Yu Group has “weathered the storm” following the resetting of its business last year, the company’s chief executive Bobby Kalar has said.
Kalar added that while the company, which owns Yu Energy and Yu Water, remains “cognisant of lessons learned”, it is now “very much a forward-facing business”.
In a trading update published today (28 January) the group said H2 2019 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) losses are expected to be “significantly below” the £2.7 million reported in its first half results last September and are in line with market expectations of a £4.5 million loss for the year.
This, the group said, is a result of “strategic actions” implemented throughout 2019 beginning to produce results.
Meanwhile, revenues are expected to increase ahead of market expectations by 35 per cent to £110 million, from £81 million in 2018.
In October 2018, the company issued a profit warning and said it expected profits to be £10 million lower than previous market expectations, resulting in a loss for the 2018 financial year.
It signed an exclusive trading agreement with Smartest Energy in December 2019 which freed up cash that would have otherwise been set aside for hedging.
Earlier this month, it announced two new senior appointments to its board, with Robin Paynter Bryant replacing chairman Ralph Cohen. Tony Perkins joined the board as a senior independent non-executive director.
Bobby Kalar said: “Our team’s determination over this past year to transform Yu Group into a disciplined, higher margin business has been momentous and necessary. 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.
“With a new and evolving board capable of guiding us in our next phase of growth, and our new progressive trading arrangement with Smartest Energy to enhance and future-proof 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.”