Yu Group PLC Trading Update (8857S)

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RNS Number : 8857S

Yu Group PLC

19 July 2022

19 July 2022

Yü Group PLC

("Yü Group" or the "Group")

Trading Update

CONTINUED STRONG FINANCIAL PERFORMANCE

Yü Group PLC, the challenger independent supplier of gas, electricity and water to the UK corporate sector, is pleased to provide an update on trading for the six months ended 30 June 2022.

Bobby Kalar, Group Chief Executive Officer, said:

"The period delivered a continued strong financial performance with significant revenue growth, margin expansion and consequently much improved profitability and cash generation. H1 22 will represent our 4(th) consecutive period of revenue growth and margin improvement and I am confident we will continue to deliver in H2 22.

Despite the wider macro environment and the pressures being felt in the industry our story, brand and growth remains strong. We are delivering our KPI's in line with management expectations and we continue to derive significant strategic benefits both operationally and commercially from the investments we have made in our systems and processes.

I'm pleased to welcome Liberum Capital as our new Nominated Adviser and Broker and am looking forward to working with them to develop a wider investor reach.

In H2 22 we will launch Yü Smart, our smart metering business, and expect to be installing our first smart meters in Q4 this year. This capability will represent a significant strategic milestone in the expansion of the Group.

I am delighted by our performance in H1 and am confident this momentum will continue into H2 and beyond. The Board remains as excited as ever about the future of the Group . I would like to thank all of my team who continue to deliver on our medium term goal of GBP500m of revenues with an adjusted EBITDA margin in excess of 4%."

Financial and Operational highlights

-- Exceptional growth with H1 22 revenues expected to exceed GBP125m, up over 90% compared to H1 21 (H1 21: GBP65.8m, FY 21: GBP155.4m) and up over 39% from H2 21

-- Significant increase in average monthly bookings to GBP14.3m, up 49.0% on H1 21 (H1 21: GBP9.6m, FY 21: GBP13.8m)

-- Strong cash generation and cash performance, closing at GBP15.7m, an increase of 36.5% from the prior year (30 June 2021: GBP11.5m, 31 December 2021: GBP7.0m)

-- Further improvement in Adjusted EBITDA with strong net customer contribution(1) driven by operational leverage and careful management of debtors. Adjusted EBITDA margin has continued positive momentum (H1 21: 0.7%, H2 21: 1.4%)

-- 26.1k meter points, an increase of 25.5% on 30 June 2021, after taking into account the expected reduction in non-firm customers acquired through the SoLR process

-- Digital by default initiatives continue to produce new growth opportunities, combined with service and cost efficiencies driving margin expansion.

o T he Group has successfully established its online portal where existing customers can self-serve in relation to billing, meter submissions and other administrative functions, reducing the Group's cost to serve

o The Group has commenced rollout of its online platform in respect of new customer acquisitions. The platform creates a standardised contractual journey generating consistent data points for customers who contract through Yü Group's in-house sales agents, third party intermediaries or elect to self-serve when contracting with Yü Group

-- Appointment of Liberum Capital as Nominated Adviser and Broker to support the Group with increasing shareholder engagement in the next chapter of growth

Outlook

   --    FY 22 revenues are expected to grow by over 50% against prior year (FY 21: GBP155.4m) 

-- The Group expects to achieve an uplift of over 50% in Adjusted EBITDA margin for FY 22 (FY 21: 1.1%)

-- Cash is performing in line with expectations. In H2 22 the Group will make its annual ROC payment and will continue to invest in the acceleration of the "digital by default" strategy alongside financing the roll out of Yü Smart

-- Launch of Yü Smart planned for H2 22, having received the required licences and accreditation, this will provide new opportunities in smart metering and EV charge installation, with the financial benefits expected be derived in FY 23 and beyond

-- Management remains mindful of wider macroeconomic conditions and energy market volatility and is actively managing its debtors while successfully maintaining a robust hedging policy.

Note:

   1.        Net customer contribution is calculated as gross profit less bad debt 

For further information, please contact:

 
  Yü Group PLC 
   Bobby Kalar 
   Paul Rawson         [phone] 
 Liberum 
  Edward Mansfield 
  William Hall 
  Cara Murphy          [phone] 
                      --------------------- 
 Tulchan Group 
  Giles Kernick 
  Olivia Peters 
  Oliver Norgate       [phone] 
                      --------------------- 
 

Notes to Editors

Information on the Group

Yü Group PLC, trading as Yü Energy, is an independent supplier of gas, electricity and water focused on servicing the SME and corporate sector throughout the UK. It has no involvement in the domestic retail market. The Group was listed on the AIM market of the London Stock Exchange in March 2016.

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July 19, 2022 02:00 ET (06:00 GMT)