TIDMYU.
RNS Number : 5178A
Yu Group PLC
23 January 2024
Year EPrior to publication the information communicated in this
announcement was deemed by the Company to constitute inside
information for the purposes of article 7 of the Market Abuse
Regulations (EU) No 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations No 2019/310 ('MAR').
With the publication of this announcement, this information is now
considered to be in the public domain.
23 January 2024
Yü Group PLC
("Yü Group" or the "Group")
Year End Trading Update
A strong performance ahead of expectations
Yü Group PLC (AIM: YU.), the independent supplier of gas,
electricity, meter asset owner and installer of smart meters to the
UK corporate sector, is pleased to provide an update on trading for
the financial year ended 31 December 2023.
The Group's strategy continues to deliver with all key financial
metrics performing ahead of expectations, which were raised three
times in 2023. The systems and processes in place in conjunction
with balance sheet strength has enabled the Group to deliver a
record financial performance and continued strategic progress
whilst navigating unprecedented turbulence in the UK energy
markets. The Board expects this progress to continue into FY24 and
beyond as energy markets begin to normalise.
Financial & Operational Highlights
Record financial performance
-- Full year revenue expected to exceed GBP450m (FY22: GBP279m),
with organic revenue growth of over 60%.
-- EBITDA expected to be significantly ahead of current market
expectations, with expansion of adjusted EBITDA margin for the
year, driven by strict controls and operating leverage.
-- Average monthly bookings grew over 120% to above GBP55.0m (FY22: GBP24.5m, H1 23: GBP51.3m).
-- Strong net cash position of GBP31.9m as at 31 December 2023
(FY22: GBP18.8m). A further GBP49.8m of cash was also held on
deposit with our trading counterparty to support our hedging
strategy and is due to flow back in the coming months.
Further operational progress
-- Significant increase in meter points on contract for FY23,
with a focus on better credit and more predictable consumption
meters. This has maintained profitable volume growth.
-- Continued improvement in customer service performance,
delivered through our digital customer journey sees s trong
customer collections, with 98% of the total value of bills raised
in the year being received in cash.
-- Hedging strategy has continued to enable the Group to
navigate energy market volatility whilst delivering profitable
growth and cash flow generation.
-- Y Smart business unit successfully integrated into the
Group's strategy with 8,000 meters installed delivering additional
operational and customer service benefits with significant scale
expected in FY 24.
-- Appointment of Gary Proctor as Managing Director of Yü Smart
to drive the scale up of the business.
Outlook
-- The Group has secured contracted revenues of GBP519.7m to be
delivered in FY24, up 111% on prior year (GBP246.8m for FY23).
o Total forward revenue contracted of GBP825.8m provides strong
foundation for FY25 and beyond.
-- Operational cash inflow expected to be substantially ahead of
current market expectations in FY24 as the Group continues to grow
supplemented by flow back into the Group of the GBP49.8m of
collateral currently with our trading counterparty as energy prices
'normalise'.
-- Continued evolution of smart metering and digital by default
activities expected to continue to provide customer, operational
and financial performance enhancements.
-- The Board will, on release of the Company's FY23 results,
provide further guidance on the ongoing capital allocation policy
given the Company's strong cash generation and growth prospects. As
part of this the Board will consider a significant increase to the
FY23 final dividend.
Bobby Kalar, CEO of Yü Group commented:
"Once again, the Group has delivered a fantastic all-round
performance, and I am delighted to report another set of
record-breaking results. We have a clear strategy and the processes
in place to deliver exceptional profitable growth whilst navigating
a turbulent commodity market. The contracted revenue and bookings
momentum provides the Board with confidence in delivering continued
significant organic growth for FY24 and beyond.
Over the previous few years, the gas and power markets have
experienced unprecedented volatility in reaction to geopolitical
events. At its peak in 2022 wholesale gas was trading at over 600p
per therm. In 2023 gas prices have significantly softened and
whilst this is great news for consumers, the rate and speed has
caused short term mark-to-market pressure on our hedging credit
lines.
Our balance sheet remains strong and will strengthen further as
energy prices continue to normalise, enabling the short-term cash
held with our trading counterparty to flow back into the Group in
the coming months.
Our focus on strict controls and gross margin enhancement have
delivered an increased Net Customer Contribution (NCC)*, as such
the Group expects to deliver an exceptionally strong adjusted
EBITDA margin for FY23.
Our Yü Smart business is now in a scale up phase and will
provide material benefits to the wider group. We continue to
monitor asset supply challenges due to shipping constraints in the
Red Sea and, although we have healthy stock pipelines, an extended
disruption could have the ability to impact H2 24.
We are confident that the Group has the proven capability to
deliver value consistently and consecutively for its investors. I
look forward to showcasing our results post publication of our
annual accounts.
A huge thank you to my team who have supported the Group's
vision."
Definition:
*Net Customer Contribution - Gross margin less bad debt
Yü Group PLC
Bobby Kalar
Paul Rawson +44 (0) 115 975 8258
Liberum - Nominated Adviser
and Broker
Edward Mansfield
Satbir Kler +44 (0) 20 3100 2000
--------------------
Teneo
Giles Kernick
Tom Davies +44 (0) 20 7353 4200
--------------------
Notes to Editors
Information on the Group
Yü Group PLC is a leading challenger supplier of gas and
electricity focused on servicing the corporate sector throughout
the UK. We drive innovation through a combination of user-friendly
digital solutions and personalised, high quality customer service.
The Group plays a key role supporting businesses in their
transition to lower carbon technologies with a commitment to
providing sustainable energy solutions.
Yü Group has a clear strategy to deliver sustainable profitable
growth and value for all of our stakeholders, built on strong
foundations and with a robust hedging policy. In 2023 the Group
launched Yü Smart to support growth through new opportunities in
smart metering installation.
With a significant opportunity in a GBP50bn+ addressable market,
Yü Group is fast approaching the stated goal of GBP500m revenue,
and is already exceeding the 5%+ EBITDA margin target.
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