TIDMYU.
RNS Number : 6034N
Yu Group PLC
24 January 2023
Prior 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.
24 January 2023
Yü Group PLC
("Yü Group" or the "Group")
Trading Update
Continued strong momentum
Record-breaking financial performance achieved in FY22 that
surpasses market expectations
"I'm thrilled to report a fantastic, record-breaking performance
for FY22. While the Board modelled a strong outcome for FY22 we may
have underestimated the accelerated contribution our strengthened
business would have on the Group's FY financial metrics. Record
breaking organic revenues, profitability and forward contracted
revenues have all exceeded management expectations. We are now in
the fast lane of growth and expect to exceed current guidance that
had already been upgraded in March, July, September and November
2022.
Our balance sheet is very strong, with excellent cash conversion
and I'm very pleased to report a fourth consecutive year of EBITDA
improvement. Cash has also far exceeded management expectations,
more than doubling from FY21. Net customer contribution (being
gross margin less bad debt) is being managed as we grow. Adjusted
EBITDA margin has also dwarfed the 2.1% achieved in H122 (FY21:
1.1%) and as such we have clear visibility of our stated GBP500m
revenue at 4%+ target.
As a consequence of our strong cash generation, management
intends to make a modest shareholder distribution in respect of the
financial performance achieved in FY22, details of which will be
announced alongside publication of the Company's audited results
for FY22. In considering the level of dividend management will
ensure it does not constrain or hinder our growth ambitions or
abilities to take advantage of corporate and other growth
opportunities as they arise.
The impact of our "digital by default" transformation has
exceeded management expectations in terms of its contribution to
margin and efficiency. Our single platform seamless onboarding has
created operational leverage alongside opening up additional
profitable sales streams. The full impact will become materially
beneficial in 2023 and beyond.
I'm pleased to welcome the Yü Smart team to our family, after
completing the purchase from Magnum Utilities in May 2022 using
cash from our balance sheet. The management have worked hard to
achieve, from a standing start, full industry accreditation and the
necessary licences to install and maintain metering infrastructure.
Yü Smart installed its first SMETs meter in August 2022 and by year
end was achieving hundreds of installs a month. As Yü Smart gains
national coverage and full operational scale in 2023 it will
complement our retail business in contributing significant Group
profitability.
As always delivering such positive results takes a huge team
effort and I would like to thank all of my team for trusting the
Board and believing management's vision. The hard yards continue to
bear fruit."
Financial & Operational Highlights
-- Very strong operating cash performance with net cash of
GBP18.8m as at 31 December 2022, an increase of GBP12.0m in the
year (FY21: GBP6.8m).
-- Extremely strong organic growth with full year revenue to
exceed GBP275m (FY21: GBP155m) an increase of over 76% on FY21.
-- Adjusted EBITDA margin for the year expected to be
significantly ahead of current market expectations.
-- Record breaking annualised contracts signed up in year has
delivered average monthly bookings of GBP24.5m (FY21: GBP13.8m), an
increase of 78% in the year. Particularly strong performance in Q4
2022 with average monthly bookings of GBP48.6m.
-- Commercially leveraging a reduction in meter points in favour
of better value, better credit higher consumption meters has seen
profitable volume growth.
-- Continued strong customer service performance, delivered
through an improved digital customer journey.
-- Hedging strategy has continued to protect the Group from energy market volatility.
-- Government's Energy Bill Relief Scheme providing significant
support to customers over Winter. Recent softening of forward
commodity markets provides some relief for customers, enabling the
Group to lock in new contracts, improving visibility for FY23 and
beyond.
-- National coverage of our smart metering installation
services, Y Smart, now fully operational and expected to scale
profitably in 2023.
Outlook
-- High organic growth expected to continue in to FY23 and over the medium term.
o Very strong forward revenue visibility, exiting 2022 with
GBP246.8m of contracted revenue for FY23, up 57% on prior year
(FY21: GBP156.5m for FY22).
o Further revenue expected as the company continues to sell
contracts that will commence during FY23:
-- Management target annualised monthly bookings to continue the
positive momentum from FY22
-- Variable and out of contract revenue customers expected to
provide further revenue enhancement
-- Continued improvement expected in EBITDA profitability for
FY23 and beyond, as benefits are realised from our investments in Y
Smart and digital by default.
-- The Board will, on release of the Company's FY22 results,
provide further guidance on the Company's ongoing capital
allocation policy given the Company's strong cash generation and
growth prospects.
o The Board currently intend to declare a modest dividend with
the view to adopting a progressive dividend policy thereafter,
whilst ensuring the Company's growth prospects are not
constrained.
o The Group is currently debt free but will examine the use of
leverage to support the growth of our meter asset business which
will serve as an annuity revenue stream.
Yü Group PLC
Bobby Kalar
Paul Rawson +44 (0) 115 975 8258
Liberum - Nominated Adviser
and Broker
Edward Mansfield
William Hall
Cara Murphy +44 (0) 20 3100 2000
--------------------
Tulchan Group
Giles Kernick
Olivia Peters +44 (0) 20 7353 4200
--------------------
Notes to Editors
Information on the Group
Yü Group PLC, trading as Yü Energy, is a leading 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 2022 the Group
launched Yü Smart to support growth through new opportunities in
smart metering and EV charge installation. With a significant
opportunity in a GBP50bn addressable market Yü Group continues to
deliver on the medium-term goal of GBP500m of revenues with an
adjusted EBITDA margin in excess of 4%.
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END
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