Yu Group back in the black as sales soar

Corporate sector gas and electricity firm Yü Group announced that it had swung into profit in the first six months of the year after revenues soared.

Yü, which trades as Yü Energy, generated £675,000 of pre-tax profits for the six months ending 30 June, a major turnaround from the £1.3m loss it had experienced at the same time a year earlier.

Revenue quadrupled to a total £20.8m from £5.1m thanks to the businesses shifting its focus towards larger corporate clients and an investment in sales and support staff, which the company said had generated instant results by virtue of increased sales.

Statutory earnings per share rose to 3.8p at 30 June 2016 from the 9.9p loss a year earlier.

Yu, which floated on AIM in March last year, said that gross margin had narrowed to 17.7% from 21% a year earlier, mostly due to increasing its total staff volume from 67 to 102.

"The rapid increase in revenue means that we expect profits this year and next year to be ahead of expectations. This has been achieved in conjunction with the increased investment in staff and a shift in revenue mix towards larger corporate customers and the broker sales channel. Maintaining the culture and vision for the business has been a priority," said chief executive Bobby Kalar.

Total revenue for the year is expected to exceed £39m, up from the £16.2m posted twelve months earlier.

Cash and equivalents were relatively stable, rising to £5.9m from £5.88m.

Kalar said the focus on keeping costs down an generating cash had led to the rise in group cash balances and operating cash inflow of £1.1m.

"This supports our progressive dividend policy and thus we are delighted to be able to announce an enhanced interim dividend of 1.00p per share, an increase of 33%," he said.

As of 1040 BST, shares had gained 13.86% to sit at 523.75p.