Yu Group (YU.) , the gas, electricity and water supplier serving the UK business sector, revealed in a trading update it expects around £110 million in 2019 revenues, a 35% increase from the prior year.

The company kept its 2019 adjusted earnings guidance unchanged but anticipates a ‘material improvement’ in its 2020 earnings, with higher gross margins. 

Bobby Kalar, Chief Executive of Yü Group, commented: "Our team's determination over this past year to transform Yu Group into a disciplined, higher margin business has been momentous and necessary.”

Yu Group spent 2019 investing into internal controls after recovering from accounting errors in 2018 which saw it write down £10 million in profits.

Mr. Kalar said: “Significant controls implemented across the organisation have now been embedded by the business and are showing a positive contribution towards areas such as cash collections, revenue protection and gross margin optimisation.”

Shares in Yu Group jumped 20% to 135p each during Tuesday morning trading

Yu Group’s monthly average bookings increased from £3.2m in H1 2019 to £5.1m in H2 2019, and it expects the upward trend to continue into 2020.

Cash at 2019 year end was £2.1 million, and trading counterparty deposits were £10.5 million, caused by a significant decrease in forward energy commodity markets in the year, the company said. 

Yu Group also revealed in the trading update that it entered a £13 million hedging facility with SmartestEnergy to reduce its cashflow volatility and working capital requirements. 

Bobby Kalar, Chief Executive of Yü Group, said: “With a new and evolving Board capable of guiding us in our next phase of growth, and our new progressive trading arrangement with SmartestEnergy to enhance and futureproof our cashflow, the focus in the year ahead is to continue to build on this solid platform and accelerate manageable growth whilst reducing the cost to serve.”

"A core indicator, Adjusted EBITDA, is improving in line with our plan and we are able to invest in our automated digital strategy. I'm confident we have weathered the storm and while we remain cognisant of lessons learned, we are now very much a forward-facing business. I look forward to a successful year ahead."

Yu Group is to publish its full year results on 31 March 2020.

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