Yu Group (YU) H1 2024 earnings summary

Executive summary

• H1 2024 revenue rose 60% to £313m, adjusted EBITDA up 49% to £20.4m, and EPS up 52% to 88p, driven by organic expansion in meter points and energy volume supplied.

• Net cash position increased 137% to £86.8m, supporting a 533% rise in interim dividend to 19p per share and a £4.0m share buyback.

• Smart meter installations surged 125% to 9,000, with 13,100 meters owned and index-linked recurring revenue of £0.6m.

• New five-year commodity trading agreement with Shell enhances scalability, hedging efficiency, and capital efficiency.

• Digital platform and 'Yütility Simplicity' drive growth, with significant market headroom from a 1.8% share.

Financial highlights

• Revenue reached £312.7m, up 60% year-over-year; aggregate contracted revenue up 70% to £945m.

• Adjusted EBITDA rose 49% to £20.4m (6.5% margin); profit before tax up 122% to £19.8m.

• Adjusted EPS increased 52% to 88p; net cash position up 137% to £86.8m.

• Gross margin declined to 13.7% (from 17.2%), reflecting higher industry costs, normalized tariffs, and mild weather.

• Interim dividend up 533% to 19p per share.

Outlook and guidance

• Strong order book with £945m forward value; ambition for 25,000 smart meter installations in FY24 remains.

• EPS forecasted to increase in H2 2024, with continued focus on margin and overhead leverage.

• Robust net cash balance forecast for year-end, after £9.0m early investment in renewable obligation certificates.

• Progressive dividend policy confirmed, with scope to decrease dividend cover to 3x+ over the medium term.

• Targeting 100,000 meters supplied by early 2025.