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Morning upsidepotential,

I think the short answer is Yes, YU have very strict criteria and risk management is second to none as they have learned the hard way.

So if say MA Energy went down the pan, YU would bid through Ofgem to take on that book, they will bid in a way that doesn’t affect YU adversely and if they do. It win so be it.

This strategy is to be admired especially as rivals are falling apart all over the place.

What I can see is in the B2B market is a wave of mergers and buyouts.

I have aways thought YU would merge with Smartest Business ( formally Dual )

It would be under the YU banner as listed but the synergies as both use smartest for hedging is huge.

I could be way off the mark but smartest do tend to pick up businesses they work with.

What interests me the most is bulb, they are obviously under financial stress and should be left to fail, but rightly so this has a major impact on the company who takes on the client so it a really tricky one.

What people need to remember there is a huge difference between Domestic and B2B clients

The well run and organised companies left standing will dominate the sector for decades.
YU learned the hard way in 2018 and now extremely well run and the risk management is second to none.

The rewards from this will be vast

H1 already a bumper first half and at this level and current MC i personally think you would be mad to sell and mad not to buy YU group.

So gross margin should be way of 10 now low margin contracts have washed through

From annual report

Analysing profitability
Gross margin for the year was 7.6%, up from 4.9% in 2019 despite the 1.5% impact of Covid-19 during 2020. Gross margin for H2 2020 was 9.1% (H1 2020: 5.7%, 2019: 4.9%), showing significant improvement.
Net customer contribution2, representing underlying profitability achieved from customer contracts, was 6.1% for the full year and 6.3% for H2 2020. Management is pleased to report this 2.5x increase in H2 2020 from the prior year (2019: 2.5%)

Also you mentioned taking over existing contracts

Remember B2B isn’t constrained with the price cap like retail so the situation is totally different in a positive way

Oh forgot to add I think small deferred payment was due to Bristol council as well for the purchase.

Thinking about it we are nearly Oct so 2021 is actually not long to go and we are soon into 2022 when YU will really stand out and if the market is still resevered about YU they cannot ignore next year as the MC v turnover v profit will be massively out of kilter when growing at 40 to 50% per annum and on a stupid PE of under 10 with no debt and cash everywhere

If you look at the figures

Overheads have been as high as 7.2% but now 6,2% and I expect this will be under 6% now.

All new contacts are a minimum of high single digit with an average last year of 9.2% but this was diluted slightly with some legacy remaining which have no washed through so gross margin could be over 10 now

So for this year net margin of say 4 to 5%

These are really scrappy figures but we should be looking at a nice profit this year even after Leicester final payment, deferred vat and investments in tech.

Next year is when the big profits start rolling in

In the next few sessions and knowing how YU move if strong buying in a matter of hours.

Morning upsidepotential,

Growing at the expense of profitability, I take your point but the way the business is currently being Run I think they can do both through organic growth. YU suffered in 2018 and domestic are now through effectively loss leading contracts to gain market share. Bulb a fine example.

YU will now only take on business with gross margins 9% or higher and through carful Rick management a pneumatic discipline we are at the point of explosive growth.

With turnover now balanced against overheads every £1 of new business has no effect on overheads as these are static bar recruiting more customer facing staff to manage the growing client base, but fundamentally we are on the cusp of huge growth organically and a cash register throwing of money.

Due to the current sector troubles YU can sit back and watch it unfold and do not have to buy rivals but hopefully pick up customer books for next to nothing.

Either way we now at a tipping point and I always said 2021 was YUs year and so far I have proved right even with a sector carnage.

Once it all settles down, which it will the competition will be reduced and YU a solid fast growing mid tier moving nicely along to a £B+ turnover top tier challenger in the gold plated B2B sector.

CEO sounded very excited in vox podcast .

Elexon has expelled three more suppliers from the Balancing and Settlement Code (BSC).

Avro Energy, AMPower UK and Delta Gas And Power are all in Default under Section H3.1.1(c)(iii) of the BSC, Elexon announced yesterday (21 September). This is due to their failure to sufficiently reduce their Credit Cover Percentage over a period of two working days.

AMpower and delta gas snd power removed from BSC system

Yep, Symbio , whoop are on list to fail shortly

Business is booming

Indeed , I have a large holding from 50p and not sold a single share and no intention to until at least 1000p when I might sell a chunk

Not very often you get chances like YU group, my last one was ASOS I held 70k I bought a 12p and sold for 17p. Biggest mistake ever, I believed in the company but was impatient , not this time and you want to win big you have to be patient

Indeed, looking further into the future

I asked a question in March to BK and it was a simple one, where do you see YU group in 5 years.

He didn’t even think about as he already has a vision and his answer was £500m turnover mid sized B2B supplier

So to reach that we need to grown £100m a year revenue from now and actually due to this current situation and the digitisation drive I Can see this in 3 years not 5

Now if this can be achieved through organic growth whilst maintaining and every growing profit I. An see YU moving to the main market and this is where it gets exciting as due to such a low MC where do we see a 1/2 billion pound turnover with say 3 to 4 % net profit margin market cap being when the funds and institutions buy in.

This is only the beginning for YU and MC in the next couple of year will be 10 times what it now now

From house broker in July

Revenue: Our revenue forecast for the full year 2021E is £128.4m. H1 2021 revenue of ~£65m represents ~50.6% of this forecast amount. Typically, H2 revenue performance is higher than H1 in any given year, which suggests that our 2021E revenue forecast is likely to be too low. Also, organic growth is tracking to +40% y/y, further supporting an expected beat of our forecasts.

Hi upsidepotential,

If you go on YU group website you can read analyst forecasts