. Current expectations for 6p (£1m in total) out of eps of perhaps 170p ... ... ... well the maths just don't add up!!!!! The dividend policy is opaque and needs addressing in the TU - and it must be a factor affecting the share price.

It's a mystery to many how share prices can hang on to the past. If (and it is an if - no body really knows), if there is resistance at current levels based on the 2018 prices, breaking out will signify that the market has finally weaned itself off from all attachment to that episode, and duly recognise that Yu is now a completely different company. Meaning we may be revalued on current merits without any drawbacks to the past - meaning the breakout and revaluation could well be very, very significant, and fully backed up on the TU fundamentals. A re-rate to say 15 times eps (at say 170p) is ... ... ... wow!

Https://www.investments.halifax.co.uk/chart/advanced-chart/?csid=51212957&ticker=YU.

We've looked at this before, but as Treven said, it depends on whether the candles are daily, every two days or weekly. Suggests intra day high at 13.95 and top closing at 13.45. But yes, I'd also say that each 50p are the steps to mark off.

Article written by Michael Taylor. He is a well known trader amongst the traders community. See his website - Shifting Shares. He talks like a trader and works like a trader. The stock came to his attention following a standard stock screen, looking for shares nearing one year highs or all time highs. He says he now holds a small position, but will add on the breakout over 1260, if it comes. Has a tight stop at just under 1200p. Many other traders will also be eyeing up, as they all use the same techniques! Therefore, traders may spike this up pre update, starting gun from early next week.

Example of his patter - "Whenever stocks trade in extended ranges, that signals to me that the stock is building a stage one base. This is the first stage before stage two, the advancing phase, but stocks that are in stage one do not necessarily break out into stage two. A stock that has trended in a stage one base for many months may have bad news and re-enter stage four." Textbook trader's spiel.

He continues - "But if the fundamentals are improving yet the stock price remains in a range, this can be a huge catalyst for a big breakout and bull run in the stock. And these are the types of patterns that we should be looking out for because they can provide the biggest winners." ... ... which is ironic, in that he agrees it is fundamentals that trigger share price movements, which then form a chart pattern, which traders pick up on in hindsight and then pile in. Traders are basically lazy people who let real investors do all the hard work first, and then jump on their coat tails! He would be better of with a subscription to SCSW who were on to Yu 12 months back!!!

He concludes - "This is purely a breakout trade on momentum, and I won’t be sticking around if the price goes south. I hold a small position, with a view to increasing should the stock break the highs of 1,260p. My stop is below the recent lows of 1,190p."

He's still young and still learning. There's an interview somewhere, maybe PI World, where he seems to suggest that he would rather be an investor than a trader, as investors make more money, with less stress, and it's easier to buy and hold good companies longer term which annually compound at a higher % than he makes from trading (if you can find them).

It was Gacky who high-lighted the larger type customers from the Investor Day. Just goes to show, that with higher energy prices here to stay, that sizeable companies are having to re-think all their costs. Energy is a major expense, so efficiency, pricing and service are on the table in these companies. To prize these from the big 6, Yu must be seriously upping their game. This will also lift the average revenue per meter, hence, forecasts need tweaking up for 2024 onwards!

(H1 - average no. of meter points (26+40 / 2) is 33,000, on 200m revenue - £12,000 per meter annualised. Actually will be higher as new meters skewed to period end, so could be at £13,000 +)

Bad reviews tend to come from bad customers trying it on and failing. Will often then fall into the bad debt category. I don't see reviews as an issue of concern.

Example of a larger type customer

https://www.yuenergy.co.uk/a-breath-of-fresh-air-hays-case-study/

Db19 - a lot more! 2023 is not over yet. The final 2023 dividend has not yet been announced. Miton have bought Yu for their dividend fund, which invests in shares paying 4% plus dividend yields. It's a pretty big pointer. PR's last comment on the dividend was "we'll see" (IM presentation) - a cryptic hint?

Take cash - forecast to be £55m - add a profit beat, plus the extra accrued ROC monies, plus the unwinding of hedges, cash could be £65m - £70m. Accrued ROC cash will be say £20 - £25m, so real cash around £50m. Expected EBITDA for 2024 of £80m (+). It's going to be very, very difficult to announce those cash levels and simultaneously tell SHs to basically FO, here's 6p final dividend. It's impossible to justify, without a major acquisition. The company has a capital light business model (they are to borrow for Yu Smart), hence decent dividends can be paid and are the normal practice (distribution of surplus cash).

It's difficult to pitch where the balance is, they do need a strong balance sheet, and cash for hedging in abnormal markets. If pressed, I'd say perhaps 30 - 40% of eps maybe where the dividend payouts settle in the medium term. 20 - 25% as a first staging post, 60 - 70% longer term (it's a utility after all). I am optimistic of a satisfactory outcome.

Quick look at calendar suggests update on Tuesday 23rd, following week 30th, or Thursday 25th.

So, Sparks, you have hit your £10 target set at the beginning of year. I don't recall posting a target my self, but think I've said something like 10 times earnings would perhaps be ok ish given the current market - so somewhere around £17 (assuming eps come in at around 170p). I'll give it till the end of Jan / early Feb. We can argue until the proverbial cows come home what a fair price is, though I do expect the gap to close as 2024 goes on (between the actual share price and 'fair' price).

What's your thoughts on 2024? Same value as TEP at £1.3 bn current is circa £76 per share. May as well hold out for a round £100! Certainly expecting eps well over 300p for 2024, maybe heading for 400p. I'd settle for £35 on 10 times earnings, but arguably 'fair' is twice that! So, in the same ball park.

Gervais Williams videos on the Diverse Income Trust. Yu briefly mentioned in both. Though these are dated 13.12.23, clearly filmed back in November (poppy). Expecting Yu to become a significant dividend payer. Not the only one!

https://www.youtube.com/watch?v=Z-tXScJ_1cE

https://www.youtube.com/watch?v=O-uMxBEkCd0

Dividends tomorrow - looking to re-invest mine.

Won't be long before you'll be posting the PER for 2024. Eps should be north of 300p, and going on 400p! (Based on revenues of £900m +)

I suspect the Jan update will include a statement of intent about dividends (as it did last year), that dividends will be higher than previously indicated. Also, there is an outside chance that a second interim dividend may be paid, say in February / early March before finals announced. Paying a higher dividend is critical in my view to getting a more appropriate share price. The company has said that this is an area of focus and the board will make announcements in due time.

Another 6 weeks patience!

Hi Treven, thanks and I agree. Year end TU should be the spring board upwards, with revised broker's numbers.

I was using Hargreaves Lansdown chart, which looks like it's printing candles every two days on the 10 year. Halifax is very good also - staggeringly low volumes in March 2018 of only 1,000 - 2,000 shares traded each day.

https://www.investments.halifax.co.uk/chart/advanced-chart/?csid=51212957&ticker=YU.

Yep, the highs of early October need to go. Strangely, these are in the same range of the previous highs way back in 2018. "Share prices can contain strong and long memories." Many people hold opinions on charting. One such opinion is that chartists believe what they believe and trade accordingly, in so doing their beliefs become self fulfilling prophecies.

As we know (even though we aren't traders), the breakout needs to clear the high, and on increased volume. The strong upwards momentum then attracts the traders! Self fulfilling pattern.

Trying to read the chart back in 2018. Hovering the mouse - looks like an in day high of 1,394.5 on 05/03/18, though it closed that day at 1,235! So, I'd say that 1,300 and 1,350 are the markers to tick off. 1,400 to be sure. Mind you, back then PER was over 100, and on false profits! Now, forward 2024 PER, about 3 to 4 times!