Yu Group has “reset” its business following the accounting issues discovered last year.
In its half year results published today (18 September) the group, which owns Yu Energy and Yu Water, posted an adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) loss of £2.7 million but added this was an improvement of £2.6 million on the H2 2018 loss of £5.3 million.
In October last year 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.
The company was owed £4.2 million in unpaid bills at the end of 2017 and £4.3 million as of the end of June 2018.
After reviewing the amount owed by each customer, the board concluded that a “significant amount” of the debt was unrecoverable and must therefore be written off.
Following today’s announcement group chief executive Bobby Kalar said the board was pleased with the progress made in the first six months of this year.
He added: “The business has been reset following the accounting issues discovered last year, we have bolstered the management team and are confident in the governance and controls now in place.
“With continued development of the contract book and a focus on quality of business and margins, the board’s objective is returning the group to profit as soon as possible.”
Kalar added that the board anticipates “incremental improvement”, with EBITDA loss in H2 2019 expected to be “significantly lower” than the £2.7 million reported in this half.
“We made a decision to temper the rate of revenue growth as we implemented the new processes and focussed on improving margins. We are now in a position to resume our focus on growth utilising the solid foundations in place”, he said.
Revenue increased by 70 per cent to £56.6 million, compared to £33.2 million in H1 2018. Meanwhile revenues for the full year are expected to be approximately £105 million.