Yu Group chief executive Bobby Kalar has said he is not worried at the prospect of reduced energy consumption from business consumers, adding that the company is focusing on growth to mitigate this.
Kalar was speaking to Utility Week following the publication of his company’s results to 31 December this morning (30 March) which revealed the impact Covid has had on the business.
The pandemic resulted in a £1.8 million loss in H1 meaning adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) losses for the year were at £1.7 million compared to a loss of £4.2 million in 2019. This was however “significantly above” market expectations.
Covid’s impact can also be seen in a fall in revenue, with the company posting £101.5 million compared to £111.6 million the year previously. Despite the pandemic the group reported a much improved overall loss after tax (£1.2 million) compared to 2019 (£5 million).
Kalar highlighted how while last April saw consumption fall by about 35 per cent, this rebounded as the year went on and returned to around 93 per cent in December which is where he believes it will stay.
He said the retailer, which serves more than 17,400 meter points, was focusing on growth in order to mitigate the impact of reduced consumption.
“I don’t think it’ll ever get up to 100 per cent because the new normal is, I believe, somewhere around 92-93 per cent. We forecast, we purchase and we price in those terms”, he said.
When asked if he was worried whether this fall in consumption will damage the business, Kalar said he was not and that the company was instead focused on growing its customer base and choosing the right type of consumer.
He continued: “It just means that we will sell to more customers to bridge that gap. Are we worried about businesses not returning? No, I think very clearly we have demonstrated that our discipline around choosing the right sort of businesses to serve, the right segmentation, the right gross margins, has meant we’ve had that blended mix of hospitality and hospitals, care homes, data centres and other buildings and properties.
“So in some cases the consumption has swung the other way, they’ve used more. Not in the majority of cases as you’d appreciate but no, I am not worried about the consumption levels. I think we will return to some form of ‘new normality’ and that won’t be 100 per cent.”