RE: Robin Hood energy3 Apr 2020 14:48
Good question Duke and yes most companies would be in a good deal of trouble after Hedging there usage and price, this could be very costly indeed if this was to go on for a long period and they were to be materially affected.
The situation with YU. is some what different as we have The Hedging Facility with Smartest they will currently provide a variable credit facility up to £13 million, to support the Group's hedging position, leading to a corresponding benefit to the Group's cash position. The Hedging Facility is structured so that the credit line grows in line with the business as it scales. This has a material benefit in reducing the working capital requirement of the Group, allowing the Board to focus the deployment of available funds to drive the Group's growth and enhance shareholder value. The Group will exclusively purchase energy commodity from Smartest, at market competitive and transparent prices, so as to meet its customers' requirements over the five year term of the Hedging Facility, and has provided certain security and commitments, following an extensive period of due diligence, in order to benefit from the new credit facility.
In all there market exposure to price volatility and contracted usage is eliminated, all this brought about by there comprehensive risk assessment policy, this company is here to stay it's not planning for the next year, they are looking for a 10 year plan , so don' t be surprised if they are a household name in 5 years time and £17 per share