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 £450m (FY22: £279m), 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 £55.0m (FY22: £24.5m, H1 23: £51.3m).

·    Strong net cash position of £31.9m as at 31 December 2023 (FY22: £18.8m). A further £49.8m 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 strong 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 £519.7m to be delivered in FY24, up 111% on prior year (£246.8m for FY23).

o  Total forward revenue contracted of £825.8m 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 £49.8m 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

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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 £50bn+ addressable market, Yü Group is fast approaching the stated goal of £500m revenue, and is already exceeding the 5%+ EBITDA margin target.