Yu Group (YU. ), supplier of energy and utility solutions to UK businesses, announced this morning solid revenue and margin growth in a trading update for the six months ended 30 June 2022 (H1 22).
Financial Highlights
Revenues in H1 soared 90% YoY to £125m, compared to £65.8m in H1 21, and are up 39% from H2 21. Average monthly bookings were also up 49% to £14.3m.
Adjusted EBITDA for the fiscal year is expected to rise 50%, driven by operational leverage and strategic management of debtors. Adjusted EBITDA margin has continued positive momentum, the company said.
The company ended with a strong cash position of £15.7m, up 36.5% YoY.
Operational Highlights
Yu successfully established its online portal during the period, which allows customers to self-serve in relation to billing, metering, and other administrative functions, reducing operating costs.
The company has also begun rollout of its online platform in respect to new customer acquisitions.
Outlook
In H2 22 Yu will launch Yu Smart, a new smart metering division, with the first smart meters expected to be installed by the end of the year. This will put Yu on par with other energy companies that have already introduced smart metering solutions and should improve margins even further.
Bobby Kalar, CEO, commented: "Despite the wider macro environment and the pressures being felt in the industry our story, brand and growth remains strong. We are delivering our KPI's in line with management expectations and we continue to derive significant strategic benefits both operationally and commercially from the investments we have made in our systems and processes."
View from Vox
Overall, a very strong showing from Yu Goup with substantial revenue growth, margin expansion, cash generation, and profitability. Investors cheered the strong results with YU. shares up 6.67% in trading.
Yu's "Digital by Default" strategy has already resulted in new growth opportunities and enabled the company to find service and cost efficiencies, improving margin. Yu Smart will build on that, and open up an entire new range of opportunities in the rapidly growing smart metering space. With soaring energy prices in the UK and Europe, more and more businesses are looking to optimise their energy usage through digital monitoring.
Yu also reiterated its forecast for the full FY 22, with the company expecting revenues and adjusted EBIDTA to both increase 50% YoY. Cash is also expected to perform in line with market expectations, underlying the visibility within the company.
As this was the 4th consecutive period of revenue growth, with strong cash conversion and an active product development programme, from a Vox Markets perspective the company is well-positioned to hit or exceed the aforementioned targets.
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