368: Bobby Kalar of Yü Group talks about their profitable revenue growth of 43% to £65.8m & continued momentum into H2

The Vox Markets Podcast

Bobby Kalar CEO of Yü Group #YU. talks about their profitable revenue growth of 43% to £65.8m & continued momentum into H2.

Highlights
· Revenue growth of 43% to £65.8m (H1 2020: £45.9m) driven by strong organic growth and recovery of customer demand.
· Profit for the period after tax of £0.9m, an increase of £2.6m year-on-year (H1 2020: £1.7m loss).
· Underlying profitability continues to see significant improvement, with adjusted EBITDA of £0.5m (H1 2020: £1.8m loss):
o Gross margin increasing by 2.1% to 7.8% (H1 2020: 5.7%).
o Strong customer collection performance driving lower provision for bad debt.
· Ambitious organic growth strategy delivering results:
o Average monthly bookings increased by 55% to £9.6m (H1 2020: £6.2m).
o Number of meter points on supply or contracted to start has increased by 112% from 30 June 2020.
· Continued progress on our digital programme as we transform the business to be 'digital by default'.
· Strong cash position and strong balance sheet remains:
o Cash held at 30 June 2021 of £11.5m (31 December 2020: £11.7m).
o Group remains debt free2. Capital expenditure of £2.4m for the new innovation centre in Leicester remains funded from cash reserves.

Current Trading
· Contracted revenue of £90.5m secured for 2022 at 31 August 2021 providing good forward revenue visibility.
· Further enhancement to gross margin as the Group prioritises higher margin contracts and customer collections remains strong.
· Strong bookings in July and August continue to support high organic growth rates.
· Exposure to record high global commodity prices continues to be mitigated by Smartest Energy agreement and robust hedging strategy albeit with some delay in customers 'locking-in' renewals at increased prices.
· The Group's current cash position remains robust and in line with management expectations.

Outlook
· Revenue for FY 2021 expected to be in line with market expectations with strong organic growth expected to continue for H2 2021.
· Adjusted EBITDA for FY 2021 expected to be ahead of market expectations based on strong net customer contribution performance.
· Further increase in monthly bookings expected in H2, following exceptional performance in July and August 2021 and continued focus on digital routes to market.
· Customer book acquisitions continue to be assessed against the Group's strict criteria to allow further potential value enhancement with supportive market consolidation expected to continue in the short and medium term.

About Yü Group
Yü Group PLC, trading as Yü Energy, 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.