Shares in Yu Group (YU.) jumped on Thursday morning after the company released a trading update for the six months ended 30 June 2021 in which it reported strong growth across both bookings and revenue which it said provides it with the confidence to deliver profitable growth.
The London-listed Company, which operates as an independent supplier of gas, electricity and water to the UK corporate sector, said it witnessed ‘significant revenue growth in 1H21.
As a result, Yu expects revenue to rise by 41.6% on 1H20, to around £65.0m from £45.9m, driven by both ‘strong organic growth from new bookings and increased customer demand.’
The Company told investors that it saw average monthly bookings of £9.7m for 1H21, an increase of 56.5% vs. 1H20, with June recording a record monthly booking of £18.4m.
Yu said it expects to deliver on its strategic objectives by reporting positive adjusted EBITDA for 1H21, a significant improvement from FY20 (1H20: £1.8m loss, 2H20: £0.1m profit).
Yu holds a strong balance sheet with a positive cash position at £11.5m, which was broadly flat in 1H21 (31 Dec 2020: £11.7m) despite investment in a new Leicester office, funded from Group cash, and its early payment of a portion of industry liabilities otherwise due in 2H21.
Looking ahead, Yu’s launch of a new sales and innovation office, coupled with investment in digital technology, is expected to enhance organic growth and EBITDA returns from FY22.
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In its final results for the year to 31 December 2020 released in March 2021, Yu said it was “primed and ready for profitable growth” in 2021 following a strong performance in 2020.
Shares in Yu Group have seen an almost three-fold increase in value since the beginning of 2021. The stock was trading 7.69% higher to 280p this morning following the announcement.
Bobby Kalar, CEO of Yu Group, said, " Our strategy is delivering, the business is performing well, and we are on track to make further strong progress during 2021 and beyond.”
In particular, Kalar cited “an exceptional end to H1 which saw record monthly bookings of £18.4m in June, an increase of 38% from our previous high of £13.3m in July 2020.”
As a result of the strong operational and financial H1 performance and the volume used by its SME customers returning to pre COVID levels, Yu said it maintains “a very positive outlook” with the Board stating it is confident the Group will meet market expectations for FY21.
‘With revenue of at least £65m for 1H21, strong monthly bookings and aggregate forward contracted revenue secured at 30 June 2021 around 40% above that at 30 June 2020, FY21 revenue is expected to increase significantly from the £101.5m reported for FY20,’ it noted.
In addition, the Board expects to report a strong EBITDA performance for FY21, with further improvement into FY22 as the firm benefits from high scale benefits and its digital roll out.
Yü Group is an independent supplier of gas, electricity and water focused on servicing the 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.
“The growth objective for 2020 was very clear that, having strengthened the business for significant sustainable growth, we would begin to rapidly scale,” Yu wrote back in January.
The company told investors that having achieved upward momentum in its performance, it is now focused on the next phase of its evolution which includes, inter alia, delivering organic growth, driving profitability and utilising digital technologies and innovation.
In short, the company highlighted that it is now ready to launch “a period of sustainable growth as it scales up to address and increase its rightful share of a £35bn market.”
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