Yu Group shares jump as firm eyes successful year ahead
Business utility supplier Yu Group’s shares jumped 20 per cent this morning as the firm announced that its 2019 revenue would be 35 per cent ahead of expectations.
According to a trading update, revenue for the financial year is expected to hit £110m, up from £80.6m in 2018.
The group did not give an estimate for profit but said that earnings would be “at least” in line with market expectations.
The improvement was attributed to the group’s strategy beginning to take effect. Last year Yü was forced to “reset” after discovering accounting errors cost it £10m last year.
In December Yu announced an energy supply arrangement with Smartest Energy, which will provide the firm with an initial credit line up to £13m.
The firm will exclusively purchase energy from Smartest at market competitive and transparent prices to meet its customers’ requirements over a five-year term.
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The new arrangement will free up cash flow for Yü as it will no longer have to post cash to support the forward purchasing of energy.
Bobby Kalar, chief executive of Yü, said: “Our team’s determination over this past year to transform Yu Group into a disciplined, higher margin business has been momentous and necessary.
“Significant controls implemented across the organisation have now been embedded by the business and are showing a positive contribution towards areas such as cash collections, revenue protection and gross margin optimisation.
“I’m confident we have weathered the storm and while we remain cognisant of lessons learned, we are now very much a forward-facing business.”
Earlier this month Yu announced two new appointments to the board, with Robin Paynter Bryant replacing Ralph Cohen as non-executive chairman.
Tony Perkins has also joined the board as a non-executive director. Kalar added: ‘Strengthening the board as the group embarks on its renewed phase of development is a strategic move building on the rapid maturity of the business over the past few years.”